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2020 (4) TMI 748 - AT - Income TaxAdmission of additional evidence by CIT-A - partial relief has been granted by CIT(A) to the assessee on the basis of additional evidences - failure to provide reasonable opportunity to the Assessing Officer - HELD THAT - No specific mention in the impugned appellate order of the Ld. CIT(A) to the effect that the Additional Evidences had been admitted by him - CIT(A) has failed to record the reasons in accordance with Rule 46A(2) of Income Tax Rules, 1962. CIT(A) is duty bound, under Rule 46A(3) to allow a reasonable opportunity to the Assessing Officer (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant but he failed to provide such reasonable opportunity to the AO. CIT(A) had only provided a perfunctory opportunity, and a very short time to the Assessing Officer. The letter asking the AO to send report is dated 08.03.2016 whereas the time was allowed to the Assessing Officer up to an earlier date 16.03.2015. It is not understood how a letter dated 08.03.2016 can be responded to by the AO by an earlier date of 16.03.2015. CIT(A) had failed to provide reasonable opportunity to the Assessing Officer for which the Assessing Officer was entitled under Rule 46A(3) of Income Tax Rules. CIT(A) had failed in due compliance of Rule 46A(2) as well as Rule 46A(3) of Income Tax Rules; in granting partial relief to the assessee on the basis of Additional Evidences furnished by the Assessee during the appellate proceedings before Ld. CIT(A) - We set aside the impugned appellate order dated 30.03.2016 of the Ld. CIT(A), and direct him to pass a fresh order on merits after following due procedure prescribed under Rule 46A of Income Tax Rules. - Revenue Appeal is partly allowed for statistical purposes.
Issues:
1. Challenge to the appellate order dated 30.03.2016 passed by the Learned Commissioner of Income Tax (Appeals)- Ghaziabad for Assessment Year 2011-12. Analysis: Grounds of Appeal Raised by the Assessee: 1. The appellant challenged the deletion of an addition of ?1,44,00,000 due to failure in proving the capacity, identity, and creditworthiness of the lenders. 2. The appellant contested the deletion of the same addition, citing the requirement to establish the identity, capacity, and genuineness of creditors as per judicial decisions. 3. Dispute arose regarding the deletion of an addition under section 2(22)(e) of the I.T. Act amounting to ?1,13,83,287, considering the substantial interest of the assessee in the lending companies. 4. The appellant objected to the deletion of the above addition despite not providing any explanation during the assessment proceedings. 5. The appellant sought to set aside the order of the Ld. CIT(A) and restore that of the Assessing Officer. Assessment Order and Appellate Proceedings: The total income of the assessee was determined at ?4,47,87,970 in the assessment order dated 31.03.2014 under section 143(3) of the Income Tax Act, deviating significantly from the returned income of ?17,01,775. Subsequently, the Ld. CIT(A) partially allowed relief to the assessee while upholding certain additions made under sections 68 and 2(22)(e) of the Income Tax Act. Judgment and Observations: The Revenue appealed against the Ld. CIT(A)'s order, with the assessee failing to appear or be represented during the proceedings. The Ld. Departmental Representative contended that the additional evidences submitted by the assessee during the appellate proceedings were not explicitly admitted by the Ld. CIT(A) and should be disregarded. Upon review, the tribunal found that while partial relief was granted based on these additional evidences, the Ld. CIT(A) did not record reasons or provide a reasonable opportunity to the Assessing Officer to examine or rebut the evidence. Consequently, the tribunal set aside the Ld. CIT(A)'s order and directed a fresh decision in compliance with Rule 46A of the Income Tax Rules. Conclusion: The appeal was partly allowed for statistical purposes, emphasizing the necessity for due procedure and compliance with the rules during appellate proceedings. The judgment highlighted the importance of providing a fair opportunity for all parties involved in tax disputes to present their case effectively.
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