Facts

The assessee made a fresh claim for the first time before the Tribunal by way of    an additional ground. The Tribunal declined to entertain the ground as it was not raised before the lower authorities.

Issue

Can a fresh claim be made for the first time before the Tribunal?

Views

The assessee argued that there is nothing in the language of section 254 which prevents the Tribunal from considering a fresh claim made before it. The Tribunal,   on the other hand, held that it could only consider the questions arising out of     the order of the CIT(A).

Held

The Supreme Court held that section 254 is couched in the widest possible terms and there is nothing in the provision which stops the Tribunal  from entertaining    a claim, which has not been raised before the lower authorities. The purpose of   the assessment proceedings is to determine the correct amount of taxable income and there is no reason that an assessee should be prevented from raising a ground before the Tribunal, if an income, which is not chargeable to tax as per law has been assessed by the AO. The only caveat is that the facts pertaining to such a ground must be on record. Followed Jute Corporation of India Ltd. v. CIT (1981) 187 ITR688 (SC) (AY. 1978-79). (Transfer case 4 of 1988 dt. 4-12-1996)

Editorial : CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344/156 DTR 161/297 CTR 441/250 Taxman 225 (SC). The view has been followed by the Bombay High Court in the case of CIT v. Pruthvi Brokers & Shareholders (2012) 349 ITR 336 (Bom)(HC). In the case of Ultratech Cement Ltd. v. ACIT (2017) 408 ITR 500 (Bom) (HC) it was held thatwhere the necessary evidence pertaining to

the additional ground was not on record and the assessee could not satisfy the authorities as to why the ground could not be raised before the lower authorities, the same was not to be admitted.

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– Mahatma Gandhi