STUDY CIRCLE MEETING Thursday, 16 th April, 2015 Conference Hall, Consultair Investments Pvt. Ltd. Churchgate. - Ajay Singh, Advocate

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1 THE CHAMBER OF TAX CONSULTANTS 3, Rewa Chambers, Ground Floor, 31, New Marine Lines, Mumbai Tel.: / Fax: office@ctconline.org Visit us at: Website: STUDY CIRCLE MEETING Thursday, 16 th April, 2015 Conference Hall, Consultair Investments Pvt. Ltd. Churchgate. - Ajay Singh, Advocate CHART FOR APPEALS UNDER CHAPTER XX PARTICULARS CIT(A) TRIBUNAL HIGH COURT INCOME TAX Sec. 246 to 251 Sec. 252 to 255 Sec. 260A & 260B 1.Orders Appealable Mentioned u/s.246a Mentioned u/s Mentioned U/s. 260A 2.Time Limit of Filing the Appeal. Within 30 Days from the date of Receipt of Notice of Demand. Within 60 Days from the date of Service of CIT(A)'s order. 3.Prescribed Form No. Form No. 35. (As per Rule 45) Form No. 36. (As per Rule 47(1)) 4.Who can file Appeal Aggrieved Assessee Aggrieved Assessee or Commissioner. 5.Fees Payable Rs.250/- where the Rs.500/- where the Assessed Income is Income assessed is Rs.1 lakh or less; more Rs.1 lakh or less, than Rs.1 lakh but less Rs.1,500/- where the than Rs.2 lakh- income assessed is Rs.500/- and more more than Rs.1 lakh than Rs.2 lakh- but less than Rs.2 lakh Rs.1000/- and 1% of assessed income, subject fee maximum of Rs.10,000/- where the income assessed income is more than 2 lakhs. Within 120 days from the date of Communication of Appellate Tribunal order. As per High Court original side Rules. Aggrieved Assessee or Commissioner. Ad-volarem fee leviable on the amount in dispute, i.e. the difference between the amount of tax actually assessed and the amount of tax admitted by the assessee as payable by him, subject to a maximum of Rs.10,000/- (only by assessee). {As per Article 16A to Schedule I of the Bombay Court Fees Act}. 1 P a g e

2 6.Documents to be Filed. Form No.35, Grounds of Appeal, Statement of Facts, Copy of Order against which appeal is preferred, Notice of Demand and original challan of filing fees. Form No.36, Grounds of Appeal, Copy of Order against which appeal is preferred, & Documents filed before the CIT(A) as referred in the column. Memo of Appeal; Statement of facts, orders of the lower authorities and documents relied upon the Tribunal and lower authorities. 7. Documents to be Submitted in : Duplicate. Triplicate. Duplicate. One copy to be served on Respondent. 8.Place of Filing. CIT(A) as mentioned in the Notice of Demand. Registrar of the Appellate Tribunal. Respective High Court. Cross Objection. 1.Prescribed Form No. --- Form No. 36 A. (As per Rule 47(1)) Rule 22 of order XLI of CPC 2.Time Limit for filing the Cross Objection. --- Within 30 days of the receipt of the notice of appeal filed by other Within 30 days form date of service of the appeal. party. 3.Fees Payable. --- No Fees Payable. --- Stay Application 1. Fees Payable --- Rs.500/- (w.e.f.1/10/1998) [per application as per the decision of the Documents to be filed. Miscellaneous Application 1) Fees Payable 2) Documents to be filed Tribunal] --- Stay Petition, Rejection order for stay by CIT & Assessing Officer Affidavit, orders of lower authorities & documents furnished to them. --- Rs.50/- (w.e.f. 1/10/98) --- Miscellaneous Application Petition, order of the Tribunal, Affidavit P a g e

3 APPELLATE PROCEEDINGS Shri Ajay R. Singh Advocate INTRODUCTION Article 265 of the Constitution of India, provides as under : Taxes not to be imposed save by authority of law No tax shall be levied or collected except by authority of law. Representation before the Assessing officer and first appellate authorities are foundation to the appeal. For making a good representation we should know the facts, law and procedure. Assessment as it is understood is a process of determination of any liability under the provision of the tax laws (sec 2(8)). Right of Appeal is a creature of Statute. A person has no inherent right of appeal and hence, it cannot come under the category of fundamental rights. No Appeal lies unless it is provided by the statute. (CIT vs. Garware Nylons Ltd. 212 ITR 242 Bom). An appeal is a continuation of assessment proceedings. Assessment proceedings complete when appeal against order of assessment is decided by Tribunal CIT vs. Mayur Foundation (2005) 274 ITR 562(Guj.) A. FIRST APPEAL: Section 246 confers the right to appeal before the CIT(A) in respect of orders specified u/s. 246A of the Income-tax Act, The relevant Rules are provided in Rules 45 to 47 of Income Tax Rules, WHO CAN FILE APPEAL? - AGREED ASSESSMENT 1.1 "Every Assessee aggrieved" by any of the orders mentioned in Section 246 of the I.T. Act, 1961 has a right to prefer an appeal. In Rameshchandra & Co. v. CIT 168 ITR 375 (380) (Bom), it has been held that where an assessee has made a statement on facts, there can be no grievance if he is taxed on the basis of that statement. As there is no grievance, there can be no appeal. When an Assessing Officer states in the Order that the Assessee agreed for addition, he cannot file an appeal unless he challenges the observation of the Assessing Officer by filing Affidavit - Western India Automobiles v. CIT 112 ITR 1048 (Bom). 3 P a g e

4 1.2 Assessee should make application u/s.154 of the Act, challenging the observation of the Assessing Officer and should also file an appeal specifically urging that he has not agreed for additions and the same should be supported by an Affidavit. 1.3 It has been held by High Courts that even a third party has a right of appeal if, as a result of an order he is saddled with a liability for any tax or other sum (See Section 2(7) of the Act) Kikabhai Abdulali Vs. ITAT Bombay 32 ITR 762 (Bom); Benoy Kurian vs. Agrl. ITO 234 ITR 617 (Ker); CIT v. N. Ch. R. Row & Co. 144 ITR 557 (Cal), CIT vs. Ambala Flour Mills. (1970) 78 ITR 256 (SC). A. A person who is beneficially entitled to the income in respect of which he is assessee through a trustee or agent or court of wards. Shrimant Govindrao Narayanrao Ghorpode vs. CIT (1963) 48 ITR 54 (Bom), Inder Singh Gill vs. CIT (1963) 47 ITR 284 (Bom) B. Where the assessee is dead, through legal representative; Rajah Manyam Meenakshamma vs. CIT (1956) 30 ITR 286 (AP) C. A coparcener, where the assessee has claimed to be a HUF: Chandumal Pannalal vs. CIT (1965) 58 ITR 711 (Cal.) D. Levy of interest u/s. 234B/234C is appealable on the ground that assessee denies his liability to be assessed. Jalgaon Dist. Central Co-op Bank Ltd. Vs. ITO [70 ITD 290 (Pune)] (Central Province Manganese Ore Co. 160 ITR 961 (SC) E. Certificate granted u/s 197? Section 248 provides for appeal by a person denying liability to deduct tax i.e. for orders u/s 195. The Bombay High Court held that no appeal lies from the order u/s 197 u/s 248 CIT vs. Garware Nylons Ltd. 212 ITR 242 (Bom) 4 P a g e

5 F. Protective assessment? In following cases, it has been held that even against Protective Assessment, Appeal can be filed. 54 ITD 471 (Delhi) (SB) E. Appeal can be filed by the director of erstwhile company, whose name was struck off the register by the Registrar of company.(s. 140,246,Companies Act 1956, S. 560). Ajay Ispat (P) Ltd v. ITO ( 2012)136 ITD 145(Ahd.)(Trib.) G. After revision u/s. 264 Appeal not maintainable u/s. 246A. Orissa Rural Hsg Development Corporation Ltd (2012) 343 ITR 316 (Orissa) 1.4 The Hon ble Bombay High Court in case of Nirmala L. Mehta vs. A. Balasubramanin CIT (2004) 269 ITR 1 (Bom) held that there cannot be any estoppel against statute. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. [Also see Balmukund Acharya 310 ITR 310 (Bom)]. Same income cannot be taxed twice R Natarajan (2012) 135 ITD 55 (TM )(Chennai) 1.5 Order Giving effect to Appellate order : Appealable : An order giving effect to the appellate order bears the same characteristic as the original order against which appeal was filed. a) CIT vs. Industrial Machinery Manufacturing P. Ltd. (2006) 282 ITR 595 (Guj.) b) Bakelite Hylam Ltd. vs. CIT (1988)171 ITR 344(AP). c) Where the Department denies its liability to pay interest on refund of self assessment tax, the issue is appealable : Sec. 244A Dy. CIT vs. BSES Ltd. (2008) 113 TTJ 227 (Mum)(para 19.6). d) Order giving effect to revision order u/s. 264 Appealable Jasbir Singh v/s. ITO (2012) 76 DTR 36 (Asr). Trib. e) Gausia Cold Storage Pvt. Ltd vs. ACIT (ITAT Mumbai) S. 264: ITAT entertains appeal against order passed by CIT u/s P a g e

6 2. PROCEDURE : GROUNDS OF APPEAL & STATEMENT OF FACTS: 2.1 An appeal should be filed within a period of 30 days of the service of the Assessment order alongwith notice of demand. The same should be concise without any argumentative or narrative. Language should not be very harsh. The grounds should highlight the main controversy in issue. The grounds should not be vague, general or too lengthy. Specific ground to be taken for each and every issues involved. 2.2 The Statement of Facts should be filed before the Commissioner (Appeals) wherein facts can be narrate. It is advisable to file elaborate statement of facts covering all issues and wherever possible, alongwith details filed before Assessing Officer and the case laws. Filing of detailed statement of facts, along with supporting case laws will help the Assessee, especially when appeals are disposed off by the first appellate authority exparte. If certain factual errors are there in the order the same must be raised in the grounds of appeal and statement of facts. 2.3 DELAY IN FILING APPEAL: An application for condonation of delay alongwith affidavit stating the reasons for delay should be filed alongwith the appeal. The Hon ble Calcutta High Court in Charki Mica Mining Co. Ltd. vs. CIT (1978) 111 ITR 193 has held that the limitation period commences from the date of receipt of notice of demand by the Assessee and not from the date of receipt of Assessment order. Affidavit should be properly drafted and notarized. (Kunal Surana vs. ITO (ITAT Mumbai) May 28th, 2013.) 2.4 In Collector of Land Acquisition v. Mrs. Katiji & Others 167 ITR 471 (SC) the Hon'ble Supreme Court has held that the Courts should have pragmatic & liberal approach in admitting the appeal beyond the period of limitation. Also see N. Balkrishnan Vs. M. Krishnamurthy (1998) 7 SCC 123, State of Nagaland vs. Lipuk A.O (183) E.L.T. 337 (SC), Earthmetal Electricals (P.) Ltd. vs. ITO (2005) 4 SOT 484 (Mum) and Bombay Mercantile Co-op. Bank vs. CBDT (2010) 45 DTR 377 (Bom). 2.5 Legal Principle culled out from various decision on condonation of delay are. 6 P a g e

7 a. The expression sufficient cause must receive a liberal construction so as to advance substantial justice and generally delays in preferring the appeals are required to be condoned in interest of justice. b. The primary function of any quasi-judicial body is furtherance of administration of substantial justice. c. Pragmatic justice oriented approach is required and not the technical detection of explanation of every days delay. d. Length of delay is immaterial. e. A litigation does not stand to benefit by resorting to delay, therefore a justice oriented approach is required by courts. f. Since explanation of assessee did not smack mala fide or was not put forth as a dilatory strategy, delay in filing appeal was to be condoned. g. In every case of delay there can be same lapses on the part of the litigant concerned, but that alone is not enough to shut the door against him. h. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. i. In matters of condonation of delay a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities. 3. PAYMENT OF TAX MANDATORY BEFORE FILING APPEAL. 3.1 Section 249(4) provides that no appeal shall be entertained unless at the time of filing the appeal the assessee has paid the taxes due on the returned income or where no return is filed, an amount equal to the amount of advance tax which was payable by him. The tax 7 P a g e

8 due does not include interest element. CIT vs. Manoj Kumar Beriwal (2009) 316 ITR 218 (Bom); 3.2 Case Laws: Once the assessee has complied with the provisions Appeal be heard on merit: i) Subbiah Nadur & Sons vs. ACIT 84 ITD 55 (Chennai) ii) Mr. Purshottam G. Budhwani vs. ACIT ITA No. 354/M/2009, dt. 21/1/2010, Bench C iii) Anant R. Thakore vs. ACIT (2006) 5 SOT 298 (Mum) v) Bhumiraj Constructions v. Addl. CIT (2011) 131 ITD 406 (Mum.)(Trib.) 4. CAN AN APPEAL BE SIGNED BY AN ADVOCATE / CHARTERED ACCOUNTANT / AUTHORISED REPRESENTATIVE 4.1 As per Rule 45 of the Income Tax Rules, 1961, the form of appeal i.e. Form No. 35, the Grounds of Appeal & the form of Verification appended thereto shall be signed & verified by the person who is authorised to sign the return of income under section 140 of the I.T. Act, Thus it can be inferred that only in the case of an individual or a company which is not resident in India, the return can be signed by a person who holds a valid power of attorney, which shall be attached to the return. 4.2 In the following cases, it has been held that an appeal signed by an Advocate/C.A. is valid -Mrs. Leezo Salidan v. CIT 16 TTJ 243 (Bom) Pyrkashim Stores v. CIT 9 ITD 93 (Bom) Hariledge v. ITO 29 Taxman 122 (Bom) (Tribunal) RajendraKumar Maneklal Sheth (HUF) v. CIT 213 ITR 715 (Guj).Yusuf Husain v/s. ITO dt 5 th Feb 2013( Mum)( Trib). 4.3 Defect in Appeal: Defect in Appeal can be rectified by an amendment. The Assessee should be given an opportunity to rectify the defect: a) Malani Trading Co. vs. CIT (2001) 252 ITR 670 (Bom) b) BDA Ltd. vs. ITO (TDS) (2006) 281 ITR 99 (Bom) (Aurangabad Bench) 8 P a g e

9 c) CIT vs. Calcutta Discount (1973) 91 ITR 8 (SC) d) Prime Securities Ltd. vs. ACIT (2009) 317 ITR 27 (Bom) 5. Hearing: Assessee should file written submission and paper book at time of hearing. 5.1 The CIT(A) has power to make such further inquiry as he thinks fit or may direct the A.O. to make further inquiry and report to him. Assessee is entitled to reply to the remand report. 5.2 The CIT(A) has to pass a speaking order dealing with each grounds of appeals. The CIT(A) should pass the order on merits even though heard exparte / or assessee did not appear. - CIT vs. Chennaippa 74 ITR 41 (SC). 5.3 The CIT(A) cannot apply Multiplan (India) Ltd. 38 ITD 320, decision and dismiss the assessees appeal exparte for non appearance. Gujarat Themis Biosyn ltd v/s. Jt CIT 74 ITD 339 (Ahd). 6. ADDITIONAL EVIDENCE If the assessee is been prevented by good, sufficient or reasonable cause or adequate time is not allowed such fresh evidence can be placed before the appellate authority by making a Application U/R. 46A. Additional evidence has to be filed in duplicate. Ensure that CIT(A) serves one copy to the Assessing officer and obtains a remand report. The CIT(A) has to give a copy of remand report and further an opportunity to reply to the remand report.if the assessee is been prevented by good, sufficient or reasonable cause or adequate time is not allowed such fresh evidence can be placed before the appellate authority by making a Application U/R. 46A. - Effect of Rule 46A Opportunity to A.O. to examine document and evidence. Rule embodies provision of natural justice: CIT vs. Shree Kangra Steel Pvt. Ltd. (2010) 320 ITR 691 (HP) 6.1 The Commissioner (Appeals) would not be justified in rejecting additional evidence produced before him Smt. Prabhavati S. Shah v. CIT 231 ITR 1 (Bom); Dwarika 9 P a g e

10 Prasad v. ITO 63 ITD 1 (Patna)(TM). g) Manish Build Well Pvt Ltd. (2012) 204 Taxman 106 (Delhi)HC ( Considering Sec250(4) of the Act) 6.2 Under Rule 46A(4) the CIT(A) on its own discretion can ask the assessee to produce documents or evidence. Additional evidence gathered by the CIT(A) on his own is not required to be produced before A.O. for his comments. a) ITO vs. Indl. Roadways (2008) 305 ITR 219 (Mum(AT). b) ACIT vs. Prime Telesystems Ltd. (2007) 11 SOT 361 (Del.) c) Dy. CIT vs. Thoresen Chartery Singapore (2009) 118 ITD 416 (Mum) e) CIT vs. K. Ravindranathan Nair (2004) 265 ITR 217 (Ker.) f) Jai Hind Co operative Sugar Mills Ltd (2011) 335 ITR 43 (P&H) 6.3 Permission to bring additional document can be granted in exercise of discretion of Court to achieve ends of justice. (Smt. Shantibai K. Vardhan & Ors. Vs. Ms. Meera G. Patel & Anr. AIR 2009 (NOC) 904 (Mum) Filing of Translated copy of document in Court is not additional evidence. (Prahlad Singh vs. Suraj Mal & Ors AIR 2009 Raj. 53) 7. RAISING ADDITIONAL GROUNDS 7.1 Sub-section 5 of Section 250 gives power to the Commissioner (A) to allow the appellant to raise additional ground if he is satisfied that the omission of that ground was not wilful or unreasonable. a) Jute Corp. of India Ltd. vs. CIT 187 ITR 688 (SC) (FB) b) Heinrichde Frics GMBH vs. Jt. CIT 281 ITR 18 (Mum)(AT) 8. JURISDICTION POINT. 8.1 The Assessee can raise the jurisdiction point at any time. - Union of India v. Rai Singh Dal Singh 88 ITR 200 (SC), CIT v. Dumravan Cold Storage & Refrigerators Services 97 ITR 137 (Pat), The Assessee can raise the jurisdictional point before the Tribunal also inrespect of reassessment proceedings. As it is a question of law which goes to the root of the matter. Inventors Industrial Corporation Ltd. vs. CIT 194 ITR 548 (Bom). Invalid jurisdiction cannot be corrected by Sec. 292B [Saraf Gramodyog Sanshtan 108 ITD 115 (Agr.)]. Technical defect in notice or proceedings would not render proceedings 10 P a g e

11 invalid. However, jurisdictional defect cannot be cured - CIT v. Norton Motors 275 ITR MAKING A CLAIM FOR THE FIRST TIME BEFORE APPELLATE AUTHORITY 9.1 If there was evidence or material on record, then only a claim made for the first time be entertained by the Appellate Authority. CIT v. Western Rolling Mills Pvt. Ltd. 154 ITR 54 (Bom). 9.2 The Board have issued instructions from time to time in regard to the attitude which the Officers of the Department should adopt in dealing with assessees in matters affecting their interests and convenience. Circular No.14(XL-35) of 1955, C.No.13(207)-IT/50, dated 11th April, 1955, states that the Officers of the Department must not take advantage of ignorance of an assessee as to his rights. 9.3 However the decision of S.C. in the case Goetze (India) Ltd vs. CIT 284 ITR 323 (SC) has held that it was open to the assessee to raise new points of law before the Tribunal. The Tribunal has such powers u/s. 254 of the Act A.O. is bound to assess the correct income and for this purpose the Assessing officer may grant relief s / refund sou motu or can do so on being pointed out by the assessee in the case of assessment proceedings for which assessee has not filed a revised return. Case Law After Considering Goetze (India) Ltd. (Supra) a) CIT v. Pruthvi Brokers & Shareholders Pvt. Ltd (2012) 208 Taxman 498/252 CTR 151(Bom.). 9.5 However, the A.O. cannot entertain a claim for deduction otherwise than by filing a revise return. 9.6 In case where assessment is not pending and the time available for filing a revised return is also expired, the only remedy is to seek extension of time u/s. 119(2) from the Board 11 P a g e

12 for filing a delayed return in case of genuine hardship. (See Bombay Mercantile Co-op Bank vs. CBDT (2010) 45 DTR 377 (Bom). The assessee can also file rectification application u/s. 154 on facts of the case or make a application to CIT u/s POWERS OF THE CIT(A) 10.1 Power to Stay the Recovery Proceedings In following cases it has been held that the CIT(A) has the power to Stay the Recovery Proceedings. City and Industrial Development Corporation of Maharashtra Ltd v. ACIT (2012) 343 ITR 102 (Bom.), Balaji Universal Tradelink (P) Ltd. v. UOI (2012) 76 DTR 132 (Bom.). Haresh Ravji Majithiya v/s.acit (2014) 227 Taxman 211(Mag) BOM. HC.; Nikhil Kelkar v/s. ITO (2014) 225 Taxman 196 (Mag) Bom. HC. The Hon ble S.C. in the case of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC) held that power to grant stay is incidental or ancillary to its appellate jurisdiction. In Employees Provident Fund Organization vs. ACIT (ITAT Delhi).S. 253(1)(a): An appeal can be filed before the Tribunal against an order of the CIT(A) rejecting the stay application The guidelines to the Income Tax authorities while deciding stay application is provided by Bombay High Court in. - KEC International Ltd. vs. B.R. Balakrishnan & Ors. (2001) 251 ITR 158 (160) (Bom) - Mahindra & Mahindra Ltd. vs. UOI 1992 (59) ELT 505 Bom. - Strictures were passed against dept for disposing stay application without proper reasons. Paramount Health Services v/s. ACIT (2010) 37 DTR 377 (Bom) ; SRAv/s. DIT (E)(2014)112 DTR 209 (Bom)(HC) Power of Enhancement The CIT(A) has power to confirm, reduce, enhance or annual the assessment; confirm or cancel or vary or enhance or to reduce the penalty and may pass such orders in the appeal as he thinks fit.. However the CIT(A) should give reasonable opportunity of hearing to 12 P a g e

13 the assessee. Notice is mandatory, Infrastructure Development Finance Co.ltd. 213 Taxman 28 Mag. (Mad) (HC). The filing of an appeal may lead to grave consequences of enhancement of assessment. The Explanation provides that CIT(A) may consider and decide any matter arising out of the proceedings, notwithstanding that such matter was not raised before the CIT(A). Thus CIT(A) powers are very wide. The scope of his powers is conterminous with that of AO. He can do what AO can do and can also direct him to do what he has failed to do. [CIT Vs. Kanpur Coal Syndicate 53 ITR 225(SC)] However he has no jurisdiction to assess a source of income which is not disclosed either in the ROI or in the assessment order. Thus it is not open to him to travel outside the record for finding out new source of income. [CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria - 66 ITR 443(SC)] In CIT Vs. Nirbheram Daluram [224 ITR 610] the Supreme Court held that the CIT(A) can make addition in respect of new source of income if it is not considered by AO. No power to consider validity of Act or Rules [CIT Vs. Straw Products Ltd. 60 ITR 156 (SC)] "Any matter arising out of the proceedings. It extends to all matters arising out of the proceedings which might have been considered and determined by the AO in the course of the assessment although such matters might not have been raised by the assessee. The competence of the appellate authority ranges over the whole assessment proceedings without restrictions on him. His jurisdiction is therefore, not confirmed to the subject matter of the appeal but extends to the subject matter of assessment. Ugar Sagar Works Ltd. Vs./ CIT -141 ITR 326 (Bom). Issues which are subject matter of revision u/s. 264 cannot be enhanced by commissioner appeals, Hindustan Colas Ltd. (2013) 140 ITD 277 (Mum). Commissioner (Appeals) has power to consider such items which was considered by the Assessing Officer and enhance assessment. Items considered by the AO but no addition made. It was held that commissioner appeal has power to consider such items and enhance assessment. Accordingly addition made by the Commissioner (Appeals), on the basis of analyzing the documents which was confirmed by the Tribunal was held to be proper. (Block Period to ) 13 P a g e

14 Gurinder Mohan Singh Nindrajog v. CIT (2012) 348 ITR 170 (Delhi)(High Court); Enhancement Income from same source of income - Held valid. Qualcomm Incorporated v/s. ADIT 85 DTR 156 (Del)(URO) 10.3 The CIT(A) powers u/s. 251 are vide enough to include the power to examine all matters covered by the assessment order and to correct the assessment. The Powers of CIT(A) are conterminous with those of the Assessing Officer. 166 ITR 494 (MP) Indermal Natwarlal vs. CIT 206 ITR 574 (Guj) CIT vs. Ahmedabad Crucible Co. 131 ITR 451 (SC) Kapoorchand Shrimal vs. CIT 305 ITR 310 (Chennai) AT Ansaldo Energia SPA vs. Astt. DIT (2012) 138 ITD 355 (Mum.)(Trib.) Ratan J. Batliboi v. ACIT 10.4 However the jurisdiction of the appellate authority u/s. 251 is strictly confined to the Assessment order of the particular year under appeal as held in ITO vs. Murlidahr Bhagwan Das 52 ITR 335 (SC), - Power of CIT (A) Finding Direction Only in respect of year under appeal. Sun Metal Factory I Pvt Ltd v/s. ACIT (2010) 124 ITD 14 (Chennai). - Power of CIT Appeal on remand by ITAT on specific issue CIT Appeal in second round cannot raise a new plea. Ritz Theatre v/s. ITO 194 Taxman 544 Del. - Matter remanded by ITAT with set out parameters, CIT (A) cannot examine the entire nature of payment. White line Chemicals (2012) 216 Taxman 242 (Guj)(HC) B. PROCEEDINGS BEFORE THE I.T.A.T 1 INTRODUCTION The Income Appellate Tribunal (in short the Tribunal ) was set up on 25 th January, 1941, as an independent quasi-judicial body functioning under the Union Ministry of Law and Justice. The Supreme Court in Ajay Gandhi & Anr. Vs. B. Singh & Ors. (2004) 186 CTR (SC) 506 : (2004) 265 ITR 451 (SC) observed : The Tribunal exercises judicial functions and has the trappings of a Court. 14 P a g e

15 ITAT v/s. V. K Agarwal 235 ITR 175 (SC)- Contempt of court Act. In the case of J.C. Augustine vs. ACIT (2009) 312 ITR 60(AT)(Coch) the Cochin Bench had observed that ITAT was not an income tax authority for the purpose of Income tax Act. The ITAT does not form part of the list of hierarchy of the Income-tax authorities as per section 116 as it is not an Income-tax authority. The ITAT, like the Income-tax department, does not function under the Ministry of Finance but it is constituted and functions under the Ministry of Law and Judiciary, Government of India. The powers of Tribunal are similar to the powers of an appellate court under the code of civil procedure. The Tribunal is considered to be the final fact finding body and its decisions on facts of the case are, ordinarily, not liable to be questioned before the High Court. 1. WHO CAN FILE AN APPEAL AND PRESENTED TO WHOM? 1.1 As per Section 253, any Assessee aggrieved by the order of the Commissioner (A) may prefer an appeal to the Appellate Tribunal. Similarly, the Commissioner may object to the order of the Commissioner (A) & direct the Assessing Officer to file an appeal to the Appellate Tribunal. It has been held by High Courts that even a third party has a right of appeal if, as a result of an order passed in an appeal by the first appellate authority before whom he is not a party, he is saddled with a liability for any tax or other sum (Discussed above) 2. TIME LIMIT FOR PREFERRING APPEAL 2.1 An appeal should be filed within Sixty days of the receipt of the order of the Commissioner (A) in the prescribed Form No As per order No. 1 of 1973 dated 10/7/1973, [F. No. F-161-AD(AT)/70 90 ITR (St.) 25], the Registrar of the Income Tax Appellate Tribunal has authorised Assistant Registrar of different places to receive appeals. However, if it is last day of presenting 15 P a g e

16 Appeal, the same can be presented at Residence of the Registrar or even residence of the Members or wherever they may be. 2.3 According to Rule 6(2) of the ITAT Rules, 1963, if the appeal is being sent through post then in such cases it must be through Registered post addressed to the Registrar or other authorised officer of the Tribunal. However, the most important point to be borne in mind is that it shall be deemed to have been presented on the day on which it is received in the office of the Tribunal. Any delay in transmission by post may not be excluded in computing the period of limitation. This is so because under the general law, the postal authorities are not considered as agents of the addressee but they are agents of the sender. [F. N. Roy vs. Collector of Customs AIR 1957 (SC) 648]. In case of delay in filing the appeal, on Application for condonation of delay alongwith the affidavit of the assessee and supporting document must be filed alongwith the appeal. The assessee should disclose sufficient and reasonable cause for the delay. 3. GROUNDS OF APPEAL & STATEMENT OF FACTS. 3.1 As per Rule 8 of the Appellate Tribunal Rules, every memorandum of appeal shall be written in English. The same should be concise without any argument ot or narrative. 3.2 The Statement of Facts should be filed before the Commissioner (A). It is very vital for the assessees to present the statement of facts in such a manner so as to bring out clearly the steps in the assessment/penalty proceedings leading to the order under challenge. There is no requirement of filing of Statement of Facts before the Appellate Tribunal. 1. Jagjivandas Nandlal vs. ITAT (Bombay High Court) ITAT President requested to make it compulsory for assessees to amend Form 36 for change of address instead of intimating vide letter 3 CROSS OBJECTIONS. 3.1 If the assessee or the Assessing Officer prefers an appeal to the Tribunal u/s.253(1) or (2), as the case may be, and the appeal is not rejected under rule 12 of the ITAT Rules, 16 P a g e

17 1963, a notice is given by the Tribunal to the respondent informing him of the fact of such filing, also enclosing the memorandum and grounds of appeal. The respondent can file, u/s.253(4), a memorandum of cross objections in Form No.36A, within 30 days from the date of receipt of such notice, against any part of the order of the first appellate authority deciding any issue against him. In case of delay Application for Condonation of delay should be filed. Delay is condonable in belated cross objection. Vareli Textile P. Ind. 154 Taxman 33 (Guj.) Sterlite Ind India ltd v/s. Addl CIT TTJ 53 (Mum) Dy CIT v/s. Harshad S Mehta (2007) 17 SOT 504 The cross objection filed is registered and numbered. It should be heard alongwith the original appeal.cross objection to be considered as an appeal and should be disposed of. TATA SPONGE V/S. CIT ITR 441 orissa. ITO vs. Jasjit Singh (ITAT Delhi) S. 253: In a cross-objection, a new legal issue can be raised for the first time before the ITAT.There is no difference between an appeal and a cross-objection. In a cross-objection, a legal issue which has not been raised before the lower authorities can be raised. The C.O. need not be confined to the points taken by the opposite party in the main appeal 4 In absence of Cross appeal the Respondent still has Right to agitate its point via R. 27.of ITAT Dahod Suhakar Kharid 282 ITR 321 (Guj.) The respondent is not required to pay any filing fees as per rule 22 and the Tribunal shall dispose off such memorandum of cross objections as if it were an appeal. Rule 27 of the ITAT Rules, 1963, empowers the respondent to the order appealed against on any of the grounds decided against him, though he may not have appealed or filed a cross objection. Vahivatdars of Ambaji Temple vs. CIT 58 ITR 675, 684 (Guj). Few Case Laws Dy. CIT vs. Turquoise Invest. 299 ITR 143 (MP) B.R. Bamsi vs. CIT (1972) 83 ITR 223 Bom ( ) 17 P a g e

18 Power of the Appellate Tribunal are similar to the powers of an appellate court under the CPC. The Respondent in an appeal is entitled to support the decree which is in his favour on any grounds which are available to him, even though the decision of the lower court in his favour may not have been based on these grounds. Assam Co. (India) Ltd. vs. CIT (2002) 256 ITR 423 (Gauh.) (Pg ) It is permissible on the part of the Tribunal to entertain a ground beyond those incorporated in the Memorandum of appeal though the party urging the said ground had neither appealed before it nor had filed a cross objection in the appeal filed by the other party. The evidentiary facts in support of the new ground must be available on record. Dy. CIT vs. Bifora Watch Co. 94 ITD 203 (Mum) (TM) Pg. 211 Para 21 The assessee can raise additional ground u/r 27 though neither appeal nor cross objection is filed by the assessee. Smt. Narasamma vs. Asst. CIT (2002) 75 TTJ 298 (Bang.) (Para 4 Pg. 302) The Tribunal has the discretion to allow any party to an appeal may be the appellant or the respondent to raise a new point or new contention provided two conditions are satisfied: a) No new facts are required to be brought on record for disposing of such new point. b) An opportunity is given to the other side to meet the point. 5. FEES PAYABLE Before the amendment to Sec. 253(6) w.e.f , appeal made on or after were to be accompanied by a fee of Rs.250/- in case where the total income assessed by the assessing officer is one lakh rupees or less and by a fee of Rs.1500/- where total income assessed is more than one lakh rupees However, w.e.f , every memorandum of appeal shall be accompanied by a fee of- 18 P a g e

19 (a) (b) (c) (d) Rs.500/- where the Assessed Income is Rs.1 lakh or less; Rs.1,500/- where the Assessed Income is more than Rs.1 lakh but less than Rs.2 lakh; 1% of the Assessed Income, subject to a maximum of Rs.10,000/- where the Assessed Income is more than Rs.2 lakhs; and With effect from , where the subject matter of an appeal relates to any matter, other than those specified in clauses (a), (b) and (c) above, then the fees payable would be Rs.500/-. Note: A. In case of Appeal against levy of penalty u/s. 271(1)(c) appeal fee is payable Rs. 500/- Dr. Ajith kumar Pandey v/s ITAT 310 ITR 195(Pat) (After referring Bidyut Kumar Seth vs. ITO 92 ITD 148 (Kol.)(SB) B. the term assessed income for this purpose, it seems, means assessed as per the original order, not as per the revised income recomputed in the order giving effect to the appellate order. C. Total income is loss it will be caluse (d) of sub-section (6) of Sec. 253 Rs. 500 Gilbs Computer (2009) 317 ITR 159 (Bom) D. In appeal against Revision order u/s.263, fees Rs.500/- Kiranjit Singh (2006) 101 TTJ 424 (Asr.) ;Chromatic India ltd v/s. ITO ; ITA no. 3486/M/01 bench D dt E. Appeal dismissed on ground of limitation Fees Rs. 500 Rajkamal Polymers Pvt. Ltd. vs. CIT 291 ITR 314(Ker.) F. No appeal fee is payable by the department in a departmental appeal. No fee is payable either by an assessee or the department on a cross-objection filed by them. 19 P a g e

20 6. Monetary Limits for filing appeal: Tax effect CBDT Instruction No. 5/2014 dated prescribing Monetary limits for filing appeal by the Department. Tax effect a) Appeal before ITAT Rs.4 lacs b) Appeal before High Court Rs. 10 lacs c) Appeal before the S.C. Rs. 25 lacs (Also see Instruction No. 5/2008, dated 15/5/2008 wherein it has been held that for the purpose of tax effect interest will not be included. Similarly in loss cases notional tax effect should be taken into account. In cases of penalty order the tax effect will mean quantum of penalty.) In cases involving substantial question of law of importance s as well as cases where the same question of law will be repeatedly arise it should be considered separately on merits. CIT vs. Surya Herbal Ltd (Supreme Court): CBDT s low tax effect circular not applicable to matters having cascading effect Decisions : CBDT instruction binding on Revenue (2009) 222 CTR 328 (Bom) CIT vs. Polycott Corporation (2007) 294 ITR 419 (Bom) CIT v/s.arvind Nilkanth kedar 276 ITR 519 (Bom) CIT vs. Pithwa Engg. Works (2002) 254 ITR 565 (Bom) CIT vs. Camo Colour Co. The objective of the CBDT instruction is squarely to reduce avoidable tax litigation. 7. Power of Stay: In Stay Petition, a fee of Rs.500/- is payable. However, if single application for stay of recovery is made to ITAT for number of assessment years, then the filing fees payable u/s.253(7) would be Rs.500/- only and not Rs.500/- per assessment year Shri 20 P a g e

21 Chiranjilal S. Goenka (Deceased) by his sole Executrix Mrs.Sushila N. Rungta, Mumbai Vs. WTO, S.A. No.30/Mum/1999 [arising out of W.T.A. No.105, 106 and 107/M/97 for Assessment Years , & ] Mumbai, Bench A, order dated 27/9/ Power of the Tribunal to grant stay of recovery is toward tax, interest and even penalty. Bhoja Reddy vs. CIT (1998) 231 ITR 47 (AP(48) Shiv Shakti Rubber & Chemcial Works vs. ITAT 213 ITR 299 (All) Rejection of Stay Petition by CIT is Required before proceeding to ITAT. RPG Enterprises vs. Dy. CIT (2001) 251 ITR 20 (AT)(Mum) Contrary Decision: Security & Detective Bureau Ltd. vs. ACIT (1993) 46 ITD 86 (Chennai) Reuters India Pvt. Ltd. vs. Dy. CIT (2004) 3 SOT 886 (Delhi) Asessee has to file separate stay petition for each assessment year. Wipro Ltd. vs. ITO (2003) 86 ITD 407 (Bang). 7.4 Stay is effective for 180 days further extension of 180 days. B. Sudhadra vs. ITO 272 ITR 100 (AT)(Hyd.) Assessee can make fresh application Tribunal has power to extend period of stay. Narang Overseas P. Ltd. vs. ITO (2007) 295 ITR 22 (Bom) CASE LAW ON STAY: a. Where the income determined on assessment is more than twice the income returned, collection of tax should be stayed during appeal. Demand raised in high pitched assessment need to be stayed, as its recovery would cause genuine hardship. Maharana Shri Bhagwat Singahiji of Mewar v ITAT (1997) 223 ITR 192 (Raj). Soul vs. Dy. CIT (2008) 173 Taxman 468 (Del.). 21 P a g e

22 b. The Hon ble Delhi High Court in the case of Valvoline Cummins Ltd vs. Dy. CIT (2008) 307 ITR 103 (Del) has considered the Instruction No. 96 dated 21/8/1969 issued by the CBDT and held that where the income determined is substantially higher than the returned income, that is, twice the latter amount or more, than the collection of tax indispute should be held in abeyance till the decision on the appeal is taken. c. Soul vs. Dy. CIT (2008) 220 CTR 211 (Del.) Issue: Whether the decision in Valvoline Cummins Ltd. vs. Dy. CIT (2008) 307 ITR 103 relying on Instruction No. 96 is bad in law in view of instruction no of 1993 dt. 2/12/1993. Held: Although Instruction No of 1993 specifically states that it is in supersession of all earlier instructions, the position obtaining after the decision of this Court in Valvoline Cummins Ltd.(supra) is not altered at all. The very question as to what would constitute the assessment order as being reasonably high pitched in consideration under the said Instruction No. 96 and, there, it has been noted by way of illustration that assessment at twice the amount of the returned income would amount to being substantially higher or high pitched. 6. Paper Book It is desirable that a detailed paper book in conformity with rule 18 of the Income-tax (Appellate Tribunal) Rules, 1963, is submitted in triplicate, as of the Income-tax (Appellate Tribunal) Rules, 1963, is submitted in triplicate, as early as possible. Whatever papers or documents or statements are proposed to be referred to or relied upon at the time of hearing deserve to be included, indexed and paged and submitted before the date of hearing of the appeal along with proof of service of a copy of the same on the other side at least a week before. 22 P a g e

23 Each paper should be certified as true copy by the party filing the same, or his Authorized Representative and indexed in such a manner as to give the brief description of the relevance of the document, with page numbers and the authority before whom it was filed. No supplementary paper book can be submitted without the permission of the Bench. If the paper book is found not in conformity with the rule, can be ignored by the Bench. Paper Book is an important document and deserves to be prepared with caution and care. The Tribunal may suo motu direct the preparation of a paper book at the cost of the appellant or the respondent containing copies of such statements, papers and documents as it may consider necessary for the proper disposal of an appeal. 7. Hearing: The Tribunal shall notify to the parties the date and place of hearing of the appeal. Sufficient time should be given. In case, any party is prevented by good, sufficient or reasonable cause from getting the appeal argued on the specified date, must make an application for adjournment sufficiently in advance and supported by the supporting material. Authority Letter / Vkalatanama.should be filed in original. The pecuniary jurisdiction of Single Member is Rs. 5 lakhs.( By Finance Bill 2015 limit has been increased to Rs 15 lacs). Other appeals are heard by a Division Bench constituted of a Judicial and an Accountant Member. Looking to the intricate law and difficult accounting principles, admixtures of the two is appreciable and has assisted in dispensation of justice. It provides healthy atmosphere to interact and co-exist. Wealthtax appeals can be heard by any two Honourable Members. The ordinary rule is that in case of a difference of opinion on any point or points between the Members of a Division Bench, the view of the majority shall prevail. But if the Members are equally divided, the duty of the members who heard the appeal is to state the point or points on which they differ and to refer the case to the President of the Tribunal for a hearing on such point or points to one or more other Member and such point or points shall be decided according to the opinion of the majority of the Members. The Third Member can only decide the point or points referred to him. 23 P a g e

24 8. POWERS OF THE TRIBUNAL 8.1 The Tribunal being the final fact finding authority enjoys all the powers conferred upon by the Act on the authorities mentioned in Section 116 & has a Status of a independent judicial body as per the provisions of Section 252 to 255 of the Act. The powers conferred on the Tribunal to pass such orders thereon as it thinks fit be discovered by reference to the jurisdiction of the authority whose order has given rise to the appeal CIT vs. Ram Murti 87 ITR 577 (All). 8.2 Every appellate authority has implied and incidental power to grant relief even if the statute does not provide. Bulk India Transport 266 ITR 144 (All) Mohammed Katri 71 ITR 815 (SC) 8.3 To issue appropriate direction Kapurchand Shrimal 131 ITR 451 (SC) - Consequential direction in interest of justice. Matchless Machines & Technology vs. ITO ITA No. 8/M/2006 DT. 12/12/ Right of assessee is not restricted to the plea raised by him. It is the duty of the authority to allow relief on any other ground, if permissible Ciba of India Ltd. vs. CIT (1993) 202 ITR 1 (Bom) CIT vs. Mahalaxmi Textiles Ltd. (1967) 66 ITR 710 (SC) Power of the Tribunal to grant relief under an alternate section ITO vs. M.M. Textiles 28 DTR 321 (Mum) (Trib.) Tribunal has inherent power to refix case for hearing to prevent Miscarriage of justice or to grant substantial justice opportunity of hearing should be given. Mafatlal Securities Ltd. vs. Jt. CIT (2009) 119 ITD 444 (Mum) 8.5 Revenue cannot be given second innings to improve its case to make an addition. 216 ITR 99 (Ahd.) (AT) (Pg. 123) ITO vs. Gurubachansingh J. Juneja (Ahmed.) 73 ITD 125 (Del) (TM) ACIT vs. Anima Investment Ltd. 24 P a g e

25 168 ITR 472 (Guj) CIT vs. Harikrishna Jethalal Patel 154 ITR 745 (Ker.) Travencore Tea Estates Co. Ltd. vs. CIT 9. POWER TO ADMIT ADDITIONAL GROUNDS 9.1 Rule 11 of the ITAT Rules, 1963, provides that the appellant shall not except, by leave of Tribunal, urge or be heard in support of ground not set forth in the memorandum of appeal. However, the Tribunal is competent to allow the appellant to raise at the hearing of the appeal an additional ground even without a formal amendment of the memorandum of appeal. 9.2 National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC), Jute Corporation of India v. CIT 187 ITR 688 (SC); Ahmedabad Electricity Co. Ltd. v. CIT 199 ITR 351 (Bom); Ramgopal Ganpatrai & Sons v. CIT 24 ITR 362 (372) (Bom); Anam Venkata Krishna Reddy v. CIT 172 ITR 425 (A.P.); Deepchand Kothari v. CIT 171 ITR 381 (Raj); J.S. Parkar v. V. B. Palekar 94 ITR 616(Bom). Leave to urge additional grounds may be sought either in writing or by oral prayer. Rule 11 of the Appellate Tribunal Rules speaks only of leave and the leave may be sought for either in writing or by an oral prayer - Amines Plasticizers Ltd. v. CIT 223 ITR 173 (Gauhati). Grounds of Appeal can be amended by taking leave of the Tribunal orally - Assam Carbon Products Ltd. v. CIT 224 ITR 57 (Gauhati). 262 ITR 385 (Bom) Baby Samuel vs. Astt. CIT 9.4 Additional Ground challenging the validity of assessment for want of jurisdiction can be urged before any authority for the first time. Bar of estoppel or resjudicata does not apply. ACIT vs. Bijay Shankar Gupta (2009) 21 DTR 254 (Jd(Trib). Question of limitation goes to root of the matter, duty of ITAT to consider the same though raised for first time before it. Mah & Mah ltd v/s. Dy CIT (2009) 22 DTR 361 (Mum )(SB)Trib. 25 P a g e

26 In CIT vs. Hindustan Tin Works Ltd. (2009) 24 DTR 88 (Del.) the Delhi High Court upheld the order Tribunal in rejecting the revenue plea to raise additional ground pertaining to section 14A for disallowing expenditure incurred for earning exempt dividend income because neither during the assessment proceeding nor during appellate proceedings before CIT(A) the revenue had invoked 14A. Issue raised before the AO has to be considered by the ITAT though the CIT (A) did not render any view on it. Jehangir H C Jehangir V/s. ITO (2014) 112 DTR 262 (Bom) HC Power to admit Additional Evidences before the Tribunal 9.5 Rule 29 does not confer any right on the parties as such to produce any additional evidence either oral or documentary before the Tribunal. Such power has been vested only in the Tribunal to admit fresh evidences & affidavits, etc. - CIT v. Smt. Kamal C. Mehboobbani 214 ITR 15 (Bom); Dy.CIT v. Vira Construction Co. 61 ITD 33 (Mum)(TM). Where additional evidence enables the Tribunal to pass orders or for any other substantial cause, it can require the parties to do so - Abhay Kumar Shroff v. ITO 63 ITD 144 (Patna)(TM). If evidence produced by assessee is genuine, reliable and proves assessee's case, then assessee should not be denied opportunity of it being produced for the first time before the appellate authority - Jagbir Singh v. ITO 23 ITD 15; Electra (Jaipur) (P.) Ltd. v. IAC 26 ITD In CIT vs. Motilal Hirabhai Spinning & Weaving Co. Ltd. 113 ITR 173 (179,180) (Guj.), it was held that though the omission to record reasons as required by rule 29 was a serious defect, it is not mandatory and the omission to record reasons for admitting additional evidence did not vitiate such admission. 9.7 Newspaper report on Mkt condition admitted as evidence Addl CIT v/s. Ratan cold storage 118 ITD 31(Agra)(TM) Power to Remand. 9.8 In cognizance of the Circular of the CBDT issued in 1955, and the decision in Navnit Lal C. Javeri vs. K.K. Sen 56 ITR 198, although at the time of the original assessments, the assessee firm itself did not claim any relief u/s.84/80j and though the responsibility for 26 P a g e

27 claiming refund and reliefs rested with the assessee, the assessing officer should have drawn the attention of the assessee to this relief u/s.84/80j to which the assessee appeared to be clearly entitled but which the assessee had omitted to claim Chokshi Metal Refinery vs. CIT 107 ITR 63 (Guj.). 9.9 Under Rule 28 of the ITAT Rules, 1963, the power of remand is only incidental to its power to hear and dispose of the appeal. But power of remand cannot exceed the jurisdiction u/s.254(1). Hence, Tribunal cannot exercise the power of remand for purpose of enhancing the tax V. Ramaswamy Iyengar vs. CIT 40 ITR 377 (Mad). On remand Tribunal cannot direct to assess income less then returned income or at higher than the assessed income. CIT vs. H.P. State Forest Corp. Ltd. (2010) 36 DTR 181 (HP) Coca Cola India (P) Ltd. vs. ITO (2007) 290 ITR 464 Bhav Shakti Steel Mines P. Ltd. vs. CIT (2010) 320 ITR 619 (Del.) Power of Enhancement U/s.254(1), the Tribunal is not competent in an appeal filed by the assessee to give a finding which is adverse to the assessee and make the latter s position worse than before, thus resulting in an enhancement of assessment Puranmal Radhakishan & Co. vs. CIT 31 ITR 294 (Bom). Where a setting aside of the entire order of assessment and a remand order has the effect of the probability of resulting in an enhancement of the Assessment under appeal, the same cannot be done. The Tribunal is not empowered to do indirectly what it cannot directly do V. Ramaswamy Iyengar vs. CIT 40 ITR 377 (Mad); Pathikonda Balasubba Setty (Deceased) vs. CIT 65 ITR 252 (Mys.). - McCrop Global P. Ltd. vs. CIT 309 ITR 434 SC Tribunal had no power to take back the benefit conferred by the AO or enhance the assessment An appellant cannot be worse off by being in appeal before Tribunal - McCrop Global P. Ltd. vs. CIT 309 ITR 434 SC - Integrated Feeder Containers Services vs. Jt. CIT 2005 (4) SOT 357 (Mum) 27 P a g e

28 - Jt. CIT vs. Sakura Bank Ltd. 100 ITD 215 (Mum) Power to call for documents u/s.255(6) r.w.s 131 of the Act, the Tribunal has the power to call for documents relevant for deciding the appeal. In Union of India vs. Sheo Shankar Sitaram 95 ITR 523 (All) at the request of the assessee, the Tribunal directed the department to produce certain records, which pertained to the assessment and penalty proceedings and the department s claim of privilege u/s.124 of the Evidence Act, was negatived by the Court. Power to Award Cost With effect from , sub-section 2B is inserted to Section 254, which gives the discretion to the Tribunal to award cost in suitable cases if the facts so warrant. In ACIT vs. Shanti Star Builders ITA No.9601/B/91 dated , Bench B, Mumbai, the Tribunal awarded cost of Rs.2,000/- for the inconvenience caused to the assessee. In that case, the departmental counsel had sought for an adjournment though on earlier occasion it was agreed that on the next date, the case would be argued. The assessee s counsel had come from Calcutta on both the occasions.( Also see Sushila Malge No power to make protective order: 9.13 Though Assessing Officer can make protective assessment, it is not open for the Tribunal to make a protective order Smt. Hemlata Agarwal vs. CIT 64 ITR 428 (All.) 10. EX-PARTE ORDER Rule 24 & 25 of the ITAT Rules, 1963, deals with procedure for hearing ex-parte by the Tribunal. Proviso to rule 24 provides that when an appeal has been disposed off ex-parte and the appellant appeals afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called out for hearing, the Tribunal shall make an order setting aside the ex-parte order and restoring the appeal. If a notice is sent to the Assessee by Registered Post, the postal authorities may send back the notice stating that the assessee refused to accept or postal authorities may deliver to a person 28 P a g e