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Income Tax Appellate Tribunal, J Bench, Mumbai
Before: Shri Saktijit Dey & Shri N.K. Pradhan
2 6408/Mum/2016 M/s. Jashubhai Engineering P. Ltd. &M/s. Jashubhai Media P. Ltd. assessee issued a questionnaire calling upon the assessee to furnish various details in relation to the deductions claimed under different heads and also to justify them. As alleged by the AO, in response to the said questionnaire and notice issued under Section 142(1) of the Income Tax Act (hereinafter “the Act”) the assessee did not furnish the details called for. As a result the AO proceeded to make various additions/disallowances by denying deductions claimed by the assessee which resulted in determination of total income at `8,84,40,550/-. Being aggrieved with the assessment order assessee preferred appeal before the CIT(A).
In the course of proceedings before the First Appellate Authority assessee produced number of documentary evidences as well asaffidavits in support of its claim of deductions/expenditure. On the basis of the evidences and affidavits filed by the assessee the learned CIT(A) granted substantial relief to the assessee. Being aggrieved by the aforesaid decision of the learned CIT(A) Revenue is in appeal before us.
We have considered rival submissions and perused the material on record. The basic grievance of the Revenue as articulated by the learned Departmental Representative before us is that in the course of assessment proceedings assessee did not produce any details/documentary evidences as called for by the AO. Before the CIT(A) assessee produced fresh evidences and relying upon such evidences the learned CIT(A) allowed deductions claimed by the assessee. The learned D.R. submitted, without affording any opportunity to the AO to verify the evidences submitted by the assessee and offer his comments, learned CIT(A) has decided the issues, which is in gross violation of Rule 46A of the Income Tax Rules,1962. Thus, he submitted that the issue may be restored back to the AO for de novo adjudication after considering the evidences submitted by the assessee before the learned CIT(A).
Dr. K. Shivaram, learned counsel for the assessee, though, supported the decision of the learned CIT(A), however, he fairly submitted that in the course of proceedings before First Appellate Authority fresh
3 6408/Mum/2016 M/s. Jashubhai Engineering P. Ltd. &M/s. Jashubhai Media P. Ltd. evidences were produced by the assessee, relying upon which the CIT(A) has granted relief to the assessee. He also fairly submitted that the CIT(A) has not remanded the matter to the AO seeking his comments on the evidences submitted by the assessee. Thus, he submitted that the issues may be restored back to the AO for de novo adjudication.
Having considered the submissions made before us by he learned counsels of both the parties we found that before the AO, for whatever may be the reason, assessee did not produce evidences or complied with the queries made by the AO, as a result of which number of additions/ disallowances were made by the AO. Before the First Appellate Authority assessee did produce fresh evidences in support of its claim of deduction. Further, affidavits of concerned Chartered Accountant and employee of the assessee company were also filed before the CIT(A) stating certain facts. However, it is a fact on record that neither the evidences filed before the CIT(A) nor the affidavits were sent for verification of the AO seeking his views/comments on assessee’s claim. The learned CIT(A), without following the mandate of Rule 46A, sub-rules (1), (2) and (3) proceeded to decide the appeal relying upon the fresh evidences/affidavits filed by the assessee. Thus, prima facie there is a clear violation of Rule 46A of the I.T. Rules as the learned CIT(A) did not afford a fair opportunity to the AO in terms of the said Rules. That being the case, we are inclined to set aside the order of the learned CIT(A) and restore the issues to the file of the AO for de novo adjudication after considering the evidences filed by the assessee or which may be filed by the assessee in the course of fresh proceedings. Needless to mention, the AO must afford reasonable opportunity of being heard to the assessee before deciding the issues. Grounds are allowed for statistical purposes.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
A.Y. 2012-13 8. Facts in this appeal being identical, aforesaid decision of ours in will apply mutatis mutandis to this appeal as well.
In a nutshell, both the appeals filed by Revenue are allowed for statistical purposes.