COMMISSIONER OF INCOME TAX, KOTTAYAM vs. M/S. JASS ROLLER FLOUR MILLS PVT. LTD.

JUDGMENT Ramachandran Nair, J. The connected appeals are filed by the revenue challenging the orders of the Tribunal, both issued in the block assessment appeal and in the appeal filed against penalty levied under Section 158BFA(2) of the Income Tax Act.

ITA 425/2009 & 412/2009 3 treating the same as first appeal before it. From the orders of the CIT (Appeal) on the grounds raised before it, prima facie, we find that the assessee has contested the reliefs granted under Section 80-IA for the assessment year 1994- 1995 and for the assessment year 1998-1999. The CIT (Appeal) has considered in detail the claim for relief under Section 80-IA and it was in fact granted. So far as the estimation of income for several years in the assessment made is concerned, what the assessee contested before the CIT (Appeal) was only in respect of the mistakes in the computation for the block period ending in 1998-1999. Here again, the First Appellate Authority has granted relief. However, from the grounds of appeal filed before the CIT (Appeals) and the order of the CIT (Appeal), we find that the assessee has not contested the assessment on any other grounds other than the issues considered and decided by the CIT (Appeal). However, on going through the appellate order of the Tribunal, we notice that the assessee has raised absolutely new grounds which were never raised or considered by the CIT (Appeal). We, prima facie feel that the Tribunal exceeded its juri iction under Section 253. The Tribunal has to decide the appeal as the Second

ITA 425/2009 & 412/2009 4 Appellate Authority against the orders of the CIT (Appeal). We do not think the Tribunal can convert itself to the First Appellate Authority on questions of fact that too relating to estimation of income. If the assessee has a case that the grounds raised before the CIT (Appeal) were not considered and decided by it, then the assessee's remedy was to file a rectification application and in the course of appeal, if found the Tribunal finds that CIT (Appeal) has not considered and decided the grounds raised by the assessee, it was for the Tribunal to remand the case and direct the CIT (Appeal) to consider the appeal on those grounds. Therefore, prima facie, we feel the Tribunal exceeded it's juri iction by deciding matters pertaining to estimation of income for various years in the block period, which were not raised before the CIT (Appeals) and decided by him. Therefore, we are of the view that matter requires re-consideration by the Tribunal on this aspect, because the department's objection about maintainability of appeal on fresh grounds raised is not considered and decided by the Tribunal. We, therefore, allow IT Appeal No.412/2008 by setting aside the orders of the Tribunal and by restoring the appeal back to the Tribunal for considering the ITA 425/2009 & 412/2009 5 maintainability of appeal on the new grounds raised and to decide the matter afresh on all grounds.

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