SHRI LAVJIBHAI HIRJIBHAI SUTARIYA,,SURAT vs. THE DY. CIT.,CIRCLE-8, NOW DY. CIT, CIRCLE-3(2),, SURAT

Per contra, the ld.Sr.Departmental Representative objected 10. to the admission of additional evidence.

The ld.Counsel for the assessee placed reliance on the 11. decision of Hon`ble Madras High Court in the case of CIT v. Indian Express (Madura) Pvt. Ltd. [1983] 140 ITR 705 (Madras) : [1983] Taxman 441(Madras): 33 CTR 314 (Madras): “It is well-settled now that while exercising its appellate jurisdiction, the Tribunal need not confine itself to the grounds which are set forth in the appeal memorandum or taken by leave of the Tribunal. Indeed, in the case of CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 , the Supreme Court described the Tribunal's appellate jurisdiction in the widest terms possible saying that all questions, whether of law or of fact, which relate to the assessment of the assessee may be raised before the Tribunal and there is nothing in the Act which restricts the Tribunal to the determination of the questions raised before the departmental authorities. On the basis of these principles laid down by the Supreme Court, it must be held in this case that the assessee was not precluded from raising the new contention and the Tribunal was not precluded from examining and determining that contention, merely on the score that it had not been put forward at the earlier stages of the proceedings in assessment and in the first appeal. The statutory provisions in section 254, which confers appellate jurisdiction on the Tribunal, clearly lays down that the Tribunal, in disposing of an appeal, may pass such orders thereon as it thinks fit. The expression 'subject-matter' has not been employed in this provision. Indeed in Mahalakshmi Textile Mills' case (supra), even the Supreme Court has understood the Tribunal's appellate jurisdiction as a jurisdiction to pass such orders on the appeal as it thinks fit without adding any gloss of their own to the expression. Therefore, both on principle and on precedent, there is no reason why the Tribunal must be precluded from handling a point which appertains to the assessee's assessment merely because nobody else had handled it before or because it had not occurred either to the assessee or to the department to raise and urge that point at earlier stages of the proceedings. Consequently, in the instant case, the Tribunal was justified in entertaining the additional ground raised by the assessee relating to a claim which was not raised either before the ITO or before the AAC.” We have heard the rival submissions and perused the 12. material on record. In the light of the above decisions and

Lavjibhai Hirjibhai Sutariya Vs. DCIT, Circle-8, Surat/ITA No’s.531 & 657/Ahd/2015 & 2013/A.Y. 2009-10 Page 7 of 8

respectfully following the decision of Hon'ble Madras High Court we allow to admit the additional evidence/ground raised by the assessee and the issue is set-aside to the file of AO with a direction to admit the additional evidence for fresh consideration of entire assessment. The assessment is therefore denovo set-aside to the file of the AO.

In the result, appeal of the assessee is allowed for statistical 13. purposes.

ITA No.531/Ahd/2015 for A.Y 2009-10 : The grounds raised by the assessee read as under : 14. “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (appeals) has erred in confirming the action of the assessing officer in levying penalty of Rs.15,72,385/- u/s.271(1)(c) of the Income Tax Act, 1961. 2. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.” The assessee has agitated against the confirmation of levy of 15. penalty of Rs.15,72,385/- u/s.271(1)(c) of the Act. As we have set-aside the quantum of appeal to the file of the AO for fresh consideration vide ITA No.657/Ahd/2013 as discussed in the above part of this order. Therefore, the issue on which penalty is levied is stands set-aside to the file of the AO for fresh decision. Therefore, the penalty levied by the AO is no longer survive.

Lavjibhai Hirjibhai Sutariya Vs. DCIT, Circle-8, Surat/ITA No’s.531 & 657/Ahd/2015 & 2013/A.Y. 2009-10 Page 8 of 8

Accordingly, we delete the penalty levied by the AO subject to condition that the AO is free to re-initiate penalty proceedings u/s.271(1)(c) of the Act on finalization of the set-aside proceedings, if the circumstances so warrant or he thinks fit.

In the result, appeal of the assessee stands allowed. 16.

Finally, in the result appeal in ITA No.657/Ahd/2013 is 17. allowed for statistical purposes and appeal in ITA No.531/Ahd/2015 is allowed.

The order pronounced in the open court on 28.03.2019. 18.

Sd/- Sd/- (RAM LAL NEGI) (O.P.MEENA) (�याियकसद�यतथा/JUDICIAL MEMBER) (लेखासद�यकेसम� /ACCOUNTANT MEMBER) सुरत/ Surat, �दनांक Dated: 28th March, 2019/S.Gangadhara Rao, Sr.PS Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat