2014 (12) TMI 1345 - AT - Income Tax

Admission of additional evidence under Rule 46A of the Act - CIT-A refusing to take into consideration the relevant documents admitted - HELD THAT - While refusing to take into consideration the relevant documents which were very much necessary for the just decision of the case CIT(A) failed to exercise his appellate jurisdiction u/s 250 of the Act. The duty was also cast upon the Ld. CIT(A) to admit and consider the evidence produced before him by the assessee. As in the case of Smt. Prabhavati S. Shah Versus Commissioner Of Income-Tax - 1998 (2) TMI 107 - BOMBAY High Court Powers conferred on the first appellate authority under sub-section (4) of section 250 of the Act being a quasi-judicial power it is incumbent on him to exercise the same if the facts and circumstances justify. Even otherwise under Rule 46A(4) of the Income tax Rules CIT(A) has been given power to call for production of any document or the examination of any witnesses to enable him to dispose of the appeal. There is no doubt about the legal position that if any document furnished by the assessee before the CIT(A) is in the nature of clinching evidence which goes to the root of the case then in the interest of justice such types of evidence should not be rejected. The documents relied upon by the assessee are very much relevant and necessary for the just and proper decision of the case hence we set aside the findings of the CIT(A) on these issues and remand back the matter to the file of AO with a direction to admit the additional evidences sought to be furnished by the assessee. Non granting TDS credits - HELD THAT - As we already restored the matter to the file of the AO while allowing the prayer of the assessee for furnishing of additional evidence on the above stated issues. This issue is also restored to the file of the AO for decision a fresh after verifying the claim of the assessee in this respect.

Summary

Issues:
1. Confirming additions made by the Additional Commissioner of Income-tax
2. Non-admission of additional evidence by the Commissioner of Income Tax (Appeals)
3. Non-consideration of submissions by the Commissioner of Income Tax (Appeals)
4. Non-granting of TDS credit

Analysis:

Issue 1: Confirming additions made by the Additional Commissioner of Income-tax
The appeal was against the order of the Commissioner of Income Tax (Appeals) confirming the action of the Additional Commissioner of Income-tax in adding an amount towards depreciation on alleged bogus purchases. The assessee failed to furnish confirmations for transactions with two parties, leading to disallowance of depreciation claim. The Commissioner of Income Tax (Appeals) did not consider additional evidence submitted by the assessee, citing rules that allow such evidence only if the AO had refused it earlier. The Tribunal held that the Commissioner of Income Tax (Appeals) should have considered the evidence as it was crucial for a just decision. Referring to legal precedents, the Tribunal set aside the Commissioner's findings and remanded the matter to the AO for fresh consideration based on the additional evidence.

Issue 2: Non-admission of additional evidence by the Commissioner of Income Tax (Appeals)
The assessee had sought to furnish additional evidence related to confirmations, ledger extracts, and invoices at the appellate stage under Rule 46A of the Income Tax Rules. However, the Commissioner of Income Tax (Appeals) did not admit these documents, stating that they could only be accepted if the AO had previously rejected them or if there was a valid reason for not producing them earlier. The Tribunal held that the Commissioner of Income Tax (Appeals) should have exercised his jurisdiction to consider the evidence, especially if it was crucial for the case. Quoting legal provisions, the Tribunal directed the AO to admit and evaluate the additional evidence in the interest of justice.

Issue 3: Non-consideration of submissions by the Commissioner of Income Tax (Appeals)
The Commissioner of Income Tax (Appeals) did not consider the details and submissions filed by the assessee, leading to the confirmation of additions made by the Additional Commissioner of Income-tax. The Tribunal emphasized that the Commissioner of Income Tax (Appeals) had a duty to evaluate all relevant evidence and submissions before making a decision. Referring to legal principles, the Tribunal set aside the Commissioner's decision and remanded the matter to the AO for fresh consideration based on the submissions made by the assessee.

Issue 4: Non-granting of TDS credit
The assessee raised an issue regarding the non-granting of credit for TDS, which was not addressed by the Commissioner of Income Tax (Appeals). The Tribunal, while remanding other issues back to the AO for fresh consideration based on additional evidence, also directed the AO to review the TDS credit claim of the assessee. The appeal was allowed for statistical purposes, and the matter was remanded to the AO for a fresh decision on the TDS credit issue.