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TMI Blog2003 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... terfering with the order of the Commissioner of Income-tax (Appeals) and in remitting the case to the assessing authority for examination of the alleged creditors? (3) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that 'the Commissioner of Income-tax (Appeals) found that the assessee has not given any reason for the delay in filing the confirmation letters belatedly' and is not the above finding factually wrong and against law? (4) Whether, on the facts and in the circumstances of the case, the Tribunal is right in envisaging any reason of delay under rule 46A of the Income-tax Rules? (5) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that processing charges will not constitute part of the turnover?" Heard counsel on both sides. The first four questions relate to the power of the Commissioner of Income-tax (Appeals) to receive additional evidence. The respondent/assessee in his accounts has shown that he had received loans during the year. The Assessing Officer did not accept the same since the assessee had only produced the copies of the receipts regarding the loans received an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer. Standing counsel also took us to the decision of this court in C. Unnikrishnan v. CIT [1998] 233 ITR 485 and the decision of the Allahabad High Court in Ram Prasad Sharma v. CIT [1979] 119 ITR 867 and submitted that the order of the Tribunal on this issue cannot be sustained. We do not find any merit in the submission made by standing counsel. The provisions of rule 46A(1) provide that the appellant shall not be entitled to produce before the Commissioner of Income-tax (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 three circumstances: "(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 to appeal." It may be true that the assessee's case may not fall under any of the above three clauses. Sub-rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner exercised his discretion arbitrarily or capriciously while refusing to admit fresh evidence at the appellate stage." The Bombay High Court had also occasion to consider this question in Smt. Prabhavati S. Shah v. CIT [1998] 231 ITR 1. In that case the Tribunal has made the following observations: "Admittedly, the evidence sought to be produced by the assessee before the Appellate Assistant Commissioner was not produced by her before the Income-tax Officer. There is nothing on the record to prove that the evidence sought to be produced before the Appellate Assistant Commissioner comes under any of the exceptions (a) to (d) in sub-rule (1) of rule 46A of the 1962 rules. That being the position, the Appellate Assistant Commissioner, in our view, was justified in not taking on record the said evidence sought to be produced before him." The High Court considered the question with reference to the provisions of e 46A and observed thus: "On a plain reading of rule 46A, it is clear that this rule is intended to put fetters on the right of the appellant to produce before the Appellate Assistant Commissioner any evidence, whether oral or documentary, other than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that evidence is primarily led before the Income-tax Officer." On a consideration of the provisions of rule 46A particularly sub-rule (4) thereof and the provisions of section 250(1) of the Income-tax Act conferring power on the Commissioner of Income-tax (Appeals), we are also of the view that in spite of the provisions of rule 46A(1), the provisions of section 250 enable the Commissioner of Income-tax (Appeals) to accept additional evidence in appropriate cases which power has been preserved by sub-rule (4) of rule 46A also. If the provisions of rule 46A, sub-rule (4), thereof are held to be mandatory that will go against the provisions of section 250 of the Act conferring power on the first appellate authority to enquire into the matter and pass appropriate orders. In other words, rule 46A without sub-rule (4) will be open to challenge as ultra vires section 250 of the Act. In the instant case the first appellate authority, as already noted, has rejected the additional evidence solely on the ground that the assessee did not satisfy the provisions of rule 46A of the Rules. We find that the Tribunal has considered the matter keeping in mind the provisions of sub-rule (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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