TMI Blog2020 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO for admission of those evidences, there was no option with the assessee except producing the same before the Ld. CIT(A). CIT(A) has rejected admission of those evidences on the ground that the assessee did not file the said documents in the DAK of the said Assessing Officer. In our opinion, merely not filing those documents in the DAK counter of the Assessing Officer, the assessee cannot be denied substantial justice and examination of the said documents, which had been filed before learned CIT(A) immediately after filing of the appeal, following the rules provided in the Income-tax Rules. We set aside the finding of the Ld. CIT(A) on the merit of the appeal and restore the matter to him with the direction to the admit the additional evidences filed by the assessee and thereafter decide the issue in dispute on merit after providing sufficient opportunity of being heard to both the parties i.e the assessee and the Assessing Officer. The relevant grounds of the appeal of the assessee are accordingly allowed for statistical purposes. - ITA No.3896/Del./2019 (Assessment Year: 2015-16) - - - Dated:- 20-3-2020 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) per provision of Rule 46(3) of the IT Rules, 1962, the Ld. AO was allowed an opportunity to report his findings per enquiries conducted u/s 250(4) of the IT Act and his version was also incorporated in his findings therefore, rejection of admission of additional evidence per rule 46A of the IT Rules, 1962 is illegal. (b) The Ld. CIT(A) has erred in not following the principle Audi alteram partem , which is the basic canon principles of Natural justice and that Rule 46A of the Income Tax Rules cannot override this principles of natural justice by rejecting the remand report called u/s 250(4) of the IT Act. 3. The Ld. CIT(A) was wrong and was not considerate to the fact that when the sale of the assessee is correct, opening and closing of stock in trade is correct, how the purchase which has been duly confirmed by all the creditors in the enquiries conducted by the same AO can be bogus and how it can be disallowed. The Ld. CIT(A) is incorrect in not considering it. 5. The appellant craves leave for addition, modification, alteration, amendment of any of the grounds of appeal. 2. Briefly stated facts of the case are that the assessee an individual, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. K K Overseas 7952875 4. Rudra Enterprises 8591096 5. J D Trading co. 6150274 6. Aggarwal Traders 127000 7. Shri Krishna Electricals Company 940251 8. Ashish Enterprises 650133 9. Prakash Traders 2311602 10. Classic Distributors 84574 11. Hartech Auto Pvt. Ltd. 350000 12. Shivom Associates 132061 13. S N P Steels Pvt. Ltd. 257949 Total 31723335 4. According to the Assessing Officer, the assessee was required to take computer printout of the ledger accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. From a perusal of the above, it is clear that additional evidence can be admitted only if AO has refused to admit such evidence or AO has passed an order without giving sufficient opportunity or where the AO was prevented by sufficient cause from producing evidence called for by the AO or relevant to any ground of appeal. It would be appropriate to examine whether the application of the appellant falls within the ambit of the clear-cut conditions laid down by the Income Tax Act Rules. During the course of appellate proceedings, the appellant through his AR, submitted that the ledger accounts were produced but were not entertained by the AO. The claim of the appellant was examined. From a perusal of the assessment record, it is noted that the appellant was accorded opportunity to produce confirmations from the creditors on 11.09.2017, 13.11.2017, 19.12.2017 and finally 28.12.2017. the appellant was allowed an opportunity on 29.12.2017 ;s well but the requisite information was not produced. The AO has recorded a categorical findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions laid down in Rule 46A. The appellant has not been able to prove 'sufficient cause' that prevented him from producing evidence in the form of confirmations/ledger accounts of sundry creditors before the AO despite specific requisition made by the AO and despite opportunity(6) accorded in this regard. Nor has he been able to establish that his case falls within the ambit of conditions detailed in Rule 46A. He has also not been able to prove that sufficient opportunity was denied to her by the AO. The Hon'ble Delhi High Court in the case of Munish Build Well as stressed the need to adhere to the conditions mandated under Rule 46A. The Hon'ble Court has held as under: Once the assessee invokes Rule 46A and prays for admission of additional evidence before the CIT (A), then the procedure prescribed in the said rule has t: be scrupulously followed. The fact that sub-Section (4) of Section 250 confers powers on the CIT (A) to conduct an enquiry as he thinks fit, while disposing of the appeal, cannot be relied upon to contend that the procedural requirements of Rule 46A need not be complied with. If such a plea of the assessee is accepted, it would reduce Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of merit and while deciding the addition of merit the Ld. CIT(A) has taken into consideration the additional evidences filed by the assessee. 6. The learned DR, on the other hand, relied on the order of the lower authorities and submitted that the assessee failed to file the said copy of confirmation of the sundry creditors before the Assessing Officer despite several opportunities and therefore the Ld. CIT(A) is justified in rejecting the additional evidences filed by the assessee. 7. We have heard the rival submission of the parties and perused the relevant material on record. As the Ld. CIT(A) has not admitted the copy of ledger account of the sundry creditors and copy of the their confirmation filed by assessee as additional evidence under Rule 46A of the Income Tax Rules, 1962, it is relevant to reproduce said rule for ready reference: [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 ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of the sundry creditors before the Assessing Officer, however, there was some delay in collecting the confirmed copy of the ledger account from the 13 parties, which he could collect in last week of the December 2017 only. When the assessee approached with those copies of the ledger accounts, the Assessing Officer refused to accept in view of the limitation of completing assessment was approaching. In our opinion, in view of the refusal by the Assessing Officer for admission of those evidences, there was no option with the assessee except producing the same before the Ld. CIT(A). The Ld. CIT(A) has rejected admission of those evidences on the ground that the assessee did not file the said documents in the DAK of the said Assessing Officer. In our opinion, merely not filing those documents in the DAK counter of the Assessing Officer, the assessee cannot be denied substantial justice and examination of the said documents, which had been filed before learned CIT(A) immediately after filing of the appeal, following the rules provided in the Income-tax Rules. 9. In view of facts and circumstances of the case and in the interest of the substantial justice, we set aside the findin ..... 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