BANUMATHY EDUCATIONAL SERVICE TRUST,THANJAVUR vs. ITO, EXEMPTIONS, WARD,, TRICHY

The ld. AR Shri T. Vasudevan, Advocate drew our attention to second para page 3 of the impugned order and submits that most of the statutory notices dated 29.06.2021, 09.11.2021, 11.12.2021, 17.02.2022 & 07.09.2022 issued by the Assessing Officer are during Covid-19 lockdown period. He further submits that the fresh evidence filed before the ld. CIT(A) during appellate proceedings is a Bank account extract which is a crucial document essential for deciding the fate of the issues raised in the grounds of appeal of the assessee before the ld. CIT(A). He vehemently argued that Rule 46A of the Income Tax Rules cannot be over ride the principles of natural justice and thus, prayed for suitable directions to the ld. CIT(A) to accept the fresh evidence and adjudicate the issue on merits.

The ld. DR Shri Vijay Kumar, JCIT submits that the admission of additional evidence under rule 46A of the Income Tax Rules is not automatic and it is the duty of the assessee to properly make out a reasonable case in order to show that the conditions prescribed under rule 46A of the Income Tax Rules have been satisfied and supported the order passed by the ld. CIT(A).

Heard both the parties and perused the material available on record. We note that against the assessment order under section 143(3) r.w.s. 144B of the Act dated 23.09.2022, the assessee preferred further appeal before the ld. CIT(A) and also filed fresh evidence during the course of appellate proceedings. Since the assessee could not file the additional evidence before the Assessing Officer, the ld. CIT(A) summarily rejected the fresh evidence and dismissed the appeal of the assessee without adjudicating the issues on merits. We find force in the contentions of the ld. AR that the statutory notices issued by the Assessing Officer are mostly during Covid-19 lockdown period, pertains to the period of general exemption provided by the Hon'ble Supreme Court vide its judgement dated 10.01.2022 in Miscellaneous Petition No.21 of 2022 in Suo Motu Writ Petition (C) No.3 of 2020 extending limitation period applicable for all proceedings before Courts and Tribunals across the country on account of spread of Covid-19 infections w.e.f.15.03.2020, till 28.02.2022. Further, the principle “Audi alteram partem”, i.e., no man should be condemned unheard is the basic canon principles of natural justice and accordingly, we find merit in the contentions of the ld. AR that Rule 46A of the Income Tax Rules cannot be over ride the principles of natural justice. Hence we are of the view that the ld. CIT(A) was not justified in refusing to admit the fresh evidence furnished by the assessee during the course of appellate proceedings. Since the assessee was not given opportunity to contradict the findings given by the Assessing Officer by not admitting the additional evidence, we are of the view that the ld. CIT(A) should re-adjudicate the issues afresh by admitting the additional evidence. Accordingly, we set aside the order of ld. CIT(A) and restore the issues to the file of the ld. CIT(A) with the direction to admit the additional evidence that may be furnished by the assessee. After admitting the same, the ld. CIT(A) may call for the remand report from the Assessing Officer. After confronting with the remand report, if any, that may be furnished by the Assessing Officer with the assessee, the ld. CIT(A) shall pass order in accordance with law by affording reasonable opportunity of being heard to the assessee. The assessee is at liberty to furnish the documentary evidences and explanation to substantiate its case before the ld. CIT(A). Thus, the grounds raised