TMI Blog2015 (11) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. One of the contentions raised in these appeals that having admitted the additional evidence, the Commissioner (Appeals) should have remanded the case to the Assessing Officer for his consideration cannot be accepted in the light of sub rule 4, a reading of which shows that it was open to the Commissioner (Appeals) to dispose of the appeal by himself or even to remit the matter to the Assessing Officer. If additional documents are summoned by the Commissioner (Appeals) and produced or if the additional evidence produced by the assessee are in the nature of clinching evidence leaving no further room for any doubt or controversy, it is not necessary to give an opportunity to the Assessing Officer to contradict the same. In other words, the finding of the Tribunal would suggest that in cases where documents are summoned by the Commissioner (Appeals) and in cases where the documents produced are conclusive, the principles of natural justice are excluded. We are unable to enclose these finding of the Tribunal. As held by Delhi High Court in Commissioner of Income Tax v. United Towers (I,) P. Ltd. [2007 (4) TMI 177 - DELHI HIGH COURT] Rule 46A(4) of the Rules does not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act vide his order dated 18.12.2009. The assessment in respect of the assessment year 2008-2009 was also completed under Section 143(3) read with Section 144 of the Act on 29.12.2009. The assessee filed appeals before the Commissioner of Income Tax (Appeals). In the appeals, paper books containing detailed written statements on various issues raised, cashflow statements filed before the Assessing Officer, replies filed in response to various notices issued by the Assessing Officer and the evidences/workings in support of various claims made in the appeals were also filed. 4. On the filing of the additional evidence before him, the Commissioner of Income Tax (Appeals) forwarded the paper books itself to the Assessing Officer and required the Assessing Officer to examine the new evidences/details/submissions of the assessee and to give a report. Accordingly, the Assessing Officer submitted his report, a copy of which is Annexure C in this appeal. In this report, insofar as the new evidences that were produced before the Commissioner of Income Tax (Appeals) are concerned, the Assessing Officer has stated thus: 20. The written submission filed by the assessee along with 5 pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not for the period under the search assessment period. 22. Receipt from sale of trees: The required particulars i.e. inflow in the cash flow statement, details of sale of tree and agreement with purchasers etc. were produced before the appellate authority as fresh evidence. These were not produced at the time of assessment proceedings. 23. Investment in immovable properties: The investment in immovable property was ascertained on the basis of seized documents. For the AY 2007-08, the assessee had invested ₹ 7,15,887/- in immovable property for which he had shown only ₹ 85,687/- in cash flow statement. For the AY 2008-09, the assessee had invested ₹ 4,27,749/- in immovable property where as the cash outflow as per cash flow statement is Rs/5,00,558/-. This cash flow statement was produced as a new evidence which was not produced at the time of assessment. Hence, this claim of the assessee may be rejected. 24. Investment in movable properties The addition on investment in movable properties were made on the basis of the sworn statement recorded from the assessee on 26.3.2008. Now the assessee had filed cash flow statements before the appellate authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act and Rule 46A of the Rules. In conclusion, the Tribunal held that it did not find any merit in the contention urged by the Revenue and accordingly, the contention was rejected. Thereafter, the Tribunal examined the other contentions and, as already stated, dismissed the appeals and cross objections. It is aggrieved by these orders passed by the Tribunal that the Revenue has filed this appeal. 8. We heard the Senior Standing Counsel appearing for the Revenue and the learned Senior Counsel appearing for the respondent assessee. 9. Although in the impugned order various issues were decided by the Tribunal, when the appeals were heard, the sole contention raised by the Senior Counsel for the Revenue was that the Commissioner of Income Tax (Appeals), ought not have admitted additional evidence that were produced by the assessee and that even if it was decided to admit the additional evidence, the Commissioner of Income Tax (Appeals) ought to have remanded the cases leaving to the Assessing Officer, to consider the additional evidence produced and to render his findings thereon. In support of this contention, learned Senior Counsel for the Revenue relied on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the period under the search assessment. Insofar as the remaining issues are concerned, although each one of them were separately dealt with, all that he has stated is that the claim of the assessee may be rejected for the reason that the materials mentioned were not produced at the time of assessment. 13. It was considering this report submitted by the Assessing Officer that the First Appellate Authority passed Annexure B order. In this order, the First Appellate Authority considered the circumstances pleaded by the assessee and held that the assessee was prevented by reasonable and sufficient causes from furnishing the details/ evidences at the assessment stage. Based on that finding, the First Appellate Authority admitted the evidence produced and adjudicated the appeal. It is this order passed by the First Appellate Authority which was confirmed by the Tribunal. 14. Rule 46A of the Income TaxRules read thus: (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not take into account any evidence produced under sub rule 1 unless the Assessing Officer has been allowed a reasonable opportunity to examine the evidence or document or to cross examine the witnesses produced by the appellant or to produce any evidence in rebuttal of the additional evidence. Insofar as this sub rule is concerned, as we have already seen, on admission of the additional evidence, the Commissioner (Appeals) forwarded the paper books itself to the Assessing Officer calling for his report. It was in response to the letter calling for remand report that the Assessing Officer submitted Annexure C report. 16. Therefore, this is a case where the Commissioner (Appeals) has allowed the Assessing Officer adequate opportunity as provided under sub rule 3 to examine the evidence produced by the appellant. In the remand report that he has furnished apart from requesting for its rejection, the Assessing Officer did not, either dispute the genuineness of the documents nor did he ask for cross examination of the witness, or to adduce any evidence in rebuttal of the documents produced by the appellant. In other words, sub rule 3 has been fully complied with. It was therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and to the [Principal Chief Commissioner or] [Chief Commissioner or [Principal Commissioner or Commissioner] 18. Reading of sub section 4 shows that the Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). From the above provision, it is clear that neither the admission of the additional materials nor the decision of the Commissioner (Appeals) to adjudicate the appeals himself rather than remanding the same to the Assessing Officer can be faulted. 19. Learned Senior Counsel for the Revenue relied on the Supreme Court judgment in Commissioner of Income Tax v. McMillan Co. [1958] 33 ITR 182 to support his contention that when documents are produced before the First Appellate Authority, the matter should have been remanded to the Assessing Officer. In our view, this judgment does not support the proposition canvassed by the learned Senior Counsel. This judgment was rendered by the Apex Court in the background of the Income Tax Act,1922 and Income Tax Rules, 1922. The facts of this case show that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in the grounds of appeal, on his being satisfied that the omission of the ground from the form of appeal was not wilful. It is clear from the above provisions that the powers of the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The scope of his powers is coterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do. He can also direct the Income tax Officer to do what he failed to do. The power conferred on the Appellate Assistant Commissioner under sub-section (4) of Section 250 being a quasi-judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the Appellate Assistant Commissioner fails to exercise his discretion judicially, and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority. On a conjoint reading of section 250 of the Act and rule 46A of the Rules, it is clear that the restrictions placed on the appellant to produce evidence do not af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence furnished by the assessee before the appellate authority is in the nature of clinching evidence leaving no further room for any doubt or controversy in such a case no useful purpose served on performing the ritual of forwarding the evidence/material to the assessing officer and obtain his report. In such exceptional circumstances the requirement of sub-rule (3) may be dispensed with. 23. Reading of the aforesaid finding of the Tribunal would suggest that according to it, if additional documents are summoned by the Commissioner (Appeals) and produced or if the additional evidence produced by the assessee are in the nature of clinching evidence leaving no further room for any doubt or controversy, it is not necessary to give an opportunity to the Assessing Officer to contradict the same. In other words, the finding of the Tribunal would suggest that in cases where documents are summoned by the Commissioner (Appeals) and in cases where the documents produced are conclusive, the principles of natural justice are excluded. We are unable to enclose these finding of the Tribunal. As held by Delhi High Court in Commissioner of Income Tax v. United Towers (I,) P. Ltd. [2008] 296 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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