Gauhati H.C : Whether, under the facts and circumstances of the case, the Tribunal was justified in restoring back the matter after setting aside the order of the learned CIT(A) invoking the provisions of s. 292B without any materials, records or evidence?

D.N. BARUAH, J.:

In this reference under s. 256(1) of the IT Act, 1961 (for short, “the Act”), the Tribunal has referred the following common question at the instance of the assessee for opinion of this Court:

“1. Whether, under the facts and circumstances of the case, the Tribunal was justified in restoring back the matter after setting aside the order of the learned CIT(A) invoking the provisions of s. 292B without any materials, records or evidence?”

The following two questions have been referred to this Court under s. 256(1) of the IT Act 1961 (at the instance of the Revenue: “1. Whether, on the facts and in the circumstances of the case and in view of the provisions of ss. 37(3A) and 37(3B) of the IT Act, 1961, the Tribunal has not erred in law in holding that expenditure of the nature mentioned in s. 31 was not to be taken into account in working out the disallowance under s. 37(3A) of the IT Act, 1961?

2. Whether, on the facts and in the circumstances of the case and in view of the Expln. 2 to s. 43B of the IT Act, 1961, the Tribunal was justified in law in directing the AO to allow the claim for the amount of Rs. 4,82,737, if the payment was found to have been made before 31st July, 1984, though the relevant previous year ended on 30th June, 1984?”

2. The facts for answering the above questions are: The assessee is a company incorporated under the Companies Act. The AO initiated proceedings under s. 217(1A) in the course of the assessment proceedings for the asst. yrs. 1984-85 and 1985-86 and levied interest amounting to Rs. 4,72,888 and Rs. 7,57,820, respectively. On appeal before the CIT(A), he after hearing the parties held that no interest could be imposed under s. 217(1A) and allowed the appeal. The Revenue took up the matter before the Tribunal by way of an appeal. Before the Tribunal it urged that the interest was correctly charged by the AO, only the section had been wrongly referred to and therefore, interest levied ought to be sustained under s. 215 inasmuch as in the facts and circumstances, it would indicate that it was charged by the AO only under that section. It was, therefore, submitted that the order of the AO was covered by the provisions of s. 292B of the Act.

3. Regarding the first question raised by the Revenue, the facts are that the assessee made an expenditure of Rs. 6,41,332 on running of motor car, etc., and it was claimed before the AO that an amount of Rs. 1,94,701 was spent towards insurance and current repairs of the motor car which was already allowed as deduction under s. 31 of the Act and as such this amount ought to be excluded while working out of the disallowance under s. 37(3A) of the Act. The AO did not agree with the above contentions of the assessee. The assessee, therefore, preferred appeal before the CIT(A) who directed the AO to work out the disallowance under s. 37(3A) after deducting Rs. 1,94,701 from Rs. 6,41,622. On further appeal preferred before the Tribunal by the Revenue, the order of the CIT(A) was confirmed.

4. As regards the second question referred at the instance of the Revenue, the facts are that in the relevant previous year of the assessee-company ended on 30th June, 1984, an amount of Rs. 4,82,737 remained outstanding on account of Assam finance tax for the previous year. This amount was paid on 31st July, 1984. As the amount was not paid within time, the AO disallowed the same following the provisions of s. 43B r/w Expln. 2 to the said section which was inserted by the Finance Act, 1989, with retrospective effect from 1st April, 1984. Being aggrieved by the order of the AO, the assessee approached the CIT(A). The CIT(A) deleted the disallowance of Rs. 4,82,737 under s. 43B. The Department not being satisfied preferred appeal before the Tribunal and the Tribunal also confirmed the decision of the CIT(A). Hence, the present reference.

5. Heard, Mr. G.K. Joshi, learned senior standing counsel appearing for the Revenue, and Dr. Saraf, learned counsel on behalf of the assessee. Learned counsel for the parties submit that the two questions referred at the instance of the Revenue are squarely covered by two decisions of this Court. The first question is covered by decision in IT Ref. No. 9 of 1994, decided on 21st Aug., 1996—[reported as George Williamson (Assam) Ltd. vs. CIT (1997) 139 CTR (Gau) 194], and the second question is covered by another decision of this Court in CIT vs. Bharat Bamboo & Timber Suppliers (1996) 219 ITR 212 (Gau). As per the decisions referred to above learned counsel for the parties submit that both the questions may be answered in the affirmative and in favour of the assessee. We have perused the decisions. Considering the submission of learned counsel appearing on behalf of the parties, we answer both the questions referred at the instance of the Revenue, in the affirmative and in favour of the assessee and against the Revenue.

6. We have also heard regarding the question referred at the instance of the assessee. Dr. Saraf, learned counsel for the assessee, submits that the Tribunal had no authority and jurisdiction to remand the matter for initiation of a proceeding under s. 215 of the Act for charging interest inasmuch as this was not the subject-matter of the appeal before the Tribunal. Dr. Saraf also submits that the necessary conditions for charging interest under s. 215 of the Act were not before the Tribunal and in fact, this aspect of the matter was not urged either before the CIT(A) or before the Tribunal. Learned counsel also submits that before the Tribunal, the Revenue took up the ground that the CIT(A) was wrong in holding that charging of interest under s. 217(1A) was bad in law. In fact, the AO after the assessment was made on regular basis levied interest under s. 217 (1A). The CIT(A) after considering the entire aspects of the matter, came to the conclusion that the provision of s. 217(1A) would not be attracted and accordingly deleted the interest. That being the position, the Tribunal had no jurisdiction to remand the matter to the AO with a direction to reconsider levying of interest under s. 215. Before the Tribunal, Dr. Saraf submits that this was not the subject-matter of the appeal. On the other hand, Mr. Joshi strenuously urges that in the facts and circumstances of the case, the Tribunal was justified in remanding the matter. He, however, very candidly submits before us that the matter was not raised before the CIT(A). Mr. Joshi further submits that the statement of facts and the annexures, namely, the assessment order, should be looked into by this Court while answering the question whether in the facts and circumstances of the case, the Tribunal was justified in remanding the matter. For mere wrong quoting of the section, the Court should not throw away the legitimate rights of the Department as the Department will suffer a great loss. On the above submission of the parties it is to be seen as to whether the Tribunal was justified in remanding the matter for initiation of the proceeding under s. 215 of the Act for charging the interest since the AO passed the order for interest under s. 217(1A) which was challenged before the CIT(A).

7. Sec. 217(1A) of the Act provides that interest will be payable by the assessee when no estimate is made. The section provides that if the AO finds that any person who is required to send an estimate under sub-s. (4) of s. 209A or any such person as is referred to in sub-s. (3A) of s. 212 has not sent the estimate referred to therein, simple interest at the rate of fifteen per cent. per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-s. (4) or as the case may be, sub-s. (3A) up to the date of the regular assessment, shall be payable by the assessee upon the amount by which the advance tax paid by him falls short of the assessed tax as defined in sub-s. (5) of s. 215. Sec. 215, however, makes provision for levying interest in case the advance tax is paid 83.33 per cent. in case of company and 75 per cent. in other cases less than the tax assessed in regular assessment. It is true that the requirement of conditions under s. 215 and under s. 217(1A) are widely different. The prerequisite conditions under s. 215 is that there must be a regular assessment and that taxes paid are less than 75 per cent of the tax assessed. In order to invoke the power under s. 215, the authority must first consider that the advance tax is paid at least less than 75 per cent. of the tax assessed. In the instant case, the AO simply levied interest invoking the powers under s. 217(1A). From the facts, it is found that the appellate authority, namely, the CIT(A), has rightly set aside the order of the AO levying interest under the said s. 217(1A). Mr. Joshi submits before us that it was for the first appellate Court to consider the future action to be taken after setting aside the appeal. The CIT(A) in his order observed as follows: “In ground No. 9, it was stated that interest under s. 217(1A) aggregating to Rs. 4,72,866 was wrongly charged because the same was chargeable only when no estimate in Form No. 29 was filed. It is to be seen that the appellant did file Form No. 29 for the asst. yr. 1984-85 on 15th June, 1983, vide acknowledgment receipt No. 927312 and, therefore, he made the compliance of the aforesaid section and there was no question of levying of interest under s. 217(1A). I have gone through the above section and noted that interest was chargeable only when no estimate was filed and, therefore, IAC (Asst.) was incorrect in charging interest and therefore he is directed to delete the interest of Rs. 4,72,866.”

8. The Revenue preferred appeal before the Tribunal raising the following ground: “The CIT(A) is not justified in cancelling the charge under s. 217(1A) amounting to Rs. 4,72,866.” This was in respect of the asst. yr. 1984-85. A similar ground was taken in respect of the next asst. yr. 1985-86. From the memo of appeal, it is clear that the intention of the Revenue was that the CIT(A) was justified in levying interest under s. 217(1A). There is nothing on record to show that at the time of hearing or prior to the hearing any amendment was made in so far as the memo of appeals were concerned. Besides, as submitted by Dr. Saraf, at least the records do not indicate the same. Mr. Joshi submits that the power of the Tribunal is wide enough to pass any order. As per s. 254, the Tribunal may, after giving an opportunity of hearing, pass such order thereon as it thinks fit. Relying on this, Mr. Joshi submits that it was open for the Tribunal that when it noticed that s. 217(1A) was not applicable, in the facts and circumstances and the intention was to proceed under s. 215, no fault can be found in the order of the Tribunal. In this connection, Mr. Joshi has drawn our attention to a decision of the apex court reported in Hukumchand Mills Ltd. vs. CIT (1967) 63 ITR 232 (SC) : TC 8R.1010. In the said decision, the apex Court held that the Tribunal could pass any order in respect of an appeal on the subject-matter arising thereon. The apex Court also observed the expression “thereon” restricts the jurisdiction to the subject-matter of the appeal. Taking the support of the decision, Mr. Joshi submits that the subject-matter was before the Tribunal and, therefore, the Tribunal was fully competent to remand the matter. Dr. Saraf, however, refutes the said submission of Mr. Joshi and submits that in the facts and circumstances of the case, the Tribunal was not justified in remanding the case, because, the subject- matter before the Tribunal was altogether different as the conditions necessary for levy of interest under s. 215 of the Act were absolutely absent before the Tribunal and, therefore, it cannot be said that the Tribunal could pass such an order. Mr. Joshi having seen the memo of appeal, on the other hand, finds it difficult to support the memo of appeal. However, he submits before us that there may be some mistake on the part of the Revenue and for that the Revenue should not be made to suffer. Dr. Saraf, however, contends that the Revenue cannot take the plea of mistake at this stage. Mr. Joshi also submits that as there was an apparent mistake in quoting the section, s. 292B is applicable. In this connection, learned counsel for the assessee has brought to our notice to a decision in Parashuram Pottery Works Co. Ltd. vs. ITO 1977 CTR (SC) 32: (1977) 106 ITR 1 (SC). In the said decision, the apex Court held thus: “It has been said that the taxes are the price that we pay for civilisation. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity.” Dr. Saraf also drew our attention to a decision in Pathikonda Balasubba Setty vs. CIT (1967) 65 ITR 252 (Mys) : TC 8R.440. In the said decision, the Mysore High Court observed as under: “The effect of these provisions is that the Tribunal’s powers are limited to passing such orders as they may think fit on the appeal. The expression `on the appeal’ clearly and indubitably points to the conclusion that the powers of the appellate authority, the Tribunal, are limited to the subjectmatter of the appeal.

At the next state of second appeal to the Tribunal, the liberty is given to both the sides to go up in appeal to the Tribunal and when the Tribunal comes to deal with the matter, the law regards it sufficient to leave it to the parties going up as appellants before the Tribunal to limit their attack on the order of the first appellate authority and to seek the intervention of the Tribunal only to the extent necessary to correct the errors in the order of the AAC according to the case of the appellant.”

It was further observed by the Mysore High Court as under : “Uniform judicial interpretation placed on these powers is that the power of remand should be used sparingly and ordinarily only in cases where the appellate

authority, after an examination of the material already placed on record by way of evidence, takes the view that it is not possible for it to make a just order on the appeal without the assistance of further evidence or without the assistance of a clearer finding by the authority from whose order the appeal has been presented. That implied limitation on the power of remand is directly related to the principle of justice that parties interested in obtaining an order from a Court or Tribunal are under a duty to place before the original authority all the evidence on which they rely for obtaining the relief they seek.”

Dr. Saraf further relying on the aforesaid decision submits that the Tribunal had no power to enhance the assessment. We have no dispute that the Tribunal had no power of enhancement but that does not mean that an order which is set aside by the first appellate Court, cannot be restored back. That cannot be said to be enhancement of assessment. We do not agree with the aforesaid submission of Dr. Saraf. It is true as submitted by Mr. Joshi that in case of any mistake or error, the Tribunal has the power to take recourse of section 292B. At the time of argument, it has been urged before the Tribunal by the representative of the Revenue that in fact the provision of s. 215 ought to have been invoked. We do not find any amendment of the memo of appeal or any supplementary ground of appeal. Counsel for the petitioner submits that without amendment of the memo of appeal, without taking leave of the Tribunal to urge additional grounds as per r. 11 of the IT (Tribunal) Rules, 1963, the Revenue cannot urge a new point altogether which was not before the Tribunal. Rule 11 of the IT (Appellate Tribunal) Rules, 1963, provides as under : “Grounds which may be taken in appeal—The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule: Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.”

11. As per r. 11 of the IT (Appellate Tribunal) Rules, 1963, the appellant is not competent to urge any ground which is not taken in the memo of appeal except with the leave of the Court. Leave need not be sought for in writing. If this is so, we feel that the Revenue might have amended the grounds by taking leave of the Tribunal orally. It is clear from the record that the Tribunal heard the matter and allowed the representative of the Revenue to urge the point. Therefore, in our view, the matter before the Tribunal was rather s. 217(1A) than s. 215. Therefore, we cannot find fault with the Tribunal in invoking the power to amend the section. However, the Tribunal did not discuss and give any reason as to why in the facts and circumstances of the case, power under s. 215 should be invoked. The Tribunal in the last paragraph 13 has observed thus: “After careful consideration of the entire facts and circumstances of the case and in view of the provisions of s. 292B of the Act, we consider that the matter is to be reconsidered by the AO and as such, we restore back the matter to him after setting aside the order of the learned CIT(A).”

12. Therefore, in our opinion, the matter requires to be reconsidered by the Tribunal. No reason have been given and as such it is difficult for this Court to give a proper answer to these questions. The Tribunal may decide the matter itself and may come to a definite conclusion and thereafter if necessary may pass any appropriate order.

In view of the above, without answering the question, we remand the matter to the Tribunal to consider the matter afresh and to decide as to the existence of the conditions necessary for invoking the s. 215 of the Act and if there are such conditions, the Tribunal may decide the same itself applying s. 292B.