TMI Blog2015 (8) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2006-07 by taking the following effective grounds of appeal:- 1. That in the facts and the circumstances of the case, Ld. CIT(AI erred in deleting the addition of ₹ 44,15,806/- made u/s.40(a)ia) of the Act for failure of the assessee to prov e deduction of TDS on aforesaid payments in assessment proceedings and by accepting fresh evidence at the appellate stage by violating the provision of Rule 46A of the I.T. Rules, 1962. 2. That in the facts and the circumstances of the case, Ld. CIT(AI erred in deleting the addition of provision for legal and professional fees and freight inward of ₹ 22,14,559/- which was not for ascertained liability. 3. That in the facts and the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of legal professional fees and freight outward of ₹ 6,55,295/- ₹ 65,79,170/respectiv ely being the expenses related to prior period. 4. That in the facts and the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of ₹ 16,85,845/- under the head general charges being the expenses related to prior period. 5. That in the facts and the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee s various grounds by accepting additional evidences in violation of Rule 46A and without providing opportunity to the Assessing Officer. 5. Ld. counsel for the assessee submitted that the ld. CIT(Appeals) had called for a remand report from the Assessing Officer but even after a lapse of nine months the Assessing officer did not offer his comments on the submissions forwarded to him for his comment s. In this regard, ld. counsel pointed out that the Bench vide its order-sheet noting dated 08.05.2015 had directed as under:- The ld. counsel for the assessee submitted that CIT(A) has called for a remand report but not discussed in the order. We direct the ld. counsel to produce the copy of the ordersheet of the ld. CIT(A) file. Hence, the hearing of the case is adjourned to 04.08.2015. Both parties are informed accordingly . In compliance ld. counsel for the assessee has filed before us a letter dated 02.12.2009 addressed to DCIT, Circle-3, Kolkata along with the copy of order-sheet of the proceeding before the ld. CIT(Appeals). With reference to these detail s, ld. counsel for the assessee pointed out that the letter from the ld. CIT(Appeals) was duly receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t apart from appellate powers, there was no violation of Rule 46A committed by him ? 22. As we have with the consent of the learned counsel, heard them on merits, we proceed to decide the aforesaid substantial questions of law. Since the CIT (A) himself refers to Rule 46A and has also admitted that the confirmation letters adduced by the assessee before him were technically fresh evidence, it is not possible to accept the plea of the learned counsel for the assessee that the CIT (A), in examining the confirmation letters, was exercising his independent powers of enquiry under sub-Section (4) of Section 250 of the Income tax Act. It is true that the CIT (A) as first appellate authority has conterminous powers over the sources of income constituting the subject matter of the assessment, except the power to tackle new sources of income not considered by the Assessing Officer, and can do what the Assessing Officer can do and can direct the Assessing Officer to do what he has failed to do, as held by the Supreme Court in the case of Commissioner of Income-Tax, U.P. v. Kanpur Coal Syndicate, (1964) 53 ITR 225, but in this case, the CIT (A) did not exercise this right. This power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter is in charge of the Income-tax Officer. 23. It is for the aforesaid reason that Rule 46A starts in a negative manner by saying that an appellant before the CIT (A) shall not be entitled to produce before him any evidence, whether oral or documentary, other than the evidence adduced by him before the assessing officer. After making such a general statement, which is in consonance with the principle stated in the above judgment, exceptions have been carved out that in certain circumstances it would be open to the CIT (A) to admit additional evidence. Therefore, additional evidence can be produced at the first appellate stage when conditions stipulate in the Rule 46A are satisfied and a finding is recorded. Rule 46 A reads:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, while dealing with the appeal, considers it fit to cause or make a further enquiry by virtue of the powers vested in him under sub-Section (4) of Section 250. It is only when he exercises his statutory suo moto power under the above sub-section that the requirements of Rule 46A need not be followed. On the other hand, whenever the assessee who is in appeal before him invokes Rule 46A, it is incumbent upon the CIT (A) to comply with the requirements of the Rule strictly. 24. In the present case, the CIT (A) has observed that the additional evidence should be admitted because the assessee was prevented by adducing them before the assessing officer. This observation takes care of clause (c) of sub-rule (1) of Rule 46A. The observation of the CIT (A) also takes care of sub-rule (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rules (1) and (2) of Rule 46A have been complied with. However, sub-rule (3) which interdicts the CIT (A) from taking into account any evidence produced for the first time before him unless the Assessing Officer has had a reasonable opportunity of examining the evidence and rebut th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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