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Facts
The assessee filed a NIL return for AY 2007-08, which was processed under Section 143(1). Subsequently, the case was reopened under Section 147 based on information regarding alleged accommodation entries, and an assessment was finalized for Rs. 19,28,500/-. The CIT(A) dismissed the assessee's appeal, rejecting the application for admission of additional evidence under Rule 46A.
Held
The tribunal remitted the quantum appeal (ITA No. 968/Del/2017) back to the CIT(A) with a direction to reconsider the matter afresh, grant an opportunity of being heard to the assessee, and admit additional evidence to prevent miscarriage of justice. Consequently, the penalty levied under Section 271(1)(c) (ITA No. 4849/Del/2019) was deleted as it does not survive the remittal of the quantum appeal.
Key Issues
Whether the CIT(A) was justified in rejecting the assessee's application for admission of additional evidence under Rule 46A in a reopened assessment under Section 147, and the consequential validity of the penalty levied under Section 271(1)(c).
Sections Cited
147, 144, 271(1)(c), 143(1), 148, 142(1), Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: Ms. MADHUMITA ROY
O R D E R
PER Ms. MADHUMITA ROY, JM:
The captioned appeals, preferred by the assessee, are directed against separate orders passed by the passed by the Commissioner of Income Tax (Appeals)-7, New Delhi dated 09.01.2017 [Appeal No. 640/CIT(A)-7/Del/14-15] and dated 06.05.2019 [Appeal No. 10040/40/CIT(A)-7/Del/18-19)], in proceedings under Section 147/144 and 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), respectively, for the Assessment Year 2007-08. Both the appeals were heard together and are being disposed of by a common order for the sake of convenience.
Facts of the case, in brief, are that the assessee filed its return of income on 29.10.2007 declaring income at Nil. It was processed under Section 143(1) of the Act at the returned income on 05.08.2008. Subsequently, on the basis of information received from the office of the Director of Income Tax (Inv.), New Delhi on the alleged fact of accommodation entries made by the assessee, the matter was reopened under Section 147 of the Act and notice under Section 148 of the Act was issued on 20.03.2014 followed by notice under Section 142(1) on 17.07.2024. The Assessment under Section 147/144 of the Act was finalized on 29.08.2014 at the total income of Rs. 19,28,500/- against which appeal was preferred before the First Appellate Authority who on 09.01.2017 in turn rejected the appeal preferred by the assessee, dismissing the application for admission of additional evidence under Rule 46A of the Income Tax Rules, 1962. Hence the instant appeal before us.
None appears on behalf of the assessee at the time of hearing. On the contrary, Learned DR relied on the order passed by the Learned CIT(A), however, failed to substantiate the same as to how the additional evidence was not being admitted by the Learned First Appellate Authority. Having regard to the facts and circumstances of the matter we are of the considered opinion that in order to prevent the miscarriage of justice, the assessee be given an opportunity of being heard by the Learned First Appellate Authority that too upon considering the additional evidences which were already filed before the Learned CIT(Appeals) as admitted by us. Thus, the issue is remitted back to the file of the Ld. CIT(A) with a specific direction upon him to consider the matter afresh upon granting an opportunity of being heard to the assessee and upon considering the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter. We also make it clear that in the event the assessee does not cooperate with the Ld. CIT(A), the said authority would be at liberty to proceed with the matter and finalize the same strictly in accordance with law. Ordered accordingly.
In view of our finding in quantum appeal, remitting back the matter to the file of the Learned First Appellate Authority, the consequential penalty levied under Section 271(1)(c) of the Act, do not survive and is deleted accordingly.
Order pronounced in open court on 31.12.2025.