2023 (12) TMI 1187 - HC - Income Tax

CIT(A) admitting additional evidence and deleted addition - Best judgment assessment - addition were made u/s 69B based on unexplained investment in time deposits - CIT(A) carried out an inquiry in the matter by exercising his powers under Section 250(4) of the Act and evidence was sought with regard to remittances made to the NRE Account maintained with the Canara Bank - Tribunal dismissed the appeal preferred by the appellant/revenue and CIT(A) had exercised his powers u/s 250(4) of the Act which was co-equal to that of the AO. It also took note of the fact that notice was issued to the concerned branch of Canara Bank under Section 133(6) of the Act and it was only after information was received from Canara Bank and material evidence furnished by assessee, that the addition was deleted HELD THAT - According to us, the Tribunal has reached the correct conclusion. Appellant cannot but accept that the CIT(A) has co-equal powers as that of the AO. The enquiry carried out by the CIT(A) revealed a grave factual error committed by the AO, in noting the figure with regard to the time deposits. In our opinion, since the CIT(A) has returned a finding of fact with regard to the source of funds that were found deposited in the period in issue, i.e., Rs. 9.50 crores, no interference is called for as these findings have been affirmed by the Tribunal as well. Thus, according to us, no substantial question of law arises for our consideration. No substantial question of law arises for our consideration.

Summary

Issues involved:
1. Condonation of delay in filing and re-filing the appeal.
2. Admissibility of additional evidence by the Commissioner of Income Tax (Appeals) without following the procedure laid down in Rule 46A(3) of the Income Tax Rules, 1962.

Issue 1: Condonation of Delay
The applications filed by the appellant sought condonation of a delay of 82 days in filing the appeal and 7 days in re-filing. The High Court, considering the period involved, decided to condone the delay and accordingly disposed of the applications.

Issue 2: Admissibility of Additional Evidence
The appeal concerned Assessment Year (AY) 2012-13 and revolved around the question of whether the Commissioner of Income Tax (Appeals) was correct in admitting additional evidence without following the prescribed procedure. The Assessing Officer had issued a notice under Section 148 read with Section 147 of the Income Tax Act, based on information regarding time deposits made by the assessee. The AO completed the assessment under "best judgment assessment," adding an amount under Section 69B of the Act for unexplained investments. The CIT(A) admitted additional evidence and, after inquiry, found that the actual deposits were significantly lower than initially assessed. The CIT(A) concluded that the source of funds was explained by the assessee and deleted the entire addition based on the evidence provided. The Tribunal upheld the CIT(A)'s decision, emphasizing that the CIT(A) had the authority to call for and examine evidence and make necessary inquiries. The Tribunal found no reason to reverse the factual findings made by the CIT(A) regarding the source of funds. The High Court agreed with the Tribunal's decision, stating that no substantial question of law arose for consideration, and closed the appeal.

In conclusion, the High Court upheld the Tribunal's decision regarding the admissibility of additional evidence by the CIT(A) and found no need for further interference. The appeal was closed, and the order was to be dispatched to the respondent/assessee through all modes, including email, for further action based on the digitally signed copy of the order.