ITO, WARD-1(4), KOLKATA, KOLKATA vs. M/S TALENT VINIMAY PRIVATE LIMITED, KOLKATA

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-I, Kolkata dated 13.06.2013. Assessment was framed by ITO Ward-1(4), Kolkata u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 31.12.2009 for assessment year 2007-08.

At the time of hearing none appeared on behalf of assessee though notice of hearing was sent through DR. However we decided to hear the present appeal as we find that the hearing is possible without the appearance of assessee or by Ld. AR for the assessee. Shri R.S. Biswas, Ld. Departmental Representative represented on behalf of Revenue.

At the outset, Ld. DR before us submitted that the addition made by Assessing Officer was deleted by Ld. CIT(A) on the basis of fresh evidence which was admitted in contravention of the provision of Rule 46A of the Rules. Accordingly, Ld. DR prayed to restore the issue to the file of AO.

Heard Ld. DR and perused the materials available on record. On examination of records and orders of Authorities Below, we find that assessment was framed u/s. 144 of the Act vide order dated 31.12.2009. On perusal of assessment order, we find that several notices were issued upon the assessee on different dates but same were not served upon the assessee. In the absence of any compliance on the part of assessee, finally, the notice was served through affixture and ex-parte assessment was framed. 5.1 The AO treated the money deposited in the bank account of assessee as unexplained cash credit and accordingly assessment was framed at ₹7,36,55,170/-. However, the Ld. CIT(A) granted relief to assessee after observing that the assessee was engaged in providing accommodation entries. Before appellate stage, assessee submitted paper book along with affidavit, copy of bank statement, copy of bank account with ICIC Bank dated 18.03.2013 in support of his claim. However, on perusal of the order of Ld. CIT(A), we find that paper book and the affidavit dated 23.03.2013 were submitted first time and Ld. CIT(A) has not called for remand report from AO. In view of the above, we are of the view that the additional evidence were accepted by Ld. CIT(A) without having any remand report from the AO. Thus, in our considered view, Ld. CIT(A) has contravened the provision of Rule 46A of the Income Tax Rules. The provision of Rule 46A requires the Commissioner Appeals to take cognizance of fresh evidences only after giving a reasonable opportunity to Assessing Officer. But in the instant case, no such ITO Wd.1(4) Kol. Vs. M/s Talent Vinimay Pvt. Ltd. Page 3 reasonable opportunity was given by Ld. CIT(A) to AO. The relevant extract of the provisions of rule 46A of Income Tax Rules read as under : [Production of additional evidence before the [Deputy Commissioner (Appeals) [and Commissioner (Appeals)] 46A.(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) … … (b) … … (c) … .. (d) …. … (2) … …. (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-“