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Appeals filed casually a cause of brain drain and source of harassment by tax authorities - a case study in respect of appeal filed for alleged violation of Rule 46A when there was no additional evidence at all

Appeals filed casually a cause of brain drain and source of harassment by tax authorities - a case study in respect of appeal filed for alleged violation of Rule 46A when there was no additional evidence at all - Income Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 3-11-2016 - Link and references: Rule 46A of the Income-tax Rules 1962 ACIT, Circle-5, Kolkata Versus Vishnu Webtech Pvt.** and Vica-Versa 2015 (10) TMI 2538 - ITAT KOLKATA ITA No1241/Kol /2010 & C.O. No.82/Kol/2010 Dated: - 20 Octob .....

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sing Officer, except in the following circumstances, namely :- (a) where the Assessing Officer has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or (c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or (d) where the Assessin .....

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le (1) unless the Assessing Officer has been allowed a reasonable opportunity (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the exam .....

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and should provide an opportunity to the AO for examination of additional evidence/ documents and cross examination of a new witness etc. Opportunity of hearing to the AO: CIT(A) is required to give an opportunity to the AO. Generally when an appeal is filed, a copy of the same is forwarded to the AO. When an appeal is fixed for hearing, a copy of notice is forwarded to the AO who can make his representations before the CIT(A) himself or through his authorised representative. Generally when a n .....

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ibunal, major reliance is on the assessment order passed by the AO, when a relief allowed by CIT(A) is disputed by the Revenue/ AO. However, in many cases, disputes are raised by Revenue for alleged violation of Rule 46A. Facts and date sheets of the case of Vishnu (supra.): Previous year ended on 31.03.2005 Original order of AO u/s 143(3) dt. 27.12.2007 Appeal filed before CIT(A) on 18.01.2009 Order of CIT(A) on above appeal was passed on 17.03.2010 Order u/s 263 dated 23.02.2009 Order u/s 263/ .....

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ve could not point out a single piece of paper as additional or new evidence in violation of Rule 46A, based on which CIT(A) allowed relief which was challenged merely on ground of violation of Rule 46A. Original assessment u/s 143(3): During original assessment proceedings for AY 2005-06, orders of assessment for earlier years were considered. Books of accounts, bank statements, confirmations, return of allotment of shares, and all relevant documents were considered. There was no lack of enquir .....

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ere promoter s contribution over more than three years against which allotment of shares was made in last week of March 2005. During hearing for original assessment, books were produced, confirmations of all money received from promoters were filed with bank statements and other supporting documents. There was neither any lack of enquiry nor there was any erroe in original assessment. Major part of sources of funds were in earlier years out of which construction was in progress and carried forwa .....

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of funds were fully established. However learned A|O made addition on totally wrong contention that allotment of shares was made later so before that there was unexplained source. The learned AO ignored that promoters and directors have brought funds by way of A/c payee cheques which were deposited in bank account of assessee and those funds were used for construction of building. The contribution made were also confirmed and accounted for in their books of account. The learned AO made addition .....

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r sheets were not provided by the AO: Assessee vide letter dt.13.05.200 8 requested for certified copy of order sheets, for aY 2004-05 and 2005-06. However the application was rejected for funny reasons - at the first time learned AO denied for wrong reason that fees has not been paid, whereas fees was duly paid by assessee in advance on estimated basis and learned AO did not asked of further amount, in addition to fees paid by assessee. Learned AO in his order dt. 27.05.08 (served on 19.06.2008 .....

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ed in his order dt. 16.07.2008: Your request is rejected as order sheet cannot be provided to the assessee and are made for intra departmental use only. Both rejections are totally contrary to the instructions of the CBDT. This shows very casual approach of Who care for instructions or judgment … and also approach of who care for assessee … adopted by many government officers including IRS officers. Grounds of appeal as approved by the CIT, Kolkata- II, Kolkata and taken in appeal .....

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of hearing. GROUNDS OF CROSS - OBJECTIONS by assessee: 1. For that learned CIT(A) has rightly deleted addition of ₹ 3,48,00,000/- and that learned CIT(A) had not relied on any new material or evidence , contrary to Rule 46A of the Income Tax Rules, as very vaguely alleged by the revenue without pointing out any such material. 2) For that the onus is on the Appellant / Revenue to point out any new evidence relied on by the CIT(A) in violation of Rule 46A, while deleting addition of ₹ .....

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fixed for the first time on 26.08.201, the assessee filed paper book and also requested for details of alleged additional evidences in violation of Rule 46A. Thereafter hearing was fixed several times inter alia (there can be some more dates) on the following dates: 1. 26.08.2010 2. 04.11.2010 3. 25.02.2011 4. 11.07.2013 5. 23.12.2013 6. 16.12.2014 7. 23.02.2015 8. 01.06.2015 9. 20.10.2015 - finally heard and order pronounced. Thus it took more than five years to decide the appeal from the date .....

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