2013 (10) TMI 1425 - AT - Income Tax

Admission of additional evidence - Held that - In the assessment proceedings resumed on 10.12.2010, 13.12.2010 and 28.12.2010, the AR has been asked to explain the issues raised in the CIT s order u/s 263 of the Act. Once again, no specific information has been called for during these dates and thereby the AO proceeded to complete the assessment on 31.12.2010 i.e., within a span of 20 days. This, in our view, resultantly implies that the assessee has not been provided with proper opportunity in the light of rule 46A (1) (d) which provides one of the exceptional circumstances under which the Ld.CIT(A) can admit the additional evidence in the first appellate proceedings. It is also relevant to note that before admitting the additional evidence, the Ld.CIT(A) has called for a remand report from the AO on the additional evidence furnished by the assessee and accordingly considered the submission of the AO dated 27.01.2012 by giving proper opportunity to the AO to examine the said additional evidence. We are of the view that the Ld.CIT(A) has not contravened Rule 46A of the I.T. Rules while admitting the additional evidences filed by the assessee during the first appellate proceedings. Therefore, we do not find any justifiable reason to interfere with the order of the Ld.CIT(A) on this count and the same is upheld.

Summary

Issues: Revenue's appeal against the allowance of additional evidence during the first appellate proceedings contravening Rule 46A of the Income Tax Rules for Assessment Year 2005-06.

Analysis:
1. The Revenue contested the action of the Ld.CIT(A) in allowing additional evidence during the first appellate proceedings, arguing it violated Rule 46A of the Income Tax Rules. The assessee, an individual, had an outstanding loan amount from a specific source, which the AO added to the total income due to lack of details and evidence. However, the Ld.CIT(A) admitted new evidence in the form of confirmation letters and repayment details, leading to the deletion of the addition. The Revenue challenged this decision.

2. The tribunal noted that the AO did not call for specific information regarding the loan transactions during various proceedings, completing the assessment within a short span, which deprived the assessee of a proper opportunity. The Ld.CIT(A) followed the procedure by seeking a remand report from the AO on the additional evidence submitted by the assessee and allowing the AO to examine it. The tribunal found that the Ld.CIT(A) did not contravene Rule 46A of the I.T. Rules while admitting the additional evidence, as the circumstances warranted it. Therefore, the tribunal upheld the Ld.CIT(A)'s decision, dismissing the Revenue's appeal.

3. The tribunal concluded that the Ld.CIT(A) provided a fair opportunity to both parties and followed the legal procedures correctly. The decision to admit additional evidence was justified under the exceptional circumstances outlined in Rule 46A. As a result, the tribunal upheld the Ld.CIT(A)'s order, dismissing the Revenue's appeal for the Assessment Year 2005-06.