Pure question of law on incriminating material in section 153A assessments can be raised first time and remanded for fresh adjudication.

A pure question of law bearing on tax liability may be raised for the first time before the Tribunal where the relevant facts are already on record, and the Tribunal may admit such a ground under its appellate powers. The assessee's objection that assessments under section 153A were unsustainable in the absence of incriminating material went to the root of the assessments, so the Tribunal admitted the additional ground and remitted the connected issues to the Commissioner (Appeals) for de novo adjudication after hearing both sides.

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Issues: Whether the assessee could be permitted to raise, for the first time before the Tribunal, a legal ground that the assessments framed under section 153A were unsustainable in the absence of incriminating material found during search, and whether the matters should be restored for fresh adjudication.

Analysis: The Tribunal noted that the proposed ground went to the root of the controversy and was based on facts already available on record. It considered the width of its powers under section 254 of the Income-tax Act, 1961, and relied on the principle that a pure question of law bearing on tax liability may be admitted at the appellate stage if the relevant facts are on record. Since the issue regarding absence of incriminating material had not been adjudicated by the first appellate authority and there were conflicting judicial views on the question, the Tribunal found it to admit the additional ground. As the admitted ground affected the foundation of the assessments, the Tribunal set aside the connected issues for fresh decision by the Commissioner (Appeals) after affording opportunity of hearing.

Conclusion: The additional ground was admitted and the matter was remitted to the Commissioner (Appeals) for de novo adjudication.

Ratio Decidendi: A pure question of law bearing on tax liability may be raised for the first time before the Tribunal when the relevant facts are already on record, and where such a ground goes to the root of the assessment, the Tribunal may admit it and remand the matter for fresh consideration.

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