C I T vs. SHIV KUMAR

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ITA/87/2008HC Punjab & HaryanaPHHC01080905200803 October 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY TEWARI2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court decided the first substantial question of law against the Revenue, holding that the ITAT was right in admitting and adjudicating the additional ground of appeal. This decision was based on the concession made by the counsel for the Revenue, who fairly admitted that the appeal was squarely covered against the Revenue by the Supreme Court's decision in National Thermal Power Co. Ltd v. Commissioner of Income-Tax, 229 ITR 383. The principle derived is that if an issue is covered by a Supreme Court decision, the appellate tribunal can admit and adjudicate an additional ground even if not raised before the lower appellate authority. The second question was not pressed by the Revenue and therefore not decided on merits. The appeal was dismissed.

What were the facts?

The Revenue, Commissioner of Income Tax, Hisar, filed an appeal before the High Court of Punjab and Haryana at Chandigarh against an order dated January 12, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The appeal was filed with a delay of 61 days, which was condoned by the Court. The Revenue proposed two substantial questions of law for adjudication. The assessee was Sh. Shiv Kumar. The assessment year(s) are not explicitly stated.

What were the issues?

The High Court was to decide two substantial questions of law. 1. Whether the ITAT was right in admitting and adjudicating an additional ground of appeal when the relevant issue was not raised by the assessee before the CIT (A)? This question turns on the principles governing the admission of additional grounds of appeal by the ITAT. 2. Whether the ITAT was right in adopting the mercantile system of accounting at the appellate stage, relying on an Apex Court order, even though the assessee had voluntarily offered income by adopting the cash system of accounting during assessment proceedings, which was assessed as such? This question turns on the principles of accounting systems and their application at the appellate stage. Contentions: Assessee: Not recorded in the judgment. Revenue: For the first question, the revenue conceded that the appeal was covered against it by the decision of the Supreme Court in National Thermal Power Co. Ltd v. Commissioner of Income-Tax, 229 ITR 383. The revenue did not press the second question.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned in the provided text.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.M No.2312 CII of 2008 and I.T.A No. 87 of 2008 Date of decision : October 03, 2008 The Commissioner of Income Tax, Hisar ...... Appellant. v. Sh. Shiv Kumar, ..... Respondent. CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY TEWARI *** Present : Mr.Sanjeev Kaushik, Advocate for the appellant. ***

Whether Reporters of Local Newspapers may be allowed to see the judgment ?

To be referred to the Reporters or not ?

Whether the judgment should be reported in the Digest ? *** AJAY TEWARI, J C.M.No.2312 CII of 2008

For the reasons stated in the application, delay of 61 days in refiling the appeal is condoned. C.M stands disposed of. ITA No.87 of 2008 The revenue has filed this appeal against the order dated 12.1.2007, passed by the Income Tax Appellate Tribunal Delhi Bench, proposing the following substantial questions of law :- “ 1. Whether on the facts and in the circumstances of the case, the learned ITAT is right in admitting and adjudicating the additional ground of appeal when the relevant issue was not raised by the assessee before the CIT (A) ?

Whether ITAT is right in adopting the mercantile system of accounting at the appellate stage by making reliance on the order of the Apex Court, even though the assessee has voluntarily offered his income by adopting cash system of accounting during the assessment proceedings and that was assessed as such ? Before us, counsel for the revenue has not pressed the second question. With regard to the first question, counsel for the revenue has fairly conceded that the appeal is squarely covered against the revenue by the decision of the Hon'ble Supreme Court in National Thermal Power Co. Ltd v. Commissioner of Income-Tax, 229 ITR 383. In this view of the matter, we decide question No.1 against the revenue. The appeal is dismissed. ( AJAY TEWARI ) JUDGE

( ADARSH KUMAR GOEL )

JUDGE October 03, 2008

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