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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI H.S. SIDHU & SHRI ANADEE NATH MISSHRA
(A) This appeal has been filed by Revenue against the impugned appellate order dated 13.02.2017 passed by Learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi, [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2013-14, on the following grounds:-
“1. That the Ld. CIT(A) has substantially erred on facts and in law in deleting the addition of Rs. 2,48,00,000/- as the assessee has not filed any evidence during the course of assessment proceeding to prove the genuineness & ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd. creditworthiness of the creditor.
That the Ld.CIT(A) has erred on facts and in law in deleting the addition of Rs. 2.48 crores made by AO on account of unexplained advance received and treated as unexplained credit u/s 68 of the I.T. Act, 1961 3. That The Ld. CIT(A) has erred on facts and in law in allowing to file additional evidences u/s 46A of the I.T. Act, before the Ld. CIT(A) without granting any opportunity to the A.O.
That The Ld, CIT(A) has erred on facts and in law in allowing the appeal of the assessee without independently verifying the facts of the case as mandated by the Hon’ble Jurisdictional High Court in the cases of Jansampark Advertising & Chetan Dass in the name of the above entities.
That the appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”
(B) Assessment Order dated 23.03.2016 was passed by Assessing officer (“AO”, for short) under Section 143(3) of the Income Tax Act, 1961 (“I.T. Act”, for short), wherein income was assessed at Rs. 2,60,82,354/- after adjustment of brought forward losses amounting to Rs. 6,05,036/-. The additions made in the aforesaid Assessment Order dated 23.03.2016 included the addition of Rs. 2,48,00,000/- under Section 68 of I.T.
Act. The relevant portion of the Assessment Order dated 23.03.2016 in respect of the aforesaid addition of Rs. 2,48,00,000/- is reproduced as under:
“5. The assessee has received Rs. 2.48 crores as advance received against order during the relevant year. The assessee was asked to explain this transaction so as to prove genuiness and creditworthiness of the same. However, the assessee has miserably failed to furnish any detail and supporting documents to prove and establish the genuiness and creditworthiness of said amount within the meaning of section 68 of the Income Tax Act therefore said amount of Rs. 2.48,00.000/- is treated as unexplained credit u/s68 of the Act and is hereby added to the total income for the year under consideration. The reliance in this ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd. regard is place on the jurisdictional high court Decisions in the cases of M/s Nova Promoters & Leasing Pvt. Ltd., reported at 342 ITR 169, N.R. Portfolio vs Ltd reported at 264 CTR 258., Nipun Builders Pvt. Ltd. reported at 350 ITR 407.”
(C) The assessee filed appeal before the Ld. Commissioner of Income Tax (Appeals), who vide impugned appellate order dated 13.02.2017 deleted the aforesaid addition.
The relevant portion of the aforesaid impugned appellate order dated 13.02.2017 of the Ld. CIT(A) is reproduced as under:
”
ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd.
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ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd. (D) The present appeal has been filed by Revenue against the aforesaid impugned appellate order dated 13.02.2017 of Ld. CIT(A). At the time of hearing before us,
Shri Gaurav Dudeja Revenue was represented by Senior Departmental Representative (“Sr. DR”, for short). However, nobody was present on behalf of the assessee. On the earlier date of hearing on 27.11.2019 also none was present from the assessee’s side and the Bench has directed notice of hearing fixed on 16.01.2020 to be served through the Departmental Representative. At the time of hearing before us, the Ld. DR confirmed that the notice of hearing fixed on 16.01.2020 had already been served by official of Revenue. In the absence of any representation from the assessee’s side, we heard the Ld. Sr. DR. The Ld. Sr. DR placed strong reliance on the order passed by the AO. He further drew our attention to the fact that the Ld. CIT(A) had collected the materials and evidences behind the back of the Assessing Officer and had deleted the aforesaid addition of Rs. 2,48,00,000/- without sharing the aforesaid materials and evidences with the Assessing Officer and further, without giving any opportunity to the Assessing Officer to rebut the same. The Ld. Sr. DR submitted that the Assessing Officer should have an opportunity to examine and rebut the materials and evidences conclude by the Ld. CIT(A). For this purpose, the Ld. Sr. DR submitted that the issue in dispute should be restored to the file of the Assessing Officer for passing fresh order. On perusal of the aforesaid impugned appellate order dated 13.02.2017 of the Ld. CIT(A) [relevant portion of which has already been reproduced in foregoing paragraph (C) of this order]; we find that the Ld. CIT(A) had indeed collected materials and evidences during the appellate proceedings before the Ld. CIT(A). There
ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd. is no mention in the impugned appellate order dated 13.02.2017 of the Ld. CIT(A) that the materials collected by him, details of which are included in the aforesaid impugned appellate order dated 13.02.2017 of the Ld. CIT(A), were shared with the Assessing Officer. There is also no mention in the impugned appellate order dated 13.02.2017 of Ld. CIT(A) that any opportunity was given to the Assessing Officer to examine this materials and evidences and to rebut the same. It is true that under Rule 46A(4) of Income Tax Rules, 1962 (“I.T. Rules”, for short), the Ld. CIT(A) has powers to direct the production of any documents, or the examination of any witness. However, when any materials or evidences are collected by the Ld. CIT(A) in exercise of power under Rule 46A(4) of I.T. Rules, the same should be shared by the Ld. CIT(A) with the Assessing Officer and the Assessing Officer should be given reasonable opportunity to examine the same and to rebut. AO is an interested party in the appellate proceedings before the Ld. CIT(A) and in accordance with well settled principles of natural justice, Ld. CIT(A) was required to confront the AO, if any Additional Evidences / Materials submitted or produced by assessee were going to be used by Ld. CIT(A) for granting relief to the assessee. If any Additional Evidences or Materials are gathered by the Ld. CIT(A) at the back of the AO, and used by the Ld. CIT(A) to grant relief to the Assessee, this is violative of the principle of natural justice. Even if Ld. CIT(A) accepts the Additional Evidences / Materials under Rule 46A(4) of I.T. Rules, even then reasonable opportunity must be provided by the Ld. CIT(A) to the Assessing Officer to examine such ITA No.- 2802/Del/2017. M/s Par Excellence Leasing & Financial Services Pvt. Ltd. Additional Evidences / Materials and to produce any evidence or document in rebuttal of Additional Evidences / Materials submitted or produced by the Assessee before the Ld. CIT(A).
(E) In view of the foregoing, we agree with the submissions of the Ld. Sr. DR that the issue in dispute should be set aside to the file of the Assessing Officer for fresh order. Accordingly, we set aside the impugned appellate order dated 13.02.2017 of Ld. CIT(A) and we restore the issue in dispute regarding the aforesaid addition of Rs. 2,48,00,000/- to the file of the Assessing Officer with the direction to pass fresh order on this issue in accordance with law and in the light of the materials on records, after providing opportunity of being heard to the assessee.
(F) In the result, the appeal is partly allowed for statistical purposes.
Order pronounced in the open court on 20/01/2020.