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2008 (6) TMI 249 - AT - Income TaxRejection of the additional evidence under r. 46A of the IT Rules, 1962 - whether the assessee was prevented by sufficient cause from producing the evidence before the AO? - addition u/s 68 - HELD THAT - Assessee has submitted the explanation that the assessee was dependent upon his counsel for representing the matter before the IT authorities and for submitting the documents given to him with regard to the details required by the AO. The assessee should not be made to suffer for the lapse on the part of the counsel of the assessee. The assessee came to know only after the receipt and perusal of the assessment order and thereafter the assessee changed the counsel, this said explanation appears to be bona fide and in our view the assessee was prevented by sufficient cause from producing the evidences which were called upon to produce before the AO. Relying on the decision of Hon'ble Bombay High Court in the case of CIT vs. Suretech Hospital Research Centre Ltd. 2007 (6) TMI 522 - BOMBAY HIGH COURT . We held that the learned CIT(A) was not justified in not admitting the additional evidences which were necessary for the disposal of the case. Since all the evidences have to be examined by the AO, therefore, in the interest of justice, the matter is restored to the me of the AO who will examine the evidences filed by the assessee before the learned CIT(A) and decide the issue de novo but by providing the adequate opportunity of being heard to the assessee. The assessee may submit further documents or evidences as required in support of his claim before the AO. The AO is directed to act accordingly. Thus, the ground Nos. 1 to 6 of the assessee are allowed for statistical purposes. The ground No. 7 of the assessee is general in nature which needs no adjudication by us. In the result, the appeal of the assessee in ITA No. 379/Jp/2008 is allowed for statistical purposes.
Issues:
1. Jurisdiction of the impugned order under section 144 2. Admission of additional evidence by the learned CIT(A) 3. Confirmation of income at nil by the learned CIT(A) 4. Addition of unsecured loans under section 68 5. Addition of share application money under section 68 6. Charging of interest under sections 234B and 234C 7. General ground not requiring adjudication Issue 1: Jurisdiction of the impugned order under section 144 The appellant contested the jurisdiction of the impugned order under section 144, arguing it was bad in law and lacked jurisdiction. The AO proceeded with an ex parte assessment under section 144 after the assessee failed to appear despite multiple opportunities. The AO added unsecured loans and share application money under section 68 to the income and denied the business loss claimed by the assessee. The appellant claimed inadequate opportunity to be heard, but the learned CIT(A) upheld the AO's actions. Issue 2: Admission of additional evidence by the learned CIT(A) The appellant sought to admit additional evidence before the learned CIT(A), citing that the previous counsel's failure to attend proceedings led to the lapse. The appellant submitted necessary evidence under rule 46A, arguing that circumstances beyond their control prevented the submission of documents before the AO. The learned CIT(A) refused to admit the additional evidence, stating that none of the conditions specified under rule 46A were fulfilled. Issue 3: Confirmation of income at nil by the learned CIT(A) The learned CIT(A) confirmed the AO's decision to assess the income at nil instead of the declared loss of Rs. 1,77,365 by the assessee. The appellant contended that they were not given a fair opportunity to present their case, leading to the confirmation of the AO's action. Issue 4: Addition of unsecured loans under section 68 The learned CIT(A) confirmed the addition of Rs. 5,42,555 under section 68 on account of unsecured loans. The appellant challenged this addition, arguing that the AO's decision was erroneous both in law and on the facts of the case. Issue 5: Addition of share application money under section 68 Similarly, the learned CIT(A) upheld the addition of Rs. 7,75,000 under section 68 on account of share application money. The appellant disputed this addition, claiming errors in law and facts in the CIT(A)'s decision. Issue 6: Charging of interest under sections 234B and 234C The AO charged interest under sections 234B and 234C of the Act, which the appellant contested as erroneous both in law and on the facts of the case. The appellant argued that the interest charges were unjustified given the circumstances of the case. In conclusion, the Appellate Tribunal allowed the appeal of the assessee for statistical purposes, directing the AO to reexamine the evidences filed before the learned CIT(A) and decide the issues afresh, providing the assessee with adequate opportunity to be heard. The Tribunal emphasized the wide powers of the first appellate authority and the importance of admitting additional evidence necessary for the disposal of the case.
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