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Facts
The assessee failed to comply with notices issued by the Assessing Officer (AO) during appellate proceedings and during assessment. The AO completed the assessment under Section 144 r.w.s. 144B, making an addition of Rs.13.60 Crores under Section 68. The CIT(A) deleted this addition based on documents filed for the first time without a remand report from the AO.
Held
The Tribunal held that the CIT(A) violated Rule 46A by not calling for a remand report from the AO before admitting fresh documents. The Tribunal also distinguished the case relied upon by the assessee. Consequently, the order of the CIT(A) was set aside and the issue was remanded back to the AO.
Key Issues
Whether the CIT(A) erred in deleting an addition based on documents filed for the first time without a remand report from the AO, thereby violating Rule 46A.
Sections Cited
143(3), 144, 144B, 68, 46A, 250(4), 271AAC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI K. NARASIMHA CHARY & SHRI MADHUSUDAN SAWDIA
ORDER PER MADHUSUDAN SAWDIA, A.M: These two appeals are filed by M/s. North Andhra Utilities Pvt. Ltd. (“the assessee”), feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), both dated 23.08.2024 for the A.Y. 2018-19. Since both the appeals are inter-related, they are being heard together and a consolidated order is being passed, for the sake of convenience and brevity.
At the outset, the Learned Department Representative (“Ld. DR”) submitted that, the assessee did not make any compliance to the notices issued by the Learned Assessing Officer (“Ld. AO”) during the appellate proceedings u/s.143(3) of the Income Tax Act, 1961 ('the Act'). Consequently, the Ld. AO completed the assessment u/s.144 r.w.s. 144B on 23.06.2021 making addition of Rs.13.60 Crores u/s.68 of the Act. However, the Ld. CIT(A) on the basis of the document filed by the assessee, for the first time before him, without calling for any remand report from the Ld. AO, deleted the said addition ofRs.13.60 Crores. Hence, the Ld. DR submitted that the Ld. CIT(A) has violated the provisions of Rule 46A of Income Tax Rules, 1962. Therefore, the order of the Ld. CIT(A) is liable to be set aside and the issue shall be remanded back to the file of the Ld. AO for fresh adjudication.
Per contra, the Ld. AR submitted that, the assessee had not filed any application under Rule 46A of the Rules before the Ld. CIT(A). These documents which have been filed before the Ld. CIT(A) were submitted at the direction of Ld. CIT(A). Hence, there is no violation of Rule 46A in the case under consideration. Further, the Ld. AR relying on the decision of CIT Vs. Anupam Fashion Palace 42 CTR 147 dated 17.05.1984, submitted that the Ld. CIT(A) has co-terminous power under section 250(4) of the Act, to call for any new document and adjudicature on the same. Accordingly, there is no violation has been done by the Ld. CIT(A) as far as the provisions of Rule 46A is concerned. Finally, the Ld. AR prayed before the bench to uphold the order of Ld. CIT(A).
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. There is no dispute about the fact that the assessee had not complied with the notice issued and did not file any piece of document before the Ld. AO. The assessment of the assessee was completed by the Ld. AO u/s.144 of the Act. Hence, there was no occasion for the Ld. AO to verify any document with regard to the case of the assessee. The documents which were filed before the Ld. AO were produced for the first time only. Therefore, in our opinion, the Ld. CIT(A) was duty bound under Rule 46A to call for a remand report from the Ld. AO which the Ld. CIT(A) has failed to do so. As far as, the reliance of the assessee on the decision of Hon'ble Delhi High Court in the case of Addl. CIT Vs. AFP (supra), the facts of this case are on different set of circumstances and are distinguishable. Therefore, we set aside the order of Ld. CIT(A), further, the documents are not verified by the Ld. AO. Hence, we remand the issue back to the file of Ld. AO for fresh adjudication. Accordingly, the appeal of the revenue is allowed for statistical purposes.
relates to the levy of penalty u/s. 271AAC of the Act by the Ld. AO on the addition made by the Ld. AO in appeal No.1012/Hyd/2024. We have set aside the quantum appeal in Ld. AO, accordingly, the penalty appeal in 1013/Hyd/2024 is also liable to be set aside to the file of Ld. AO for fresh adjudication. Accordingly, we set aside the issue to the file of Ld. AO for fresh adjudication.
In the result, the appeal of revenue is allowed for statistical purposes.
To sum up, both the appeals of revenue are allowed for statistical purposes.
Order pronounced in the open Court on 14th Feb., 2025.