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2019 (12) TMI 684 - AT - Income TaxMismatch between income as per Form 26AS maintained in data base of Revenue and income offered to tax by assessee in return of income filed with the Revenue as is reflected in books of accounts - Addition made purely based on entries in Form 26A - return of income was originally processed by Revenue u/s 143(1) but later case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(3) read with Section 143(2) - HELD THAT:- There could be several reasons for mismatch between income as is reflected in Form 26AS and income offered to tax in return of income filed with Revenue which could be due to recognition of income in the preceding year or in the subsequent year by the taxpayer vis-a-vis the other party owing to stage of completion of the work, different method of accounting followed by taxpayer and other party , deficiency in rendering of services /supplies which could lead to rejection of material/services rendered , credit notes /debit notes issued by one party while the same is not accounted by other party etc. The assessee on its part has tried to reconcile its income as offered in the books of accounts with Form 26AS but the said evidences which are critical evidences going to the root of the matter has been discarded by the CIT(A) at the threshold as the same were not admitted by CIT(A). No doubt, Rule 46A of the 1962 Rules give powers to Ld.CIT(A) to refuse admit additional evidences in certain circumstances as stipulated under Rule 46A but whence substantial justice is pitted against technicalities , the Courts will lean towards substantial justice. We admit the additional evidences filed by assessee before Ld.CIT(A) and restore the matter back to the file of the AO for framing fresh assessment denovo after considering entire evidences furnished by the assessee in its defense on merits in accordance with law. AO shall admit all the evidences/explanation filed by assessee in its defense and then decide the issue in denovo assessment on merits in accordance with law. Needless to say that the AO shall give proper and adequate opportunity of being heard to the assessee in the interest of principles of natural justice in accordance with law.
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