I won before the CIT(A) but lost the jurisdiction point. Can I raise it in their appeal?
Yes. Rule 27 lets a respondent who has not appealed support the order on a ground decided against him, provided the ground relates to the subject matter of the appeal and bears on the outcome. Not filing a cross-objection is not acceptance of the adverse findings, and the Rule prescribes no written application.
Decided by the High Court (Delhi High Court — Vipin Sanghi and Sanjeev Narula JJ) on 2020-05-18, reported as IT Appeal No. 834 of 2019; [2020] 116 taxmann.com 701 (Delhi) / [2020] 273 Taxman 332 (Delhi); neutral citation 2020:DHC:1935-DB. It bears on section 253, section 254, section 153C, section Rule 27 ITAT Rules 1963 of the Income Tax Act 1961, in Appeals matters.
It rescues the situation every practitioner recognises: the client won on merits, so nobody appealed, and the jurisdictional ground appears to be lost when the department goes to the Tribunal. The Court held the ground was integral to the appeal because accepting it would sustain the very order under challenge. It also disposes of the Tribunal's objection that the invocation must be in writing.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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Following a search on the Kouton group on 19 February 2009, an MOU relating to the sale and purchase of share capital of S.R. Resorts Pvt. Ltd. was seized, and a notice under s.153C was issued to the assessee for AY 2008-09. The assessee filed a return declaring Rs. 8,90,760, and the assessment determined total income at Rs. 1,46,15,445. Before the Commissioner (Appeals) he challenged both the additions on merits and the validity of the s.153C proceedings, on the grounds that no satisfaction note had been recorded and that there was no nexus with the seized material. The Commissioner (Appeals) rejected the jurisdictional pleas but deleted the additions, so the assessee was the winner in the result and filed no appeal or cross-objection. The Tribunal, by order dated 25 March 2019 in ITA No. 4856/2015, allowed the Revenue's appeal and remanded the matter to the Assessing Officer, having declined to entertain the assessee's jurisdictional grounds under Rule 27 because no written application had been made.
A respondent who has succeeded in the result before the Commissioner (Appeals), and has therefore filed no appeal or cross-objection, is entitled under Rule 27 of the ITAT Rules 1963 to defend that order before the Tribunal on any ground decided against him, including a jurisdictional ground going to the validity of the s.153C proceedings, provided the ground bears on the final decision under appeal. Not filing a cross-objection raises no inference that the adverse findings were accepted. The Tribunal's order was held perverse in so far as it refused to let the assessee urge those grounds by oral application under Rule 27, and was set aside. The High Court did not itself decide the s.153C jurisdictional question: it remitted the matter to the Tribunal to hear afresh, allowing the assessee to raise the additional grounds on assumption of jurisdiction and validity of the reassessment (para 26).
The Court read Rule 27 from its opening words. 'The Respondent, though he may not have appealed' shows the rule is meant for a party who could have appealed or cross-objected and chose not to, and who is enabled by it to defend the order effectively; conversely a respondent with no such right of appeal cannot invoke it (para 20). The remaining words — 'may support the order appealed against on any of the grounds decided against him' — allow the respondent to support the order on any ground decided against him, so the assessee, seeking to have the initiation of reassessment declared invalid in order to sustain the Commissioner (Appeals)'s order in his favour, was within the rule (para 20). The Court set the limit in the same paragraph: Rule 27 cannot be used for an issue independently decided against the respondent which has no bearing on the final decision below, and a respondent who wants anything beyond confirmation of the order must file a cross-appeal or cross-objection; Rule 27 and the cross-objection provisions operate in separate fields with some overlap. The Court rejected the Revenue's argument that permitting Rule 27 would enlarge the subject-matter of the appeal, holding that 'subject-matter' is not to be read narrowly but as encompassing the entire controversy, and that the word 'thereon' in s.254(1) confines the Tribunal to the subject-matter, not to the appellant's grounds (paras 14, 19, 21). It distinguished its own earlier decisions in Divine Infracon and Edward Keventer on their facts (paras 16 to 18) and relied on CIT v. Sundaram & Co. (Mad.), Kanpur Industrial Works (All.), Sun Pharmaceuticals (Guj.) and Dahod Sahakari Kharid Vechan Sangh (Guj.). The proposition that the principle underlying Rule 27 would be available even without the rule, as a matter of natural justice, is the Madras High Court's in Sundaram & Co., which this Bench adopted at para 21. On the facts, the jurisdictional question had a bearing on the Commissioner (Appeals)'s final order because success on it would have been an additional reason to delete the additions (para 22), and the Tribunal, instead of applying the rule, 'engaged itself in a totally irrelevant issue of the form and structure of the application' (para 21).
Rule 27 embodies a fundamental principal that a Respondent who may not have been aggrieved by the final order of the Lower Authority or the Court, and therefore, has not filed an appeal against the same, is entitled to defend such an order before the Appellate forum on all grounds, including the ground which has been held against him by the Lower Authority, though the final order is in its favour.
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Handle my notice → Ask a CA on WhatsAppYes. Rule 27 lets a respondent who has not appealed support the order on a ground decided against him, provided the ground relates to the subject matter of the appeal and bears on the outcome. Not filing a cross-objection is not acceptance of the adverse findings, and the Rule prescribes no written application. This was decided by the High Court (Delhi High Court — Vipin Sanghi and Sanjeev Narula JJ) and bears on section 253, section 254, section 153C, section Rule 27 ITAT Rules 1963 of the Income Tax Act 1961. It is reported as IT Appeal No. 834 of 2019; [2020] 116 taxmann.com 701 (Delhi) / [2020] 273 Taxman 332 (Delhi); neutral citation 2020:DHC:1935-DB. It rescues the situation every practitioner recognises: the client won on merits, so nobody appealed, and the jurisdictional ground appears to be lost when the department goes to the Tribunal. The Court held the ground was integral to the appeal because accepting it would sustain the very order under challenge. It also disposes of the Tribunal's objection that the invocation must be in writing. If it applies to you, the first step is this: Invoke Rule 27 on the record at the hearing of the department's appeal, and do not assume a written application is required.
Following a search on the Kouton group on 19 February 2009, an MOU relating to the sale and purchase of share capital of S.R. Resorts Pvt. Ltd. was seized, and a notice under s.153C was issued to the assessee for AY 2008-09. The assessee filed a return declaring Rs. 8,90,760, and the assessment determined total income at Rs. 1,46,15,445. Before the Commissioner (Appeals) he challenged both the additions on merits and the validity of the s.153C proceedings, on the grounds that no satisfaction note had been recorded and that there was no nexus with the seized material. The Commissioner (Appeals) rejected the jurisdictional pleas but deleted the additions, so the assessee was the winner in the result and filed no appeal or cross-objection. The Tribunal, by order dated 25 March 2019 in ITA No. 4856/2015, allowed the Revenue's appeal and remanded the matter to the Assessing Officer, having declined to entertain the assessee's jurisdictional grounds under Rule 27 because no written application had been made. The matter was decided on 2020-05-18 by the High Court (Delhi High Court — Vipin Sanghi and Sanjeev Narula JJ). On those facts the High Court held as follows. A respondent who has succeeded in the result before the Commissioner (Appeals), and has therefore filed no appeal or cross-objection, is entitled under Rule 27 of the ITAT Rules 1963 to defend that order before the Tribunal on any ground decided against him, including a jurisdictional ground going to the validity of the s.153C proceedings, provided the ground bears on the final decision under appeal. Not filing a cross-objection raises no inference that the adverse findings were accepted. The Tribunal's order was held perverse in so far as it refused to let the assessee urge those grounds by oral application under Rule 27, and was set aside. The High Court did not itself decide the s.153C jurisdictional question: it remitted the matter to the Tribunal to hear afresh, allowing the assessee to raise the additional grounds on assumption of jurisdiction and validity of the reassessment (para 26).
The Court read Rule 27 from its opening words. 'The Respondent, though he may not have appealed' shows the rule is meant for a party who could have appealed or cross-objected and chose not to, and who is enabled by it to defend the order effectively; conversely a respondent with no such right of appeal cannot invoke it (para 20). The remaining words — 'may support the order appealed against on any of the grounds decided against him' — allow the respondent to support the order on any ground decided against him, so the assessee, seeking to have the initiation of reassessment declared invalid in order to sustain the Commissioner (Appeals)'s order in his favour, was within the rule (para 20). The Court set the limit in the same paragraph: Rule 27 cannot be used for an issue independently decided against the respondent which has no bearing on the final decision below, and a respondent who wants anything beyond confirmation of the order must file a cross-appeal or cross-objection; Rule 27 and the cross-objection provisions operate in separate fields with some overlap. The Court rejected the Revenue's argument that permitting Rule 27 would enlarge the subject-matter of the appeal, holding that 'subject-matter' is not to be read narrowly but as encompassing the entire controversy, and that the word 'thereon' in s.254(1) confines the Tribunal to the subject-matter, not to the appellant's grounds (paras 14, 19, 21). It distinguished its own earlier decisions in Divine Infracon and Edward Keventer on their facts (paras 16 to 18) and relied on CIT v. Sundaram & Co. (Mad.), Kanpur Industrial Works (All.), Sun Pharmaceuticals (Guj.) and Dahod Sahakari Kharid Vechan Sangh (Guj.). The proposition that the principle underlying Rule 27 would be available even without the rule, as a matter of natural justice, is the Madras High Court's in Sundaram & Co., which this Bench adopted at para 21. On the facts, the jurisdictional question had a bearing on the Commissioner (Appeals)'s final order because success on it would have been an additional reason to delete the additions (para 22), and the Tribunal, instead of applying the rule, 'engaged itself in a totally irrelevant issue of the form and structure of the application' (para 21). In the words reproduced by the source cited on this page: "Rule 27 embodies a fundamental principal that a Respondent who may not have been aggrieved by the final order of the Lower Authority or the Court, and therefore, has not filed an appeal against the same, is entitled to defend such an order before the Appellate forum on all grounds, including the ground which has been held against him by the Lower Authority, though the final order is in its favour." The decision followed or applied CIT v. Sundaram & Co. (P.) Ltd. [1964] 52 ITR 763 (Mad.) — relied on; Kanpur Industrial Works v. CIT [1966] 59 ITR 407 (All.) — relied on; Pr. CIT v. Sun Pharmaceuticals Industries Ltd. [2018] 408 ITR 517 (Guj.) — relied on; Dahod Sahakari Kharid Vechan Sangh Ltd. v. CIT [2006] 282 ITR 321 (Guj.) — relied on; CIT v. Divine Infracon (P.) Ltd. [2015] 64 taxmann.com 472 (Delhi) — distinguished; CIT v. Edward Keventer (Successors) (P.) Ltd. [1980] 123 ITR 200 (Delhi) — distinguished.
It was decided by the High Court on 2020-05-18 and is reported as IT Appeal No. 834 of 2019; [2020] 116 taxmann.com 701 (Delhi) / [2020] 273 Taxman 332 (Delhi); neutral citation 2020:DHC:1935-DB. 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 253, section 254, section 153C, section Rule 27 ITAT Rules 1963, 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 helps the taxpayer. A respondent who has succeeded in the result before the Commissioner (Appeals), and has therefore filed no appeal or cross-objection, is entitled under Rule 27 of the ITAT Rules 1963 to defend that order before the Tribunal on any ground decided against him, including a jurisdictional ground going to the validity of the s.153C proceedings, provided the ground bears on the final decision under appeal. Not filing a cross-objection raises no inference that the adverse findings were accepted. The Tribunal's order was held perverse in so far as it refused to let the assessee urge those grounds by oral application under Rule 27, and was set aside. The High Court did not itself decide the s.153C jurisdictional question: it remitted the matter to the Tribunal to hear afresh, allowing the assessee to raise the additional grounds on assumption of jurisdiction and validity of the reassessment (para 26). It arises in Appeals matters, on section 253, section 254, section 153C, section Rule 27 ITAT Rules 1963 of the Income Tax Act 1961, and was decided by Delhi High Court — Vipin Sanghi and Sanjeev Narula JJ. 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. Show how the ground you are reviving would sustain the order you won rather than enlarge the relief given to you. Where the point could give you more than the CIT(A) allowed, file a cross-objection within time instead of relying on this. Do not leave adverse findings unanswered in the appellate order on the assumption that winning overall protects them.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision applying, following or affirming this judgment was found on the database, and the report carries no citator banner recording any appellate treatment or SLP. The CASE REVIEW block records only what this decision did below — the Tribunal's order dated 25 March 2019 in ITA No. 4856/2015 was reversed, and Divine Infracon and Edward Keventer were distinguished. Absence of contrary authority is not confirmation, so the status stays unverified. No source could be cited for that finding. 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.
This entry is also where the library covers cross-objections, but the judgment decides when Rule 27 substitutes for one, not the limitation or scope of a cross-objection itself — do not cite it for those. The rules are the Income-tax (Appellate Tribunal) Rules, 1963. Two things the entry did not say: the previously published quote was the text of Rule 27 itself rather than anything the Court held, and the disposal was a remand — the Delhi High Court answered the Rule 27 question and sent the case back to the Tribunal to hear the s.153C jurisdictional grounds, which remain undecided. The s.153C jurisdictional grounds — no satisfaction note, no nexus with seized material — were not decided; the Court remitted them to the Tribunal (para 26). This is therefore authority on Rule 27 only. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
A respondent who has succeeded in the result before the Commissioner (Appeals), and has therefore filed no appeal or cross-objection, is entitled under Rule 27 of the ITAT Rules 1963 to defend that order before the Tribunal on any ground decided against him, including a jurisdictional ground going to the validity of the s.153C proceedings, provided the ground bears on the final decision under appeal. Not filing a cross-objection raises no inference that the adverse findings were accepted. The Tribunal's order was held perverse in so far as it refused to let the assessee urge those grounds by oral application under Rule 27, and was set aside. The High Court did not itself decide the s.153C jurisdictional question: it remitted the matter to the Tribunal to hear afresh, allowing the assessee to raise the additional grounds on assumption of jurisdiction and validity of the reassessment (para 26).
TaxSphere, “Sanjay Sawhney v PCIT”, https://taxnotice.vittsphere.com/caselaw/case/sanjay-sawhney-v-pcit-rule-27/ (validity last checked 2026-08-19)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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