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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
This appeal by the assessee is arising out of the two orders of Commissioner of Income Tax (Appeals)-28, Mumbai [in short CIT(A)], in appeal Nos. CIT(A)-28/IT-451/ITO-17(1)(4)/2016-17 vide order dated 01.03.2018 under sections 46A(2) & 250(6) of the Income Tax Act, 1961 (herein after ‘the Act’). The Assessment was framed by the Income Tax Officer, Ward 17(1)(4), Mumbai (in short ‘ITO/ AO’) for the A.Y. 2012-13 vide order dated 23.03.2015 under section 143(3) read with section 144 of the Act.
At the outset, the learned Counsel for the assessee took us through the first ground raised by assessee in respect of filing of additional evidences rejected by CIT(A) under Rule 46 of the Income Tax Rules,1962 (hereinafter the ‘Rules’). For this assessee has raised the following ground No. 1: -
“1. Rejection for petition of additional evidence under rule 46A of the Income Tax Rules is unjustified.
(i) The ld. Commissioner of Income Tax (Appeals) - 28, Mumbai [hereinafter referred to as the 'Ld. CIT (A)] erred in rejecting the petition filed by the Appellant to produce additional evidence under Rule 46A of the Income Tax Rules. ii. The ld. CIT (A) failed to appreciate that due to reasonable and sufficient cause the Appellant was prevented from producing the evidence to substantiate the return of income. The action of the Id CIT (A) causes injustice and hardship to the Appellant. iii. The ld. CIT (A) failed to appreciate that at the fag end of the Assessment proceedings the Appellant came to know that the notices delivered to his authorised representative were not attended. Thus, the non-attendance before the 14 AO was due to reasons beyond control of the Appellant. Hence the Appellants case falls within the exception (b) and (c) of Rule 46A of the Income tax Rules.”
At the outset, the learned for the assessee took us through the first order of CIT(A) passed under Rule 46A(2) of the Rules rejecting the assessee’s additional evidences filed before him. The CIT(A) has reproduced additional evidences as under: -
Copy of few invoices raised for 13-124 Agency & Services Charges along- with copy of Invoice raised for reimbursements. Numbering of the reimbursement invoice had a suffix as “A”. i.e. for invoice No. 1 the reimbursement invoice raised is 1A.
Ledger Copy of Expenses 125-147 (Summary) an copy of summarized reimbursement statement. 6. Copy of fixed Deposit List along- 148-149 with copy bank fixed deposit bearing Account No. QICRIP/17328/814645 4. Then CIT(A) discussed facts of the case and finally rejected the additional evidences by observing in Para 3.1 as under: -
“3.1 The appellant fails miserably for this is an act of deliberate defiance for reasons best known to him. If it is true that revenue can’t be so allowed by a Rule 46A petition. The evidence is liable to ‘creation’ and no cause, let alone a sufficient one, is established. If we look at the nature of so called evidence, it is capable of being ‘created’ easily after receipt of assessment order to negate the deficiencies pointed out therein. No evidence of this so called is understating is before me. No affidavit to that effect has been filed. A contention inherently incapable of being proved wrong is a unacceptable contention. No cause has been established let alone a sufficient one. The plea fails.”
5. The CIT(A) passed another order under section 250(6) of the Act on merits by observing in para 5.1 as under: -
“5.1 On merit, the proceedings in appeal culminating in the findings in Order Sheet noting (supra) have exposed the case of appellant on merit as well. However, it is not denied by AO that the nature of receipt was professional charges (PR.3 of Her order). That conceded, inference of expenses becomes inevitable. So, strictly on facts, it is held that 3% of receipts of ₹ 5.57 crores is to be allowed as expenses on best judgement basis and after rejection of books u/s 145(3). The AO shall redraft computation taking professional receipts at ₹ 5,57,25,444/- and allow deduction of 3% of the same as expenses. On the amount, addition of cash deposit under section 69A shall be made to the tune of ₹ 3,19,373/-. The latter addition runs separately to above estimation. The appellant gets relief of the rest.”
When these facts were narrated to the learned Sr. Departmental Representative, he drew our attention to the claim of assessee that inadequate opportunity was provided by AO, the CIT(A) has reproduced order sheet entries and observed that assessee did not appear before AO nor seek any adjournment or even furnish the single detail. Hence, there was totally non-cooperation from assessee’s side. According to him, even the CIT(A) has noted in order sheet entries on 22.02.2018 except the application of additional evidences there was no representation. When it was pointed out that infact the assessee was never allowed to argue on additional evidences, he fairly conceded that the matter can be restored back to the file of the AO exactly on identical directions as in AY 2010-11 in assessee’s own case in order dated 20.07.2018, wherein Tribunal has recorded the findings that there was casual approach on the part of the assessee to represent his case but allowed one more opportunity by observing in para 5 as under. : -
“5. Undisputedly, the assessee has remained negligent to substantiate his claim before both the lower authorities and the approach of the assessee was casual in nature. However, keeping in view that fact that the assessee is an individual and suffered high pitched assessment and keeping in view the principle of natural justice, we deem fit to provide another opportunity to the assessee to substantiate the returned income. Therefore, the matter stand remitted back to the file of Ld. AO with a direction to the assessee to file requisite details / documentary evidences forthwith failing which Ld. AO shall be at liberty to adjudicate the same on the basis of material available on record.”
We have gone through the facts in entirety and are of the view that there is total casual approach by the assessee in representing its case but in the interest of justice, we restore this assessment back to the file of the AO and set aside the orders of the lower authorities. Needless to say that the assessee will present before AO as and when called, he will represent with all the evidences to explain its claim. The appeal of assessee appeal is allowed for statistical purposes.
In the result, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 29-10-2018. AadoSa kI GaaoYaNaa Kulao mao idnaMk 29-10-2018 kao kI ga[- .