2024 (2) TMI 266 - AT - Income Tax

Non acceptance of fresh evidence submitted u/r 46A of the I. T. Rules by CIT(A) - HELD THAT - Once, the CIT(A), Bikaner had forwarded copies of additional evidence to the ACIT -Sriganganagar, it means, that CIT(A) has admitted the additional evidence. Once ld.CIT(A) admits the additional evidence, he is duty bound to discuss the additional evidence, remand report in the order under section 250 of the Act. However, in this case, it seems that the case was transferred from CIT(A), Bikaner to CIT(A) NFAC . Since for the first time CBDT had introduced the Faceless Appeal Scheme for adjudication by CIT(A), it is possible that in the transition, the ld.CIT(A) NFAC had not received copies of the additional evidence filed by assessee. As a result CIT(A) NFAC failed to discuss the additional evidence and remand report. In these facts and circumstances of the case, as the Faceless Appeal was a new concept to CIT(A) as well as Assessee, the error which has crept is a possible human error. In these facts and circumstances of the case, we deem it appropriate to set-aside the order of ld.CIT(A) NFAC to ld.CIT(A) for denovo adjudication. CIT(A) shall consider the additional evidence filed by the assessee, consider remand report. The ld.CIT(A) shall also provide opportunity to the assessee. Assessee shall also be at liberty to file necessary documents before the ld.CIT(A). Accordingly, the Ground No.4 is allowed for statistical purpose.

Summary

Issues involved:
The issues involved in this case include illegality of the assessment order, failure to cross-examine the deponent, contempt of court, acceptance of fresh evidence under rule 46A of the I.T. Rules, legality of the assessment under section 147/148, legality of exparte assessment, legality of high-pitch assessment, excessive addition made by the Assessing Officer, legality of charging interest, failure to consider the reply submitted by the assessee, and unnecessary harassment.

Issue 1: Legality of Assessment Order
The appeal was filed against the order under section 250 of the Income Tax Act, 1961 passed by the Commissioner of Income Tax(Appeals). The grounds of appeal raised by the assessee challenged the legality of the order, stating that it was illegal and against the law.

Issue 2: Failure to Cross-Examine the Deponent
The assessee argued that the department failed to cross-examine the deponent of the affidavit submitted, which rendered the entire order liable for quash, citing a judgment of the Hon'ble Supreme Court in the case of Mehta Parikh & Co.

Issue 3: Contempt of Court
The assessee claimed that ignoring judgments of the Supreme Court and High Court amounted to contempt of court, urging for a reference to contempt proceedings.

Issue 4: Acceptance of Fresh Evidence
The assessee contended that the Commissioner of Income Tax Appeals should have accepted the fresh evidence submitted before him under rule 46A of the I.T. Rules, which was not adequately addressed in the order.

Issue 5: Legality of Assessment under Section 147/148
The action taken by the Assessing Authority under section 147/148 was challenged as illegal and against the law by the assessee.

Issue 6: Legality of Exparte Assessment
The assessee argued that being prevented by reasonable cause from furnishing the Income Tax return made the exparte assessment illegal and against the law.

Issue 7: Legality of High-Pitch Assessment
The assessment was challenged as a high-pitch assessment, claiming that the Assessing Officer failed to obtain approval by the higher authority, making the assessment illegal and against judicial decorum and discipline.

Issue 8: Excessive Addition Made by the AO
The addition made by the Assessing Officer was challenged as illegal and against the law since the entire amount deposited by the assessee was fully explained.

Issue 9: Legality of Charging Interest
The charging of interest was disputed as illegal and against the law by the assessee.

Issue 10: Failure to Consider Assessee's Reply
The assessee claimed that the Commissioner of Income Tax failed to consider the reply submitted, leading to the order being illegal and against the law, and sought costs for unnecessary harassment.

Judgment Analysis:
The Tribunal found that the ld.CIT(A) failed to discuss the additional evidence submitted by the assessee under rule 46A of the I.T. Rules. The Tribunal observed that the case was transferred to the ld.CIT(A)[NFAC] under the Faceless Appeal Scheme, possibly leading to the oversight of not discussing the additional evidence. Therefore, the Tribunal set aside the order for denovo adjudication by the ld.CIT(A), instructing a reevaluation of the additional evidence and providing the assessee with an opportunity to present necessary documents. Consequently, the appeal was partly allowed, and all other grounds were dismissed, with ground number 5 being dismissed as not pressed by the Assessee.

This summary provides a detailed breakdown of the issues raised in the legal judgment, highlighting the key arguments and the Tribunal's findings regarding each issue.