9911796707
TMI Blog2006 (7) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 per cent. was earned, for 90 days, amounting to Rs. 24,65,095. The Assessing Officer, however, observed that the assessee had not filed any evidence or proof that this interest was exempt, as per the Interest-tax Act. As such, the Assessing Officer added this amount to the taxable interest shown by the assessee. On appeal, by virtue of the impugned order, the learned Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer, observing that counsel for the assessee, during the appellate proceedings, had filed a certificate issued by M/s. Kotak Mahindra Finance Ltd., to the effect that the said amount pertained to commercial papers ; and that the details of the commercial papers had been given. The Department is aggrieved by this order passed without, according to the Department, allowing any opportunity to the Assessing Officer, before relying on the additional evidence produced by the assessee. Before us, the learned Departmental representative has submitted that affording a proper and adequate opportunity to the Assessing Officer before entertaining additional evidence, is a statutory pre-requisite, as envisaged by rule 46A(3) of the Income-tax Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity-- (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant." The stand of the Department is that it is only under section 295 of the Income-tax Act, that the Income-tax Rules, 1962, have been framed. Section 295(1) runs as follows : "295. (1) The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act." Learned counsel for the assessee has pleaded that applicability of the provisions of the Income-tax Act, to the Interest-tax Act, is governed by section 21 of the Interest-tax Act. For facility, section 21 of the Interest-tax Act is being reproduced hereunder : "Section 21. Application of provisions of Income-tax Act.--The provisions of the following sections and Schedules of the Income-tax Act and the Income-tax (Certificate Proceedings) Rules, 1962, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther. Firstly, at worst, as is evident from the above discussion, it is a case of mere wrong mentioning of the provisions. Ground of appeal No. 1 raised by the Department before us is as follows : "1. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in not allowing any opportunity to the Assessing Officer before admitting additional evidence produced by the assessee which was a statutory requirement as per rule 46A(3) of the Income-tax Rules, 1962, read with section 15(4) of the Interest-tax Act." Admittedly, the proceedings before the taxing authorities were proceedings under the Interest-tax Act. The orders passed by both the authorities were orders under the Interest-tax Act, i.e., though the impugned order starts as "Order under section 250(6)", and though this order has been passed by the learned Commissioner of Income-tax (Appeals), Bhatinda, undeniably, the order of the Assessing Officer, passed on March 30, 2001, was passed under section 8(3) of the Interest-tax Act, whereas that passed by the first appellate authority, i.e., the impugned order, was passed under section 15(4) of the Interest-tax Act, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the Assessing Officer has been allowed a reasonable opportunity-- (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant." Rule 46A(3) (supra) thus casts a statutory obligation on the Commissioner (Appeals) not to take into account any additional evidence unless the Assessing Officer has been allowed a reasonable opportunity to rebut the same. In the present case, as the impugned order itself shows, no opportunity has been afforded to the Assessing Officer by the learned Commissioner of Income-tax (Appeals) before entertaining the additional evidence. This action is clearly violative of rule 46A(3) of the Income-tax Rules, 1962, which, as discussed hereinabove, is squarely applicable to proceedings under the Interest-tax Act. An argument could be raised that whereas in the Income-tax Act, a specific power has been given by section 295 to the Central Board of Direct Taxes to frame rules and rule 46A of the Income-tax Rules has been framed thereunder, whereas in the Interest-tax Act, though section 27 has provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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