COMMISSIONER OF INCOME-TAX VS MUHAMMAD IQBAL, 1998 PTD-MADHYA-PRADESH-HIGH-COURT-INDIA 834 (1996)

Income-tax---

----Appeal to Appellate Tribunal---Powers of Tribunal---Additional ground of appeal that order of I.T.O. barred by limitation raised before Tribunal for first time---Additional ground admitted by Tribunal---Justified---Indian Income Tax Act, 1961, S.254.

In the assessment year 1978-79, the appeals of the three assessees regarding their objections to the amount of income assessed and interest levied by the Income-tax Officer were dismissed by the Commissioner of Income-tax (Appeals) and second appeals were filed before the Tribunal on the same objections. During the course of hearing of these appeals, the assessees sought permission to raise preliminary objection by way of additional grounds that the order of the Income-tax Officer was barred by limitation and hence a nullity and that as a consequence, all taxes paid by the assessee be directed to be refunded. The Tribunal admitted the additional plea of limitation and allowed the appeals. Thereafter, an application for rectification under section 254(2) of the Income Tax Act, 1961, on the ground that the additional grounds should not have been permitted to be raised, was rejected by the Tribunal. On a reference:

Held, that the Tribunal was justified in admitting the additional grounds of appeal and rightly held that the assessments were barred by limitation. Both the questions were questions of fact.

A. Adhikari for the Commissioner.

B.L. Nema for the Assessee.

JUDGMENT

This is an Income-tax Reference at the instance of the Revenue and the following two questions of law have been referred by the Tribunal before this Court for answer, which read as under:

"(1)Whether on the facts and in the circumstances of the case, the Tribunal was justified in admitting the additional grounds of appeal?

(2)Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessments were barred by limitation?"

The brief facts giving rise to this reference are thus: The assessment year involved is 1978-79 in the cases of all the three assessees, viz., Kalekhan, Muhammad Hanif, Muhammad Idris and Muhammad Iqbal. The appeals of the assessees regarding their objections to the amount of income assessed and interest levied by the Income-tax Officer were dismissed by the Commissioner of Income-tax (Appeals), and second appeals were filed before the Tribunal on the same objections. During the course of hearing of these appeals, the assessees sought permission of the Tribunal to raise the preliminary objection by way of additional grounds that the order of the Income-tax Officer was barred by limitation and hence, is a nullity and that as a consequence of the above ground, all taxes paid by the assessee whether before or after the assessment, be kindly directed to be refunded. Thus, this additional plea of limitation was permitted by the Tribunal and the Tribunal ultimately passed an order on May 22, 1986, and allowed the appeals. Thereafter, an application for rectification under section 254(2) of the Income-tax Act was filed and it was pleaded that the additional grounds should not have been permitted to be raised in all these appeals and that was rejected by the Tribunal. Hence, the aforesaid questions of law have been referred for answer of this Court.

Essentially, it is a question of fact whether the assessments have been made within limitation or not. The question of limitation can be raised at any point of time because it goes to the root of the matter. Therefore, it is wrong to contend that the Tribunal should not have permitted to raise the additional plea of limitation for the first time. It is essentially a question of fact and does not call for any answer of this Court. Hence, both the questions are related to the question of fact and the Tribunal has rightly taken the view in the matter. Hence, both the questions are answered against the Revenue and in favour of the assessee.

M.B.A./1979/FCReference answered.