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Facts
The assessee, engaged in tailoring, failed to file an income tax return for AY 2016-17. The case was reopened due to a cash deposit of Rs. 1,49,05,621 and interest income of Rs. 4,06,892. The Assessing Officer treated these as unexplained cash credit and added them to the assessee's income.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal solely based on the non-admissibility of additional evidence due to non-compliance with Rule 46A. The Tribunal remanded the matter to the CIT(A) for re-examination of the additional evidence and to call for a remand report from the AO if necessary.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal due to non-compliance with Rule 46A for submitting additional evidence. The Tribunal's decision to remand the matter for fresh consideration of evidence.
Sections Cited
147, 148, 142(1), 144, 69A, 115BBE, 250, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Sanjay Awasthi
Assessment Year: 2016-17 Muslim Alam……………………………….……………....…....Appellant S/o Late Samid Miyan, H. No.34, Vill. Lachchmipur, Kaurihar, East Champaran, Bihar-845305. [PAN: BAKPA7419J] vs. ACIT, NFAC, Delhi…....…..…………….............................…..…..... Respondent Appearances by: Shri Sanjeev Kr. Anwar, Advocate, appeared on behalf of the appellant. Shri Ashwani Kr. Singal, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 09, 2025 Date of pronouncing the order : January 15, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 17.10.2023 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
Brief facts of the case are that the assessee is an individual and was engaged in tailoring work in the village of Raxaul. As the assessee did not file its return of income for the assessment year 2016-17, the case of the assessee was reopened u/s 147 by issuing notice u/s 148 of the Act on the ground that the assessee had deposited a cash amounting to Rs.1,49,05,621/- into its bank account and had also earned interest income of Rs.4,06,892/- thereupon. Since the assessee did not file Income tax return in response to notice u/s 148 of the Act, further a notice u/s 142(1) of the Act was issued requiring the assessee to furnish its ITR and relevant documents/information as asked for. Despite doing so, the assessee neither filed its ITR nor furnished any details. As a result, the Assessing Officer proceeded to complete the assessment u/s 144 of the Act. The Assessing Officer while passing his order observed that the cash deposits of Rs.1,49,05,621/- was made into the assessee’s BOI account during the relevant period. In the absence of any explanation in this respect, the Assessing Officer treated the cash deposits of Rs.1,49,05,621/- as unexplained cash credit u/s 69A of the Act including interest income thereon of Rs.4,06,892/- charging tax on the same as per 115BBE of the Act and added to the income of the assessee.
Dissatisfied with the above order, the assessee filed an appeal before the ld. CIT(A) but the ld. CIT(A) dismissed the appeal of the assessee by the upholding the order of the Assessing Officer. However, during the appellate proceedings, the assessee attempted to submit additional evidence but failed to submit accompanying petition under Rule 46A of the IT Rules. Consequently, the ld. CIT(A) has dismissed the appeal of the assessee on the ground that the additional evidence cannot be entertained in the absence of proper compliance as prescribed under Rule 46A of the IT Rules, 1962.
Aggrieved by the order of the ld. CIT(A), the assessee filed an appeal before this Tribunal raising various grounds but the primary contention was that the ld. CIT(A) erred in dismissing the appeal of the assessee solely because the additional evidence was not admissible under Rule 46A of the IT Rules. The ld. AR prayed that the issue may be remanded back to the file of the Assessing Officer in order to make proper examination of the facts of the case after considering the additional evidence filed by the assessee.
On the other hand, the ld. DR relied on the order of the ld. CIT(A) and stated that the assessee cannot file additional evidence during which does not fall in the limbs of Rule 46A(1) of the IT Rules. He prayed that the appeal of the assessee may be dismissed.
We, after hearing both the partied and perusing the materials available on record, observe that the assessee did not appear during the assessment proceedings. Subsequently, the assessee sought to file additional evidence before the ld. CIT(A). However, the ld. CIT(A) did not consider the additional evidence as the assessee failed to comply with the mandatory requirement under Rule 46A of the IT Rules, which governs the admissibility of additional evidence. It is clarified that the Rule 46A mandates specific procedures when additional evidence is sought to be introduced. The ld. CIT(A) has the authority to call a remand report from the Assessing Officer regarding the additional evidence or/and admit the additional evidence, provided valid reason exist and remit the case back to the A.O for verification and re- examination. This procedural requirement ensures fairness in adjudicating and grants the revenue an opportunity to examine the additional evidence submitted by the assessee. When the assessee seeks to produce additional evidence before the ld. CIT(A) adherence to Rule 46A is mandatory and non-compliance renders the evidence inadmissible. We, therefore, in the interests of justice and procedural fairness, remand the matter to the of the ld. CIT(A) with a direction to re-examine the additional evidence submitted by the assessee, if it is necessary, call for a remand report from Assessing Officer regarding the additional evidence in order to facilitate proper verification and examination and shall pass a fresh order after considering additional evidence and submission made by the assessee in accordance with law.
In terms of the above, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 15th January, 2025.