“Appeals Court Upholds Admission of New Evidence in Tax Case”

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Case Name

Commissioner of Income Tax vs E.D. Benny (High Court of Kerala)

ITA. No. 84 of 2015 

Date: 17th August 2015

Key Takeaways

• The court confirmed that the Commissioner (Appeals) has the discretion to admit additional evidence if the appellant was prevented by reasonable cause from presenting it earlier.
• Rule 46A (of Income Tax Rules, 1962), was central to the case, outlining when additional evidence can be admitted.
• The decision emphasized the importance of procedural fairness and the principles of natural justice in tax proceedings.

Issue

Was the Commissioner of Income Tax (Appeals) justified in admitting additional evidence that was not presented during the initial assessment proceedings?

Facts

The case involved a dispute over the admission of new evidence in a tax assessment appeal. The assessee, E.D. Benny, had not presented certain documents during the initial assessment by the Assessing Officer. These documents were later submitted to the Commissioner (Appeals), who admitted them, leading to a favorable decision for the assessee. The Revenue challenged this decision, arguing that the additional evidence should not have been considered.

Arguments

• Revenue’s Argument: The Revenue contended that the Commissioner (Appeals) should not have admitted the additional evidence without remanding the case back to the Assessing Officer for consideration. They relied on Rule 46A (of Income Tax Rules, 1962) and previous court decisions to support their position.
• Assessee’s Argument: The assessee argued that the conditions under Rule 46A (of Income Tax Rules, 1962) were met, as they were prevented by reasonable cause from presenting the evidence earlier. They also emphasized that the Commissioner (Appeals) had followed due process by allowing the Assessing Officer to review the new evidence.

Key Legal Precedents

• Commissioner of Income Tax v. McMillan & Co. [1958] 33 ITR 182: This case was cited by the Revenue to argue for remanding the case to the Assessing Officer. However, the court found it not directly applicable to the current procedural context.
• Smt. Prabhavati Shah v. CIT [1998] 231 ITR 1 (Bom.): This case clarified the powers of the Appellate Assistant Commissioner under Section 250 (of Income Tax Act, 1961) and Rule 46A (of Income Tax Rules, 1962), supporting the view that the Commissioner (Appeals) can admit additional evidence under certain conditions.

Judgement

The court upheld the decision of the Commissioner (Appeals) and the Tribunal, allowing the additional evidence to be considered. The court found that the Commissioner (Appeals) had acted within their powers under Rule 46A (of Income Tax Rules, 1962) and Section 250 (of Income Tax Act, 1961). The appeal by the Revenue was dismissed.

FAQs

Q: What is Rule 46A (of Income Tax Rules, 1962)?

A: Rule 46A (of Income Tax Rules, 1962), outlines the conditions under which an appellant can present additional evidence during an appeal, such as when they were prevented by sufficient cause from presenting it earlier.

Q: Why was the additional evidence admitted?

A: The court found that the assessee was prevented by reasonable cause from presenting the evidence during the initial assessment, satisfying the conditions of Rule 46A (of Income Tax Rules, 1962).

Q: Does this case set a precedent for future tax appeals?

A: Yes, it reinforces the discretion of the Commissioner (Appeals) to admit additional evidence under Rule 46A (of Income Tax Rules, 1962), provided the conditions are met and procedural fairness is maintained.

Q: What does this mean for the parties involved?

A: The decision is favorable for the assessee, as the additional evidence was considered, potentially impacting the outcome of their tax assessment. The Revenue’s appeal was dismissed, affirming the lower authorities’ decisions.

1. The issues raised in these appeals are connected. Therefore, these

appeals were heard together and are disposed of by this common judgment

treating, with the consent of the parties, ITA84/15 as the leading case.

2. ITA 84/15 is filed by the Revenue, challenging the order passed by

the Income Tax Appellate Tribunal, Cochin Bench in ITANo.612/2013. The

respondent assessee is a partner in various business concerns and the

other partners of these firms are the family members of the assessee. A

search under Section 132 (of Income Tax Act, 1961) (hereinafter referred as

'the Act') was conducted in the business premises of various firms and the

residences of the partners on 26.3.2008. During the course of the search, various incriminating documents were found and seized and statements

of the partners were also recorded. Consequent to the search, notices

under Section 153A (of Income Tax Act, 1961) were issued for the assessment years

2002-2003 to 2007-2008 and notice under Section 142(1) (of Income Tax Act, 1961)

was issued for the assessment year 2008-2009. In response to the

notice under Section 153A (of Income Tax Act, 1961), the assessee filed his returns of

income on 10.7.2009 and on 13.7.2009, filed his regular return of

income in response to the notice under Section 142(1) (of Income Tax Act, 1961), for the

assessment year 2008-2009.

3. The Assessing Officer completed assessment under Section

153A read with Section 144 (of Income Tax Act, 1961) vide his order dated 18.12.2009.

The assessment in respect of the assessment year 2008-2009 was also

completed under Section 143(3) (of Income Tax Act, 1961) read with Section 144 (of Income Tax Act, 1961) 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 paper books the whole group of individual cases

and one paper book in the case of the assessee were

verified. These are fresh evidences filed by the assessee

before the Appellate Authority. None of them were filed

during the course of assessment proceedings. Detailed

investigations were made on the fresh evidences placed

by the assessee on record. They are summarized as

under:

21. AGRICULTURAL INCOME EARNED BY THE ASSESSEE:

The Inspector attached to this Circle was deputed to

inspect the various agricultural land holdings of the assessee and to verify the genuineness of the bills

produced as fresh evidences claimed by the assessee.

As per this report dated 23.2.2011 submitted by

the Inspector, he visited the agricultural lands held by

the assessee on 22.2.2011 and reported as under:

As per the direction of the Dy.CIT, Central Circle,

Thrissur, I had visited the agricultural lands of the

assessee situated in various villages and satisfied with

the documents produced by the assessee. The assessee

hold approximately 13.5 acres of cultivable land in

different villages in which 12 acres are paddy field. The

agricultural income claimed by the assessee as per

bills/vouchers produced as fresh evidences were verified

with the original bills/vouchers with dealers and the

genuineness was verified. I have verified the original

bills/vouchers from the following dealers for the period

from 2.4.2010 to 3.8.2010 and found genuine.

Sl.

No

Name of trader/dealer

Period

From To

1 KPK Oil Mills 2.4.2010 15.6.2010

2 Kottayam Rubbers 28.4.2010 19.7.2010

3 Anna Coconut Products 1.5.2010 3.6.2010

4 St.Joseph Oil Mills 2.5.2010 22.6.2010

5 Aloor Service Co.Op. Bank 1.6.2010 3.8.2010

6 Jeeva Bonemeal 21.7.2010 30.7.2010

It is pertinent to state that the agricultural income

claimed to have earned by the assessee is for the

assessment year 2010-2011 and 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 Rs.7,15,887/- in immovable

property for which he had shown only Rs.85,687/- in

cash flow statement. For the AY 2008-09, the assessee

had invested Rs.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

prove his claim. This may be rejected on the ground that

this is a fresh evidence.

25. Opening Balance in the cash flow statement.

The opening cash balance of Rs.25,000/- shown by the

assessee in the cash flow statement can not be accepted

on the ground that the cash flow statement is a fresh

evidence filed before the CIT(A). He has not even

produced the copy of his balance sheet for the financial year ended 2001-2002 relevant to the AY 2002-03 for

verification. Hence, this can not be accepted as genuine.

26. In view of the observations it is prayed that all the

evidences now filed before the appellate authority are

fresh and not produced at the time of assessment

proceedings. They are prima facie inadmissible in view

of provisions of Rule 46A (of Income Tax Rules, 1962). Hence, they

may be rejected and assessment orders sustained.”

5. The Appellate Authority considered the matter in the light of

the provisions contained in Rule 46A (of Income Tax Rules, 1962)

(hereinafter referred to as 'the Rules') and passed Annexure B order, in

which after dealing with each of the justification offered by the

assessee, he concluded that:

“Considering these circumstances, I am of the opinion

that the appellant was prevented by reasonable and

sufficient causes from furnishing various

details/evidences at the assessment stage.

Therefore, considering the totality of the facts and

circumstances of the case, the additional

evidences/details filed by the appellant are admitted and

adjudicated in this appeal.”

6. Challenging Annexure B order,Revenue filed appeals before the

Tribunal. Cross Objections were also filed by the assessee impugning

Annexure B to the extent it was against him. By Annexure E common

order rendered on 10th October 2014, the appeal and Cross Objection

were dismissed by the Tribunal.

7. In its order, the Tribunal has stated that the first common

ground in all the appeals that were considered was with regard to the

admission of fresh/new evidences filed by the assessee before the

Commissioner of Income Tax (Appeals) without satisfying the

conditions laid down in Rule 46A (of Income Tax Rules, 1962). In paragraph 4 to 9 of its

order, the Tribunal dealt with the above contention in the light of the

provisions contained in Section 250 (of Income Tax Act, 1961) 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 provisions contained in

Section 250 (of Income Tax Act, 1961), Rule 46A (of Income Tax Rules, 1962), the decision of the Apex

Court in Commissioner of Income Tax v. McMillan & Co. [1958] 33 ITR 182, Sm t.Prabhavati Shah v. CIT [1998] 231 ITR 1 (Bom.) and

Commissioner of Income Tax v. United Towers (I.) P. Ltd. [2008] 296 ITR

106 (Delhi).

10. On the other hand, learned Senior Counsel appearing for the

assessee contended that this is a case in which the grounds provided

under Rule 46A (of Income Tax Rules, 1962) were established by the assessee and,

therefore, the First Appellate Authority was entitled to admit the

documents in evidence. He also pointed out that before deciding to

admit the additional documents and considering the same, the First

Appellate Authority had complied with the principles of natural justice.

Therefore, according to the learned counsel, no grounds have been

made out for interference with the orders impugned.

11. We have considered the submissions made. It is evident from

paragraph 3 of Annexure B order passed by the First Appellate

Authority itself that when the authorised representative of the assessee

appeared in response to the notice of hearing, he filed paper books

containing detailed written submissions on various issues raised in the appeal, cashflow statements filed before the Assessing Officer, reply

filed in response to various notices issued by the Assessing Officer and

evidences/working in support of various claims made in the appeal. On

production of these materials, admittedly, the First Appellate Authority

forwarded the paper books to the Assessing Officer and required the

Assessing Officer to examine the new evidences/details/submissions

and to give his report.

12. It was in response to that letter of the First Appellate

Authority that the Assessing Officer submitted Annexure C Remand

Report. Reading of this Report shows that in paragraphs 1 to 19, the

Assessing Officer has justified his conclusions in the assessment order.

Thereafter, from paragraph 20 onwards, extracted above, he dealt with

the additional materials that were produced by the assessee before the

First Appellate Authority. This report shows that insofar as the

agricultural income earned by the assessee, after stating that the

bills/vouchers produced by the assessee were found genuine, all that

the Assessing Officer has stated is that the period pertains to the assessment year 2010-2011 and 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 Income Tax Rules, 1962) 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 before

the [Assessing Officer] except in the following

circumstances, namely:-

(a) where the [Assessing Officer] has refused to

admit evidence which ought t 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 [Assessing Officer] has made the

order appealed against without giving sufficient

opportunity to the appellant to adduce evidence

relevant to any ground of appeal.

(2) No evidence shall be admitted under sub-rule (1)

unless the [Deputy Commissioner (Appeals) [or, as the

case may be, the Commissioner (Appeals] records in

writing the reasons for its admission.

(3) The [Deputy Commissioner (Appeals)] [or, as the

case may be, the Commissioner (Appeals)] shall not take

into account any evidence produced under sub-rule (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 examination of any

witness, to enable him to dispose of the appeal, or for

any other substantial cause including the enhancement

of the assessment or penalty (whether on his own

motion or on the request of the [Assessing Officer] under

clause (a) of sub-section (1) of section 251 (of Income Tax Act, 1961) or the

imposition of penalty under section 271 (of Income Tax Act, 1961).]”

15. Reading of this provision shows except on establishing the

circumstances enumerated in clauses (a) to (d) under sub rule 1 (of Income Tax Rules, 1962), an

appellant shall not be entitled to produce the Commissioner (Appeals)

any evidence whether oral or documentary. Sub rule 2 (of Income Tax Rules, 1962) mandates that

the Commissioner (Appeals) shall not admit any evidence, unless he

records in writing the reasons for its admission. Once the documents

are so admitted, sub rule 3 (of Income Tax Rules, 1962) comes into operation, which further

mandates that the Commissioner (Appeals) shall not take into account any evidence produced under sub rule 1 (of Income Tax Rules, 1962) 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 (of Income Tax Rules, 1962) 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 (of Income Tax Rules, 1962) has been fully complied with. It was thereafter, that the First Appellate Authority proceeded to

adjudicate the appeal, duly taking into account the additional evidence

produced by the appellant.

17. One of the contentions raised in these appeals is that having

admitted the additional evidence, the Commissioner (Appeals) should

have remanded the case to the Assessing Officer for his consideration.

In our view,this contention cannot be accepted in the light of sub rule 4 (of Income Tax Rules, 1962),

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. This power of the Appellate Authority is

also evident from Section 250 (of Income Tax Act, 1961), which reads thus:

“250. Procedure in appeal:

(1) The [Commissioner (Appeals)] shall fix a day and

place for the hearing of the appeal, and shall give notice

of the same to the appellant and to the [Assessing] Officer

against whose order the appeal is preferred.

(2) The following shall have the right to be heard at the

hearing of the appeal--

(a) the appellant, either in person or by an

authorised representative;

(b)the [Assessing] Officer, either in person or by a

representative.

(3) The [Commissioner (Appeals)] shall have the power to

adjourn the hearing of the appeal from time to time.

(4) 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)]

(5) The [Commissioner (Appeals)] may, at the hearing of

an appeal, allow the appellant to go into any ground of

appeal not specified in the grounds of appeal, if the

[Commissioner (Appeals)] is satisfied that the omission of

that ground from the form of appeal was not wilful or

unreasonable.

(6) The order of the [Commissioner (Appeals] disposing of

the appeal shall be in writing and shall state the points

for determination, the decision thereon and the reason for

the decision.

[(6A) In every appeal, the Commissioner (Appeals), where

it is possible, may hear and decide such appeal within a

period of one year from the end of the financial year in

which such appeal is filed before him under sub-section

(1) of section 246A (of Income Tax Act, 1961).]

(7) On the disposal of the appeal, the [Commissioner

(Appeals)] shall communicate the order passed by him to

the assessee and to the [Principal Chief Commissioner or] [Chief Commissioner or [Principal Commissioner or

Commissioner]”

18. Reading of sub section 4 (of Income Tax Act, 1961) 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 assessment was completed and appeal

was filed by the assessee. The Appellate Authority, after issuing notice

to the assessee, fixed the income of the assessee enhancing the tax

liability, presumably relying on the proviso to Section 13 (of Income Tax Act, 1961) and

Rule 33 (of Income Tax Rules, 1962). This was confirmed by the Tribunal and the High

Court. In the judgment, while interpreting the provisions of Section 13 (of Income Tax Act, 1961)

of the Act, the Apex Court has highlighted the requirement of

satisfaction by the Income Tax Officer. In our view, that finding of the

Apex Court does not suggest that in every case where additional

materials are produced before the First Appellate Authority, the

Appellate Authority is bound to remit the case to the Income Tax Officer

for fresh consideration. Therefore, this judgment does not support the

contention raised by the learned Senior Counsel for the Revenue.

20. Insofar as the Bombay High Court judgment in

Smt.Prabhavati Shah v. CIT [1998] 231 ITR 1 (Bom.) is concerned that

was a case where the provisions contained in Section 250 (of Income Tax Act, 1961) and Rule 46A (of Income Tax Rules, 1962) were dealt with. The relevant paragraphs of the

judgment reads thus:

“On a plain reading of rule 46A (of Income Tax Rules, 1962), it is clear that this

rule is intended to put fetters on the right of the appellant

to produce before the Appellate Assistant Commissioner

every evidence, whether oral or documentary, other than

the evidence produced by him during the course of the

proceedings before the Income-tax Officer, except in the

circumstances set out therein. It does not deal with the

powers of the Appellate Assistant Commissioner to make

further enquiry or to direct the Income tax officer to make

further enquiry and to report the result of the same to

him. This position has been made clear by sub rule (4)

which specifically provides that the restrictions placed on

the production of additional evidence by the appellant

would not affect the powers of the Appellate Assistant

Commissioner to call for the production of any document

or the examination of any witness to enable him to

dispose of the appeal. Under sub-section (4) of section

250 of the Act, the Appellate Assistant Commissioner is

empowered to make such further inquiry as he thinks fit

or to direct the Income tax officer to make further inquiry

and to report the result of the same to him. Sub-section

(5) of section 250 (of Income Tax Act, 1961) empowers the Appellate

Assistant Commissioner 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 (of Income Tax Act, 1961) 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 Income Tax Act, 1961) and

rule 46A (of Income Tax Rules, 1962), it is clear that the restrictions

placed on the appellant to produce evidence do not affect

the powers of the Appellate Assistant Commissioner under

sub-section (4) of Section 250 (of Income Tax Act, 1961). The purpose of

rule 46A (of Income Tax Rules, 1962) appears to be to ensure that evidence is

primarily led before the Income tax officer.”

21. This judgment also does not lead to the conclusion that in

every case where additional evidence are produced, the Appellate

Authority is bound to remand the case to the Assessing Officer.

22. However, in paragraph 9 of the order passed by the Tribunal it

has stated thus:

“In the instant case the entire additional evidence has

come on the record of the first appellate authority because the first appellate authority decided to examine

the facts of the case in depth and adjudicate upon the

matter on the basis of evidence and material thus

gathered. The learned CIT(A) was empowered to do so

under the provisions of Section 250(4) (of Income Tax Act, 1961). The results of

enquiry conducted by him could either go to further

cement the case made out by the assessing officer or to

help out the assessee against the findings of the assessing

officer. The mere fact that the results of the enquiries

thus conducted supported the case of the assessee and

not that of Revenue has no bearing on the jurisdiction

and powers of the learned CIT(A). The learned CIT(A)

has confronted the assessing officer with the evidence

thus received and the material thus gathered and allow

the assessing officer to have his say in the matter vide

remand report dated 29.4.2013 and being done so this

dispute have no merits. We do not see any requirement

in law that the first appellate authority should invariably

consult or confront the assessing officer every time an

additional evidence that was not filed before the

assessing officer comes on the record of the first appellate

authority. Where the additional evidence is obtained by

the first appellate authority on its own motion, there is

no requirement in law to consult/confront the assessing

officer with such additional evidence. There may be cases

where additional evidence is admitted by the first

appellate authority on a request or application being

made by the assessee. In such cases sub rule (2) of rule

46A requires the first appellate authority to allow the

assessing officer a further opportunity to rebut the fresh

evidence filed by the assessee. Even that requirement

cannot be said to be a rule of universal application. If the

additional evidence 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 ITR 106 (Delhi), Rule 46A(4) (of Income Tax Rules, 1962) of the

Rules does not specifically exclude the principles of natural justice and, therefore, these principles are to be read into the Rules. Therefore, we

disprove the finding of the Tribunal as contained in paragraph 9 of the

order extracted above.

24. Having considered the sole contention urged, we do not find

any merit in these appeals. Appeal, therefore, fail and is accordingly

dismissed.

25. The issues involved in all other cases are similar. In view of

the dismissal of the leading case ITA 84/2015, all other appeals are also

dismissed.

All pending interlocutory applications in these cases stand closed.

SD/-

ANTONY DOMINIC

JUDGE

SD/-

SHAJI P. CHALY

JUDGE