Appellate Tribunal – Power to admit additional ground – Notice u/s. 158BD – The Tribunal cancelled the block assessment order u/s. 158BD holding that the notice u/s. 158BD was not valid – The High Court held that the notice was valid and remanded the matter back to the Tribunal for deciding on merits – The assessee raised an additional ground relying on the decision of the Supreme Court – The Tribunal was not justified in refusing to admit the additional ground:

Pursuant
to the search action in the premises of one of the partners of the
assessee firm a block assessment order u/s. 158BD was passed in the case
of assessee firm. The order was cancelled by the Tribunal holding that
the notice u/s. 158BD was not valid. On appeal by the Revenue the High
Court held that the notice was valid and remanded the matter back to the
Tribunal for deciding on merits. In the remand proceedings the assessee
raised an additional ground relying upon the decision of the Supreme
Court. The Tribunal refused to admit the additional ground holding that
the powers of the Tribunal were confined to the order of the remand
passed by the Court wherein, a direction was given by the Court to
consider the appeal on merits.

The Kerala High Court allowed the appeal filed by the assessee and held as under:

“i)
The powers of the Tribunal are not curtailed by the judgment of the
Division Bench, merely because the judgment, in the operative portion “
directed the matter to be considered on the merits after hearing the
parties.”

ii) It was also not correct to say that the decision
of the Division Bench concurring the validity of the notice would
prevent the Tribunal from considering any other ground which the
assessee had raised for consideration. It could not, therefore, be said
that when the Court sent back the matter for fresh consideration, no
other points than those raised in the grounds of appeal could be
considered and no additional ground could be allowed to be raised for
consideration.

iii) Therefore, the Tribunal was to consider the additional ground raised by the assessee and take appropriate decision.”