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TMI Blog2003 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The Commissioner of Income-tax, Thiruvananthapuram, has filed this appeal against the order of the Income-tax Appellate Tribunal, Cochin Bench, in I.T.A. No. 457/Coch of 1995, dated March 20, 1999. While admitting the appeal notice was ordered on the following questions of law: "(1) Whether, on the facts and in the circumstances of the case, and the Tribunal having found that 'the Commissioner of Income-tax (Appeals) further held that the assessee's representative could not point out that the assessee's case came under any of the exceptional cases specified in rule 46A', the Tribunal is right in law in holding that 'the Commissioner of Income-tax (Appeals) was not justified in straightaway refusing to entertain the confirmation letters'? (2) Whether, on the facts and in the circumstances of the case and on an interpretation of rule 46A of the Income-tax Rules, the Tribunal is right in law in interfering with the order of the Commissioner of Income-tax (Appeals) and in remitting the case to the assessing authority for examination of the alleged creditors? (3) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that 'the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to examine the two persons mentioned above to ascertain their credit worthiness to advance the amounts to the assessee in view of the provisions contained in that rule 46A. Standing counsel submits at rule 46A clearly prohibit the production of any documents before the first appellate authority other than the evidence produced by the assessee during the course of the assessment proceedings except in the three circumstances specified in the said rules. Counsel also submits that the assessee's case does not fall under any of the said three circumstances. Standing counsel pointed out that the first appellate authority in its order had clearly stated that the assessee had not shown any cause for not producing this evidence before the assessing authority. Standing counsel also submitted that the Tribunal without considering the effect of the provisions of rule 46A had issued the direction to the Assessing Officer. Standing counsel also took us to the decision of this court in C. Unnikrishnan v. CIT [1998] 233 ITR 485 and the decision of the Allahabad High Court in Ram Prasad Sharma v. CIT [1979] 119 ITR 867 and submitted that the order of the Tribunal on this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether oral or documentary, which was not produced in the course of the proceedings before the Income-tax Officer except in specified circumstances. Thus, the appellant has a right to produce additional evidence only in the circumstances specified in the rule and the appellant may be permitted to produce additional evidence in a fit case which falls outside the specified circumstances. The present case does not fall within the first category and the appellant has no right to produce additional evidence before the Appellate Assistant Commissioner. He may have been permitted to produce additional evidence but that was a matter of discretion with the Appellate Assistant Commissioner. In the present case repeated opportunities were given by the Income-tax Officer to produce evidence to prove the genuineness of the disputed deposits but no evidence whatsoever was given. It cannot be said that in these circumstances the Appellate Assistant Commissioner exercised his discretion arbitrarily or capriciously while refusing to admit fresh evidence at the appellate stage." The Bombay High Court had also occasion to consider this question in Smt. Prabhavati S. Shah v. CIT [1998] 231 ITR 1. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer. He can do what the Income-tax Officer can do. He can also direct the Income-tax Officer to do what he failed to do. The power conferred on the Appellate Assistant Commissioner 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 Assistant Commissioner fails to exercise his discretion judicially, and arbitrarily 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." It was further observed as follows: "On a conjoint reading of section 250 of the Act and rule 46A of the rules, it is clear that the restrictions placed on the appellant to produce evidence do not affect the powers of the Appellate Assistant Commissioner under sub-section (4) of section 250 of the Act. The purpose of rule 46A appears to be to ensure that evidence is primarily led before the Income-tax Officer." On a consideration of the provisions of rule 46A particularly sub-rule (4) thereof and the provisions of section 250(1) of the Income-tax Act conferring power on the Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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