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TMI Blog2012 (6) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 30-3-2012 - A.N. PAHUJA, CHANDRA MOHAN GARG, JJ. Mrs. Reena S. Puri for the Appellant. Sunil Arora for the Respondent. ORDER Chandra Mohan Garg, Judicial Member This appeal has been preferred by the Revenue against the order of CIT(A)-XIX, New Delhi dated 21.3.2011 by which the ld. CIT(A) deleted the addition of Rs. 11,84,45,205 made by the AO admitting the additional evidence of the assessee at the first appellate stage. The case is pertaining to Asst. Year 2007-08. 2. The grounds of appeal are reproduced as under:- "1. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting addition of Rs. 5,00,00,000/-made u/s 68 in respect of receipts of share application money in the absence of adequate material to establish the creditworthiness of the share applicant despite adequate opportunity granted to the assessee during the assessment proceedings. 2. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting addition of Rs. 5,00,00,000/-made u/s 68 in respect of transactions between the assessee and M/s ASA Agencies (P) Ltd. by not deciding entirely on merits the contentions of the AO in the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed a rejoinder on 15.03.2011. The report of the AO, available from page 113A to 113C, shows that the AO opposed the admissibility of additional evidence mainly on following grounds:- "The assessee has not fulfilled any of the above condition or established any exceptional circumstances. The mere fact that the evidence sought to be produced is vital/important does not constitute sufficient cause to allow its admission at the appellate stage. It is for the party seeking to adduce additional evidence to come within the four corners of Rule 46A. It is trite law that evidence capable of being adduced should be credible from the relevancy and materiality point of view. The onus is on the person seeking to adduce additional evidence to prove the circumstances enabling him to do so. It is indeed incorrect on the part of the assessee to assert that the same had not been called for by the Assessing Officer. Your Honour, it is my humble submission that the assessee's submissions hold no ground and the assessee's appeal needs to be rejected." 5. A careful perusal of rejoinder filed by the assessee, which is available on page 113D and 113E of the Paper Book, shows the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful perusal and consideration of the rival arguments placed before us by both the parties, we are of the view that the AO did not provide an opportunity to the assessee to submit relevant evidence and documents regarding clarifications asked by the AO himself before passing the assessment order. Therefore, we are constrained to note that the AO violated the principles of natural justice and the findings of the ld. CIT(A) in para 7 of impugned order are found to be just and proper. 9. It is evident from a perusal of Rule 46A of the Rules that the assessee is not entitled to produce fresh oral or documentary evidence as a matter of right, in appeal. However, under certain circumstances, as mentioned in clause (a) (b) (c) and (d) of sub-rule (1) of Rule 46A, additional evidence can be filed. Sub-rule (2) of Rule 46A casts a duty on the authority concerned to record reasons in writing for admission of additional evidence. Under sub-rule (3) of the Rule 46A, further requirement is that the appellate authority shall not take into account any evidence produced under sub-rule (1) unless the AO has been allowed a reasonable opportunity to examine the evidence or document or to cross-exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction between a case where the assessee invokes Rule 46A to adduce additional evidence before him and where without being prompted by the assessee, the CIT(A) considers it fit to make a further enquiry by virtue of the powers vested in him under sub-section (4) of Section 250 of the Act. When the CIT(A) exercises his statutory powers suo moto under Section 250(4) of the Act, the requirement of Rule 46A need not be followed. But whenever the assessee in an appeal invokes Rule 46A for submission of additional evidence, it is incumbent upon the CIT(A) to comply with the requirement of the rule strictly. 14. Ld. AR appearing before us submitted a certificate in respect of documents compiled in the appeal Paper Book stating the details regarding submission of evidence before the AO and the CIT(A). The certificate itself shows that documents stated in Sl. No. 7, 8, 11, 12(ii), 13, 16 to 23, 26(i), 27 and 28 were not before the AO and this additional documentary evidence was admitted by the ld. CIT(A) without complying with the provisions of Rule 46A(3). 15. In para 7 of the impugned order, the observation of ld. CIT(A) is in accordance with clauses (b) and (c) of sub-rule (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossibility that the additional evidence, sought to be introduced by an assessee before the CIT(A), could not be subjected to the conditions prescribed in Rule 46A because in any case, the CIT(A) is vested with coterminous powers over the assessment orders or powers of independent enquiry under sub-section (4) of Section 250 of the Act. The consequence of this interpretation of above statutory provisions would mean that additional evidence by the assessee at First Appellate stage would be allowed without following statutory provisions of Rule 46A and this interpretation cannot be allowed or countenanced. 20. For the above reasons, the issue relating to additions of Rs. 11,84,45,205(Rs. 5,00,00,000+Rs. 5,00,00,000+1,00,00,000+84,45,205) from undisclosed sources by the AO in the assessment order passed u/s 143(3) of the Act is restored to the file of the ld. CIT(A), who shall comply with the requirements of Rule 46A and shall adjudicate the matter by taking a fresh decision on the merits of the case in accordance with the Act and the procedure prescribed by the rules made thereunder. 21. On the basis of above discussion, we conclude that this appeal by the Revenue is disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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