S.P.GOYAL, J. - (1.) THE Tribunal, Chandigarh has referred the following question to this Court at the instance of the assessee: "Whether on the facts and in the circumstances of the case, the Tribunal was right in law and also acting within its powers in directing the ITO to make the assessment afresh in the light of the five issues framed by the Tribunal".
(2.) THE assessee was registered firm consisting of four partners, namely, Sarvshri Dev Dutt, Mulk Raj, Jagdish Chand and Smt. Smt. Shant Devi. It derived its income from the manufacture and sale of utensils. The assessment for the year 1970-71 was completed by the ITO on 6th Jan., 1973 at a total income of Rs. 36,580/- as against the declared income of Rs. 18,879/-. The assessee claimed a deduction in respect of an amount of Rs. 13,599/- which was stated to have been paid by way of commission to a partnership firm. Mulkraj & Co. (hereinafter called the second firm) consisting of five partners, two of which, namely, Jagdish Chander and Smt. Shant Devi were also partners in the assessee firm. Shakuntla Devi and Santosh kumari, the other two partners of the second firm, were wives, of the two partners of the assessee firm and the fifth partner, Swarn Nagpal, was the daughter of Smt. Shant Devi. The deduction claimed by the assessee was disallowed by the ITO but his order was reversed, on appeal, by the AAC on the basis of the Addl. evidence consisting of five certificates and the fact that such payment had been allowed as deduction in the preceding years. In the appeal by the Revenue before the Tribunal against the said order of the AAC, two contentions were raised. First, that the AAC had not provided an opportunity to the ITO to meet Addl. evidence produced by the assessee at the appellate stage, and second, that the precedents of earlier assessment years could not be relied upon inasmuch as after the death of one Shri Hira Lal on 25th Sept., 1968, who until his death was a partner of the assessee firm as also of the second firm, there was executed no agreement of agency between the two firms like the one dt. 2nd April, 1966 which automatically expired on Shri Hira Lal's death. The Tribunal after hearing the Revenue and the assessee came to the conclusion that these matters required further probe and fresh decision. Consequently, it framed the following issues and remanded the case vide orders dt. 27th Feb., 1974 to the ITO : "(i) In view of the certificates of the 5 parties mentioned above, what was the service rendered to the 'A' firm by the selling agents to producing the orders from the said parties ? (ii) What is the material to indicate the services rendered by the selling agents to the assessee firm and the material in the shape of some documentary evidence which is contemporary in its nature ? (iii) What is the implication of the dissolution of the firm which entered into agreement with the selling agents on 2nd April, 1966 and what is the implication of the dissolution of the firm of selling agents also; both the events happening on the death of Shri Shri Hira Lal in September 1968 ? (iv) Keeping in view the dissolution of the firm as well as of the firm of selling agents by virtue of the death of Shri Hira Lal and the coming to existence of the new firm of selling agents by virtue of freshly executed deed, in 1968, whether the old agreement dt. 2nd April, 1966 continues to subsist automatically or there was any Act of ratification for the same which can be proved by documentary evidence or circumstantial evidence and the documentary or substantial evidence should be contemporary in nature ? and (v) Keeping in view the ratio of the decisions in (1970) 77 ITR 410 and (1958) 30 ITR 618, whether the ITO is competent to disallow a similar claim which has been allowed earlier by his predecessor ?"
(3.) MR . B. S. Gupta, the learned counsel for the assessee, has raised two contentions to challenge the validity of the course adopted by the Tribunal. Firstly, it was contended that no ground having been taken in the memorandum of appeal that the Revenue was not afforded any opportunity lead evidence in rebuttal, to the five certificates produced by the assessee at the appellate stage, the Tribunal had no jurisdiction to go into this matter as it was never the subject matter of the Appeal. In support of his contention, the learned counsel relied on ITO, 'A' Ward, District (A) & Ors. vs. R. L. Rajgharia, CIT vs. Steel Cast Corporation (1977) 107 ITR 683 and CIT vs. G. M. Chennabasappa, (1959) 35 ITR 261 but none of these decisions supports the proposition of law sought to be canvassed by him. It was held in these cases that the Tribunal cannot travel beyond the subject matter of the appeal or make a new case for either of the parties. The matter involved in the appeal in the present case was as to whether the AAC had erred in deleting the addition of Rs. 13,599/- and not the grounds urged in support thereof. The argument of the learned counsel is obviously misconceived and has no merit. Secondly, it was argued that the Tribunal was not justified in remanding the case and should have himself finally decided it on the material available on the record. It was also argued that the Tribunal had no jurisdiction to order a remand to afford on opportunity to the Revenue to lead evidence in rebuttal. Reliance for this contention was placed on Arjan Dass vs. CIT B. L. Choudhury vs. CIT, Orissa (1976) 105 ITR 371 and K. Mohammed vs. ITO, Palght (1977) CTR (Ker) 1 : (1977) 107 ITR 808. A perusal of these decisions would show that in none of them any proposition law, as advanced by the learned counsel, was laid down. It is a basic principle of natural Mr. Justice that if a party at the appellate stage is allowed to lead additional evidence, the opposite party has to be afforded an opportunity to lead evidence, in rebuttal, if it so desires. Moreover, the Tribunal during the course of the arguments asked the assessee certain questions regarding both the matters, namely, the production of the Addl. evidence and the death of Shri Hira Lal, one of the partners, but the assessee showed his inability to give any information. There was, therefore, no option with the Tribunal but to remand the case for fresh decision after making further enquiries on the issues framed . No fault, therefore, can be found with the order of the Tribunal and the question referred to us is accordingly answered in the affirmative. The Revenue shall also be entitled to costs which are assessed at Rs. 250/-;