According to rule 27 of ITAT Rules, the respondent in appeal before the Tribunal even without filing an appeal could support the order appealed against on any of the grounds decided against him. Vide 408ITR517 it could be that all prayers in the appeal might be allowed by the Commissioner (Appeals), however, some of the contentions of the appellant might not have appealed to the Commissioner (Appeals). When such an order of the Commissioner (Appeals) was at large before the Tribunal, the respondent before the Tribunal would be entitled to defend the order on all grounds including on grounds held against him without filing an independent appeal or cross-objection with an application under rule 27.
Moreover, the powers of the ITAT while hearing appeals and cross-objections have been explained by DHC in 123 ITR 200 in the following words (page 207):
“Now, adverting to the rights of the respondent in an appeal, we start with the basic idea that, if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has a grievance, he has a right to file a cross-appeal (and under the Civil Procedure Code and the Income-tax Act of 1961, a memorandum of objections). But, if no such thing is done, he is deemed to be satisfied with the decision. He is, therefore, entitled to support the judgment of the first officer on any ground but he is not entitled to raise a ground that will work adversely to the appellant. In fact, such a ground may be a totally new ground, if it is purely one of law, and does not necessitate the recording of any evidence, even though the nature of the objection may be such that it is not only a defense to the appeal itself but goes further and may affect the validity of the entire proceedings. But the entertainment of such a ground would be subject to the restriction that even if it is accepted, it should be given effect to only for the purpose of sustaining the order in appeal and dismissing the appeal and cannot be made use of, to disturb or to set aside, the order in favor of the appellant (See B. R. Bamasi v. CIT  83 ITR 223 (Bom)). This liberty to the respondent is reserved by rule 27 of the Tribunal Rules.”
The Bombay High Court in 83ITR223 held that the refusal of the Tribunal to allow the assessee to challenge for the first time before it the validity of the notice and assessment under section 34 while considering the appeal filed by the department against the order of the Appellate Assistant Commissioner was not in accordance with law.
Recently now in 16ITR-Ol 114, the ITAT is found to have rejected the application filed before it under rule 27 by simply stating that the assessee could not point out as to what were the grounds decided against the assessee. In other words, the Tribunal held a point that the assessee under the garb of the application is trying to agitate a new ground which was not before the learned Commissioner of Income-tax (Appeals). Upon their examination of the order of Commissioner (Appeals), the Court found definite adverse inference against the assessee that is so pointed in the application by the assessee and ignored by the Tribunal. On this ground, the MP High Court held the order of ITAT to be perverse. The Court further on chose to refer to the decision of the Supreme Court rendered in the case of Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement  4 SCC 772, wherein the exact terms mentioned in section 260A of the Act, namely, “any order passed” were considered and interpreted by the Supreme Court with reference to the provisions of section 35 of the Foreign Exchange Management Act, 1999. The Supreme Court while interpreting the words “any decision or order of the appellate authority” has held that the word “any” would mean “all” orders passed by the appellate authority. The Supreme Court has held that as the words of the provision providing for appeal are wide enough to include all orders, a litigant cannot be denied the right to appeal conferred by the statutory provision, subject to the conditions mentioned therein, namely, that a substantial question of law arises for adjudication from the order in appeal.