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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM
O R D E R Per Dr. Arjun Lal Saini, AM: Captioned two appeals filed by the Revenue, pertaining to Assessment Year 2004-05 & 2005-06, are directed against the orders passed by the Commissioner of Income Tax (Appeals)-VI, Kolkata, which in turn arise out of assessment orders passed by the Assessing Officer u/s 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’). 2.Since these two appeals relate to same assessee, different Assessment Years, identical issues are involved, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience M/s Vanguard Credit & Holdings Pvt. Ltd. & 18/Kol/2015 Assessment Year: 2004-05& 2005-06 and brevity. The Revenue’s appeal in ITA No.17/Kol/2015, for Assessment Year 2004-05, is taken as the lead case. 3.The grounds of appeal
raised by the Revenue in lead case, ITA No.17/Kol/2015, reads as under: “(i)That on the facts and in circumstances of the case, the CIT(A) erred on facts as well as in law in holding that the addition of Rs.75,36,730/- was not warranted by accepting additional evidences which is not in accordance with Rule 46A as it was not furnished before the Assessing Officer for examination. 4.At the outset, the ld. DR for the Revenue has submitted, before us that there is violation of Rule 46A of the Income Tax Rules, which was done by the ld. CIT(A) while adjudicating these two appeals.That is, during the appellate proceedings, the ld. CIT(A) had accepted additional evidence in violation of Rule 46A of the Income Tax Rules. The ldCIT(A) did notgive adequate opportunity to the AO to examine the additional evidence therefore, ld DR requested the Bench to remand the matter back to the file of the Assessing Officer to adjudicate the issue afresh.
5. The ld. Counsel for the assessee has submitted, before us, that there is no any violation of Rule 46A of the I.T. Rules.Whatever the additional evidences the assessee submitted before the ld. CIT(A), during the appellate proceedings, had been sent by him to the Assessing Officer to examine them and prepare a remand report on them. At this juncture, the ld. Counsel for the assessee, drew our attention towards the remand report submitted by the Assessing Officer to the CIT(A)- VI, the relevant para of the remand report is reproduced below: “Now, on the basis of the additional documents furnished by the assessee during the appellate stage,it appears that MohanlallNathany was the Page | 2 M/s Vanguard Credit & Holdings Pvt. Ltd. & 18/Kol/2015 Assessment Year: 2004-05& 2005-06 proprietor of M/s. JuggonPursadBaijnath, the address of which is shown as 59, MuktaramBabu Street, Kolkata-700 007, which also happens to be the address of Mr. MohanlallNathany. This new fact has emerged during the course of appellate proceedings regarding the name of the proprietor of M/s. JuggonPursadBaijnath. In view of the above, since it appears to be a fact related to the case, the undersigned has no objection for admitting the said documents submitted before your kindself as additional evidence.” Based on the relevant para, of the remand report,cited above, the ld. Counsel submitted that during the appellate proceedings, the Assessing Officer had examined the additional evidence furnished by the assessee and, that is why, the Assessing Officer had clearly stated in his remand report that he had no objection for admitting the said documents submitted before the CIT(A), as an additional evidence. Therefore, whatever, the documents submitted by the assessee during the appellate proceedings, the same had been examined by the Assessing Officer and a proper remand report was sent by the Assessing Officer to the ld. CIT(A).
6. Without prejudice to the above submissions, the ld Counsel for the assessee took an alternative plea, stating that during the appellate proceedings, while adjudicating the quantum of the said appeal, the CIT(A) did not use these additional evidences at all. The ld CIT(A) did not feel any necessity to use these additional evidences, that is, these additional evidences, did not have any impact on the decision ( ratio decendi) of the CIT(A), if these additional evidences were used or not. Therefore, considering the factual position, there is no violation of Rule 46A of the I.T Rules. At this juncture, the ld Counsel drew our attention towards Rule 46A of the I. T Rules 1962, which reads as under:
M/s Vanguard Credit & Holdings Pvt. Ltd. & 18/Kol/2015 Assessment Year: 2004-05& 2005-06 “Rule 46A:Production of additional evidence before the Commissioner (Appeals)]. “(1) The appellant shall not be entitled to produce before the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely:— (a) where the [Assessing Officer] has refused to admit evidence which ought to have been admitted; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [Assessing Officer]; or (c) where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any ground of appeal; or (d) where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons for its admission. (3) The [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant; or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.” Page | 4 M/s Vanguard Credit & Holdings Pvt. Ltd. & 18/Kol/2015 Assessment Year: 2004-05& 2005-06 The ld Counsel submitted that it is abundantly clear from Rule 46A, mentioned above, that although the assessee is not entitled to produce additional evidences before the ld. CIT(A), however, there are circumstances where the additional evidence can be produced, these circumstances include:1) where the Assessing Officer has refused to admit evidence, 2) where the appellant was prevented by sufficient cause from producing the evidence.3)where the Assessing Officer has made the order appealed against without giving sufficient opportunity. Rule 46A(2) clearly says that the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity to examine this evidence. In the assessee`s case under consideration, all the above cited conditions are being satisfied and hence there is no violation of Rule 46A of the I.T. Rules.
On the other hand, ld DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.
Having heard the rival submissions, perused the material available on record, we are of the view that in the given case, the ld. CIT(A) admitted the additional evidence in writing which was not produced before the Assessing Officer and he sent these additional evidences to the Assessing Officer for his examination. The Assessing Officer had examined the additional evidences and he reported to the ld. CIT(A) by way of a remand report stating that he did not have objection for admitting said documents. Therefore, there is proper compliance of Rule 46A on the part of CIT(A). At this juncture, we also examine the ruling of Hon`ble High Page | 5