9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 240 - AT - Income TaxAdmissibility of additional evidences under Rule 46A - Power of CIT(A) - Penalty u/s 271D - taking cash loan - Default under provisions of section 269SS - proof of bona fides and genuiness of the transaction - reasonable cause - whether transactions were between family members/spouse for acquiring a house for their living and all had pooled their resources which were genuine transactions for acquiring the property for mutual benefit of the family and the intention was not to evade taxes? - admission of additional evidences - HELD THAT - From the perusal of the orders of the authorities below, it transpires that the assessee has submitted additional evidences before ld. CIT(A) for the first time, but, however, ld. CIT(A) did not complied with Sub-Rule (1), (2) and (3) of Rule 46A of the 1962 Rules, and proceeded to adjudicate the appeal of the assessee, although same stood dismissed by ld. CIT(A). The purpose and purport of Rule 46A of the 1962 Rules, is that the assessee is required to explain and justify as to why the evidences could not be produced in the proceedings before the AO, and reasons and justification for producing the evidences for the first time before ld. CIT(A). Secondly, the ld. CIT(A) has to pass a speaking order in writing as to his decision as to admission or refusal to admit additional evidences. Thirdly, ld. CIT(A) is obligated to forward these additional evidences to the AO for his examination / cross examination, as well for filing by AO of evidences in rebuttal thereof. No remand report from AO on the additional evidences submitted by assessee for the first time before ld. CIT(A), was called for by ld. CIT(A). These additional evidences/explanations filed by the assessee before ld. CIT(A) for the first time, remained unverified. Thus in nut-shell, what emerges from records before us, is that ld. CIT(A) did not comply with Rule 46A of the 1962 Rules. Under these circumstances, we are of the considered view that matter may be restored to the file of ld. CIT(A) for fresh adjudication on merits in accordance with law, after complying with Rule 46A. Assessee appeal is allowed for statistical purposes.
Issues Involved:
1. Applicability of Section 269SS of the Income Tax Act, 1961 to cash loans between family members. 2. Validity of penalty under Section 271D for violation of Section 269SS. 3. Compliance with Rule 46A of the Income Tax Rules, 1962 regarding additional evidence. Issue-wise Detailed Analysis: 1. Applicability of Section 269SS to Cash Loans between Family Members: The assessee argued that the cash loan of Rs. 16,75,000/- was taken from her husband for the purchase of a residential property, asserting that transactions between close family members should not attract Section 269SS. The assessee cited various judicial precedents, including the decisions of the Kolkata Tribunal and the Punjab and Haryana High Court, to support the claim that genuine transactions between family members for mutual benefit do not fall under the purview of Section 269SS. 2. Validity of Penalty under Section 271D for Violation of Section 269SS: The Assessing Officer (AO) observed that the assessee took a cash loan of Rs. 16,75,000/- from M/s. Industrial Power Solutions, violating Section 269SS. Despite being given opportunities, the assessee did not submit any explanation or evidence before the AO. Consequently, the AO levied a penalty of Rs. 16,75,000/- under Section 271D. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the penalty, noting that the assessee failed to demonstrate a reasonable cause for accepting the cash loan, which could have been routed through banking channels. The CIT(A) dismissed the appeal, emphasizing that the assessee did not provide sufficient justification for the cash transaction. 3. Compliance with Rule 46A of the Income Tax Rules, 1962 Regarding Additional Evidence: The Tribunal noted that the assessee submitted additional evidence for the first time before the CIT(A), including the balance sheet and tax audit report of the husband's proprietary concern. However, the CIT(A) did not comply with Rule 46A, which mandates recording reasons for admitting additional evidence and allowing the AO to examine and rebut the evidence. The Tribunal observed that the CIT(A) failed to call for a remand report from the AO on the additional evidence, leading to an unverified adjudication. Conclusion: The Tribunal concluded that the CIT(A) did not adhere to the procedural requirements under Rule 46A when admitting and considering additional evidence. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for fresh adjudication on merits, ensuring compliance with Rule 46A. The appeal filed by the assessee was allowed for statistical purposes. Order Pronouncement: The order was pronounced on 03/06/2022 at Allahabad, U.P., in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.
|
