The Madras High Court in the case of Commissioner of Income-tax Vs. West Coast Electric Supplies Corporation Ltd. (243ITR565) held that it is impermissible for an assessee to raise a new contention unless it is a pure legal without involving any investigation into facts and other materials. In this case the assessee for the first time before the High Court contended that the holding of investment itself would amount to the
business of the assessee. The High Court held that it is not open to the assessee to raise a new ground, which was not considered by the Tribunal.
In this regard the following parameters were laid down by the Apex Court in the leading case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 to judge the jurisdiction of the Court to answer any ground under appeal:
“(1) When a question is raised before the Tribunal and is dealt with
by it, it is clearly one arising out of its order;
(2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order;
(3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order;
(4) When a question of law is neither raised before the Tribunal nor
considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it.”