TMI Blog1995 (3) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. However, in an exparte assessment u/s 144 of the Act, the Assessing Officer made additions of Rs. 30,000 and Rs. 20,000 for not explaining deposits u/s 80CCA and 80CCB respectively. He separately added Rs. 15,000 on account of low household withdrawals and completed assessee's income at Rs. 76,466 as against Rs. 11,380 disclosed. 2. The assessee challenged the above assessment in appeal before the CIT(A) and pointed out that the assessee did not have benefit of professional services before the Assessing Officer. It was further explained that the assessee was transferred out of Delhi and even the assessment order was not served on him which resulted in the delay in filing of the appeal. The assessee flied an affidavit before the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional services, could not respond to notices during the course of assessment proceedings. The learned CIT(A), on the basis of material available on record, condoned the delay and allowed relief to the assessee. The question of condonation of delay was not challenged before us. The learned CIT(A) said nothing on justification of assessment completed u/s 144 of the I.T. Act. Even before us, Assessing Officer's action in proceeding ex parte against the assessee, was not challenged. We consider other question raised before us by the parties. 5. It is a settled law that even an exparte assessment made u/s 144 of the I.T. Act must conform to rules of justice, equity and good conscience and cannot be arbitrary and capricious. There may be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty under section 271." Under section 250(4) of the Act, the first appellate authority may make such further enquiry as he thinks fit. In deserving cases, the appellate authority is obliged to hold such further enquiry which necessarily includes the production of additional evidence. Where fresh evidence is available and the assessee is in a position to produce the same, there is no reason as to why the first appellate authority should not examine it on merit and pass an appropriate order. The above view is supported by the decision of Hon'ble Kerala High Court in the case of K. Mohammed v. ITO [1977] 107 ITR 808. 6. The decision of the jurisdictional High Court in the case of Addl. CIT v. Anupam Fashion Palace 42 ITR 147 (sic) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepting ex parte evidence of the fact that the partner was a major and not a minor. 7. The Hon'ble High Court held that there was no doubt that both the sides should be given fair opportunity of being heard but when question of date of birth is involved and when parents have given evidence supported by records of municipality, it becomes difficult to imagine what ITO could have done to rebut this evidence. The Hon'ble High Court further observed that notice of hearing from the Appellate Tribunal must have gone to the ITO and he was represented before the Appellate Tribunal. It was, therefore, open to the ITO to bring the necessary facts before the Appellate Tribunal at the time of hearing of second appeal. The court then referred to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that facts and principle laid down in case of Anupam Fashion Palace are applicable to the facts of the case before us. It is not correct that in every case, the first appellate authority should provide opportunity to the ITO to examine any evidence produced by the assessee in the appellate proceeding and obtain a remand report from the Assessing Officer. There is ample power and jurisdiction with first appellate authority to take evidence necessary for disposal of appeal. However, in complex cases and where new material is placed in appeal, an opportunity to the ITO to find rebutting material should be provided in terms of rule 46A of Income-tax Rules. With the aforesaid legal quoting, we proceed to examine the facts in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 80CCA as "details of investment" were not given. Likewise, he added Rs. 20,000 for investment under section 80CCB as the said investment was also not made out of the taxable income of the assessee. Without elaboration, the observations made are prima facie untenable. "For want of details", the conclusion that investments were "not made out of taxable income of the year" could not be reached. There is no nexus between the material or want of it (details) and the conclusion reached. Likewise, addition of Rs. 15,000 on account of low household withdrawals was made without specifying the amount actually withdrawn or should reasonably be withdrawn in the circumstances of the case. There is no reference to past records. The order of the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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