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TMI Blog2024 (11) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the first appellate authority can be deemed to be decided against the assessee and that the assessee was entitled to canvass the said issue before the Tribunal without independently filing the appeal in the light of Rule 27 of ITAT Rules, 1963. Hon'ble Bombay High Court in Peter Vaz and Others Vs. CIT [ 2021 (4) TMI 605 - BOMBAY HIGH COURT] also considered very similar issue and held that Rule 27 of ITAT Rules, 1963 gives a right to the respondent in an appeal before the Tribunal to support the order appealed against on any of the grounds decided against him, even though he may not have appealed against the order. For supporting the order, it is not necessary for the respondent in the appeal to file a memorandum of cross objection challenging a particular finding that is rendered by the trial court against him, when the ultimate decree itself is in his favour. The sum and substance of ratio laid down by various courts is that the respondent can support the order appealed against on any points which has been decided against him by way of application under Rule 27 of ITAT Rules, 1963. Since the question raised by the assessee by way of application under Rule 27 of ITAT Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to disallow cash payments of Rs. 65,28,28,100/- made to M/s Aurora Educational Society vide his statement recorded during search proceedings. 3. The Ld.CIT(A) ought to have appreciated the fact that in order to escape from the penal provisions of dealing in cash the assessee disguised and camouflaged the cash payments of Rs. 4,83,51,191/- under the head Development Expenses and Site Salaries in the books of accounts. 4. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary. 3. Brief facts of the case are that a search and seizure operation u/s 132 of the Income tax Act, 1961 ( the Act ) was conducted in the case of M/s Aurora Educational Society Other groups, in which assessee was also covered. During the course of search at the premises of M/s Incredible India Projects Pvt. Ltd., certain cash receipts and cash vouchers in respect of cash payments made to M/s Aurora Educational Society for purchase of immovable properties were found and seized vide Annexure A/IIPPL/01. The assessee was called upon to explain the nature of payment and treatment given in its books of accounts for which, it was stated that the cash payments are debited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on additional income offered towards cash payments made for purchase of immovable property and admitted in the return of income filed in response to notice u/s 153A of the Act. The assessee had also filed detailed written submission on the issue which has been reproduced at para 6.1 of the order of the Ld.CIT(A) for both the assessment years. Ld.CIT(A) after considering the submissions of the assessee and also by following certain judicial precedents held that cash paid towards purchase of immovable properties and debited under the heads Development Expenses and Site Expenses has been admitted as additional income while filing the return of income u/s 153A of the Act. Therefore, it is not a case of recording any false entry in the books of accounts and further the Assessing Officer has not made out a case that these expenses were not actually incurred and were falsely claimed by the appellant. Further, it is only the case of admitting income on the basis of deeming provision of section 40A(3) of the Act and not on account of recording a false entry in the books of account. An entry is said to be a false entry, if it is patently incorrect or untrue or wrongly made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) on the points which has been decided against the assessee. Therefore, submitted that the penalty levied by the Ld.AO on the basis of vague notice without specifying any limb under which the said penalty is attracted cannot be sustained under law and needs to be deleted. 9. Learned Counsel for the assessee further submitted that even otherwise penalty levied by the Assessing Officer u/s 270A of the Act, in respect of additional income offered by the assessee in the return of income u/s 153A does not fall under the category of under reporting of income which is in consequence of mis reporting, because the assessee has accounted cash payments in its books of account before the date of search, however, offered additional income under deeming provisions of section 40A(3) of the Act. Further penalty u/s 271AAB of the Act is also not applicable for the A.Y.2018-19, because additions made by the Assessing Officer does not fall under the definition of undisclosed income. Therefore, Ld.CIT(A) has rightly deleted penalty levied by the Assessing Officer and the order should be upheld. 10. Ld.DR on the other hand opposing the application filed by the assessee under Rule 27 of ITAT Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, the assessee has challenged the penalty levied by the Assessing Officer on the basis of vague notice, without specifying the limb under which the said penalty is levied. From the above, it is clear that the assessee has raised the issue of notice u/s 274 r.w.s. 270A/271AAB and the validity of said notice in light of certain judicial precedents and argued that in the absence of specific limb under which penalty is levied whole penalty proceedings becomes vitiated and liable to be quashed. 13. There is no dispute, Ld.CIT(A) has not adjudicated the legal issue raised by way of written submission. However, the question before us is whether the assessee can raise the said plea before the Tribunal by way of application under Rule 27 of ITAT Rules, 1963 or not. This issue is no longer res-integra. Hon'ble Madras High Court in the case of CIT Vs. India Cement Ltd. (supra) had considered identical issue and held that, once the assessee raised an issue before the CIT(A), which was not adjudicated by the first appellate authority can be deemed to be decided against the assessee and that the assessee was entitled to canvass the said issue before the Tribunal without independently fili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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