The jurisdictional pre-conditions for re-opening can be questioned in the appellate proceedings, and the tribunal has the power to entertain additional grounds.

1. The Revenue, in this appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) impugns order dated 31.8.2010 passed by the Income Tax Appellate Tribunal (tribunal, for short) in the case of Expeditors International Pvt. Ltd, the respondent-assessee. The assessment year in question is 2002-03.

2. Learned counsel for the revenue has submitted that the tribunal has erred in ntertaining and deciding the additional ground, questioning the validity of re-opening under Section 147/148 of the Act. It is submitted that the respondent had not raised and questioned the re-opening before the Assessing Officer and the Commissioner of Income Tax (Appeals) (CIT (A), for short). It is urged that the procedure prescribed in GKN Driveshafts (India) Ltd. vs. ITO, (2003) 259 ITR 19 (SC) was not followed by the respondent-assessee and, therefore, the respondent is precluded and should not have been permitted to raise the additional ground.

3. It is not possible to accept the last contention of the Revenue. GKN Driveshafts (supra) prescribes one of the methods or modes by which an assessee can object to re-opening of assessment. It is not necessary or mandatory that an assessee should file a writ petition. The assessee can also object to re-opening in the appellate proceedings. Whether or not the pre-conditions for re-opening are satisfied is a matter of jurisdiction or lack of jurisdiction. It goes to the root of the matter. If the jurisdictional pre-conditions are missing and are absent, the assessee can object and question the reopening in the appellate proceedings. It is not necessary that the assessee must file a writ petition and question the reassessment proceedings.

4. Whether and when an additional ground can be raised and entertained by the tribunal is not res integra. The Supreme Court in Jute Corporation of India Limited vs. CIT, (1991) 187 ITR 688 (SC) had observed:-

“….The declaration of law is clear that the power of the Appellate Assistant Commissioner is conterminous with that of the Income-tax Officer, and if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income-tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an appellate authority while hearing the appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer.”

5. Similarly, in the case of National Thermal Power Corporation Ltd. vs. CIT; [1998] 229 ITR 383 (SC), it was held:-

“Under section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribuna