BALASUBRAHMANYAN J.

This reference raises a point about the scope of the appellate jurisdiction of the Income-tax Appellate Tribunal This Tribunal came into being in January, 1941. In the forty years and more of its existence, this Tribunal has become probably the best-known quasi-judicial Tribunal in the country. What is more, other quasi-judicial appellate bodies are trying to model themselves on this Tribunal.

The chief function of the Income-tax Appellate Tribunal is to hear and determine appeals from orders passed by the AAC. Similar function has been assigned to the same Tribunal under either the Direct Taxes Act, such as the E.D. Act, 1953, the W.T. Act, 1957, the G.T. Act, 1958, and so on. Over the years, Benches of the Tribunal in far-flung parts of the country have disposed of hundreds of thousands of appeals from orders of the AAC. Many questions have cropped up during this period touching the scope of the Tribunal's appellate jurisdiction. The Tribunal itself has dealt with aspects of its own jurisdiction, on the principle that a Tribunal has undoubted jurisdiction to decide whether it has jurisdiction or not. Many of the determinations of this Tribunal on the question of its own jurisdiction have been the subject of consideration by the several High Courts in the country and also by the Supreme Court. The case with which jurisdictional questions have been brought before the High Court and the Supreme Court is not surprising, because against any order passed by the Tribunal in appeal, a reference is available to the aggrieved party before the High Court, and against the judgment of the High Court on such reference, the statute provides for an appeal to the Supreme Court if the case is a fit one for appeal. There is thus no dearth of case-law from the High Courts and the Supreme Court on the subject of the scope of the Tribunal's appellate jurisdictionThe scope of the Tribunal's appellate jurisdiction has been set out in the simplest terms both in the Indian I.T. Act, 1922, under which the Tribunal was first constituted and subsequently in the present I.T. Act, 1961, in identical terms. The crucial words of the provision are as under (s. 254(1)).

"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 expression" thereon" *

means ' on the appeal'. Thus, the Tribunal has power to pass such orders on the appeal as it thinks fit. The trend of earlier judicial decisions, however, was to regard the expression "thereon" as meaning "on the subject-matter of the appeal". This judicial gloss in construction having been set by earlier decisions, naturally, the subsequent cases in which the Tribunal's appellate jurisdiction was in point, reiterated as an axiom of tax appeals that the Tribunal's jurisdiction must be confined to the "subject-matter of the appeal". This test of "subject-matter of the appeal" was almost invariably applied, as if it were a statutory imperative, to all aspects of the Tribunal's appellate jurisdiction, such for instance, as the scope of the appeal, the grounds of appeal, the maintainability of additional grounds of appeal and the availability of new pleas at the hearing, and the points to which and the extent to which the respondent can invite a decision from the Tribunal. In the event, a superabundance of case law has grown on the scope of the appellate jurisdiction of the Tribunal.

Three decisions of the Supreme Court, however, stand out prominently on this subject. They are: (i) Hukumchand Mills Ltd. v. CIT (ii) CIT v. Mahalakshmi Textile Mills Ltd. and (iii) CIT v. Nelliappan. In those cases, the Supreme Court had occasion to lay down what the real scope of the Tribunal's appellate jurisdiction is. However, before referring to the Supreme Court's decisions in detail, it is necessary to explain how the point of jurisdiction had arisen in the present referenceThe assessee is a newspaper publisher