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TMI Blog2011 (8) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue for consideration in Revenue's appeal relates deleting the addition of Rs. 14,52,000/- made on account of unexplained cash deposits by admission of additional evidence in violation of provisions of Rule 46-A of the Income-tax Rules, 1962. The facts of the case stated in brief are that the Assessing Officer, Ward : 25(4), the Designated Assessing Officer-43 received AIR information from CIT [CIB] Delhi vide reference No.CIT[CIB]/Delhi/GSL14948 for transaction of Rs. 14,52,000/-. He issued notice under section 142(1) which was sent to the assessee by Speed Post at the last address available on record. Since the notice issued u/s 142(1) was not received back, the AO treated the notice as served. Another notice was sent to the assessee on 3/12/2007 for compliance on 11/12/2007. On this date neither any person attended nor was any reply filed. Since no reply was received by the AO, he decided to complete the assessment ex-parte u/s 144 of the Income-tax Act, 1961 by making addition of Rs. 14,52,000/-. 4. On appeal before the ld. CIT (Appeals) it was submitted that the assessment made under section 144 of the Act dated 27/12/2007 was without jurisdiction as the assessee was regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the additional evidence, it was submitted that the assessee did not have any valid and proper; opportunity of producing the evidence before the AO and, therefore, the assessee's case was covered by clauses (b), (c) and (d) of Rule 46-A. It was also submitted that under sub Rule (4) of Rule 46A the ld. CIT (A) could admit any evidence, which was necessary for rendering substantial justice. The assessee placed reliance on several decisions. 6. The ld. CIT (A) considered the submissions made by the assessee, the remand report and rejoinder of the assessee. Ld. CIT(A) has observed that though the rules require new evidence to be admitted only where there is reason for the assessee for not being able to present such evidence before the assessing officer, it is considered not only fair but justified, where the appellate authority itself considers such evidence necessary. He also noted that the Hon'ble Courts have held that where there was omission to submit part of the documents as required by the assessing officer, the appellate authority might not be justified merely by drawing an adverse inference against the assessee failing to furnish certain documentary evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant gets relief." 7. Aggrieved by the order of the ld. CIT (A) the Revenue is in appeal before us. 8. Before us the ld. Sr. DR submitted that where no comments were offered by the assessing officer on examination/verification of the additional evidence in his remand report, one more opportunity should have been offered by the ld. CIT (Appeals) to the assessing officer to examine/verify the additional evidence when the same was admitted by him overruling the objections raised by the assessing officer for admission thereof. She placed reliance for this proposition on the decision of the ITAT, Delhi Bench G in the case of ITO Vs. M/s. SFIL Stock Broking Ltd. in I. T. Appeal No. 4687 (Del) of 2007 for assessment year 1999-2000 reported as [2009] TIOL - ITAT - Del. dated 17th October, 2008. She also placed reliance on the decision of Hon'ble Delhi High Court in the case of DIT Vs. Modern Charitable Foundation dated 18th May, 2011 reported as [2011] - TIOL - 363 - HC - Del. - IT. She further submitted that the ld. CIT (A) has not given reasons before admission of additional evidence. The ld. CIT (A) has accepted the submissions made by the assessee which are available at page 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances set out therein. It does not deal with powers of Appellate Assistant Commissioner to make further enquiry or to direct the Income Tax Officer to make further enquiry and to report the result of the same to him. This position had been made clear by sub rule (4) of Rule 46-A, which specifically provides that the restrictions placed on the production of additional evidence by the appellant would not affect the powers of appellate authority to call for production of any document or the examination of any witness to enable him to dispose of the appeal. Hon'ble High Court has further noted that the powers of first appellate authority are co-terminus with that of the assessing officer. The powers conferred on first appellate authority under sub section (4) of section 250 being a quasi judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the appellate authority fails to exercise his discretion judicially and arbitrary refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority. The purpose of Rule 46-A of the Rules is to ensure the evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case before us the ld. CIT (Appeals) has recorded his satisfaction that the additional evidence was necessary for deciding the appeal on merits and for the purpose of rendering substantial cause of justice. Therefore, in our considered opinion, the ld. CIT (Appeals) was justified in admitting the additional evidence and deciding himself the issue after verification of the additional evidence. 11. It is not a case where the ld. CIT (Appeals) has admitted the additional evidence and without verification has decided the appeal in favour of the assessee. Hon'ble Delhi High Court in the case of Modern Charitable Foundation (supra) has held that where the ld. CIT (Appeals) after admitting additional evidence relied upon the same without any verification the matter was to go back to the assessing officer for consideration of the additional evidence. The facts of the present case are distinguishable to the effect that the ld. CIT (Appeals) has himself has verified the evidence and has recorded a finding of fact that the source of deposit in the bank account has been explained by the assessee with the help of books of accounts and bank account of proprietorship concerns. Under such circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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