Per Shri Anand Prakash, Accountant Member - These are departmental appeals. As the facts giving rise to them are common, they are heard together and are being disposed of by a common order for the sake of convenience. The respondent is the only legal heir of the deceased assessee, Smt. Ratni Devi Bagaria; hence he represents her as her representative assessee.
2. These appeals were originally filed by the Commissioner on 20-2-1981, i.e., the last date of the filing of the said appeals. In respect of the assessment year 1963-64, the Commissioner took only one ground of appeal, pertaining to the direction of the learned Commissioner (Appeals) to the WTO that he should allow income-tax liabilities of the assessee which he had originally disallowed. In respect of the assessment years 1964-65 to 1972-73, the Commissioner raised two grounds of appeal, one of which was as above, and the other was with regard to the direction of the Commissioner (Appeals) to allow deduction under section 5(1) (iv) of the Wealth-tax Act, 1957 (the Act), in respect of the house property occupied by the assessee. In respect of the assessment years 1973-74 and 1974-75, one more question, apart from the aforesaid two questions, was raised by the Commissioner regarding the direction of the Commissioner (Appeals) reducing the valuation of property situated at 7, Ashoka Road, Calcutta.
3. On the date when these appeals came up for hearing on 14-7-1981, the department moved an application requesting the permission to raise additional grounds of appeal, pertaining to issues altogether different from what had been made the subject-matter of appeal through the aforesaid original grounds of appeal. For example, through one of the grounds, the Commissioner challenged the order of the Commissioner (Appeals) regarding the computation of the assessees interest in the firm, in respect of the assessment years 1964-65 and 1967-68 to 1974-75. In respect of the assessment years 1966-67 to 1974-75, another question was raised by the Commissioner through the additional ground, touching upon the valuation of the immovable property. Yet through another question the Commissioner wanted to challenge the finding of the learned Commissioner (Appeals) regarding the valuation of jewellery in respect of the assessment years 1969-70 to 1974-75.
4. The circumstances, in which the Commissioner could not raise this additional ground at the time of filing the original memos of appeals, were explained by the learned departmental representative through his written submissions, received by the Appellate Tribunal on 1-3-1982. It was pointed out by the learned departmental representative, inter alia, as follows :
'The assessment years involved are as many as twelve. The scrutiny report of the appellate orders were put up before the Commissioner of Income-tax, WB. XI, on 17-2-1981. Since the CIT (A) followed the order of the Tribunal in W. T. A. No. 2/8/1969-70 for the assessment years 1964-65 in the case of Shri Shiva Prasad Bagaria, it was necessary to go through that order. The above order would to be traced by the ITO, P-Ward. Dist. 1(1). The CIT, W. B. XI, therefore, authorised filing of appeal to save limitation with the following observation :
We may file the appeal as proposed. In the meantime we may call for the CIT (A)s file and look into the Tribunals order referred to by the CIT. In case after perusal of the file if certain additional grounds are to be taken. we may request the B. R. (sic) accordingly. This procedure has been necessary as there is practically no time left for the scrutiny wing of the judicial section to take action in these cases. The W. T. records have not yet been received.
Thereafter, the original appeals were authorised to be filed by the CIT, W. B. XIs letter dt. 22-2-1981. The above observation of the CIT, W. B. XI. was also forwarded to the ITO to trace out the records of Sri Shiva Prasad Bagaria. After diligent search it was found that Sri Shiva Prasad Bagaria. HUF, was assessed by ITO, Bundi Circle and WTA No. 2(Cal.) /1969-70 for the assessment year 1964-65 relied upon by the CIT (A) was traced out. In the light of the above order further scrutiny was made and additional grounds were taken.'
5. On the basis of the above, the learned departmental representative urges the admission of the additional grounds. On behalf of the assessee, the raising of the additional grounds is stoutly resisted and it is pointed out that the time limit laid down for the filing of the appeals would be meaningless if an appellant was allowed to move a series of additional grounds of appeal, for the aforesaid reason at his convenience and will. the appellate procedure laid down the time limit to ensure that all the points about which a person had a grievance was raised in a consolidated manner before the Tribunal within the time prescribed. A person cannot, therefore, file a truncated appeal by raising one or two grounds of appeal only to meet the time limit prescribed and then take its own time for rummaging through his record and formulating additional grounds of appeal, totally unconnected with the subject-matter of the original grounds of appeal. Even rule 11 of the Appellate Tribunal Rules did not justify trying this view of the procedure for filing appeals before the Tribunal.
6. In rejoinder, the learned departmental representative said that rule 11 was very flexible and it ought to be interpreted liberally and that the appellant should not be denied the opportunity of raising additional grounds before the Tribunal, when the appeals came up for hearing. He relied on the following decisions in support of his stand :
CIT v. Gujarat Travancore Agency : 103ITR149(Ker) , Oswal Cotton Spg. & Wvg. Mills v. CIT , CIT v. Oswal Woollen Mills Ltd. and Smt. Dhirajben R. Amin v. CIT : 70ITR194(Guj) .
7. We have given our careful consideration to the rival submissions. Taking into account the facts of the present case, we are not inclined to accept the departmental request that additional grounds of appeal, as raised by the Commissioner through his application dated 14-7-1981, be permitted to be raised. The order of the Commissioner (Appeals) was before the Commissioner, when he authorised the filing of the appeals in this case, to begin with and the grounds of appeal, which have been raised by him subsequently, are all arising out of the aforesaid orders of the learned Commissioner (Appeals). With proper diligence and application of mind, the additional grounds which have been raised on 14-7-1981 could have been raised right at the time when the original appeal was filed. No appellant can be allowed to file piecemeal appeals in the aforesaid manner just to beat the time limit prescribed by law for filing appeals reserving for himself the elbow room for the future to raise additional grounds after scrutinising the case records at leisure. The entire purpose of setting the time limit for filing an appeal would be frustrated, if the aforesaid procedure of filing appeals in a piecemeal fashion is permitted. An appellate order becomes final if not appealed against and this finality of an order is an important legal right which gets vested in the respondent after the lapse of the period of limitation for filing an appeal. This important vested right of a respondent should not be established by a court, unless the appellant is able to show that there was some compelling reason which prevented the appellant from raising these issues, sought to be raised through additional grounds, through the original memos of appeal.
8. The cases relied on by the learned departmental representative do not at al advance the revenues case. In the case of Gujarat Travancore (supra), which has been cited by the learned departmental representative, we find no discussion throwing light on the subject-matter presently before us. All that was in question in that case was whether the Tribunal could allow a new reason for attacking the penalty order before it for the first time. The reason was taken in the grounds of appeal before the AAC, but was to stressed before him. It was held by their Lordships that the Tribunal could do so. IT is not the case in the present appeals. Here altogether new subjects are being sought to be raised through additional grounds. The decision in Gujarat Travancores case (supra) is not authority for the proposition that the grounds should be allowed to be raised.
9. In the case of Oswal Cotton (supra), the original question, which was in dispute, was the computation of the capital base, in terms of rule 1 of the Second Schedule to the Super Profits Tax Act, 1963. The question raised originally for the consideration of the tribunal was whether the amount shown as surplus transferred to general reserve after the end of the previous accounting year and in the middle of the current accounting year could be treated as reserve, as on the first day of the current accounting year, and could also be treated as capital. In the course of the hearing of the appeal, the assessee sought permission to raise another question by way of an additional ground stating that the amount of Rs. 1,29,974 standing under the head provision of dividend and another of Rs. 71,800 standing under the head provision for taxation may also be considered as part of the capital employed in its business under said rule 1 of the Second Schedule. The Tribunal granted permission to raise the said issues. This was challenged before the Punjab and Haryana High Court through reference by the revenue. The Punjab and Haryana High Court upheld the action of the Tribunal and pointed out that an additional ground could be raised for the first time before the Tribunal in view of rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. As will be seen from the facts stated above, the additional question, which the assessee was seeking the permission of the Tribunal to raise, pertained to the original subject-matter, namely, the computation of capital in terms of rule 1 of the Second Schedule. The subject-matter of the additional ground was in no way different from that of original ground of appeal of the assessee. Through the original as well as the additional ground, the assessee was merely seeking to support his computation of the capital. In the present case, however, the Commissioner is seeking to raise questions through additional grounds of appeal, pertaining to subject-matters which are altogether new and unrelated to what was the subject-matter of the original grounds of appeal.
10. The Punjab and Haryana High Court, while giving the judgment in the case of Oswal Cotton (supra), had relied upon their earlier decision in the case of CIT v. Ram Sanehi Gian Chand . In that case also, the facts were more or less similar as in the case of Oswal Cotton (supra). There, an addition was made to the assessees total income, amounting to Rs. 20,004, on account of the difference between the books of account of the assessees branch in which the balance of capital was shown at Rs. 31,459 and the partition document (whereby the family was partitioned) wherein the capital of the branch was shown to be Rs. 51,463. The difference between the two figures was added by the ITO as the assessees income from undisclosed sources. When the matter came up for appeal before the Tribunal, the assessee raised a new contention during the hearing of the appeal that the amount of Rs. 20,004 represented the intangible addition made to the assessees income not only in the present year but also in the earlier assessment year and that, therefore, the impugned addition was not justified. The raising of the additional plea was resisted by the revenue but the High Court turned it down by saying that the Tribunal could allow the new plea to be raised under the power to be spelt out from rule 11 of the Appellate Tribunal Rules. It would be see from the aforesaid facts that in this case also, the additional ground of contention raised pertained to the subject-matter of the original ground of appeal. An altogether fresh and new subject-matter was not permitted to be raised through the additional ground of appeal. Similar was the position in the case of CIT v. Hazarimal Nagji & Co. : 46ITR1168(Bom) . There, it was the respondent who was allowed to set up a new plea altogether, to defend the decision of the AAC which was in his favour. The Bombay High Court expressed the opinion that the contention raised before the Tribunal was one purely, in law, on the facts as they existed all along before the ITO as well as the AAC, though the legal arguments available on those facts were not urged before either of the authorities, and so it was within the jurisdiction of the appellate powers of the Tribunal to permit the assessee-respondent to raise the question, which it sought to raise for the first time before the Tribunal.
11. None of the cases referred to above, has laid down the proposition that an appellant may be permitted to file the original appeal on a new ground only in order to beat the time limit and then take his own time to formulate other grounds of appeal on subject-matters totally unrelated to those which were contained in the original grounds of appeal. It would in our opinion, be a dangerous precedent, if we let in the additional grounds of appeal of the nature presently sought to be raised by the revenue in the present appeals, in the setting of the facts stated above. We, therefore, refuse to entertain the additional grounds raised on behalf of the Commissioner in the present appeals.
12 to 17. [These paras are not reproduced as they involve minor issues.]
18. In the result, all the appeals are partly allowed.