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Facts
The Revenue filed an appeal against the order of the CIT(A) which allowed the appeal of the assessee. The CIT(A) entertained additional evidence not filed before the AO, violating Rule 46A. The assessee had made claims under Section 36(1)(va) and Section 37, showing substantial current liabilities without satisfactory details before the AO.
Held
The Tribunal noted that the assessee's conduct before the AO was unsatisfactory and that the CIT(A) violated Rule 46A by entertaining additional evidence. To meet the ends of justice, the assessee was given one last opportunity to present its case before the AO.
Key Issues
Whether the CIT(A) erred by entertaining additional evidence in violation of Rule 46A, thereby jeopardizing the Revenue's right to natural justice and opportunity to examine evidence.
Sections Cited
36(1), 37, 250, 46A
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI AMITABH SHUKLA
Years: 2017-18 Asst. Commissioner of Income Tax, Prudential Sugar Corporation LTU Circle-1, Limited, Chennai. Prudential Nagar, Koppedu Post, Nindramandal, Andhra Pradesh-517587 [PAN: AAACP4338D] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : None प्रत्यर्थी की ओर से /Revenue by : Shri Nilay Baran Som, CIT सुिवाई की तारीख/Date of Hearing : 07.01.2025 घोर्णा की तारीख /Date of Pronouncement : 07.02.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the Revenue against the order bearing DIN & Order No.ITBA/NFAC/S/250/2024-25/1064272174(1) dated 22.04.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2017-18. Through the aforesaid appeal the Revenue has challenged order u/s 250 dated 22.04.2024 passed by NFAC, Delhi.
Page - 1 - of 4 2.0 On the given date of hearing none appeared on behalf of the assesee. The appeal is adjudicated after hearing the Ld. DR and considering the material available on records. 3.0 It is noted that the impugned appeal is delayed by 70 days. The Revenue has submitted that the delay had arisen on account of extreme work pressure of time barring cases and that the delay was neither willful nor wanton. After considering the arguments we are satisfied with the sufficiency of grounds contributing to the delay and consequently proceed to condone the same and adjudicate this appeal. 4.0 At the outset, the Ld. DR informed that the rights of the Revenue of being afforded a reasonable opportunity of being heard have been hit by the action of the Ld. First Appellate Authority in as much as he has violated provisions of Rule 46A. It was submitted that the Ld. First Appellate Authority entertained additional evidences filed by the assessee before him, which were not submitted before the Ld. AO, without affording the Ld.AO an opportunity to examine the same. The Ld. DR informed that in this case the assessee had made claims qua provisions of section 36(1) (va), under section 37 as well as had shown current liabilities of substantial amounts, in respect of which no satisfactory details were filed before the Ld. AO. The Ld. DR further argued that the order of the Ld.First Appellate Authority clearly shows that the assessee had filed detailed submissions and evidences before him which were considered Page - 2 - of 4 for deleting the additions giving relief to the assessee. Thus it was argued that the rights of Ld. AO available under rule 46A was violated. A request was accordingly made to remit the file back to the Ld. AO for re-adjudication de novo. 5.0 We have noted that in the present appeal the conduct of the assessee before the Ld. AO has been far from satisfactory. We have also noted that the Ld. First Appellate Authority has entertained evidences which were not filed before the Ld. AO and thus a case of violation of provisions of Rule 46A has been made out. Be that as it may be, we are of the view that the natural rights of Revenue are thus jeopardized. We are therefore of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file supporting evidences before the Ld.AO. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. It is evident in this case that the Ld. AO did not have adequate opportunities to examine the varied facts seminal therein. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. Accordingly, the case stands remitted back to the Ld. AO for fresh adjudication de novo by passing a speaking Page - 3 - of 4 order. To this extent the order of lower authorities stands set aside. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. Any non-compliance on the part of the assesse can be adversely viewed. The assessee is at liberty to produce all the evidences deemed relevant in support of its claims before the Ld. AO during the re- adjudication proceedings. Accordingly, all the grounds of appeal raised by the Revenue are therefore allowed for statistical purposes. 6.0 In the result, the appeal of the Revenue is allowed for statistical purposes. Order pronounced on 7th , February-2025 at Chennai.