2018 (5) TMI 2143 - AT - Income Tax

Admission of additional evidence by Tribunal in the interest of justice - Revenue submitted that rules does not enable the assessee to submit the additional evidences whether oral or documentary before the Bench without explaining the proper reason why the same could not be produced before AO / CIT(A) - discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter - HELD THAT - Hon ble Delhi High Court in the case of Text Hundred India (P) Limited 2013 (6) TMI 72 - DELHI HIGH COURT held that It is well-settled that the procedure is handmaid of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence the Tribunal can pass an order to that effect to admit the additional evidence. We admit the additional evidence filed before us and therefore we set aside the order of the ld CIT(A) and remand the issues back to the file of the AO for de- novo adjudication. We allow these appeals for statistical purposes.

Summary

Issues:
- Admissibility of additional evidence before the Tribunal for Assessment Years 2005-06, 2006-07, and 2007-08.
- Whether the Tribunal should allow additional evidence submitted by the assessee.
- Interpretation of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 regarding the admissibility of additional evidence.
- Exercise of discretion by the Tribunal in admitting additional evidence in the interest of justice.

Detailed Analysis:

Admissibility of Additional Evidence:
The judgment pertains to three appeals filed by the assessee and one appeal by the Revenue concerning Assessment Year 2007-08. The appeals were against orders passed by the Commissioner of Income Tax (Appeals) and the Assessing Officer under section 143(3) of the Income Tax Act, 1961. The appeals were clubbed together due to common issues. The assessee submitted additional evidence related to various issues for the mentioned assessment years, which were not presented before the lower authorities.

Arguments and Considerations:
The assessee argued that the additional evidence was not submitted earlier due to the negligence of professionals/accountants, and the assessee should not be penalized for this. The Revenue contended that the rules do not allow for the submission of additional evidence without proper reasons. The Tribunal noted that the assessee is a government agency for IT development and that the additional evidence was crucial for adjudicating the issues where additions were made to the taxable income.

Interpretation of Rule 29:
Rule 29 of the Appellate Tribunal Rules, 1963 was examined to determine the admissibility of additional evidence. The Tribunal can allow additional evidence if it is necessary for passing orders or for substantial cause. In this case, the assessee's inability to produce evidence before lower authorities due to lack of guidance from the authorized representative was considered a substantial cause falling under the rule.

Exercise of Discretion by the Tribunal:
The Tribunal acknowledged its discretion to admit additional evidence in the interest of justice. Citing a judgment, it emphasized that justice should not be impeded due to inadvertent errors. The Tribunal admitted the additional evidence, set aside the order of the CIT(A), and remanded the issues back to the Assessing Officer for fresh adjudication, ensuring the assessee's right to be heard and present necessary documents.

Conclusion:
The appeals were allowed for statistical purposes, emphasizing the importance of a fair and detailed inquiry. The Tribunal's decision to admit the additional evidence was based on principles of natural justice and the need for a comprehensive examination of the issues involved. The judgment highlighted the Tribunal's discretionary power to ensure substantial justice and proper adjudication of matters.