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TMI Blog2019 (12) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation 5A(b) to section 271(1)(c) is bad in law and void-ab-initio, for the same was not applicable. 2. That on the facts and circumstances of the case and in law, Explanation 5A to section 2 71(1)(c) ivas not applicable to assessment year 2005-06, for the search was conducted on 30.7.2009, whereas Explanation 5A to section 271(1)(c) received the assent of the President of India on 13.8.2009. 3. That on the facts and circumstances of the case and in law, order levying penalty is without jurisdiction and bad in law, for the notice under section 274 read with section 271(1)(c) dated 23.12.2011, the words "have concealed the particulars of your income" or "furnish inaccurate particulars of such income" were not crossed out. 4. Without prejudice, the order levying penalty is without jurisdiction and bad in law, for no proper satisfaction was recorded by the Assessing Officer." 5. The assessee has taken additional ground pertaining to levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961. It was contended that the instant case of the assessee is covered under the provisions of Section 271AAA. Admission of the additional ground has been opposed in principle by the ld. DR and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(c) of the Income Tax Act, 1961. On the grounds that assessee was also covered u/s 132 in the search conducted on 30.07.2009, the assessee filed his return u/s 139 at an income of Rs. 1,48,33,570/- and the same has been treated as returned filed in response to notice u/s 153A of the Act. Further, addition of Rs. 5,59,802/- was made during the year under consideration by the AO on the basis of the documents seized during the search which were related to the assessee which the assessee has also admitted to this undisclosed income as stated in the assessment order by the Assessing Officer. 11. Heard the arguments of both the parties and perused the material available on record. 12. We find that, Explanation 5A to section 271(1)(c) was introduced for the first time by the Finance Act, 2007 and was amended w.r.e.f. 1.6.2007 by the Finance Act, 2009, Explanation 5A to section 271(1)(c) is applicable to cases where search was conducted on or after 1.6.2007. The provisions of the relevant provisions of the Act are as under: "[Explanation 5A.- Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer has not specified under which limb of the provisions of Section 271(1)(c), the penalty is being initiated and levied. The specific mention whether the penalty is levied whether for concealment of particulars of income or for furnishing inaccurate particulars of income. The judgment of Hon'ble jurisdictional High Court in the case of PCIT Vs Sahara India Life Insurance Co. Ltd. in ITA No. 475/2019 dated 02.08.2019 affirmed as under: "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT Vs Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Curt had followed the above judgment in the subsequent order in Commissioner of Income Tax V. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar.), the appeal against which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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