Is Rule 27 a concession the Tribunal may refuse, or a right the respondent can insist on?
The Madras High Court held that Rule 27 confers a right on the respondent and that the Tribunal has no discretion to deny him its benefit. It is an enabling provision, rooted in natural justice, which allows a party who won below to defend that result on every ground he had urged, whether or not it found favour.
Decided by the High Court on 1964, reported as (1964) 52 ITR 763 (Madras). It bears on section 251, section 253 of the Income Tax Act 1961, in Appeals matters.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The respondent before the Tribunal had succeeded before the Appellate Assistant Commissioner on one ground while other grounds had been decided against it. It had not filed a cross-appeal. When the Revenue appealed, the respondent sought to support the order on the grounds decided against it. The question was whether the Tribunal was bound to hear those grounds.
The respondent, though he may not have appealed, may support the order of the Appellate Assistant Commissioner on any of the grounds decided against him. This is a right conferred upon him and the Tribunal has no discretion to deprive the respondent of the benefit of the rule; it is an enabling provision which the respondent can avail himself of.
A litigant who has obtained a favourable decision should not be prejudiced merely because the deciding authority preferred one of his several arguments over the others. Natural justice requires that when the successful party's order is under attack, he be permitted to support it on every ground he had urged below. Since the rule is framed for the respondent's benefit and imposes no condition, there is nothing on which a discretion could operate. Treating it as discretionary would force protective cross-appeals in every case.
This is a right conferred upon him. The Tribunal has no discretion to deprive the respondent of the benefit of this rule.
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Handle my notice → Ask a CA on WhatsAppThe Madras High Court held that Rule 27 confers a right on the respondent and that the Tribunal has no discretion to deny him its benefit. It is an enabling provision, rooted in natural justice, which allows a party who won below to defend that result on every ground he had urged, whether or not it found favour. This was decided by the High Court and bears on section 251, section 253 of the Income Tax Act 1961. It is reported as (1964) 52 ITR 763 (Madras). If it applies to you, the first step is this: If the bench suggests Rule 27 is discretionary or that you have 'waived' the ground by not cross-appealing, cite Sundaram & Co for the contrary.
The respondent before the Tribunal had succeeded before the Appellate Assistant Commissioner on one ground while other grounds had been decided against it. It had not filed a cross-appeal. When the Revenue appealed, the respondent sought to support the order on the grounds decided against it. The question was whether the Tribunal was bound to hear those grounds. The matter was decided on 1964 by the High Court. On those facts the High Court held as follows. The respondent, though he may not have appealed, may support the order of the Appellate Assistant Commissioner on any of the grounds decided against him. This is a right conferred upon him and the Tribunal has no discretion to deprive the respondent of the benefit of the rule; it is an enabling provision which the respondent can avail himself of.
A litigant who has obtained a favourable decision should not be prejudiced merely because the deciding authority preferred one of his several arguments over the others. Natural justice requires that when the successful party's order is under attack, he be permitted to support it on every ground he had urged below. Since the rule is framed for the respondent's benefit and imposes no condition, there is nothing on which a discretion could operate. Treating it as discretionary would force protective cross-appeals in every case. In the words reproduced by the source cited on this page: "This is a right conferred upon him. The Tribunal has no discretion to deprive the respondent of the benefit of this rule."
It was decided by the High Court on 1964 and is reported as (1964) 52 ITR 763 (Madras). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 251, section 253, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The respondent, though he may not have appealed, may support the order of the Appellate Assistant Commissioner on any of the grounds decided against him. This is a right conferred upon him and the Tribunal has no discretion to deprive the respondent of the benefit of the rule; it is an enabling provision which the respondent can avail himself of. It arises in Appeals matters, on section 251, section 253 of the Income Tax Act 1961. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Identify, at the time of filing the appeal papers, every ground the CIT(A) decided against you even though you won overall - those are your Rule 27 grounds. Raise the Rule 27 plea at the hearing and ask that it be recorded; no formal written application is required. Do not treat Rule 27 as a reason to skip a cross-objection where you actually want relief - the rule only sustains the existing order. In the first appeal itself, press the CIT(A) to decide all your grounds, not just the one he accepts, so that your Rule 27 armoury is on record.
Still good law. A separate check found the Delhi High Court in Sanjay Sawhney v PCIT (2020) treating Sundaram & Co as the seminal decision on Rule 27 and adopting its reasoning that the rule embodies natural justice and confers a right, and further holding that Rule 27 can be invoked orally without a written application. No overruling found. That finding was checked against a published source, which is linked on this page, on 2026-08-19. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The respondent, though he may not have appealed, may support the order of the Appellate Assistant Commissioner on any of the grounds decided against him. This is a right conferred upon him and the Tribunal has no discretion to deprive the respondent of the benefit of the rule; it is an enabling provision which the respondent can avail himself of.
TaxSphere, “CIT v Sundaram & Co”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-sundaram-and-co-rule-27-no-discretion/ (validity last checked 2026-08-19)
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Can a respondent who did not appeal use Rule 27 to get the assessment annulled?
How far can a respondent go under Rule 27 - can it reopen matters outside the subject-matter of the appeal?
Does failing to file a cross-objection make the findings decided against you final?
How wide are the first appellate authority's powers when it disposes of an appeal?
