Allahabad High Court
Rashtriya Vikas Ltd. vs Commissioner Of Income-Tax And Ors. on 1 May, 1991
Equivalent citations: [1992]196ITR694(ALL)
JUDGMENT K.P. Singh, J.
1. The assessee-petitioner filed a revision petition under Section 264 of the Income-tax Act, 1961, relating to the income-tax assessment year 1975-76 as is evident from annexure III attached with the writ petition.
2. One of the grounds taken in the revision petition was as below :
" Because the petitioner had not made the claim under Section 32(1)(vi) of the Income tax Act, 1961, for the cinema carbon and process carbon manufacturing plant installed in his small-scale unit which came into operation after May 31, 1974, the learned Income-tax Officer as well as the learned Appellate Assistant Commissioner both have erred and acted illegally in not allowing the deduction prescribed in Section 32(1)(vi) of the Income-tax Act, 1961."
3. The revisional court, through its order dated January 22, 1982, repelled the contention raised on behalf of the assessee-petitioner in the following words :
" It is contended by the assessee that the Income-tax Officer has not allowed deduction under Section 32(1)(vi) as well as extra shift allowance. On a query made by me, it was admitted on behalf of the assessee that this claim was not made before the Income-tax Officer nor any such ground was taken before the Appellate Assistant Commissioner. Hence, the assessee is not entitled to raise these grounds for the first time in these proceedings. I am supported by the decision of the Hon'ble Supreme Court in the case of Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1. I, therefore, decline to interfere."
4. Aggrieved by the decision of the Commissioner of Income-tax, Allahabad Range, Allahabad, the assessee-petitioner has approached this court under Article 226 of the Constitution of India.
5. Learned counsel for the petitioner has contended before us that the revisional court has misappreciated the import of the ruling relied upon and reported in Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1 (SC) ; it has also been stressed before us that the aforesaid ruling has been explained and distinguished later on and that the revisional court has patently erred in not examining the claim of the assessee-petitioner on merits.
6. Learned counsel for the Department has tried to justify the impugned judgment of the revisional court. We have considered the contentions raised on behalf of the parties. It is proper to mention here the relevant portion of the finding recorded in Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1 (SC) as below (headnote) :
" Reversing the decision of the High Court, that, as neither was any claim made before the Income-tax Officer regarding the relief under Section 84 nor was there any material on record in support thereof, and from the mere fact that such a claim had been allowed in subsequent years, it could not be assumed that the prescribed conditions justifying a claim for exemption under Section 84 were also fulfilled, the Tribunal was not competent to hold that the Appellate Assistant Commissioner should have entertained the question of relief under Section 84 or to direct the Income-tax Officer to allow the relief."
7. It is noteworthy that, in the aforesaid finding, the emphasis is that there is no material on the record in support of the contention raised. It appears that this aspect of the matter has escaped the notice of the revisional court in repelling the contention raised on behalf of the assessee-petitioner.
8. In Subhash Chandra Sarvesh Kumar v. CIT [1981] 132 ITR 619, a Bench of this court had considered the effect of the ruling reported in Addl CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1 (SC) and has observed as below (at page 621) :
" The Supreme Court made it clear that they were not dealing with a case where there was some material on the record sustaining the claim, though made for the first time before the appellate authority. It was pointed out that in the case before them neither any claim was made before the Income-tax Officer nor was there any material on the record to support such a claim. On such facts, the appellate authorities could not direct the Income-tax Officer to entertain the claim. In the present case, the Commissioner has not approached the problem from the correct legal view-point. He should have considered whether there was material or particulars on the record to sustain the claim. If so, the fact that the claim was not formally made in the return of income or while the proceedings were pending before the Income-tax Officer would not be a substantial obstacle to the entertainment of the claim. Merely saying that the Income-tax Officer could not grant relief suo motu is not sufficient for a valid disposal of the revision."
9. In the case before us, the revisional court has only relied upon the ruling in Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1 (SC) and has negatived the claim of the assessee-petitioner without examining the contention raised on behalf of the petitioner that there was material enough to sustain the plea raised on behalf of the petitioner before the revisional court. In paragraph 8 of the writ petition, it has been asserted that the relevant material necessary for grant of depreciation under Clause (vi) of Section 32(1) of the Income-tax Act, 1961, was on the record of the Income-tax Officer for the assessment year 1975-76. No counter-affidavit has been filed in this case. However, since this question is to be re-examined by the revisional court in the light of our observation, non-filing of the counter-affidavit is immaterial. In Parekh Brothers v. CIT [1984] 150 ITR 105, a Bench of the Kerala High Court has observed as below :
" Accordingly, where an assessee claimed weighted deduction in an application under Section 264, although he had not claimed it in the original assessment proceedings or in appeals therefrom :
Held, that the Commissioner was bound to consider the claim. (See headnote at page 106)."
10. Relying upon the aforesaid ruling, learned counsel for the assessee-petitioner contended before us that the revisional court has patently erred in not deciding the claim of the assessee-petitioner as put forward in ground No. 1 of the revision petition.
11. Since the revision petition is under Section 264 of the Income-tax Act, 1961, we think that the ruling of the Kerala High Court fully supports the claim of the petitioner.
12. Recently, their Lordships of the Supreme Court have considered in Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 ; AIR 1991 SC 241, the scope of the ruling in Addl CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1 (SC), and they have observed as below in paragraph 7 at page 245, col. 2 (of AIR 1991 SC) and at page 695 of 187 ITR :
" There may be several factors justifying the raising of such a new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied, he would be acting within his jurisdiction in considering the question so raised in all its aspects ; of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose."
13. In paragraph 8 of the aforesaid ruling, it has been indicated that (at page 695 of 187 ITR) : " the Appellate Assistant Commissioner was entitled to admit new grounds or evidence either suo motu or at the invitation of the parties. If he is acting on being invited by the assessee, then there must be some ground for admitting new evidence in the sense that there must be some explanation to show that the failure to adduce earlier the evidence sought to be adduced before the Appellate Assistant Commissioner was not wilful and not unreasonable. This view is reasonable and it finds favour with us ".
14. In the present case, we think that the revisional court should have examined as to whether there was material on the record to sustain the pleas raised on behalf of the assessee-petitioner and whether the assessee-petitioner was entitled to adduce evidence before the revisional court in support of his contention. Since the revisional court.has failed to examine the claim of the assessee-petitioner on merits, we think it has patently erred in dismissing the revision petition filed by the assessee.
15. For the foregoing discussions, this writ petition succeeds and the impugned judgment of the revisional court contained in annexure 4 is hereby quashed. The case is sent back to the revisional court for deciding the revision petition on merits in the light of the discussions made above. There will be no order as to costs.