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2014 (6) TMI 464 - AT - Income TaxRejection of order u/s 143(3) of the Act Admission of additional evidence under Rule 46A of the Rules Held that - Before the AO assessee has not filed confirmatory letter and other evidence to prove the genuineness of the deposits - additional evidence was filed before the CIT(A) in order to prove the genuineness of the deposits there was no iota of evidence that the additional evidence was ever confronted to the AO before taking cognizance of the same for adjudicating the appeal filed before him - additional evidence were filed for the first time before the CIT(A) and it was never confronted to the AO for his comments or for remand report and the evidence was taken into account by the CIT(A) while deleting the addition made by the AO - there is a clear violation of the provisions of rule 46A of the Rules the order of the CIT(A) suffers from infirmity and it is not valid in the eyes of law thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for re-adjudication Decided in favour of Revenue.
Issues:
1. Admissibility of additional evidence without remanding the matter to the Assessing Officer. 2. Interpretation of facts by the lower authority. 3. Validity of relief granted by the lower authority without considering the Assessing Officer's reasons. Issue 1: Admissibility of Additional Evidence: The Revenue appealed against the order of the ld. CIT(A) citing that additional evidence was considered without remanding the matter to the Assessing Officer, violating Rule 46A of the Income-tax Rules, 1962. The ld. D.R. argued that the additional evidence should have been confronted to the Assessing Officer for comments before adjudication. The ld. counsel for the assessee contended that the ld. CIT(A) had the power to inquire during appellate proceedings and thus, admitting additional evidence was justified. The ITAT observed that while the assessee submitted confirmatory letters and documents before the ld. CIT(A), these were not confronted to the Assessing Officer as required by Rule 46A. Issue 2: Interpretation of Facts: The ld. CIT(A) was accused of wrongly interpreting the facts of the case. Upon review, the ITAT found that the ld. CIT(A) had indeed admitted additional evidence without following the proper procedure of confronting it to the Assessing Officer. The ITAT emphasized the importance of adherence to Rule 46A, which mandates confrontation of additional evidence before its consideration in the appeal process. The ITAT held that the order of the ld. CIT(A) was flawed due to the violation of Rule 46A. Issue 3: Validity of Relief Granted: The ITAT noted that the relief allowed by the ld. CIT(A) was based on additional evidence not confronted to the Assessing Officer, leading to a violation of Rule 46A. Consequently, the ITAT set aside the order of the ld. CIT(A) and directed a re-adjudication of the issue after obtaining comments/remand report on the additional evidence from the Assessing Officer. The matter was restored to the file of the ld. CIT(A) for a fresh decision while ensuring both parties are afforded a proper opportunity to be heard. The appeal of the Revenue was allowed for statistical purposes. In conclusion, the judgment highlighted the significance of following procedural rules, particularly Rule 46A, in admitting additional evidence during appellate proceedings. The ITAT stressed the necessity of confronting such evidence to the Assessing Officer before consideration to ensure a fair and lawful adjudication process.
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