2023 (3) TMI 322 - HC - Income Tax

Profit undisclosed by the assessee - ITAT deleted the addition - revenue is in appeal against the order of Tribunal on the premise that the appellate authorities have erred in permitting the raising of additional evidence without affording an opportunity to the Assessing Officer and in violation of Rule 46A of the Income Tax Rules - HELD THAT - We find from the concurrent findings of the first appellate authority and also the Tribunal that the documents assumed to be additional evidence were produced even before the AO As a matter of fact, the same was produced even during survey. Thus, the question of invoking Rule 46A of the Income Tax Rules does not even arise, in view of the fact that the alleged material, which was assumed to be the additional evidence, was always available before the AO. No reason to interfere with the order impugned herein, for no question of law arises for consideration.

Summary

Issues:
1. Tribunal's decision based on incorrect claim in the paper book of the assessee.
2. Upholding the order of the CIT (A) admitting additional evidence without affording opportunity to the Assessing Officer.

Issue 1 - Tribunal's Decision on Incorrect Claim:
The respondent assessee, a leading printer, filed a return of income admitting 'Nil' income for the Assessment Year 2013-2014. During scrutiny, a significant difference was found in the net profit declared by the assessee and the impounded profit and loss account. The Assessing Officer added the difference as undisclosed profit. The Commissioner of Income Tax (Appeals) noted that the branch loss was not considered, leading to the discrepancy. The Tribunal upheld the first appellate authority's decision, emphasizing that all relevant documents were provided to the Assessing Officer. The Tribunal concluded that no new material was presented, and the consolidated figures were consistent with the declared net profit. The Tribunal found no reason to refer the matter back to the Assessing Officer, as all information was submitted before the survey. The High Court dismissed the Revenue's appeal, stating that no infirmity existed in the order of the CIT (A) and confirming the deletion of the addition.

Issue 2 - Admission of Additional Evidence without Opportunity to AO:
The Revenue appealed to the High Court, alleging that the appellate authorities erred in allowing the introduction of additional evidence without giving the Assessing Officer an opportunity, violating Rule 46A of the Income Tax Rules. However, both the first appellate authority and the Tribunal confirmed that the documents assumed to be additional evidence were already submitted before the Assessing Officer, even during the survey. The High Court noted that Rule 46A did not apply since the alleged additional evidence was available to the Assessing Officer. Consequently, the High Court found no legal question warranting consideration and upheld the order without interference, dismissing the Tax Case Appeal.

This detailed analysis of the judgment from the Madras High Court highlights the issues raised, the facts of the case, the decisions of the lower authorities, and the High Court's final ruling on both issues presented in the appeal.