P.K. Mehta, Accountant Member - (1.) THE assessee-firm is in appeal for the assessment year 1979-80 urging a single grievance against the order of the Commissioner (Appeals) in not admitting an additional ground raised before him about the legality of the assessment on the ground of limitation. THE Commissioner (Appeals) has dealt with this issue in paragraphs 4, 4.1 and 4.2 of his order and held that the assessee cannot challenge the whole assessment on the ground of limitation when a limited issue only had been remanded to him for decision by the Tribunal.
(2.) Shri N.K. Sud contended that even when the Tribunal had vacated the findings of the Commissioner (Appeals) on the limited issue of the assessee's claim for deduction of Rs. 26,246, being the liability on account of leave with wages and restored the matter to his file for fresh disposal, the legality of the whole assessment on the ground of limitation could be challenged through the additional ground. It was further contended that a time-bar assessment is void ab initio and its validity could be challenged at any stage of the proceedings. He cited in support a Gujarat High Court decision in the case of P.V. Doshi v. CIT [1978] 113 ITR 22 and referred to a decision of the Delhi Bench of the Tribunal in Madan Mohan Lall Shriram (P.) Ltd. v. I AC [1985] 12 ITD 21. On behalf of the revenue, reliance was placed on the order of the Commissioner (Appeals). On a careful consideration of the rival submissions, we are inclined to uphold the view taken by the Commissioner (Appeals) about not admitting the additional ground moved before him. The Commissioner (Appeals) in paragraph 1 has reproduced the relevant part of the order of the Tribunal. In that order, the relevant observation of the Tribunal is as under : We would, therefore, vacate the finding of the Commissioner (Appeals) on this issue and restore the matter to his file for fresh disposal. The issue was the assessee's claim for deduction of liability on account of leave with wages amounting to Rs. 26,246. It is apparent that the Tribunal had disposed of the other points arising from the assessment and only on this one issue the findings of the Commissioner (Appeals) were vacated and the matter restored to his file for fresh disposal. As to what is the scope of such limited proceedings on remand by an appellate authority certain decisions are available. A decision of the Bombay High Court in the case of CIT v. Indo-Aden Salt Works Co. [1959] 36 ITR 429 deals with exactly the point arising in this case, namely, the scope of appellate proceedings before the AAC when a particular point was remanded by the Tribunal to him. It was held in that case that the order of the Tribunal, when read in the proper context, restricted the scope of enquiry by the AAC only to the question of merits affecting the claim of the assessee for relief from super tax and, therefore, the AAC had no jurisdiction to issue the notice of enhancement and to withdraw the relief in respect of income-tax granted by the ITO under Section 25(4) of the Indian Income-tax Act, 1922. There are three decisions available about the scope of proceedings before the ITO when a particular point is remanded to him by the AAC. There are two decisions of the Calcutta High Court one in the case of Katihar Jute Mills (P.) Ltd. v. CIT [1979] 120 ITR 861 and the other in the case of Surrendra Overseas Ltd. v. CIT [1979] 120 ITR 872. In the case of Katihar Jute Mills (P.) Ltd. (supra), the AAC had set aside the assessment on one particular issue but the assessee in the course of those proceedings on the basis of a Supreme Court decision on another issue sought to raise that issue but the High Court held that it was not open to the assessee. There is a third decision of the Andhra Pradesh High Court taking a similar view in CIT v. Bandaru Sanyasi Raju [1981] 127 ITR 453. The line of reasoning in all the four cases is of similar nature in restricting the scope of proceedings to the limited point on which remand was made. The Gujarat High Court decision relied upon by the assessee is distinguishable on facts. That was a case of reassessment being remanded by the Tribunal to the ITO and the issue mainly turned on the waiver of the mandatory conditions in respect of issuing of valid notice under Section 147 of the Income-tax Act, 1961 ('the Act') on which the jurisdiction to frame the reassessment rested. It cannot be said to be a direct authority on the issue before us. There is only an incidental remark about the only point left open by the Tribunal and the real issue considered was the aspect of finality of the order of the Tribunal. On the other hand, in the assessee's case, there is no question of any reassessment and what has happened is the Tribunal restoring one point decided by the Commissioner (Appeals) for fresh disposal to him and not to the ITO. Again it will be interesting to note the observations of the High Court at page 33 about an assessee waiving the provisions about limitation in the context of the Supreme Court decision in the case of Director of Inspection of Income-tax (Investigation) v. Pooran Mall & Sons [1974] 96 ITR 390. The assessee here wants to raise a question of limitation. The decision of the Tribunal cited by the assessee also does not advance the assessee's case in our opinion. We will, therefore, prefer to follow the direct authorities of the High Courts referred to earlier against the assessee and sustain the action of the Commissioner (Appeals) in rejecting the additional ground moved before him.
(3.) THE appeal of the assessee fails and is dismissed.;