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TMI Blog2006 (3) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatorily required to be given under Rule 46A(3) of the IT Rules, 1962. 2. That the learned CIT(A) has erred in condoning the delay in filing the appeals before the CIT(A) without passing any speaking order. At the time of hearing of the appeals, the learned Departmental Representative submitted that these additional grounds may be admitted as these arise from the orders of the CIT(A). 4. The learned Counsel for the assessee, on the other hand, opposed the admission of these additional grounds. He submitted that there is delay of about 16 months in raising such additional grounds. He further submitted that second ground relating to condoning the delay in filing the appeals does not arise from the orders of the CIT(A). 5. I have heard both the parties and carefully considered the rival submissions. As regards the first additional ground relating to admission of additional evidence by the CIT(A) without allowing an opportunity to the AO under Sub-rule (3) of Rule 46A, the same is purely a legal ground for which the relevant facts are already on record. Therefore, relying on the judgment of Hon'ble Supreme Court in the case of National Thermal Power Co. v. CIT , this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the said notice. The assessee also failed to comply with the notices issued under Section 142(1). The AO, therefore, completed assessment under Section 144 and by relying on the information received from the bank, determined the income at ₹ 3,27,476 from interest after allowing deduction under Section 80L. The AO also initiated penalty proceedings under Section 271F for non-filing of return, under Section 271(1)(b) for non-compliance with the notice under Section 142(1) and also under Section 271(1)(c) r/w Expln. 3 thereto. 7. Aggrieved, the assessee filed an appeal before the CIT(A). It was submitted before the CIT(A) that Smt. Chanan Kaur, grandmother of the assessee, had opened term deposit DBD A/c No. 499 in Bank of India, Jalandhar, Overseas Branch, 89, Bhagwan Mahavir Marg, BMC Chowk, Jalandhar, on 23rd Dec, 1991. Two term deposit receipts under DBD A/c No. 499 for ₹ 4,17,288 and ₹ 11,41,200 were taken on 23rd Dec, 1991 for a period of 36 months at the time of opening the term deposit account and subsequent another TDR for ₹ 1,30,000 was also taken on 13th Aug., 1992. Smt. Chanan Kaur delivered to the bank term deposit opening form on 23rd Dec, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order, I am of the view that there is force in assessee's contentions. The statement on oath submitted by the bank dt. 16th Feb., 2004 in accordance with Section 226(3)(vi) of the IT Act duly supported by the judgment of Hon'ble Supreme Court of India in case of Behari Lal Ramcharan v. ITO puts all controversy to rest. It has been clearly held therein that where a person to whom a notice under Section 226(3) is sent, objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the ITO to the extent of his own liability to the assessee on the date of the notice or to the extent of assessee's liability for any sum due under this Act, whichever is less. It is quite clear in the present case that as per the statement on oath the bank had made a mistake which was rectified later. As such, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 for the reason that assessment was made in the wrong name of the assessee. He further submitted that no income accrued to the assessee because the entries for crediting interest to the assessee's account without any instructions from the joint holders did not result in earning any income by the assessee. This fact was also intimated to the AO by the bank after the assessment was completed. He submitted that obviously there were 4 joint account holders including the assessee. It is not understood as to how the entire interest was taxed in the hands of the assessee. He further relied on the judgment of Hon'ble Supreme Court in the case of Jute Corporation of India v. CIT , where it was held that the CIT(A) has wide powers to admit any additional ground or plea taken before him for the first time. He also relied on the judgment of Hon'ble Punjab Haryana High Court in the case of CIT v. Jai Textile Mills , where it was held that the CIT(A) has wide powers to do justice to assessee and also to protect interest of the Revenue. He could also remand the case to the AO and record further evidence to do justice between the parties. It was held by the High Court that the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant shall not be entitled to produce before the Dy. CIT(A) or, as the case may be, the CIT(A), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the AO except in the following circumstances, namely : (a) where the AO has refused to admit evidence which ought to have been admitted; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the AO; or (c) where the appellant was prevented by sufficient cause from producing before the AO any evidence which is relevant to any ground of appeal; or (d) where the AO has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under Sub-rule (1) unless the Dy. CIT(A) or, as the case may be, the CIT(A) records in writing the reasons for its admission. (3) The Dy. CIT(A) or, as the case may be, the CIT(A) shall not take into account any evidence produced under Sub-rule (1) unless the AO has been allowed a reasonable opportunity- (a) to examine the evidence or docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jai Textile Mills (supra) where it was held that CIT(A) has wide powers to entertain any fresh ground or plea to do justice. Nobody is denying such powers vested with the CIT(A). But, while admitting fresh plea or ground, the learned CIT(A) is duty-bound to observe and comply with the statutory provisions of Act and Rules for providing adequate opportunity to the other party. The very fact that CIT(A) has such powers does not mean that he can bypass or disregard the statutory requirement of the law/rules; same is the position with the ratio of the decision of the Supreme Court in the case of Jute Corporation of India Ltd. v. CIT (supra) relied upon by the learned Counsel. The fact that CIT(A) has powers to admit fresh evidence in deciding the appeal is not disputed. But, while doing so, the learned CIT(A) was required to observe the mandatory provisions of Rule 46A, which has been ignored. Thus, such order of CIT(A) cannot be upheld. I, therefore, consider it fair and appropriate to set aside the order of the CIT(A) and restore the appeal to his/her file for deciding the same afresh as per law after complying with the provisions of Rule 46A and after allowing sufficient and reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 10,000 imposed by the AO under Section 271(1)(b) of the Act for non-compliance with the notices issued by the AO. In ITA No. 553/Asr/2004, the grievance of the Revenue relates to deletion of penalty of ₹ 5,000 imposed by the AO under Section 271F for failure of the assessee to file return of income in response to notice issued under Section 142(1). Briefly stated, the facts of the case are that the AO levied penalty for non-filing of return in response to notice under Section 142(1) and penalty of ₹ 10,000 under Section 271(1)(b) for assessee's failure to comply with the terms of notice issued under Section 142(1). The learned CIT(A) cancelled the penalty on the ground that assessee being NRI was not present to plead the case and also to file the return. 14. Both the learned Departmental Representative and learned Counsel for the assessee submitted that this issue is also linked with other appeals which have been restored to the file of the CIT(A). Therefore, these appeals may also be restored to the file of the CIT(A) for deciding the same afresh along with other appeals. 15. I have heard both the parties and considered the rival submissions. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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