2022 (8) TMI 449 - AT - Income Tax

Admission of additional evidence by CIT-A - HELD THAT - It is not in dispute that during assessment proceedings, effective hearing commenced on 04/03/2013 for which the assessee filed replies on 21/03/2013 to the Assessing Officer. It is also not in dispute that the Assessing Officer did not provide any further opportunity, and completed the assessment on 28/03/2013. There is nothing on record to show that AO expressed any further requirements on or after aforesaid 21/03/2013 to the assessee requiring the assessee to support its claim by further evidence/materials. We are of the view that the additional evidences filed by the assessee in the office of Ld. CIT(A) deserved to be admitted by Ld. CIT(A). Both sides were also in agreement at the time of hearing before us, that the Ld. CIT(A) may be directed to admit additional evidences already filed in the office of the Ld. CIT(A), and to pass a fresh appellate order after providing reasonable opportunity to the assessee. Thus we set aside the impugned appellate order dated 18/02/2019 of the Ld. CIT(A); and we direct the Ld. CIT(A) to admit additional evidences already filed in the office of the Ld. CIT(A), and we further direct the Ld. CIT(A) to pass a fresh appellate order after providing reasonable opportunity to the assessee

Issues Involved:
1. Jurisdiction of the Assessing Officer (AO) under section 147 of the Income Tax Act, 1961.
2. Validity of the assessment order passed without following the mandate of the Hon'ble Apex Court in the case of GKN Drive Shaft.
3. Approval under section 151 of the Act before assuming jurisdiction under section 147.
4. Conducting fishing and roving enquiries.
5. Live nexus between the reasons recorded and the belief that income has escaped assessment.
6. Vague material in possession of the AO.
7. Borrowed satisfaction and reliance on findings of the investigation wing.
8. Sustaining the addition of Rs. 2,62,00,000/- to the returned income.
9. Rejection of additional evidences filed by the assessee.
10. Denial of proper opportunity to the assessee during assessment proceedings.
11. Predetermined mindset of the AO in framing the assessment.
12. Ignoring the certificate filed by M/s Jaipuria Infrastructures Developers Pvt. Ltd.

Detailed Analysis:

1. Jurisdiction of the AO under Section 147:
The appellant challenged the jurisdiction of the AO under section 147, contending that the AO's order was without jurisdiction and not in compliance with the legal provisions. The CIT(A) affirmed the AO's jurisdiction, which was contested by the appellant.

2. Validity of Assessment Order:
The appellant argued that the assessment order was void ab initio as it did not follow the mandate of the Hon'ble Apex Court in the case of GKN Drive Shaft, which requires the AO to dispose of the objections of the assessee before framing the final assessment.

3. Approval under Section 151:
The appellant contended that the assessment order was nullity as no approval under section 151 was taken by the AO before assuming jurisdiction under section 147.

4. Fishing and Roving Enquiries:
The appellant claimed that the AO assumed jurisdiction under section 147 for conducting fishing and roving enquiries, evident from the reasons recorded.

5. Live Nexus:
The appellant argued that there was no live nexus between the reasons recorded and the belief that income had escaped assessment, as required under section 147.

6. Vague Material:
The appellant contended that the material in the possession of the AO was vague, with no reference to any specific instrument number or bank details.

7. Borrowed Satisfaction:
The appellant claimed that the AO relied solely on the findings of the investigation wing without independently applying his mind to the information received, indicating borrowed satisfaction.

8. Sustaining Addition of Rs. 2,62,00,000/-:
The CIT(A) sustained the addition of Rs. 2,62,00,000/- made by the AO to the returned income of the assessee. The appellant contested this addition and the rejection of additional evidences filed to support the receipt of the amount.

9. Rejection of Additional Evidences:
The CIT(A) rejected the additional evidences filed by the assessee, which were crucial to support the appellant's case. The appellant argued that the CIT(A) failed to appreciate the provisions of section 250 and rule 46A, which stipulate that once additional evidence is called for, it must be considered on merits.

10. Denial of Proper Opportunity:
The appellant contended that there was a denial of proper opportunity during the assessment proceedings, as the effective hearing started on 21.03.2013 and the AO passed the order on 28.03.2013 without raising any further queries.

11. Predetermined Mindset:
The appellant argued that the assessment was framed with a predetermined mindset, without refuting the documentary evidences, confronting the material used against the assessee, or providing an opportunity to cross-examine.

12. Ignoring Certificate from M/s Jaipuria Infrastructures Developers Pvt. Ltd.:
The appellant claimed that the CIT(A) ignored the certificate filed during the assessment proceedings from M/s Jaipuria Infrastructures Developers Pvt. Ltd., which clarified the transactions of Rs. 2,62,00,000/-.

Judgment:
The Tribunal set aside the impugned appellate order dated 18/02/2019 of the CIT(A) and directed the CIT(A) to admit the additional evidences already filed and to pass a fresh appellate order after providing reasonable opportunity to the assessee. Grounds 10 and 12 were treated as allowed for statistical purposes, while the other grounds of appeal were dismissed as not being pressed. The appeal was partly allowed for statistical purposes.

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