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Facts
The assessee company, engaged in coal trading and related activities, filed its return of income. The Assessing Officer made additions for unexplained cash credit, disallowance of unsubstantiated service charges, and disallowance of interest expenditure. The CIT(A) allowed the assessee's appeal.
Held
The Tribunal held that the CIT(A) erred by admitting additional evidence without affording the Assessing Officer an opportunity to examine it or offer comments, thereby violating procedural safeguards and principles of natural justice. The order of the CIT(A) was set aside.
Key Issues
Whether the CIT(A) violated Rule 46A of the Income Tax Rules by admitting additional evidence without giving the AO an opportunity to respond, thus vitiating the order.
Sections Cited
68, 37, 143(3), 36(1)(iii), 133(6)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal by the Revenue is directed against order dated 04.02.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2021-22, raising following grounds:
“1(a) "Whether on facts and circumstances of the case and in law, the CIT(A) erred in allowing the appeal filed by the assessee and deleting the addition of Rs. 19,49,32,568/- being addition made u/s 68 of the Income tax Act, 1961 being addition made u/s 68 of the Income tax Act, 1961 being addition made u/s 68 of the Income tax Act, 1961 on the Issue of non genuine unsecured loans though the on the Issue of non genuine unsecured loans though the on the Issue of non genuine unsecured loans though the creditworthiness of the parties from whom the unsecured creditworthiness of the parties from whom the unsecured creditworthiness of the parties from whom the unsecured loans loans were were taken taken and and genuineness genuineness of of the the said said transactions were not proved." transactions were not proved." 1(b) Whether on the facts and circumstances of the case 1(b) Whether on the facts and circumstances of the case 1(b) Whether on the facts and circumstances of the case and in law, CIT(A) erred in allowing the assessee's appeal and in law, CIT(A) erred in allowing the assessee's appeal and in law, CIT(A) erred in allowing the assessee's appeal by deleting the addition of Rs.19,49,32,568/ by deleting the addition of Rs.19,49,32,568/-on the issue on the issue of non genuine unsecured loans ignoring the of non genuine unsecured loans ignoring the facts of the facts of the case and not appreciating the fact that mere filing of case and not appreciating the fact that mere filing of case and not appreciating the fact that mere filing of PANS, ITRS, account confirmations and banks statements PANS, ITRS, account confirmations and banks statements PANS, ITRS, account confirmations and banks statements of the creditors is not sufficient enough to discharge the of the creditors is not sufficient enough to discharge the of the creditors is not sufficient enough to discharge the onus cast upon the assessee u/s 68 of the Income tax Act, onus cast upon the assessee u/s 68 of the Income tax Act, onus cast upon the assessee u/s 68 of the Income tax Act, 1961. 2(a)" Whether on facts and circumstances of the case and ther on facts and circumstances of the case and ther on facts and circumstances of the case and in law, the CIT(A) erred in allowing the appeal filed by the in law, the CIT(A) erred in allowing the appeal filed by the in law, the CIT(A) erred in allowing the appeal filed by the assesee and deleting the addition made on account of assesee and deleting the addition made on account of assesee and deleting the addition made on account of unsubstantiated service charge of Rs.7,09,24,217/ unsubstantiated service charge of Rs.7,09,24,217/- paid to M/s. Roselife Sales Pvt. Ltd. Ignor to M/s. Roselife Sales Pvt. Ltd. Ignoring the fact that the ing the fact that the assesse assesse assesse failed failed failed to to to provide provide provide documentary documentary documentary evidences evidences evidences regarding receiving any service(s) from M/s. Rosellfe Sales regarding receiving any service(s) from M/s. Rosellfe Sales regarding receiving any service(s) from M/s. Rosellfe Sales Pvt. Ltd. during the relevant period." ners of Pvt. Ltd. during the relevant period." ners of 2(b) "Whether on facts and circumstances of the case and 2(b) "Whether on facts and circumstances of the case and 2(b) "Whether on facts and circumstances of the case and in law, the CIT(A) err in law, the CIT(A) erred in allowing the appeal filed by the ed in allowing the appeal filed by the assesse and deleting the addition made on account of assesse and deleting the addition made on account of assesse and deleting the addition made on account of unsubstantiated service charges of Rs.7,09,24,217/ unsubstantiated service charges of Rs.7,09,24,217/- paid to M/s. Roselife Sales Pvt. Ltd. ignoring the fact that notice to M/s. Roselife Sales Pvt. Ltd. ignoring the fact that notice to M/s. Roselife Sales Pvt. Ltd. ignoring the fact that notice u/s 133(6) of the the Act was issued to M/s. u/s 133(6) of the the Act was issued to M/s. Roselife Roselife Sales Pvt. Ltd to provide details of the said transactions Sales Pvt. Ltd to provide details of the said transactions Sales Pvt. Ltd to provide details of the said transactions but no reply was received." but no reply was received." 3. "Whether on facts and circumstances of the case and in 3. "Whether on facts and circumstances of the case and in 3. "Whether on facts and circumstances of the case and in law, the CIT(A) erred in allowing the appeal filed by the law, the CIT(A) erred in allowing the appeal filed by the law, the CIT(A) erred in allowing the appeal filed by the assesse and deleting the addition made on a assesse and deleting the addition made on account of ccount of disallowance of interest expenditure of Rs.5,65,507/ disallowance of interest expenditure of Rs.5,65,507/ disallowance of interest expenditure of Rs.5,65,507/- ignoring the fact that entire amount of funds borrowed by ignoring the fact that entire amount of funds borrowed by ignoring the fact that entire amount of funds borrowed by the assessee were treated as unexplained cash credit." the assessee were treated as unexplained cash credit." the assessee were treated as unexplained cash credit." par 4. "Whether on facts and circumstances of the case and in 4. "Whether on facts and circumstances of the case and in 4. "Whether on facts and circumstances of the case and in law, the CIT(A) er law, the CIT(A) erred in deleting the additions made by the red in deleting the additions made by the Assessing Officer by accepting the additional evidences Assessing Officer by accepting the additional evidences Assessing Officer by accepting the additional evidences submitted submitted submitted by: by: by: the the the assessee assessee assessee during during during the the the appellate appellate appellate proceedings which were not submitted during the proceedings which were not submitted during the proceedings which were not submitted during the assessment proceedings despite adequate opportunities." assessment proceedings despite adequate opportunities." assessment proceedings despite adequate opportunities." 5. "Whether on facts and circumstances of the case and in ether on facts and circumstances of the case and in ether on facts and circumstances of the case and in law, the CIT(A) erred in deleting the additions made by the law, the CIT(A) erred in deleting the additions made by the law, the CIT(A) erred in deleting the additions made by the Assessing Assessing Assessing Officer Officer Officer on on on the the the basis basis basis of of of the the the assesee's assesee's assesee's submissions but without giving opportunity to the AO as submissions but without giving opportunity to the AO as submissions but without giving opportunity to the AO as per sub-rule(3) of Rule 46A of the Incom rule(3) of Rule 46A of the Income tax, 1962 by e tax, 1962 by calling for remand report." calling for remand report."
6. The appellant prays that the order of the CIT(A) on the 6. The appellant prays that the order of the CIT(A) on the 6. The appellant prays that the order of the CIT(A) on the grounds to be set aside and confirm the order of the AO. grounds to be set aside and confirm the order of the AO. grounds to be set aside and confirm the order of the AO.”
Briefly stated, facts of the case are that during the relevant , facts of the case are that during the relevant , facts of the case are that during the relevant year, the assessee company was year, the assessee company was engaged in the business of coal engaged in the business of coal trading, handling & disposal of fly ash and related activities of fly ash and related activities. The assessee filed its return of income on 15.03.2022 declaring total assessee filed its return of income on 15.03.2022 declaring total assessee filed its return of income on 15.03.2022 declaring total income at Rs.13,29,90,950/ Rs.13,29,90,950/-, which was subsequently revised on which was subsequently revised on 26.03.2022 retaining the same 26.03.2022 retaining the same total income. The return of income income. The return of income filed by the assessee was selected for scrutiny and statutory notices filed by the assessee was selected for scrutiny and statutory notices filed by the assessee was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and tax Act, 1961 (in short ‘the Act’) were issued and tax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed u/s 143(3) of the Act, complied with. In the assessment completed u/s 143(3) of the Act, complied with. In the assessment completed u/s 143(3) of the Act, the Assessing Officer made following additions: the Assessing Officer made following additions:
Sr No. Particulars Particulars Amount in Rupees in Rupees 1. Unexplained cash credit u/s Unexplained cash credit u/s 19,4932,568/- 19,4932,568/ 68 of the Act 68 2. Disallowance un-substantial Disallowance un 7,09,24,270/- 7,09,24,270/ on service u/s 37 of the Act on service u/s 37 3. Disallowance u/s 36(1)(iii) of Disallowance u/s 36(1)(iii) 5,65,507/- - the Act the Act 3. Aggrieved, the assessee filed appeal before the Ld. CIT(A). Aggrieved, the assessee filed appeal before the Ld. CIT(A). Aggrieved, the assessee filed appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee filed certain additional evidences Before the Ld. CIT(A), the assessee filed certain additional Before the Ld. CIT(A), the assessee filed certain additional including bank statement in respect of certain parties. The Ld. including bank statement in respect of certain parties. The Ld. including bank statement in respect of certain parties. The Ld.
CIT(A) after considering the submission of the assessee allowed CIT(A) after considering the submission of the assessee allowed CIT(A) after considering the submission of the assessee allowed relief to the assessee. Aggrieved, the Revenue is in appeal before us relief to the assessee. Aggrieved, the Revenue is in appeal before us relief to the assessee. Aggrieved, the Revenue is in appeal before us by way of raising grounds as reproduced above. by way of raising grounds as reproduced above.
Before us, the learned Departmental Representative (Ld. DR) Before us, the learned Departmental Representative (Ld. DR) Before us, the learned Departmental Representative (Ld. DR) drew attention to Ground Nos. 6 and 7 of the appeal, which, in his drew attention to Ground Nos. 6 and 7 of the appeal, which, in his drew attention to Ground Nos. 6 and 7 of the appeal, which, in his submission, go to the root of the matter. Accordingly, with the submission, go to the root of the matter. Accordingly, with the submission, go to the root of the matter. Accordingly, with the consent of both parties, arguments were first addressed on these consent of both parties, arguments were first addressed on the consent of both parties, arguments were first addressed on the grounds prior to delving into the merits of the addition. The Ld. DR grounds prior to delving into the merits of the addition. grounds prior to delving into the merits of the addition. submitted that, in connection with the additions made under submitted that, in connection with the additions made under submitted that, in connection with the additions made under Sections 68 and 37 of the Act, the assessee had filed certain Sections 68 and 37 of the Act, the assessee had filed certain Sections 68 and 37 of the Act, the assessee had filed certain additional evidence before the Ld. CIT(A). However, it was contended additional evidence before the Ld. CIT(A). However, it was con additional evidence before the Ld. CIT(A). However, it was con that the Ld. CIT(A) did not adhere to the procedural safeguards that the Ld. CIT(A) did not adhere to the procedural safeguards that the Ld. CIT(A) did not adhere to the procedural safeguards mandated under Rule 46A of the Income mandated under Rule 46A of the Income-tax Rules, 1962 tax Rules, 1962 (hereinafter “the Rules”), inasmuch as no opportunity was granted (hereinafter “the Rules”), inasmuch as no opportunity was granted (hereinafter “the Rules”), inasmuch as no opportunity was granted to the Assessing Officer (AO) to furnish objections or offer to the Assessing Officer (AO) to furnish objections or offer to the Assessing Officer (AO) to furnish objections or offer comments on the merits of such additional evidence. In support of ents on the merits of such additional evidence. In support of ents on the merits of such additional evidence. In support of this contention, the Ld. DR referred specifically to the findings of this contention, the Ld. DR referred specifically to the findings of this contention, the Ld. DR referred specifically to the findings of the Ld. CIT(A) concerning “Deomight Enterprises Pvt. Ltd.” It was the Ld. CIT(A) concerning “Deomight Enterprises Pvt. Ltd.” It was the Ld. CIT(A) concerning “Deomight Enterprises Pvt. Ltd.” It was pointed out that the Ld. CIT(A), in the impugned order, observed pointed out that the Ld. CIT(A), in the impugned order, obs pointed out that the Ld. CIT(A), in the impugned order, obs that the bank account of the said company had not been produced that the bank account of the said company had not been produced that the bank account of the said company had not been produced during the assessment proceedings. However, the Ld. CIT(A) noted during the assessment proceedings. However, the Ld. CIT(A) noted during the assessment proceedings. However, the Ld. CIT(A) noted that during the course of appellate proceedings, the bank statement that during the course of appellate proceedings, the bank statement that during the course of appellate proceedings, the bank statement was furnished and considered. The ld DR submitted that said was furnished and considered. The ld DR submitted tha was furnished and considered. The ld DR submitted tha consideration of bank statement is without putting the same to the consideration of bank statement is without putting the same to the consideration of bank statement is without putting the same to the AO or seeking his comments thereon. AO or seeking his comments thereon. The relevant observation of he relevant observation of the Ld. CIT(A) is reproduced as under: the Ld. CIT(A) is reproduced as under:
“Deomight Enterprises Pvt Ltd “Deomight Enterprises Pvt Ltd-6,58,00,000 During the course of appellate proc During the course of appellate proceeding complete eeding complete financials of Deomight financials of Deomight Enterprises Pvt Ltd were Pvt Ltd were produced. During F.Y. March 21 income declared by produced. During F.Y. March 21 income declared by produced. During F.Y. March 21 income declared by the company was income of 3,65,532/ the company was income of 3,65,532/- which AO which AO has duly acknowledged in the assessment order has duly acknowledged in the assessment order has duly acknowledged in the assessment order and also held that it is meagre income and on the and also held that it is meagre income and on the and also held that it is meagre income and on the basis of this fact only addition was made by AO. basis of this fact only addition was made by AO. basis of this fact only addition was made by AO. During appeal proceeding balance sheet and During appeal proceeding balance sheet and During appeal proceeding balance sheet and complete complete complete financials financials financials were were were submitted submitted submitted before before before undersigned. The total of all assets as per balance undersigned. The total of all assets as per balance undersigned. The total of all assets as per balance sheets comes to Rs 293.36 crores. Loans and sheets comes to Rs 293.36 crores. Loans and sheets comes to Rs 293.36 crores. Loans and advances given (assets) co advances given (assets) comes to Rs 14.36 crores mes to Rs 14.36 crores which is quite high in comparison to the loan which is quite high in comparison to the loan which is quite high in comparison to the loan advanced to Verve industries. On examination of advanced to Verve industries. On examination of advanced to Verve industries. On examination of Profit and loss account submitted during appellate Profit and loss account submitted during appellate Profit and loss account submitted during appellate proceeding it was found that the total Revenue from proceeding it was found that the total Revenue from proceeding it was found that the total Revenue from operation as on March 21 comes to Rs operation as on March 21 comes to Rs 286.62 286.62 crores. Still Ld. AO held this company as bogus crores. Still Ld. AO held this company as bogus crores. Still Ld. AO held this company as bogus company. During the appeal proceeding it was also company. During the appeal proceeding it was also company. During the appeal proceeding it was also found that interest is being paid to the above found that interest is being paid to the above found that interest is being paid to the above company on borrowing and TDS was also deducted company on borrowing and TDS was also deducted company on borrowing and TDS was also deducted by assessee. With respect to the above lender all by assessee. With respect to the above lender all by assessee. With respect to the above lender all funds have been transferred to appellant through have been transferred to appellant through have been transferred to appellant through Banking channel only. Regarding the Bank Account Banking channel only. Regarding the Bank Account Banking channel only. Regarding the Bank Account of above company AO has mentioned that same was of above company AO has mentioned that same was of above company AO has mentioned that same was not produced.However, during appeal proceeding not produced.However, during appeal proceeding not produced.However, during appeal proceeding bank statement was produced and was examined. bank statement was produced and was examined. bank statement was produced and was examined. Thus, looking to the ba Thus, looking to the balance sheet profit loss lance sheet profit loss account and return of income of the company,loan account and return of income of the company,loan account and return of income of the company,loan imparted to appellant cannot be held bogus. It is imparted to appellant cannot be held bogus. It is imparted to appellant cannot be held bogus. It is worth mentioning here that loan was already repaid worth mentioning here that loan was already repaid worth mentioning here that loan was already repaid during March 2023 in the books of appellant. during March 2023 in the books of appellant. during March 2023 in the books of appellant. Regarding the loan payment copy of Ba Regarding the loan payment copy of Bank statement nk statement was also produced. Therefore, AO was not justified was also produced. Therefore, AO was not justified was also produced. Therefore, AO was not justified in making addition on account of loan received from in making addition on account of loan received from in making addition on account of loan received from Belly Gems Private limited holding the Belly Gems Private limited holding the company company bogus.”
4.1 Similarly, with respect to the addition made on account of Similarly, with respect to the addition made on account of Similarly, with respect to the addition made on account of unexplained cash credit pertaining to the entity “Refex Aviation Pvt. credit pertaining to the entity “Refex Aviation Pvt. credit pertaining to the entity “Refex Aviation Pvt. Ltd.”, the Ld. CIT(A) has recorded that the bank statement of the Ltd.”, the Ld. CIT(A) has recorded that the bank statement of the Ltd.”, the Ld. CIT(A) has recorded that the bank statement of the said party was not furnished during the course of assessment said party was not furnished during the course of assessment said party was not furnished during the course of assessment proceedings but was subsequently produced during the appellate proceedings but was subsequently produced during the appellate proceedings but was subsequently produced during the appellate proceedings. The Ld. Departmental Representative (DR) cited these The Ld. Departmental Representative (DR) cited these The Ld. Departmental Representative (DR) cited these two instances—namely, “Deomight Enterprises Pvt. Ltd.” and “Refex namely, “Deomight Enterprises Pvt. Ltd.” and “Refex namely, “Deomight Enterprises Pvt. Ltd.” and “Refex Aviation Pvt. Ltd.”—as illustrative of a procedural lapse amounting as illustrative of a procedural lapse amounting as illustrative of a procedural lapse amounting to a violation of Rule 46A of the Rules. He therefore submitted that to a violation of Rule 46A of the Rules. He therefore submitted that to a violation of Rule 46A of the Rules. He therefore submitted that the appellate order passed by the Ld. CIT(A) be set aside and the the appellate order passed by the Ld. CIT(A) be set aside and the the appellate order passed by the Ld. CIT(A) be set aside and the matter be restored to his file for fresh adjudication after complying matter be restored to his file for fresh adjudication after complying matter be restored to his file for fresh adjudication after complying with the mandatory procedure laid down under Rule 46A(3) of the with the mandatory procedure laid down under Rule 46A(3) of the with the mandatory procedure laid down under Rule 46A(3) of the Rules, including affording an opportunity to the Assessing Officer to Rules, including affording an opportunity to the Assessi Rules, including affording an opportunity to the Assessi examine the additional evidence and furnish his comments thereon. examine the additional evidence and furnish his comments thereon. examine the additional evidence and furnish his comments thereon.
4.2 In response, the Ld. Counsel for the assessee submitted that In response, the Ld. Counsel for the assessee submitted that In response, the Ld. Counsel for the assessee submitted that the alleged infraction, if any, was minor and only pertained to a few the alleged infraction, if any, was minor and only pertained to a few the alleged infraction, if any, was minor and only pertained to a few pages of the bank statements, which, acco pages of the bank statements, which, according to him, had already rding to him, had already been partially submitted before the Assessing Officer. However, he been partially submitted before the Assessing Officer. However, he been partially submitted before the Assessing Officer. However, he fairly conceded that the complete set of bank statements was filed fairly conceded that the complete set of bank statements was filed fairly conceded that the complete set of bank statements was filed only at the stage of appellate proceedings before the Ld. CIT(A). only at the stage of appellate proceedings before the Ld. CIT(A). only at the stage of appellate proceedings before the Ld. CIT(A).
We have heard rival submiss We have heard rival submissions of the parties and perused ions of the parties and perused the relevant materials on record the relevant materials on record. In the grounds raised, the . In the grounds raised, the violation of the Rule 46A of the Rules has been challenged and violation of the Rule 46A of the Rules has been challenged and violation of the Rule 46A of the Rules has been challenged and therefore, for ready reference, for ready reference, we feel it appropriate to we feel it appropriate to reproduce said Rule as under:
“6[7Production of additional evidence before the Production of additional evidence before the Production of additional evidence before the 8[8a[Joint [Joint [Joint Commissioner] Commissioner] Commissioner] (Appeals)] (Appeals)] (Appeals)] 9[and Commissioner (Appeals) Commissioner (Appeals)]. 46A. (1) The appellant shall not be entitled to produce before (1) The appellant shall not be entitled to produce before (1) The appellant shall not be entitled to produce before the 8[8a[Joint Commissioner] (Appeals)] [Joint Commissioner] (Appeals)] 9[or, as the case may be, [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or the Commissioner (Appeals)], any evidence, whether oral or the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during documentary, other than the evidence produced by him during documentary, other than the evidence produced by him during the course of proceedings before the the course of proceedings before the 10[Assessing Officer], [Assessing Officer], except in the following circumstances, name except in the following circumstances, namely :— (a) where the where the 10[Assessing Officer] has refused to admit [Assessing Officer] has refused to admit evidence which ought to have been admitted ; or evidence which ought to have been admitted ; or evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce producing the evidence which he was called upon to produce producing the evidence which he was called upon to produce by the 10[Assessing Officer] ; or by the (c) where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from where the appellant was prevented by sufficient cause from producing before the 10[Assessing Officer] any evidence prod [Assessing Officer] any evidence which is relevant to any ground of appeal ; or which is relevant to any ground of appeal ; or which is relevant to any ground of appeal ; or (d) where the 10[Assessing Officer] has made the order appealed where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. to adduce evidence relevant to any ground of appeal. to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub (2) No evidence shall be admitted under sub-rule (1) unless the rule (1) unless the 11[11a[Joint Commissioner] (Appeals)] [Joint Commissioner] (Appeals)] 12[or, as the case may be, the [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons for its Commissioner (Appeals)] records in writing the reasons for its Commissioner (Appeals)] records in writing the reasons for its admission. 13(3) The 14[14a[Joint Commissioner] (Appeals)] [Joint Commissioner] (Appeals)] 15[or, as the case may [or, as the case may be, the Commissioner (Appeals)] shall not take into account any be, the Commissioner (Appeals)] shall not take into account any be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub evidence produced under sub-rule (1) unless the 16[Assessing Officer] [Assessing Officer] has been allowed a reasonable opportunity has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross to examine the evidence or document or to cross to examine the evidence or document or to cross-examine the witness produced by the appellant, or witness produced by the appellant, or (b) to produce any evidence or document or any witness in to produce any evidence or document or any witness in to produce any evidence or document or any witness in rebuttal of rebuttal of the additional evidence produced by the the additional evidence produced by the appellant. appellant. (4) Nothing contained in this rule shall affect the power of the (4) Nothing contained in this rule shall affect the power of the (4) Nothing contained in this rule shall affect the power of the 17[17a[Joint Commissioner] (Appeals)] [Joint Commissioner] (Appeals)] 18[or, as the case may be, the [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or Commissioner (Appeals)] to direct the production of any document, or Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the the examination of any witness, to enable him to dispose of the the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement appeal, or for any other substantial cause including the enhancement appeal, or for any other substantial cause including the enhancement of the assessment or p of the assessment or penalty (whether on his own motion or on the enalty (whether on his own motion or on the request of the 19[Assessing Officer]) under clause (a) of sub [Assessing Officer]) under clause (a) of sub-section (1) [Assessing Officer]) under clause (a) of sub of section 251 or the imposition of penalty under section 271.]” of section 251 or the imposition of penalty under section 271.] of section 251 or the imposition of penalty under section 271.] 5.1 Upon a plain reading of the Upon a plain reading of the provisions contained in Rule 46A provisions contained in Rule 46A of the Rules, it is manifest that where additional evidence is sought of the Rules, it is manifest that where additional evidence is sought of the Rules, it is manifest that where additional evidence is sought to be adduced by the assessee before the first appellate authority, it to be adduced by the assessee before the first appellate authority, it to be adduced by the assessee before the first appellate authority, it is incumbent upon the ld CIT(A) to provide an opportunity to the is incumbent upon the ld CIT(A) to provide an opportunity to the is incumbent upon the ld CIT(A) to provide an opportunity to the Assessing Officer to submit his objections, if any, and to offer to submit his objections, if any, and to offer to submit his objections, if any, and to offer comments on the merits of such additional evidence. In the present comments on the merits of such additional evidence. In the present comments on the merits of such additional evidence. In the present case, it is evident that the learned CIT(A) has failed to adhere to the case, it is evident that the learned CIT(A) has failed to adhere to the case, it is evident that the learned CIT(A) has failed to adhere to the procedure so prescribed under Rule 46A. The admission of procedure so prescribed under Rule 46A. The admission of procedure so prescribed under Rule 46A. The admission of additional evidence without affording the Assessing Officer such vidence without affording the Assessing Officer such vidence without affording the Assessing Officer such opportunity constitutes a breach of the mandatory procedural opportunity constitutes a breach of the mandatory procedural opportunity constitutes a breach of the mandatory procedural safeguard, and is, in substance and effect, a violation of the safeguard, and is, in substance and effect, a violation of the safeguard, and is, in substance and effect, a violation of the principles of natural justice. principles of natural justice.
5.2 In view of the foregoing, we are of the cons In view of the foregoing, we are of the considered opinion that idered opinion that the order passed by the learned CIT(A) stands vitiated. Accordingly, the order passed by the learned CIT(A) stands vitiated. Accordingly, the order passed by the learned CIT(A) stands vitiated. Accordingly, the impugned order is set aside, and the matter is remanded to the the impugned order is set aside, and the matter is remanded to the the impugned order is set aside, and the matter is remanded to the file of the CIT(A) for fresh adjudication in accordance with law, after file of the CIT(A) for fresh adjudication in accordance with law, after file of the CIT(A) for fresh adjudication in accordance with law, after strictly complying with the strictly complying with the requirements of Rule 46A, including the requirements of Rule 46A, including the obligation to grant the Assessing Officer due opportunity to respond obligation to grant the Assessing Officer due opportunity to respond obligation to grant the Assessing Officer due opportunity to respond to the additional evidence. to the additional evidence.
5.3 Consequently, Ground Nos. 6 and 7 of the present appeal are Consequently, Ground Nos. 6 and 7 of the present appeal are Consequently, Ground Nos. 6 and 7 of the present appeal are allowed. In light of the matter being restored to the file of the CIT(A), allowed. In light of the matter being restored to the f allowed. In light of the matter being restored to the f we do not consider it necessary or appropriate to adjudicate Ground we do not consider it necessary or appropriate to adjudicate Ground we do not consider it necessary or appropriate to adjudicate Ground Nos. 1 to 5 at this stage, which pertain to the merits of the Nos. 1 to 5 at this stage, which pertain to the merits of the Nos. 1 to 5 at this stage, which pertain to the merits of the additions. We Order accordingly. additions. We Order accordingly.
In result, the appeal of the Revenue is allowed for statistical he appeal of the Revenue is allowed for statistical he appeal of the Revenue is allowed for statistical purposes.