ACIT-2(1), RAIPUR (CG) V. M/S Ankyra Systems Pvt.Ltd, RAIPUR (CG)

ITA 148/BIL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0213 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 09-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Non compliance
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 43B; 271(1)(b); 139; 92; 80G; 250; 201; 192

Judgement Text

ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, SMC , RAIPUR [CORAM : PRAMOD KUMAR AM ] ITA NO . 148 / BLPR /201 2 AS SESSMENT Y EAR : 200 8 - 09 ASSTT. COMMISSIONER OF INCOME TAX - 1(2) RAIPUR (CG). .APPELLANT VS. ANKYRA SYSTE MS PVT. LTD., ..... . RESPONDENT 12 TH A CROSS, 2 ND PH A SE, J.P. NAGAR, BANGALORE. [P AN: A AGCA 7 551D ] APPEARANCES BY: D.K. JAIN , FOR THE A PPELLANT SUNIL KUMAR AGRAWAL , F OR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 21.06.2016 D ATE OF PRONOUNCING THE ORDER : 20 .09.2016 O R D E R 1. BY WAY OF TH IS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 30.05. 201 2 , PASSED BY THE LEARNED CIT (A) , RAIPUR (C.G.) FOR ASSESSMENT YEAR 200 8 - 09 , ON THE F OLLOWING GROUNDS : - 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY AO OUT OF EXPENSE S CLAIMED IN P&L ACCOUNT AT RS.3,86,638/ - BEING UNVERIFIABLE. 2. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF VAT TAX PAYABLE AT RS.65,393/ - U/S 43B OF THE INCOME - TAX ACT, 1961. 3. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE DIS ALLOWANCE OF RS.36,93,034/ - U/S 68 OF THE I. TAX A CT, 1961 ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 2 OF 8 4. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT ( A ) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF RU L E 46A OF I. TAX RU LE 1962. 5. THE OR D ER OF THE LD . CIT( A ) IS ERRONEOUS BOTH IN LAW AND ON FACTS. 2. SO FAR AS FIRST GROUND OF APPEAL IS CONCERNED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED 50 % OFF THE EXPENSES INCURRED BY THE ASSESSEE FOR WANT OF DETAILS AND AS THE EXPENSES DID NOT SEEM TO BE REASONABLE FROM ANY POINT OF VIEW. IN APPEAL, THE ASSESSEE SUBMITTED ALL THE REQUISITE DETAILS, POINTED OUT THAT THE BOOKS OF ACCOUNTS ARE DULY AUDITED AND NO ADVERSE COMMENTS ON EXPENSES FIND PLACE IN THE AUDIT REPORTS, AND POINTED OUT THAT SUCH A DISALLOWANCE WAS WHOLLY UNWARRANTED. WHILE THE CIT(A) UPHELD THE DISALLOWANCE IN PRINCIPLE, HE RESTRICTED THE QUANTUM OF DISALLOWANCE TO 10%. THE ASSESSING OFF ICER IS AGGRIEVED OF THE RELIEF GRANTED BY THE CIT(A) AND IS IN APPEAL BEFORE ME. 3. HAVING HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD, I SEE NO REASONS TO INTERFERE IN THE MATTER. THE DISALLOWANCE @10% IS ALREADY CONFIRMED AND THE ASS ESSEE IS NOT IN APPEAL AGAINST THE SAME. IN THE APPELLATE PROCEEDINGS BEFORE THE CIIT(A), THE ASSESSEE HAD GIVEN THE REQUISITE DETAILS AND IN THE REMAND REPORT, THE CIT(A) HAD NOTHING TO SAY EXCEPT TO PLACE HIS RELIANCE ON THE REMAND REPORT. I HAVE ALSO NO TED THAT MAIN DIRECTOR OF THE COMPANY HAD PASSED AWAY AND THAT WAS THE REASON OF SOME NON COMPLIANCES BEFORE THE ASSESSING OFFICER. ALL THESE FACTS TAKEN TOGETHER, IN MY CONSIDERED VIEW, THE CONCLUSIONS ARRIVED AT BY THE CIT(A) DO NOT CALL FOR ANY INTERFER ENCE. I CONFIRM THE ACTION OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 3 OF 8 4. AS REGARDS THE ADDITION OF RS 65,393, IN RESPECT OF VAT, HAVING BEEN DELETED BY THE CIT(A), THE DISALLOWANCE WAS MADE ON THE BASIS THAT THE ASSESSEE DID NOT FILE ANY EVIDE NCE REGARDING PAYMENT OF VAT. IN APPEAL, CIT(A) DELETED THIS ADDITION ON THE GROUND THAT THE VAT HAS NOT BEEN CLAIMED AS A DEDUCTION AT ALL. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE ME. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL ON RECORD, I SEE NO REASONS TO INTERFERE IN THIS MATTER EITHER. ONCE IT IS AN UNDISPUTED POSITION THAT THE DEDUCTION HAS NOT BEEN CLAIMED, THERE IS OBVIOUSLY NO QUESTION OF DISALLOWANCE. THE ORDER OF THE CIT(A) IS CONFIRMED ON THIS ISSU E. 6. AS REGARDS THE ASSESSING OFFICER S GRIEVANCE AGAINST THE CIT(A) DELETING THE ADDITION OF RS 36,93,034, IN RESPECT OF ADDITION FOR UNEXPLAINED CREDITS, IT IS SUFFICIENT TO NOTE THE FACT THAT THE ASSESSEE HAD DULY GIVEN ALL THE DETAILS, INCLUDING IDEN TITY, MEANS AND BONAFIDES OF THE LENDERS, AT THE FIRST APPELLATE STAGE, THAT THE CIT(A) HAD DULY CALLED FOR A REMAND REPORT ON THE SAME AND THAT THE AO DID NOT HAVE ANYTHING TO SAY ON THE SAME. ALL THAT THE AO STATED, VIDE LETTER DATED 21 ST MAY 2012, WAS T HAT THE MATTER, IN THE LIGHT OF ADDITIONAL EVIDENCES, MAY BE DECIDED ON THE BASIS OF MERITS OF FACTS AND LAW THOUGH HE IS STRONGLY DEFENDING THE ASSESSMENT ORDER PASSED THE OBSERVATIONS/FINDINGS MADE THEREIN . YET, WHEN THE CIT(A) DECIDED THE MATTERS O N MERITS BY HOLDING THAT THE LENDERS ARE DIRECTORS OF THE ASSESSE COMPANY AND THAT THEY HAD SUFFICIENT MEANS TO ADVANCE THESE LOANS, THE ASSESSING OFFICER IS IN APPEAL BEFORE ME. 7. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DU LY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 4 OF 8 8. I HAVE NOTED THAT THE UNSECURED LOANS WERE TAKEN BY THE ASSESSEE FROM ITS OWN DIRECTORS, THE BALANCE SHEETS AND ASSESSMENT DETAILS ON THESE PERSONS WERE ON RECORD AND THE AO , DESPITE HAVING BEEN GIVEN A SPECIFIC OPPORTUNITY TO REBUT THE CLAIM OF THE ASSESSEE, DID NOT HAVE ANYTHING TO SAY. IN THESE CIRCUMSTANCES, THE RELIEF GRANTED BY THE CIT(A) CANNOT BE FAULTED. IN ANY EVENT, EVEN DURING THE PROCEEDINGS BEFORE US, LEARNED DR DID NOT BRING ON RECORD ANY MATERIAL TO, OR EVEN RAISED ARGUMENTS AGAINST, CONTROVERT THE RELIEF ON MERITS. THE ONLY ARGUMENT OF THE DR IS THAT NO SUCH EVIDENCE WAS ADDUCED AT THE ASSESSMENT STAGE BUT THEN, AS IS THE UNDISPUTED POSITION, MAIN DIRECTOR OF THE ASSESSEE COMPANY HAD PASSED AWAY AND THE NON COMPLIANCE WAS DUE TO THIS TRAGEDY. THE EVIDENCES HAVE NOT BEEN SUBMITTED AT THE FIRST APPELLATE STAGE, THE AO HAS ALSO BEEN GIVEN AN OPPORTUNITY, WHICH REMAIN UNAVAILED THOUGH, IN THE REMAND PROCEEDINGS AS WELL. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER ON THIS MATTER ALSO. 9. AS REGARDS THE GRIEVANCE AGAINST ADMISSION OF ADDITIONAL EV IDENCE UNDER RULE 46A, I FIND THAT, AS DISCUSSED ABOVE, THERE ARE VALID REASONS FOR THE ASSESSEE NOT BEING ABLE TO FIND THE EVIDENCES AT THE ASSESSMENT STAGE AND THE AO HAS ALSO BEEN GIVEN A DUE OPPORTUNITY OF BEING HEARD IN RESPECT OF THE SAME. IN THESE C IRCUMSTANCES, IN MY CONSIDERED VIEW, THERE IS NO INFIRMITY IN THE ADMISSION OF ADDITIONAL EVIDENCE PARTICULARLY IN THE LIGHT OF THE DECISION OF A DIVISION BENCH OF THIS TRIBUNAL, IN THE CASE OF ITO VS BAJORIA FOUNDATION [(2001) 71 TTJ 343 (KOL)], AS FOL LOWS: 4. WE HAVE NOTICED THAT SOLE GRIEVANCE OF THE REVENUE IS AGAINST VIOLATION OF R. 46A BY THE LEARNED CIT(A) AND THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT MADE ANY SUBMISSIONS ON MERITS OF THE CASE. RULE 46A OF THE IT RULES 1962, PROVIDES T HAT THE APPELLANT SHALL NOT BE ENTITLED TO ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 5 OF 8 PRODUCE BEFORE THE CIT(A) ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE AO EXCEPT IN FOLLOWING CIRCUMSTANCES : (A) WHERE THE AO HAS REFUSED TO ADMIT THE EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH WAS CALLED UPON TO BE PRODUCED BY THE AO, OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICI ENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPE AL. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSMENT WAS DONE UNDER S. 144 OF THE IT ACT AND THE ADDITIONS MADE BY THE LEARNED AO WERE BASED ON INFERENCES DRAWN BY HIM. IT, IS, THEREFORE, SETTLED FACT THAT SUFFICIENT INQUIRIES WERE NOT CONDUC TED WITH REGARD TO THE CLAIMS MADE IN THE RETURN OF THE ASSESSEE AND THAT THE CASE WAS FIXED FOR HEARING ON ONLY TWO DATES I.E. ON 29TH SEPT., 1993 AND ON 16TH MARCH, 1994, ON WHICH THERE WAS NO COMPLIANCE. WE HAVE ALSO NOTICED THAT THE ASSESSEE HAS, IN FI RST PARAGRAPH OF THE STATEMENT OF FACTS FILED BEFORE THE FIRST APPELLATE AUTHORITY, SUBMITTED THAT THE NOTICES FOR THESE TWO HEARINGS WERE NOT RECEIVED BY THEM. WE HAVE ALSO OBSERVED THAT FIRST HEARING WAS FIXED ON JUST A DAY BEFORE LIMITATION UNDER S. 143 (2) WAS TO EXPIRE AND THEREAFTER NEXT DATE WAS FIXED SHORTLY BEFORE THE ASSESSMENT ITSELF WAS GETTING TIME - BARRED; BETWEEN THESE TWO DATES, ASSESSMENT PROCEEDINGS DID NOT GET ANY ATTENTION FROM THE LEARNED AO. WHEN THE ASSESSMENT ITSELF WAS DONE UNDER S. 1 44, THE ASSESSEE OBVIOUSLY DID NOT HAVE OPPORTUNITY OF PRODUCING THE EVIDENCE BEFORE THE AO. ON THESE FACTS, WE ARE OF THE VIEW THAT FILING OF ADDITIONAL EVIDENCE BEFORE THE CIT(A) WAS CLEARLY COVERED BY CL. (C) ABOVE. A VIEW MAY INDEED BE TAKEN, AS TAKEN BY HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. VALI MOHD AHMED BHAI (1982) 27 CTR (GUJ) 97 : (1982) 134 ITR 214 (GUJ), THAT THE CIT(A) CANNOT ADMIT ANY ADDITIONAL EVIDENCE PLACED UNDER R. 46A(1) UNLESS THE ITO HAS BEEN ALLOWED A REASONABLE OPPORTUNIT Y TO EXAMINE THE EVIDENCE, BUT IT IS NOT NECESSARY TO CONSIDER THAT ASPECT OF THE MATTER SINCE IN THE CASE BEFORE US THE AO NOT ONLY HAD AN OPPORTUNITY TO EXAMINE ALL THE EVIDENCE FILED BY THE ASSESSEE BUT, AVAILING THIS OPPORTUNITY, HE EVEN FILED A REJOIN DER ON THE SAME WHICH WAS DULY CONSIDERED BY THE LEARNED CIT(A). IN THIS REGARD, WE MAY HOWEVER REFER TO OBSERVATIONS OF SHRI G. KRISHNAMURTY, THE THEN HON BLE PRESIDENT AND WHILE ARTICULATING VIEWS ON BEHALF OF JAIPUR BENCH OF THIS TRIBUNAL IN THE CASE OF ELECTRA (JAIPUR) (P) LTD. VS. IAC (1988) 26 ITD 236 (DEL), WHICH ARE REPRODUCED BELOW : 'AFTER GOING THROUGH THE EVIDENCE PLACED BEFORE US, CONSIDERING THE FACTS OF THIS AND GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT THE A SSESSEE SHOULD NOT BE DISQUALIFIED FROM PRODUCING THIS EVIDENCE ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 6 OF 8 MERELY ON THE GROUND THAT THE EVIDENCE WAS NOT PLACED BEFORE AUTHORITIES BELOW. THE SOLE PURPOSE OF JUDICIARY AS OF THE REVENUE IS TO GET AT THE TRUTH. IF THE TRUTH IS THAT PAYMENT OF COMMISSI ON WAS GENUINE AND WAS DICTATED BY THE BUSINESS NEEDS, SUCH A PAYMENT SHOULD NOT BE DISALLOWED MERELY ON THE GROUND THAT ASSESSEE WAS UNABLE TO LEAD PROPER EVIDENCE OR ON THE GROUND THAT EVIDENCE LEAD WAS OF SUCH A NATURE AS TO CREATE A VERY HIGH DEGREE OF SUSPICION. THERE SHOULD BE NO OBJECTION TO CONSIDER ANY EVIDENCE PRODUCED, TO TEST ITS AUTHENTICITY AND RELEVANCE AND THEN ACT ON IT. IF THE EVIDENCE IS GENUINE, RELIABLE, PROVES ASSESSEE S CASE, THEN ASSESSEE SHOULD NOT BE DENIED THE OPPORTUNITY. BUT ON THE OTHER HAND, IF THE EVIDENCE LED TURNS OUT TO BE SPURIOUS, FABRICATED OR OF IRRELEVANT NATURE, SUCH CONSEQUENCES, AS PROVIDED UNDER THE LAW, WILL ENSURE. IT IS, THEREFORE, INCORRECT TO SHUT OUT THE ASSESSEE IN THE PROCESS OF ADMINISTRATION OF JUSTICE FR OM LEADING EVIDENCE TO PROVE ITS CASE. THE EARLIER INABILITY TO LEAD THE EVIDENCE SHOULD NOT BE HELD AGAINST THE ASSESSEE UNLESS IT IS KNOWN TO THE COURT OR SUGGESTED TO THE COURT OR THERE WAS EVIDENCE TO THE SUSPECT THAT EVIDENCE WAS FABRICATED. THERE IS NO SUCH SUGGESTION IN THIS CASE. WE ARE THEREFORE, OF THE OPINION THAT REQUEST OF THE LEARNED COUNSEL IS REASONABLE AND REQUEST MADE BY THE DEPARTMENT FOR THE REFUSAL OF ITS ADMISSION IS NOT PROPER......' 5. WE ALSO FIND THAT HON BLE ORISSA HIGH COURT IN THE CASE OF B.L. CHOWDHURY VS. CIT (1976) 105 ITR 371 (ORI) HAVE OBSERVED THAT BY THE VIRTUE OF S. 250 WIDE PROVISION HAS BEEN MADE CONFERRING JURISDICTION ON THE FIRST APPELLATE AUTHORITY TO MAKE SUCH INQUIRY AS HE DEEM FIT AND THAT CIT(A) DOES NOT EXCEED HIS JURISDICTION IF HE ASKS OR ALLOWS THE APPELLANT TO FILE ADDITIONAL EVIDENCE IN THE MATTER HE THINKS FIT. HON BLE BOMBAY HIGH COURT, IN THE CASE OF SMT. PRABHAVATI S. SHAH VS. CIT (1998) 148 CTR (BOM) 192 : (1998) 231 ITR 1 (BOM), HAVE OBSERVED THAT R. 46A DOES FETTER THE RIGHT OF THE ASSESSEE TO PRODUCE EVIDENCE BUT IT DOES NOT RESTRAIN CIT(A) S POWERS UNDER S. 250(4) OR 250(5) OF THE IT ACT AND THAT THIS RULE APPEARS TO ENSURE THAT EVIDENCE IS PRIMARILY LED BEFORE THE AO. IN VIEW OF THIS JUDGMENT OF T HE HON BLE BOMBAY HIGH COURT, IF PRIMA FACIE AN INFORMATION IS NECESSARY TO EXAMINE THE CLAIM OF THE ASSESSEE, THE CIT(A) SHOULD CONSIDER THE NECESSARY EVIDENCE IN EXERCISE OF HIS POWERS UNDER SUB - SS. (4) AND (5) OF S. 250. IT IS TRITE THAT RULES HAVE TO B E FRAMED WITHIN THE SCOPE OF MAIN, PROVISION AND THAT A RULE, WHICH TRAVELS BEYOND OR IS INCONSISTENT WITH OR IS REPUGNANT TO THE PROVISIONS IN THE STATUTE WILL BE ULTRA VIRES AND VOID. RULE 46A WAS INTRODUCED W.E.F. 1ST APRIL, 1973 AND AS A RESULT OF INSE RTION OF S. 295(2)(MM) IN THE IT ACT WHICH EMPOWERED BOARD TO PROVIDE FOR THE CIRCUMSTANCES IN WHICH, THE CONDITION SUBJECT TO WHICH AND THE MANNER IN WHICH CIT(A) MAY PERMIT AN APPELLANT TO PRODUCE AN EVIDENCE WHICH THE APPELLANT DID NOT PRODUCE OR WAS NO T ALLOWED TO PRODUCE BEFORE THE AO. HOWEVER, THESE POWERS OF THE BOARD, WHICH HAVE BEEN VESTED IN THEM FOR CARRYING OUT FOR THE PURPOSES OF THE ACT, HAVE TO BE EXERCISED IN SUCH A JUDICIOUS MANNER SO AS NOT TO MAKE ANY STATUTORY PROVISION REDUNDANT AND NUG ATORY. THE RULES MADE IN EXERCISE OF THESE POWERS SHOULD ALSO NOT BE INTERPRETED IN SUCH A MANNER AS TO NARROW DOWN, DILUTE OR CURTAIL THE STATUTORY POWERS, CONFERRED ON THE CIT(A), BY THE PROVISIONS OF S. 250(4) OR (5) OF THE IT ACT, 1961. THEREFORE, A HA RMONIOUS INTERPRETATION OF S. 250, EVEN R/W R. 46A, CANNOT BUT MEAN THAT IF FACTS OF A CASE WARRANT THAT, BEFORE DISPOSAL OF ANY APPEAL, CIT(A) IS REQUIRED TO MAKE FURTHER INQUIRIES, EITHER ON HIS OWN OR ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 7 OF 8 THROUGH THE AO, HE IS NOT DENUDED OF THE POWERS TO D O SO BECAUSE OF THE PROVISIONS OF R.46A. 6. WE ARE CONSCIOUS TO THE ESTEEMED VIEWS OF HON BLE JURISDICTIONAL HIGH COURT THAT THERE HAS TO BE A REASONABLE EXPLANATION FOR NON FILING OF SUCH ADDITIONAL EVIDENCE BEFORE THE AO. HON BLE CALCUTTA HIGH COURT, IN THE CASE OF RAJ KUMAR SRIMAL VS. CIT (1976) 102 ITR 525 (CAL), HAD AN OCCASION TO EXAMINE THIS ASPECT OF THE MATTER WHEREIN JUSTICE SABYASACHI MUKERJEE (AS HE THEN WAS) OBSERVED : 'IT IS TRUE, AS CONTENDED BY THE COUNSEL OF THE ASSESSEE, THAT AAC HAS VER Y VIDE POWERS AND THE INTEREST OF THE SUBSTANTIAL JUSTICE HE CAN MAKE FURTHER ENQUIRY AND HE CAN ADMIT A NEW GROUND OF APPEAL. HE CAN ALSO GIVE DEDUCTIONS NOT CLAIMED BY THE ASSESSEE, AS WAS HELD BY THIS COURT IN THE CASE OF UNION COAL CO. LTD. VS. CIT (19 68) 70 ITR 45 (CAL). IN THIS CASE, COUNSEL FOR THE REVENUE ALSO DID NOT DISPUTE THAT IN CERTAIN CIRCUMSTANCES THE AAC HAD JURISDICTION TO ADMIT NEW GROUNDS IF IT WAS NECESSARY TO ADMIT NEW EVIDENCE. THE POINT IN THIS CASE IS NOT WHETHER THE AAC IS ENTITLED TO ADMIT THE NEW GROUND OR EVIDENCE EITHER SUO MOTU OR AT THE INVITATION OF PARTIES. IN THIS CASE, THIS IS APPARENT THAT THE AAC WAS NOT ACTING SUO MOTU IN ADDITIONAL EVIDENCE. IF AAC WAS ACTING ON BEING INVITED BY THE ASSESSEE, THERE MUST BE SOME GROUND FOR ADMITTING NEW EVIDENCE IN THE SENSE THAT THERE MUST BE SOME EXPLANATION TO SHOW THAT THE FAILURE TO ADDUCE EVIDENCE EARLIER SOUGHT TO BE ADDUCED BEFORE THE AAC WAS NOT WILFUL AND NOT UNREASONABLE.......IF WITHOUT ANY EXPLANATION AT ALL, THE AAC ADMITS ADDITIONAL EVIDENCE AT THE INVITATION OF THE PARTIES, HE WOULD BE EXERCISING, IN OUR OPINION, A DISCRETION NOT PROPERLY. HE HAS UNDOUBTEDLY A DISCRETION VESTED IN HIM TO ADMIT ADDITIONAL EVIDENCE IN APPROPRIATE CASES BUT ADMISSION OF EVIDENCE AT THE INSTAN CE OF AN APPELLANT WITHOUT ANY GROUND OR EXPLANATION WOULD NOT BE EXERCISING DISCRETION PROPERLY AND IN SUCH CASES THE APPELLATE AUTHORITY IS COMPETENT, IN OUR OPINION, TO INTERFERE IN THE DISCRETION BY THE AAC.' IT IS, THEREFORE, NECESSARY THAT APPELLATE AUTHORITY HAS TO BE SATISFIED ON BONA FIDES OF THE REASONS OF FILING EVIDENCE - AN ASPECT WHICH HAS ALSO BEEN REFERRED TO IN ELECTRA S CASE, SUPRA. IN THE CASE BEFORE US, THE ASSESSEE S CLAIM BEFORE THE CIT(A) HAS BEEN THAT 'ADEQUATE OPPORTUNITY HAS NOT BEE N GIVEN FOR HEARING' AND THAT 'ORDER UNDER S. 144 IS NOT JUSTIFIED'. IT WAS IN THE BACKGROUND OF THESE FACTS THAT THE ASSESSEE SUBMITTED SOME FRESH EVIDENCE IN THE SHAPE OF S. 80G EXEMPTION CERTIFICATE OF ANANDLOK HOSPITAL AND PAPERS SUPPORTING THE CORPUS DONATIONS. ALL OTHER PAPERS LIKE AUDIT REPORT, LIST OF CHARITIES AND DONATIONS AND FINANCIAL STATEMENTS WERE ALREADY FILED BEFORE THE AO, ALONG WITH THE INCOME - TAX RETURN. IT IS ALSO NOT REVENUE S CASE THAT FILING OF ADDITIONAL EVIDENCE BEFORE THE CIT(A) S MACKS OF ANY MALA FIDES OR DELIBERATE INTENT TO ACT CONTRARY TO THE SCHEME OF THE IT ACT. WE, THEREFORE, SUPPORT ADMITTANCE OF ADDITIONAL EVIDENCE BY THE CIT(A). 7. WE HAVE ALREADY EXPRESSED OUR VIEW, IN PARA. 4 ABOVE, THAT ON THE GIVEN FACTS, FILING OF A DDITIONAL EVIDENCE BEFORE THE CIT(A) WAS COVERED BY R. 46A(1)(C) OF THE IT RULES, 1962. IN THE LIGHT OF THE SUBSEQUENT DELIBERATIONS, WE ALSO FIND THAT CIT(A) S ADMISSION OF ADDITIONAL EVIDENCE WAS CLEARLY WITHIN ITA NO . 148 / BLPR /201 2 ASSESSMEN T Y EAR: 200 8 - 09 PAGE 8 OF 8 THE SCHEME OF POWERS VESTED IN HIM UNDER S. 250(4) OF THE IT ACT BECAUSE, AS HELD BY BOMBAY HIGH COURT IN THE CASE OF PRABHAVATI S. SHAH (SUPRA), IF PRIMA FACIE AN INFORMATION IS NECESSARY TO EXAMINE THE CLAIM OF THE ASSESSEE, THE CIT(A) SHOULD CONSIDER THE NECESSARY EVIDENCE IN EXERCISE OF HIS POW ERS UNDER S. 250(4). IT IS SETTLED IN LAW THAT WHEN A STATUTORY AUTHORITY HAS THE POWERS TO DO SOMETHING, THEN IT HAS A CORRESPONDING DUTY TO EXERCISE SUCH POWERS WHENEVER CIRCUMSTANCES WARRANTING EXERCISE OF SUCH POWERS EXIST. THE CASE BEFORE US, IN OUR C ONSIDERED VIEW, WAS A FIT CASE WHERE THE CIT(A) SHOULD HAVE EXERCISED HIS POWERS TO MAKE FURTHER INQUIRIES. WE, THEREFORE, SEE NO LEGAL INFIRMITY IN CIT(A) S PROCEEDING ON MERITS OF THE CLAIM AND ADMITTING NECESSARY ADDITIONAL EVIDENCE FOR THAT PURPOSE. WE ALSO FIND SUPPORT FROM THE VIEW TAKEN BY A CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ELECTRA (JAIPUR) (P) LTD., (SUPRA). 10. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 11. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES 1963 TODA Y ON 20 TH DAY OF SEPTEMBER, 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 20 TH DAY OF SEPTEMBER , 2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUN AL RAIPUR BENCH, RAIPUR