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TMI Blog2022 (12) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... due verification of the aforesaid additional evidences; and further, to examine the purpose of the interest payment to M/s Bajaj Finance Ltd. having regard to the assessee s business/profession; before finalizing fresh order, for coming to a conclusion about its allowability. All the grounds of appeal are treated as disposed of in accordance with aforesaid directions. For statistical purposes this appeal is partly allowed. - ITA No.7586/Del/2019 - - - Dated:- 28-11-2022 - Shri Saktijit Dey, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : Mr. Ajay Vohra, Sr. Advocate and Ms. Somya Jain, CA For the Respondent : Mr. Jeetender Chand, Senior Departmental Representative ( Sr. DR for short) ORDER PER ANADEE NATH MISSHRA, AM: (A) This appeal by Asseessee is filed against the impugned appellate order of Learned Commissioner of Income Tax (Appeals)- 38, New Delhi [Ld. CIT(A) , for short], dated 16/07/2019 for Assessment Year 2015-16. Grounds taken in this appeal are as under: 1. That the order passed by the Commissioner of Income Tax (Appeals)- 38 ('Ld. CIT(A) ) u/s 250 of the Income Tax Act, 1961 ( Act ) is arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignoring that the Appellant has satisfied the conditions prescribed in the first proviso to sub-section (1) of section 201 of the Act, whereby a certificate from an independent accountant issued in prescribed FORM No. 26A under Rule 31ACB of the Income Tax Rules 1962 certifies that the recipient of interest i.e. M/s Bajaj Finance Ltd. has disclosed the interest income received from the Appellant as it taxable income and also paid tax on the same for the year under consideration. 6. The Ld. CIT(A) has erred on facts and in law in ignoring the loan approval letter dated 11.07.2012 of Bajaj Finance Ltd. wherein it is clearly stated that the loan against pledge of property is sanctioned to the Appellant for business use and erroneously observing that the Appellant could not substantiate that the loan was taken for business purposes. 7. The Ld. CIT (A) has erred on facts and in law in presuming that the Appellant did not comply with Rule 46A of Income Tax Rules, 1962 in furnishing additional evidences and/or case laws being relied upon by him and this presumption in itself is contradictory since, if the additional evidence was not admissible, there was no need for seeking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Submission dated 25/04/2019 filed in response to notice dated 11/01/2019 u/s 250(1). 7. Copy of loan approval letter dated 11/07/2012 issued by Bajaj Finance Ltd. specifying the purpose of loan. 8. Copy of Chartered Account s certificate under first proviso to section 201(1) furnished by M/s Reliance Capital Limited and M/s Bajaj Finance Ltd. Confirming that income has been offered to tax. 9. Copy of remand report dated 13/06/2019 issued by the Assessing Officer. 10. Submission dated 16/07/2019 filed in response to notice dated 20/06/2019 seeking rejoinder to AO s remand report. (A.2) In addition copy of order of SMC Bench of ITAT, Delhi Bench in the case of Zia Ur Rehman vs. Income-tax Officer [2018] 96 taxmann.com 482 (Delhi-Trib.) was also filed from the assessee s side in the course of appellate proceedings in Income Tax Appellate Tribunal. (B) At the time of hearing before us, Mr. Ajay Vohra, Senior Counsel, appeared for the appellant assessee. The learned Senior Counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act read with rules and furnished the tame during the course of Appeal proceedings. The Appellant respectfully prays that due to an inadvertent delay for the reasons mentioned above in furnishing of these certificates there was no loss to the revenue. Tins clearly shows that the Appellant has fulfilled conditions of section 40(a) (m) after providing the CA certificate that the income is disclosed by both the payees (i.e. lender institutions) in their respective Return of Income and the conditions of Proviso to section 40(a) (ia) of the Act are met. Thus, the Appellant fulfills all the conditions prescribed under section 40(a) (ia) of the Act and is therefore entitled to the claim and its disallowance on mechanical grounds will be against the principles of natural justice and equity and result into undue hardship merely because requisite certificates could not be furnished during the course of assessment to the Ld. Assessing Officer. (B.1) The learned Senior Counsel for the assessee further submitted that in view of the aforesaid facts and circumstances, the learned CIT(A) should have admitted aforesaid certificates issued by the learned Chartered Accountants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect also, before finalizing fresh order. (B.2.1) The learned Senior Counsel for the assessee made a specific prayer that the Assessing Officer may be directed to restrict the scope of fresh order to the specific issue of allowability of aforesaid amount of Rs.1,41,84,866/- after due verification. The learned Senior DR was in agreement with this request also and did not express any objection to it. (C) We have heard both sides. We have perused the materials on record. We find that the assessee had submitted explanation before the learned CIT(A) as to why the aforesaid additional evidences by way of certificates issued by Chartered Accountant u/s 201(1) of IT Act could not be submitted by the assessee during the assessment proceedings. The assessee s submissions made before the learned CIT(A) in this regard have already been reproduced in the foregoing paragraph (B) of this order. There is no dispute regarding the facts claimed by the assessee in the aforesaid submissions. In view of the explanation furnished by the assessee as to why these additional evidences could not be submitted to the Assessing Officer in the course of assessment proceedings, the issue before us is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view [erroneously, as we have held in preceding paragraph (C.1) of this order] that filing of a separate application was a necessary requirement for admission of additional evidences under Rule 46A of Income Tax Rules; then she could and should have communicated this (erroneous) requirement to the assessee, which in her opinion was necessary to be fulfilled, and she should also have accorded reasonable opportunity to the appellant assessee to file a separate application for admission of additional evidences under Rule 46A of Income Tax Rules. Failure on the part of the learned CIT(A) to communicate this (erroneous) requirement, if in her opinion this was a necessary requirement, to the appellant assessee, and, to then instead refuse the admission of additional evidences; was unjust, unfair and harsh. (C.2.1) In view of the foregoing, we order the admission of the aforesaid additional evidences in the nature of certificates issued by the learned Chartered Accountants under Rule 201(1) of IT Act, which were filed by the assessee in the course of appellate proceedings in the office of the learned CIT(A). Further, we restore the issue regarding allowability of interest expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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