2012 (7) TMI 92 - AT - Income Tax

Rule 46A - Admission of additional evidences By Commissioner(Appeals) - Revenue contended violation of Rule 46A since on opportunity of rebutting the evidences has been given to Assessing officer - Held that - CIT (A) while admitting additional evidences had not given any findings under which exception of Rule 46A these evidences were admitted. Additional evidence can be produced at the first appellate stage only when conditions stipulated in the rule 46A are satisfied and a finding is recorded. The conditions prescribed in rule 46A must be shown to exist before additional evidence is admitted and every procedural requirement mentioned in the rule has to be strictly complied with so that the rule is meaningfully exercised and not exercised in a routine or cursory manner. Sub-rule (3) of Rule 46A, interdicts the Commissioner (Appeals) from taking into account any evidence produced for the first time before him unless the AO has had a reasonable opportunity of examining the evidence and rebut the same. Therefore, we set aside the issue to the file of the Assessing Officer to be decided de novo - Decided in favor of Revenue for statistical purposes.

Summary

Issues involved:
1. Allowance of relief to the assessee under section 43B without proper evidence.
2. Deletion of addition on account of interest without giving the Assessing Officer an opportunity to examine additional evidence.
3. Admissibility of additional evidence by the CIT (A) without following Rule 46A.

Analysis:
1. The first issue pertains to the relief granted to the assessee under section 43B without sufficient evidence. The revenue contended that the CIT (A) erred in allowing the relief without the assessee establishing evidence before the Assessing Officer. The Tribunal found a violation of I.T. Rule 46A in deleting the addition under section 43B. The decision of the Hon'ble Delhi High Court in a similar case was cited to support this argument.

2. The second issue revolves around the deletion of an addition on account of interest without giving the Assessing Officer a chance to examine additional evidence submitted by the assessee. The revenue argued that the CIT (A) accepted new evidence from a bank without affording the Assessing Officer an opportunity to rebut. The Tribunal noted that the CIT (A) did not provide findings on why these new evidences were admitted, indicating a clear violation of Rule 46A.

3. The third issue focuses on the admissibility of additional evidence by the CIT (A) without adhering to Rule 46A. The assessee's representative argued that the CIT (A) exercised powers under section 250(4) of the Income-tax Act by issuing summons to the bank and submitting only copies of bank statements and certificates. However, the Tribunal found that the CIT (A) did not comply with all requirements of Rule 46A, specifically sub-rule (3) which mandates the Assessing Officer to have a reasonable opportunity to examine the evidence.

In conclusion, the Tribunal set aside the issues for the Assessing Officer to decide afresh, emphasizing compliance with Rule 46A and proper examination of evidence. The appeal of the revenue was allowed for statistical purposes, granting the assessee the liberty to file documents before the Assessing Officer.