TMI Blog2023 (4) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the wrong provisions of the Act i.e. section 271(1)(c) of the Act and therefore the same is not maintainable. Hence the ground of appeal of the assessee is allowed. - ITA No. 219/Rjt/2022 - - - Dated:- 31-3-2023 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER And Ms MADHUMITA ROY, JUDICIAL MEMBER For the Assessee : Ms Devina Patel, AR For the Revenue : Shri Shramdeep Sinha, C.I.T DR ORDER PER WASEEM AHMED , ACCOUNTANT MEMBER : The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), Rajkot, dated 12/07/2022 arising in the matter of penalty order passed under s. 271(1)(c) of the Income Tax Act, 1961 (here-in-after referred to as the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Hence, it is prayed that the additional ground being wholly legal in nature can be raised at any stage of proceedings and may kindly be admitted for adjudication in the interest of justice. 3. It was pleaded by the assessee in the application filed for the admission of the additional ground that the issue raised in the additional grounds are legal ground and goes to the root of the matter. The necessary facts are already available on record as they are arising from the order of authorities below. Accordingly, it was prayed by the learned AR for the assessee that the same should be admitted for adjudication. 4. On the other hand, the learned DR opposed to admit the additional ground of objection on the reasoning tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised earlier. 5.1 From the above, it is transpired that the view that the Tribunal is confined only to those issues arising out of the appeal before Commissioner (Appeals) is too narrow a view to describe the powers of the Tribunal. Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which were on record during the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Since, the claim of the assessee is purely legal claim and entire facts are availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has either concealed income or furnished inaccurate particulars of income. The assessee also contended that there was no material on record to suggest that there was willful attempt to conceal the particulars of income. 8. However, the AO disagreed with the contention of the assessee and held that the addition was made on the basis of material found during the search and not on the estimation basis. The penalty proceeding under section 271(1)(c) as held the Hon ble supreme court in the case of Dharmendra Textile Processers reported in 306 ITR 227 are civil proceeding therefore establishment of willful attempt/mens-rea is not necessary to levy penalty. Further, the income was found during the search, had the search not been carried out, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention is not correct. As per the documents seized the Appellant and his two partners had earned profits of Rs. 10,70,000/- and Rs. 2,62,000/- from two land deals whose details are outlined in said documents. One third share of Appellant works out to Rs. 4,44,000/-. Thus, it is specific and factual addition and not an estimated addition. f) The next contention of Appellant is that there is no finding of AO of willful neglect or fraud by Appellant. This is not correct. As per seized documents the profit of Rs. 4,44,000/- accrued to Appellant but he did not offer this Income in the ITR filed. It is a clear cut case of Willful neglect. g) The Hon'ble Apex Court in MAK Data (P) Ltd. vs CIT (2013) in 358 ITR 593(SC) held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30th May 2012. As such, the date of search falls under the period specified under section 271AAA of the Act i.e. on or after 1st June 2007 but before 1st July 2012 and the year in dispute is the specified assessment year as provided under clause (b) of explanation to section 271AAA of the Act. Therefore, if any penalty is leviable, then the same has to be charged under the provisions of section 271AAA(1) of the Act and not under section 271(1)(c) of the Act. Therefore, the penalty levied under section 271(1)(c) of the Act is required to be quashed. 12. On the other hand, the learned DR vehemently supported the order of the authorities below. 13. We have heard the rival contentions of both the parties and perused the materials av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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