Sabyasachi Mukharji, J. - (1.) In this application under Article 226 of the Constitution the petitioner has challenged an order and/or direction of the Income-tax Tribunal. The question has arisen in respect of assessment year 1962-63. In that year the assessee had claimed loss of Rs. 23,100 to be set off against his business income. The said loss had arisen, according to the assessee, in share dealing and as such the assessee was entitled to set off the said loss against his other income. The Income-tax Officer in his order of assessment came to the view that the said loss of Rs. 23,100 was speculative loss and as such not entitled to be set off against business gains. The assessee preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner agreed with the view of the Income-tax Officer. The assessee thereupon preferred an appeal to the Income-tax Appellate Tribunal. By an order dated the 16th December, 1969, the Appellate Tribunal disposed of the appeal. The Tribunal came to the conclusion that the departmental authorities were not justified in treating the loss as a speculative loss. Thereafter, the Tribunal observed as follows: "However, the fact remains whether the said loss is a capital loss or a trade loss in the hands of the assessee. It appears that the departmental authorities have not applied their mind to the said question. There is nothing on record to suggest that the assessee was a dealer in shares. Similarly, there is nothing on record to determine the intention of the assessee at the time of purchase of the said block of shares. The block of shares represented investment made by the assessee or the assessee's stock-in-trade. In view of the fact that the departmental authorities have not looked into the said issue, which is material for purposes of finding out whether the loss should be allowed as a deduction to the assessee, we are of opinion that the matter should once again be restored to the file of the Appellate Assistant Commissioner. With this end in view we set aside the order of the Appellate Assistant Commissioner and restore the appeal once again to his file for fresh disposal according to law after investigating the relevant facts,"
(2.) From the aforesaid direction of the Tribunal it is clear that the Tribunal has remanded the matter back to the Appellate Assistant Commissioner to decide whether the loss was capital loss or revenue loss. The question posed in this application under Article 226 is whether the Tribunal has jurisdiction and power to give the aforesaid direction. Section 254(1) of the Income-tax Act, 1961, authorises the Appellate Tribunal after giving both the parties to the appeal an opportunity of being heard "to pass such order thereon as it thinks fit". Therefore, the Tribunal has authority and jurisdiction to pass such order as the Tribunal thinks fit on the appeal before it. The amplitude of the power of the Tribunal is only circumscribed by the subject-matter of the appeal. The question, therefore, is what is the appeal before the Tribunal. This question had been the subject-matter of several judicial pronouncements to some of which my attention was drawn. It is not necessary to refer to all of these. Reliance may, however, be placed on the observations of the Supreme Court in the case of Hukumchand Mills Ltd. v. Commissioner of Income-tax. The Supreme Court observed that the powers of the Appellate Tribunal in dealing with appeals were expressed in Section 33(4) of the Indian Income-tax Act, 1922 (which is in similar terms with Section 254(4) of the present Act) in the widest possible terms. . The word "thereon" in Section 33(4) of the old Act, according to the Supreme Court, restricted the jurisdiction of the Tribunal to the subject-matter of the appeal. Many of these authorities were reviewed by a Bench of this court in the case of Commissioner of Income-tax v. Calcutta Discount Company Ltd. [1971] 82 ITR 941 (Cal), to which I was a party. After reviewing several authorities, Sankar Prasad Mitra J., as the learned Chief Justice then was, observed as follows at page 948 of the report: "The above decisions of the different High Courts in India establish beyond doubt that the word 'thereon' in Section 33(4) is restricted to the subject-matter of the appeal before the Tribunal and the subject-matter of the appeal consists of the memorandum or grounds of appeal, the additional grounds, if any, allowed by the Tribunal, and the grounds, if any, urged by or on behalf of the respondent, to support the order under appeal. If the Tribunal, therefore, does not allow a particular ground to be urged, that ground can never be included in or considered to be part of the subject-matter of the appeal."
(3.) In the instant case the controversy before the Income-tax Officer as well as Appellate Assistant Commissioner was whether the loss of Rs. 23,100 should be treated as speculative loss or business loss. The grounds of appeal filed before the Tribunal by the petitioner were as follows : "Grounds of appeal 1. For that on the facts and in the circumstances of the case the learned Appellate Assistant Commissioner was not justified in confirming the Income-tax Officer in treating the loss of Rs. 23,100 in share account as speculation loss. 2. For that the learned Appellate Assistant Commissioner has erred on both points of law as well as fact.";