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2023 (9) TMI 548 - ITAT DELHITDS u/s 195 - expenses intercompany fee and commissions attributable to Non-Resident entities - Non admission of additional evidence - CIT(A) confirmed the action of the AO and refused to admit additional evidences filed by the assessee in the form of ‘no PE certificate’ from certain entities, ‘Tax Residency Certificate’ (TRC) etc. on the ground that no formal application has been moved under Rule 46A explaining the reasons why such evidences were not submitted in the course of assessment proceedings - counsel contended that the additional evidences placed before CIT(A) goes to the root of the matter and would demonstrate the absence of obligation for deduction of withholding tax contemplated u/s 195 - HELD THAT:- In the present circumstances, evidences obtained from external sources which have a critical bearing on the outcome of the subject matter ought to have been admitted to reinforce the overriding cause of substantial justice vis-a-vis technical considerations. The breach of sacrosanct principles of natural justice is fundamental and goes to the root of process of framing assessment. Needless to say that the spirit of Rule 46A of IT Rules enabling the assessee to place additional evidences before the CIT(A) are founded on the doctrine of legitimate expectation and principles of natural justice. It is indeed the sacrosanct obligation of the first appellate authority to have ensured that any effective opportunity is granted to the assessee for presenting its case and all evidences are taken into account while determining the issue. The powers of the CIT(A) are not fettered or circumscribed by Rule 46A for admission of additional evidences. In view of mandate of provisions of Section 250(4) of the Act also, the situation existing in the case as narrated above, clearly warranted admission of additional evidences by the CIT(A). We are thus convinced on the fallacy in the action of the CIT(A). The order of the CIT(A) on the subject matter of appeal is thus set aside and restored to the file of the Assessing Officer for de novo adjudication in accordance with law, after making or causing proper inquiry as may be deemed expedient and after taking into account of such evidences as may be placed before him by the assessee - Appeal of the assessee is allowed for statistical purposes.
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