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2015 (11) TMI 190 - HC - Income TaxAssessment under Section 153A read with Section 144 - On the filing of the additional evidence before him, the Commissioner of Income Tax (Appeals) forwarded the paper books itself to the Assessing Officer and required the Assessing Officer to examine the new evidences/details/submissions of the assessee and to give a report - satisfaction of conditions laid down in Rule 46A of the Rules - Held that - This is a case where the Commissioner (Appeals) has allowed the Assessing Officer adequate opportunity as provided under sub rule 3 to examine the evidence produced by the appellant. In the remand report that he has furnished apart from requesting for its rejection, the Assessing Officer did not, either dispute the genuineness of the documents nor did he ask for cross examination of the witness, or to adduce any evidence in rebuttal of the documents produced by the appellant. In other words, sub rule 3 has been fully complied with. It was thereafter, that the First Appellate Authority proceeded to adjudicate the appeal, duly taking into account the additional evidence produced by the appellant. One of the contentions raised in these appeals that having admitted the additional evidence, the Commissioner (Appeals) should have remanded the case to the Assessing Officer for his consideration cannot be accepted in the light of sub rule 4, a reading of which shows that it was open to the Commissioner (Appeals) to dispose of the appeal by himself or even to remit the matter to the Assessing Officer. If additional documents are summoned by the Commissioner (Appeals) and produced or if the additional evidence produced by the assessee are in the nature of clinching evidence leaving no further room for any doubt or controversy, it is not necessary to give an opportunity to the Assessing Officer to contradict the same. In other words, the finding of the Tribunal would suggest that in cases where documents are summoned by the Commissioner (Appeals) and in cases where the documents produced are conclusive, the principles of natural justice are excluded. We are unable to enclose these finding of the Tribunal. As held by Delhi High Court in Commissioner of Income Tax v. United Towers (I,) P. Ltd. 2007 (4) TMI 177 - DELHI HIGH COURT Rule 46A(4) of the Rules does not specifically exclude the principles of natural justice and, therefore, these principles are to be read into the Rules. Therefore, we disprove the finding of the Tribunal.
Issues Involved:
1. Admission of additional evidence by the Commissioner of Income Tax (Appeals). 2. Compliance with Rule 46A of the Income Tax Rules, 1962. 3. Requirement of remanding the case to the Assessing Officer after admitting additional evidence. 4. Principles of natural justice in the context of additional evidence. Detailed Analysis: Admission of Additional Evidence by the Commissioner of Income Tax (Appeals): The Revenue challenged the admission of additional evidence by the Commissioner of Income Tax (Appeals) (CIT(A)). The CIT(A) admitted various documents and evidence that were not produced during the assessment stage. The CIT(A) forwarded these documents to the Assessing Officer (AO) for examination, and the AO submitted a remand report. The CIT(A) justified the admission of additional evidence by stating that the appellant was prevented by reasonable and sufficient causes from furnishing the details/evidence at the assessment stage. This decision was upheld by the Tribunal. Compliance with Rule 46A of the Income Tax Rules, 1962: Rule 46A restricts the appellant from producing additional evidence before the CIT(A) unless specific conditions are met, such as the AO's refusal to admit evidence or the appellant being prevented by sufficient cause from producing the evidence earlier. The CIT(A) must record reasons for admitting such evidence and provide the AO with a reasonable opportunity to examine the evidence or produce rebuttal evidence. In this case, the CIT(A) complied with Rule 46A by forwarding the additional evidence to the AO and considering the AO's remand report before making a decision. Requirement of Remanding the Case to the Assessing Officer: The Revenue argued that the CIT(A) should have remanded the case to the AO for consideration of the additional evidence. However, the court held that sub-rule 4 of Rule 46A and Section 250 of the Income Tax Act empower the CIT(A) to either dispose of the appeal themselves or direct the AO to make further inquiries. The CIT(A) is not bound to remand the case to the AO and can adjudicate the appeal based on the additional evidence, provided the AO is given an opportunity to examine the evidence. Principles of Natural Justice: The Tribunal suggested that in cases where additional evidence is summoned by the CIT(A) or is conclusive, it may not be necessary to provide the AO with an opportunity to contradict the evidence. However, the court disagreed with this view, stating that the principles of natural justice must be adhered to, and the AO should be given a reasonable opportunity to examine and rebut the additional evidence. The court emphasized that Rule 46A does not exclude the principles of natural justice, and these principles must be read into the Rules. Conclusion: The court found no merit in the Revenue's appeals and dismissed them. The CIT(A)'s decision to admit additional evidence and adjudicate the appeal without remanding the case to the AO was upheld, as it complied with Rule 46A and Section 250 of the Income Tax Act. The court also clarified that the principles of natural justice must be followed, and the AO should be given an opportunity to examine and rebut additional evidence. All other appeals involving similar issues were also dismissed, and all pending interlocutory applications were closed.
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