INCOME TAX OFFICER, NAHAN V. RAM SWROOP, SANGRAH

ITA 1216/CHANDI/2024

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) which pertained to the Assessment Year 2013-14. The primary issue was the CIT(A)s acceptance and reliance on additional evidence provided by the assessee during the appellate proceedings, which was not examined by the Assessing Officer. The additional evidence pertained to the source of funds for Fixed Deposit Receipts (FDRs), claimed to be from compensation received due to compulsory acquisition of land. The Tribunal found that the CIT(A) had not followed the procedural requirements of Rule 46A of the Income Tax Rules, 1962, which mandates that any additional evidence should be confronted to the Assessing Officer and a remand report should be called for before adjudication.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828626 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2026
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Chandigarh
• Assessment Year: misc
• Appeal Filed On: 18-12-2024
• Laws Referred To: Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: SACHIN DOGER; VIRTUAL MODE
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Corroborative evidences; Unexplained investment; Principle of natural justice; Competent authority

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA Nos. 1215 & 1216 /Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2013-14 The ITO Nahan बनाम Ram Swroop Village Siun, Tehsil Sangrah Dist: Sirmour, Himachal Pradesh- 173023 ˕ायी लेखा सं./PAN NO: ESNPS9736N अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Sachin Doger, CA (Virtual Mode) राजˢ की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 14/01/2026 उदघोषणा की तारीख/Date of Pronouncement : 15/01/2026 आदेश/Order PER LALIET KUMAR, J.M: Both the above appeals have been filed by the Revenue against the separate orders of Ld. CIT, NFAC, Delhi each dt. 23/10/2024 pertaining to Assessment Year 2013-14 respectively. 2. Since the issues involved in both the above appeals are common and the appeals were heard together, the same are being disposed of by this consolidated order for the sake of convenience and brevity. 3. We shall take up the Revenue’s appeal in ITA No. 1215/Chd/2024 pertaining to the Assessment Year 2013-14 as the lead case for the purpose of adjudication, wherein the Revenue has raised the following grounds: (i) Whether the Ld. CIT (A)/ NFAC has erred on facts and in law in allowing benefits of additional evidence submitted by the assessee during the appellate proceedings without providing opportunity to the AO to examine the same, and offer his comments as per Rule-46A of the Income Tax Rules, 1962. (ii) Whether the Ld. CIT (A)/NFAC has erred on facts and circumstances of the case in allowing appeal of the assessee and deleting addition of Rs. Printed from counselvise.com 2 2,53,00,000/-, ignoring the facts that the assessee did not submit any information inspite of issuing various statutory notices. (iii) It is prayed that the order of the Ld. CIT(A) be set-aside and that of the Assessing Officer may be restored. (iv) It is prayed that the order of the Ld. ClT(A) be revoked and that of the Assessing Officer may be restored. 4. Briefly, the facts of the case are that the assessment was completed by the Assessing Officer by making additions on account of unexplained investments in Fixed Deposit Receipts (FDRs). 5. Aggrieved by the said assessment order, the assessee preferred an appeal before the Ld. CIT(A). 6. During the appellate proceedings, the assessee furnished additional evidence which was not produced before the Assessing Officer during the course of assessment proceedings. Relying upon such additional evidence, the Ld. CIT(A) granted relief to the assessee. 7. Against the order of the Ld. CIT(A) the Revenue preferred in appeal before the Tribunal. 8. During the course of hearing the Ld. DR challenged the impugned order on the ground that the Ld. CIT(A) admitted and relied upon additional evidence in violation of Rule 46A of the Income Tax Rules, 1962, without confronting the Assessing Officer and without calling for a remand report or comments from the Assessing Officer. 9. Per contra, the Ld. AR for the assessee submitted that the FDRs were made out of the amount received by the assessee on account of compulsory acquisition of land. It was submitted that the compensation was received pursuant to an award passed by the competent authority and the same is verifiable from public records. It was further submitted that the entire flow of funds is reflected in the bank statements and, therefore, no prejudice has been caused to the Revenue. Printed from counselvise.com 3 10. We have heard the rival submissions and perused the material available on record. Undoubtedly, the assessee has taken a plea that the source of investment in FDRs is the compensation received on compulsory acquisition of land and that the supporting evidence is in the form of the award passed by the competent authority and the corresponding bank statements. However, the manner in which such evidence has been dealt with by the Ld. CIT(A) does not conform to the statutory scheme. 10.1 It is a settled position of law that while exercising appellate powers, the Ld. CIT(A) is duty-bound to confront the Assessing Officer with any additional evidence filed by the assessee and to call for a remand report or comments from the Assessing Officer before placing reliance upon such evidence. Compliance with Rule 46A is mandatory and is an integral part of the principles of natural justice. The Ld. CIT(A) cannot bypass the Assessing Officer and adjudicate the issue solely on the basis of additional evidence, even if such evidence is claimed to be available in the public domain. 10.2 In the present case, the Ld. CIT(A) has accepted and relied upon the additional evidence and granted relief to the assessee without affording any opportunity to the Assessing Officer to examine the evidence or to submit his comments. Such an approach is contrary to Rule 46A and amounts to violation of the principles of natural justice. 10.3 In view of the above, we set aside the impugned order and restore the matter to the file of the Ld. CIT(A) with a direction to confront the Assessing Officer with the additional evidence, call for a remand report/comments, grant due opportunity of being heard to both the parties, and thereafter decide the appeal afresh on merits in accordance with law. 10.4 We clarify that we have not expressed any opinion on the merits of the case, including the assessee’s claim that the FDRs were made out of compensation received on compulsory acquisition of land, and all contentions are left open. Printed from counselvise.com 4 11. Both the parties fairly submitted that the facts and circumstances of the other appeal, i.e., ITA No. 1216/Chd/2024, are exactly identical to those in ITA No. 1215/Chd/2024, and that similar contentions raised therein may be considered. Therefore, our findings and directions given in ITA No. 1215/Chd/2024 shall apply mutatis mutandis to the other appeal as well. Accordingly, the same is allowed for statistical purposes. 12. In the result, both the above appeals of the Revenue are allowed for statistical purposes. Order pronounced in the open Court on 15/01/2026 Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "