2016 (2) TMI 1052 - AT - Income Tax

Admission of additional evidence - objection to the DVO s Report - sale of land - Held that - The prayer of the assessee for admission of additional evidences in the peculiar facts and circumstances of the case, I find was fully justified. Not only the evidence is relevant and crucial for determining the issues even otherwise the explanation offered in support of admission of the same i.e. the acute financial need of the assessee prior to the sale on account of the assessee s father suffering from cancer and finally succumbing to the disease where the financial needs for the treatment etc. was sourced from friends, relatives and the aforesaid uncle thus the relevant document remaining with the uncle is not a far-fetched story and is an acceptable explanation. CIT(A) in the facts of the present case has not cared to ensure that compliance is made of the directions given by his predecessor CIT(A) dated 08.12.2014 communicated to the DVO through AO vide letter dated 28.08.2014. A perusal of the same shows that the said authority was directed that the assessee be provided an opportunity of being heard by the DVO before submitting the Final Report which issue is found addressed vide Ground No.1.4 of the present proceedings. The sale instance relied upon by the assessee, it is found have also not been taken into consideration as found addressed in Ground No.2.2. Accordingly in view of these obvious and patent deficiencies, the impugned order is set aside and the issues are restored to the CIT(A) with the direction to admit the fresh evidences and confront the same to the AO by way of a Remand Report. In case the DVO s Report is relied upon then an opportunity of being heard to the assessee by the DVO be provided before submitting a final Report which as per law is required to be confronted to the assessee before the passing of the order. Similarly, the sale instance of land in the vicinity relied upon by the assessee in support of his prayer are evidences which need to be addressed and the CIT(A) cannot avoid adjudication on the prayer made and the evidences filed. Accordingly, in view of the above reasoning, the impugned order is set aside and the issue is restored back to the CIT(A) with the direction to pass a speaking order in accordance with law. - Appeal of the assessee allowed for statistical purposes.

Summary

Issues:
Appeal against correctness of order dated 16.06.2016 of CIT(A)-21, New Delhi for 2009-10 assessment year on various grounds including rejection of additional grounds of appeal, failure to decide application under rule 46A of IT Rules, 1962, and deciding appeal without final report of DVO.

Analysis:
1. Rejection of Additional Grounds of Appeal:
The appellant challenged the CIT(A)'s decision not to decide the application dated 21.07.2014 for permission to raise additional grounds of appeal. The appellant argued that due to personal circumstances, crucial documents supporting the case were inadvertently left with the uncle and could not be produced before the AO. The appellant requested the tax authorities to admit the evidence and consider the claim. The ITAT found the explanation plausible, given the financial difficulties faced by the appellant due to the father's illness. The ITAT set aside the impugned order and directed the CIT(A) to admit fresh evidence for a fair consideration.

2. Failure to Decide Rule 46A Application:
The appellant contended that the CIT(A) erred in rejecting the application under rule 46A of the IT Rules, 1962. The ITAT noted that the CIT(A) did not ensure compliance with the directions given by the predecessor CIT(A) to provide the appellant an opportunity to be heard before the DVO submitted the final report. The ITAT found this to be a deficiency and set aside the impugned order, directing the CIT(A) to confront the fresh evidence to the AO through a Remand Report.

3. Decision Without Final Report of DVO:
The appellant raised concerns about the CIT(A) deciding the appeal without the final report of the DVO, which was called for by the predecessor CIT(A). The ITAT observed that the CIT(A) did not address the additional grounds raised before him, leading to a lack of consideration of crucial evidence and sale instances presented by the appellant. The ITAT set aside the impugned order and instructed the CIT(A) to pass a speaking order in accordance with the law, considering the fresh evidence and providing an opportunity for the appellant to be heard by the DVO before the final report submission.

Conclusion:
The ITAT allowed the appeal of the assessee for statistical purposes, setting aside the impugned order and restoring the issues back to the CIT(A) with directions to admit fresh evidence, address the concerns raised, and pass a speaking order in compliance with the law. The decision aimed to ensure a fair consideration of the appellant's case and the crucial evidence supporting it.