GOLDENBRICKS CONSUMER PRODUCTS PVT LTD ,MUMBAI vs. INCOME TAX OFFICER WARD 9(3)(1), MUMBAI

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ITA 1643/MUM/2026Status: DisposedITAT Mumbai24 July 2026AY 2022-239 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in rejecting the additional evidence without considering sufficient cause for its non-production before the AO. The matter was restored to the CIT(A) for fresh adjudication after admitting the evidence.

What were the facts?

The assessee's appeal concerns an addition of Rs. 53,00,000 on account of an unsecured loan. The assessee sought to admit the lender's Income-Tax Return as additional evidence before the CIT(A), which was rejected.

What were the issues?

Whether the CIT(A) was justified in rejecting the admission of additional evidence under Rule 46A, and whether the assessee had shown sufficient cause for not producing it before the AO.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI PAWAN SINGH

For Appellant: Shri Hemant Jawhar Lal, Adv
For Respondent: Shri Rajgopal Parthasarathi – SR
Hearing: 22/07/2026Pronounced: 24/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 1643 /MUM/2026 Assessment Year: 2022-23

Goldenbricks Consumer National Faceless appeal Centre/ Products Private Limited, 401, Income Tax Officer, Room Crecent Royale, New Link Vs. No.419, Aayakar Bhavan, M.K. Road, Behind Morya Estate, Road, Mumbai – 400020, Andheri West, Mumbai – Maharashtra. 400053.

PAN NO. AAFCG 0087 K Appellant Respondent

Assessee by : Shri Hemant Jawhar Lal, Adv.

Revenue by : Shri Rajgopal Parthasarathi – SR DR.

Date of Hearing : 22/07/2026 Date of pronouncement : 24/07/2026

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 30.01.2026, passed by the learned Commissioner of Income-Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short, ‘the Ld. CIT(A)’], for Assessment Year (in short ‘A.Y’), 2022-23, raising following grounds:

Goldenbricks Consumer 2 Products Private Limited ITA No. 1643/MUM/2026

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs.53,00,000 on account of unsecured loan as unexplained cash credits made by Ld. AO under sec 68 r.w.s 115BBE of the Income Tax Act, 1961. On facts and circumstances of the case and law on the subject, the addition be deleted.

2.

On the facts and circumstances of the case and in law the assessing officer erred in initiating penalty proceedings u/s 271AAC (1) of the Income Tax Act, 1961. In view of the facts and circumstances of the case and law, the Penalty Proceedings be dropped.” 2. During the course of hearing, the learned Authorised Representative sought admission of the following additional ground:

“On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) [CIT(A)] erred in rejecting the appellant’s application for admission of additional evidence filed under Rule 46A of the Income-tax Rules, 1962, without properly appreciating the facts and circumstances which prevented the appellant from producing such evidence before the Assessing Officer and without affording adequate opportunity for consideration thereof. The action of the Learned CIT(A) is contrary to the provisions of Rule 46A and principles of natural justice, rendering the appellate order unsustainable to that extent.”

3.

We have heard the rival submissions on the question of admission of the additional ground. The issue raised therein goes to the legality of the appellate proceedings, particularly the rejection of additional evidence under Rule 46A of the Income-tax Rules, 1962. The additional ground raised by the assessee is purely legal in nature and does not require any investigation of the fresh facts dehors the material already available on record. It is now well settled that a pure question of law arising from the facts already on record can be raised at any stage of the proceedings. Accordingly, following the ratio laid down by the Hon'ble Supreme Court in

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National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC), we admit the additional ground for adjudication.

4.

The learned counsel for the assessee submitted that the assessee is an individual, not conversant with the technical requirements of income-tax proceedings and, therefore, could not furnish the Income-tax Return of the lender, Shri Hemant N. Sarvaiya, during the assessment proceedings. It was submitted that although confirmation, PAN and other primary details of the creditor had been furnished, the copy of the creditor's return of income could not be procured within the limited time granted by the Assessing Officer. The additional evidence, being the income-tax return of the third-party creditor, could not be procured during the course of the assessment proceedings on account of the said creditor's non- cooperation. After completion of the assessment proceedings, the said return was obtained and filed before the learned CIT(A) by way of an application under Rule 46A. It was contended that the learned CIT(A), instead of examining whether sufficient cause existed and whether the additional evidence was necessary for proper adjudication, rejected the application solely on the premise that the return was downloadable from the e-filing portal and ought to have been produced earlier.

4.1 The learned Departmental Representative, on the other hand, supported the orders of the lower authorities and submitted that

Goldenbricks Consumer 4 Products Private Limited ITA No. 1643/MUM/2026

sufficient opportunities had been granted during the assessment proceedings and the assessee failed to discharge the onus cast upon it under section 68 of the Act.

5.

We have carefully considered the rival submissions and perused the material placed on record. The addition of Rs.53,00,000/- in respect of the unsecured loan received from Shri Hemanth N. Sarvaiya, under section 68 has principally been sustained on the ground that the assessee failed to establish the creditworthiness of the lender by producing, inter alia, his Income-tax Return. The assessee subsequently sought to produce the said return before the learned CIT(A) by invoking Rule 46A. The learned CIT(A), however, declined to admit the additional evidence by observing that the return had already been filed by the creditor on 29.12.2022, was readily available on the e-filing portal and that its non-production during assessment proceedings amounted to deliberate suppression. The relevant finding of the learned CIT(A) is reproduced as under:

“10. The assessee received Rs. 53,00,000/- vide cheque from Shri Hemant N Sarvaiya during F.Y. 2021-22. While PAN and ledger confirmation were furnished, the critical ITR of the creditor for A.Y. 2022-23filed as early as 29/12/2022was conspicuously withheld despite repeated notices u/s 142(1) dated 12/10/2023, 21/11/2023, 19/02/2024, and the final show-cause dated 07/03/2024 specifically calling for it. The partial bank passbook submitted revealed frequent, unexplained credits and debits, incompatible with the creditor's capacity to advance such a large unsecured loan without corresponding income proofa classic red flag noted by the Assessing Officer. The assessee's post-assessment tendering of the ITR as "additional evidence" u/s Rule 46A lacks bona fides, as it was readily downloadable from the e-filing portal during

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proceedings and non-production despite short notice (5 days) indicates deliberate suppression.” 6. The controversy before us, therefore, lies within a narrow compass, namely, whether, in the facts of the present case, the assessee had shown "sufficient cause" within the meaning of Rule 46A(1)(b) and (c) of the Income-tax Rules for not producing the said evidence before the Assessing Officer. The Rule 46A embodies a salutary principle that while parties should ordinarily produce all relevant evidence before the Assessing Officer, the appellate authority is empowered to admit additional evidence where the assessee establishes sufficient cause for its earlier non-production. Equally important is sub-rule (3), which safeguards the interests of the Revenue by requiring that any additional evidence admitted shall be subjected to examination by the Assessing Officer before being relied upon. In this regard, Rule 46A is reproduced as under:-

“46A. (1) The appellant shall not be entitled to produce before the 83[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :— (a) where the Assessing Officer 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 Assessing Officer ; or (c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or (d) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

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(2) No evidence shall be admitted under sub-rule (1) unless the 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3) The 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.” 7. The discretion conferred upon the appellate authority under Rule 46A must be exercised judiciously. The appellate authority possesses the requisite discretion to admit additional evidence where the assessee was denied a fair and adequate opportunity at the assessment stage, and that a hyper-technical approach to Rule 46A defeats rather than serves the cause of justice.

8.

In the present case, it is not in dispute that the lender's Income-tax Return was subsequently produced before the learned CIT(A). It is equally undisputed that the Assessing Officer allowed the assessee only seven days to furnish documentary proof of the creditor's creditworthiness — a period that, in our considered view, was manifestly inadequate for procuring a document from a third

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party over whom the assessee exercised no control. The assessee has consistently maintained that the return could not be procured from the lender during the assessment proceedings. It is only after completion of the assessment proceedings that the assessee was able to obtain the income-tax return of the said creditor.

9.

Whether this explanation ultimately inspires confidence or not is a matter to be examined while appreciating the evidentiary value of the document. However, at the stage of considering admission of additional evidence, the primary consideration is whether the evidence is relevant for proper adjudication of the dispute and whether denial of its consideration may result in failure of justice.

10.

The Income-tax Return of the creditor directly bears upon one of the essential ingredients required to be examined under section 68, namely, the creditworthiness of the creditor. The evidence is thus relevant and material for adjudication of the issue. In our considered opinion, the ends of justice would be better served by permitting its consideration rather than shutting it out on a technical ground, particularly when adequate protection is available to the Revenue under Rule 46A(3) by permitting verification through the Assessing Officer.

11.

In these peculiar facts, we are of the considered view that the assessee has shown sufficient cause within the meaning of Rule 46A for the non-production of the document before the Assessing

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Officer. Consequently, the learned CIT(A) was not justified in rejecting the application outright without admitting the evidence and calling for a remand report from the Assessing Officer.

12.

Accordingly, we set aside the impugned order on this limited issue and restore the matter to the file of the learned CIT(A). The learned CIT(A) shall admit the additional evidence, obtain the comments or remand report of the Assessing Officer in terms of Rule 46A(3), if considered necessary, afford adequate opportunity of hearing to both the parties and thereafter adjudicate the issue afresh by passing a reasoned and speaking order in accordance with law. We clarify that we have expressed no opinion on the merits of the addition under section 68. The additional ground raised by the assessee is, accordingly, allowed.

14.

Since the matter relating to the addition under section 68 has been restored to the file of the learned CIT(A) for fresh adjudication, the grounds challenging the addition on merits do not survive for consideration at this stage and are left open.

15.

Ground No. 2 challenges the initiation of penalty proceedings under section 271AAC(1) of the Act. The ground is premature, as it merely assails initiation of penalty proceedings and no penalty order is stated to have been passed pursuant thereto. It is settled law that initiation of penalty proceedings, by itself, does not give rise to an independent cause of action in appellate proceedings

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against the assessment order. Accordingly, the said ground is dismissed as premature.

16.

In the result, the appeal of the assessee is partly allowed for statistical purposes

Order pronounced in the open Court on 24/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 24/07/2026 M. Ranganath Vittal , Sr. P.S.

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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