INCOME TAX OFFICER , WARD- 5(1), C.R. BUILDING vs. BORZE INDIA PRIVATE LIMITED, GAZIPUR, DELHI

On hearing both the sides, we find that amongst other grounds on merits, department has raised ground no. 2 that the additional evidences were admitted at the stage of Ld. First Appellate Authority without complying with Rule 46A of the Income Tax Rules.

Ld. Counsel for assessee has vehemently argued that as the submissions were lengthy and the paper book and documents were bulky assessee was unable to upload the same online and AO was not ready to accept the physical copies. Attention was drawn to copy of application under Rule 46A available at page 129-130 of the paper book wherein similar facts were asserted. The Ld. Counsel submitted that the additional evidences were primarily the returns filed under VAT Act to justify the cash sales. It was Borze India Pvt. Ltd. (AY: 2017-18) submitted that other evidences are also prima facie uncontroverted and can be very well taken into consideration at this stage.

However, what we find from the impugned order is that although Ld. CIT(A) mentions of the fact of filing of the application under Rule 46A but without calling for any comments or remand report from the AO or otherwise making any observation with regard to circumstances leading to non-filing evidences before the AO and justification within the ambit of Rule 46A, admitted the additional evidences and proceeded to benefit the assessee.

We are of the considered view that given nature of additions and the nature of evidences even if same are official records and are available in public domain, Rule 46A is mandatorily to be followed or otherwise justified that the assessee was handicapped in filing the evidence before the AO. As assessee had taken a plea that AO had refused to take additional evidence that all the more warranted an opportunity to AO to rebut such assertion.

We are inclined to allow this ground. The appeal of the revenue is allowed for statistical purpose and issue with regard to admissibility of additional evidence with consequences to follow the event, is restored to the Borze India Pvt. Ltd. (AY: 2017-18) files of ld. CIT(A) to dispose of the application afresh in light of the provision of Rule 46A of the Act.