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TMI Blog1990 (7) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A)." Thus, the Department objects to the assessment being set aside by the CIT(A) with the direction to give yet another opportunity to the assessee for producing the relevant books of accounts and then decide about the disallowances and additions. Department's contention is that the return was filed late and thereafter also many opportunities had been allowed to the assessee for producing the books of accounts and vouchers and bank pass books, but the assessee had failed to produce them before the ITO. It is further contended that the reasons given by the assessee before the CIT(A) for non-compliances before the ITO have been unjustifiably accepted by the CIT(A). 2. On the other hand, learned advocate for the assessee has contended that the CIT(A) was absolutely justified in deciding the matter as he did and further that the CIT(A) should have and could have annulled the assessments. A specific objection was taken on behalf of the assessee to the Department's stand that merely filing of copies of ledger accounts of the creditors implied that the account books were in the possession of the assessee and he deliberately failed to produce the same before the ITO. It is conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 143(3) on 12-2-1985 on the basis of information made available to him by the assessee and against a returned loss of Rs. 9,80,066, the total income was computed at Rs. 4,93,839. The CIT(A) passed order on 2-4-1985 and in para 1 thereof, briefly narrated the background of requisitions and non-compliances. Then in paras 2 to 14 on pages 2 to 10, the learned CIT(A) has taken note of the assessee's objections to various additions made in the assessment order, and then in para 15 on page 10, he takes note of the assessee's letter dated 7-3-1986 wherein the assessee has contended that the account books, etc., could not be produced before the Income-tax Officer because they were in the possession of the Accountant, who was not only non-co-operative, but was also very hostile to assessee, as his salaries could not be paid. Then in para 16 of his appellate order, the CIT(A) has noted inter alia as follows : " 16 ........ At the same time, the appellant has now pleaded that due to circumstances beyond his control such as blackmailing by the Accountant, it was not possible for him to produce these books before the ITO. In these circumstances, the only course open for me is to set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details before the Income-tax Officer and he himself offers before the CIT(A) to produce the account books vide his letter dated 5-3-1986, but never mentions that the assessee's account books, vouchers and bank pass books were not available to him because the same were with the hostile accountant. Therefore, there is quite some substance in the Department's contention that the learned CIT(A) was unreasonable in giving yet another opportunity to the assessee for production of account books, vouchers, bank pass books, etc. This is all the more important in view of the fact that the return itself was filed so much belatedly and after the filing of the return, one Mr. P.C. Sharma as Accountant had attended before the ITO and the assessment was required to be completed certainly by 31-3-1985 in view of the limitation period prescribed under s. 153. 5. We may now take note of Rule 46A of the Income-tax Rules, which in terms disentitles the assessee to produce any fresh evidence before the first appellate authority except in the cases enumerated in clauses (a) to (d) of sub-rule (1). Clause (a) covers the cases of refusal to admit evidence by the ITO. Clauses (b) and (c) cover the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst appellate authority, in contravention of Rule 46A. 7. Reliance is also placed on the Rajasthan High Court decision in the case of Tulsi Lal Manilal v. CIT [1985] 23 Taxman 573/154 ITR 665. Indeed, this is a very very interesting judgment, and on very very peculiar facts. At any rate, it does not help the assessee at all. It is peculiar in the sense the assessee objected in that case to the books of account being looked into at the behest of the Tribunal and took the plea that the said books had not been produced before the ITO by the assessee and hence they should not be looked into. The judgment is interesting in the sense that it lays down the limits of the purposes for which the appellate authority may look into such books. These aspects are clear from para 17 of the decision starting on page 578 in Tulsilal Manilal's case and the relevant portions may be extracted as follows : " We may point out that in the cases which have been cited before us and to which a reference has been made above, it was the assessee who desired to produce the account books and the department objected to the production thereof on the ground that the application filed by the assessee under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the circumstances into account, it would be reasonable for us to set aside the order of the CIT(A) and restore the matter back to the file of the CIT(A) for readjudication afresh after giving the assessee and the assessing officer reasonable opportunities of being heard. He will first take into account the relevant factors (whose examples are indicated in para 4 hereinabove) and decide whether assessee should be allowed to produce books of accounts, etc., which were not produced before the Income-tax Officer. Obviously, much of the problem will not arise if the CIT(A) holds that the assessee should be really given that right. In case, the CIT(A) decides the point against the assessee, he may refer to or direct the ITO to refer to (if necessary) these papers, account books, etc., for the limited purpose of seeing that the additions and disallowances made in the assessment were " not wholly arbitrary and capricious ". In other words, even if the assessee is denied the right to produce the account books, vouchers, etc., which were not produced before the Income-tax Officer, the same may be referred to for the limited purpose of seeing that the original assessment is " not wholly arb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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