Tribunal has power to direct the Assessing Officer to consider the allowance of the expenditure under altogether different Section.

The facts in brief leading
to the controversy were that unaccounted commission earned by the assessee was
unearthed during the search. In his return of income, the assessee claimed
expenditure incurred to earn the said income which the AO disallowed u/s.69C of
the Act. The CIT(A) deleted this disallowance by observing that S. 69C along
with the proviso thereto cannot be made applicable to the facts of the case for
the reason that the expenditure stands explained insofar as the same was
incurred from the unaccounted commission earned by the assessee. Both the
Members who heard the matter have also concurred with the view of the CIT(A)
that S. 69C is not applicable. However, in the course of hearing before the
Tribunal, the learned Departmental Representative raised a fresh plea to the
effect that the AO should have invoked the provisions of S. 37(1) and requested
the Bench to remit the matter to the file of the AO to consider the allowability
or otherwise of the expenditure u/s. 37(1) of the Act. The learned Accountant
Member rejected the request of the learned Departmental Representative by
observing that the jurisdiction of the Tribunal is restricted to the
subject-matter of the appeal and the fresh plea taken by the learned
Departmental Representative being out of the subject-matter, it cannot be
accepted. In arriving at the conclusion that it is out of the subject-matter of
the appeal, the learned Accountant Member tried to draw distinction between the
words ‘aggrieved’ and ‘objects’ appearing in S. 253(1) and S. 253(2)
respectively. On the other hand, the learned Judicial Member held that the
Tribunal has the jurisdiction to entertain a fresh plea on the subject-matter

of the appeal and has the power to pass necessary direction for ascertainment of
relevant facts
and deciding the issue by applying correct
provisions of law.

The use of different words
in the two sub-sections i.e., ‘aggrieved’ and ‘objects’ appearing in S. 253(1)
and S. 253(2), respectively, has no bearing on the scope of the appeal to be
filed by the assessee and the Department. Relying upon the decision of
Hukumchand Mills Ltd. v. CIT, 63 ITR 232 (SC), it was held that there is no
reason as to why the plea of the learned Departmental Representative cannot be
accepted. In the present case, of course, the Department is the appellant unlike
in the case of Hukumchand Mills (supra). But, it makes no difference. The
Department is aggrieved by the deletion of disallowance of expenditure which
disallowance was made under one particular provision. The subject-matter of the
appeal was whether the expenditure claimed by the assessee was allowable or not.
If it was not disallowable under one particular provision, but is disallowable
under any other provision, the subject-matter, viz., the allowability of
expenditure remains the same. It is not precluded from considering a point which
arises out of the appeal merely because such point had not been raised or urged
by either party at the earlier stage of the proceedings. The matter was remanded
to the AO for considering the claim of the assessee for claiming deduction of
unaccounted expenditure u/s.37(1) of the Act.