DCIT, New Delhi V. Smt. Vanita Jain, New Delhi

ITA 1923/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58844 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 19-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMARDR
• Assessee Lawyers: P N SHASTRIAR
• Keywords: Income from undisclosed sources; Principle of natural justice; Additional evidence
• Section: 142(1); 133A; 54; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI H BENC H BEFORE SHRI A.N. PAHUJA, AM AND SHRI C.M. GARG,JM ITA NO.1923/D/2011 ASSESSMENT YEAR:2006-07 DY. CIT,CENTRAL CIRCLE-12, ROOM NO.330, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI V/S . MRS. VANITA JAIN H-82, SOUTH EXTENSION PART-I, NEW DELHI [PAN:AAIPJ 8688 B] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P.N. SHASTRI,AR REVENUE BY SHRI B.R.R. KUMAR,DR DATE OF HEARING 20-03-2012 DATE OF PRONOUNCEMENT 20-03-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 19.04.2011 BY THE REVENUE AGA INST AN ORDER DATED 24.12.2009 OF THE LD. CIT(A)-I, NEW DELHI, RA ISES THE FOLLOWING GROUNDS:- 1 THE ORDER OF THE LD. CIT(A) IS NOT CORRECT IN LA W AND FACTS. 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) WAS WRONG IN ACCEPTING ADDITIONAL EVIDENCE FILED AS ENOUGH OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS WRONGLY ALLOWED RELIEF ON AGRICULTURAL INCOME W HEREAS HONBLE ITAT IN THE CASE OF SHRI MAHABIR PRASAD JAI N I.T.A. NOS.2967 TO 2973/D/08 HAS RULED THAT ASSESSEE HAS T O PRODUCE EVIDENCE OF INDULGING IN AGRICULTURAL ACTIV ITIES DURING THE YEAR UNDER CONSIDERATION. 4 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN HOLDING THAT THE CREDIT ENTRIES AMOUNTING T O ` ` 8,36,087/- AS EXPLAINED BY ADMITTING ADDITIONAL EVI DENCES. 5 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF ` 1,26,100/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE SEA RCH OPERATION FROM ASSESSEES ROOM. ITA NO.1923/DEL./2011 2 6 THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. FACTS, IN BRIEF AS PER RELEVANT ORDERS ARE THAT A SEARCH U/S 132 OF INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 10.11.2005 WHILE A SURVEY U/S 133A OF THE ACT WAS UNDERTAKEN IN THE BUSINESS PREMISES OF M/S BENGALI SWEET CENTRE H-82, SOUTH EXTENSION, PART-I, NEW DELHI AND G-19, SOUTH EXTENSION, PART-I, NEW DELHI ON THE SAME DATE. DURING THE SEARCH, A N UMBER OF DOCUMENTS WERE SEIZED. CONSEQUENTLY, IN RESPONSE TO A NOTICE U/S 153C OF THE ACT, THE ASSESSEE FILED RETURN REFLECTING INCOME OF ` `1,76,450/- ON 04.08.2006,WHEREIN THE ASSESSEE DID NOT DECLARE ANY UNDISCLOSED INCOME . S UBSEQUENTLY, IN RESPONSE TO A NOTICE U/S 143(2) OF THE ACT ISSUED ON 1.2.2007, NONE APPEARED ON BEHALF OF THE ASSESSEE. IN RESPONSE TO SUBSEQUENT NOTICES DAT ED 3 RD OCTOBER, 2007 ISSUED U/S 143(2) AND 142(1) OF THE ACT AND QUESTIONNAIRE DATED 10.10.2007 ALSO NONE RESPONDED NOR THE NOTICE ISSUED U/S 143(2) AND 142( 1) OF THE ACT ON 21.11.2007 AND 28.11.2007 WERE COMPLIED WITH. ACCORDINGLY, TH E ASSESSING OFFICER (A.O. IN SHORT) PROCEEDED TO COMPLETE THE ASSESSMENT IN TE RMS OF THE PROVISIONS OF SECTION 144 OF THE ACT, ON THE BASIS OF MATERIAL ON RECORD. 2.1 SINCE, THE ASSESSEE DID NOT SUBSTANTIATE HER C LAIM OF AGRICULTURE INCOME OF ` `1.18,655/-, THE AO TREATED THE AMOUNT AS INCOME FR OM UNDISCLOSED SOURCES. BESIDES, THE ASSESSEE DID NOT FURNISH ANY EXPLANATION REGARDING CREDIT ENTRIES IN HER BANK ACCOUNT WITH DENA BANK DURING T HE PERIOD 1.4.2005 TO 31.3.2006. ACCORDINGLY, AN AMOUNT OF ` `93,890/- WAS TREATED AS INCOME FROM UNDISCLOSED SOURCES. 2.2 MOREOVER, THE ASSESSEE DID NOT FURNISH ANY EXP LANATION REGARDING SOURCE OF CASH OF ` `1,26,100/- FOUND DURING THE COURSE OF SEARCH. ACC ORDINGLY, THE AO ADDED THE AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. ITA NO.1923/DEL./2011 3 3. ON APPEAL, THE ASSESSEE IS STATED TO HAVE SUBM ITTED AN APPLICATION UNDER RULE 46A OF INCOME-TAX RULES, 1962 WITH THE R EQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE. THE LD. CIT(A) WITHOUT CALLIN G FOR ANY REPORT FROM THE CONCERNED AO, DELETED THE AFORESAID ADDITIONS IN TH E FOLLOWING TERMS:- 3.1 SINCE THE ASSESSING OFFICER PASSED ORDER U/S 1 44 WHEN NO DETAILS WAS SUBMITTED ON BEHALF OF THE ASSESSEE DES PITE GIVING SUFFICIENT OPPORTUNITIES, THE PASSING OF EXPARTE OR DER IS HELD AS JUSTIFIED. HOWEVER, THE PAPER BOOK SUBMITTED EXPLA INING THE INFORMATION SUBMITTED AND THE PAST INFORMATION ON R ECORD ARE BEING CONSIDERED. 4.1 THE LEARNED AR FOR THE APPELLANT SUBMITTED T HAT THE STATEMENT OF AFFAIRS AS ON 31.3.2005 AND 31.3.2006 AND BANK S TATEMENTS, FOR THE YEAR ARE ON RECORD. THERE WAS ALSO AN INCOME & EXPENDITURE ACCOUNT AND COMPUTATION OF TAXABLE INCOME ON RECORD . FURTHER THAT HOWEVER, THE LEARNED AO ADDED THE WHOL E OF THE TOTAL OF THE DEPOSITS SIDE OF THE DENA BANK ACCOUNT AT ` `93,890/- (CORRECT TOTAL IS ` `9,38,901/-) WITHOUT EVEN READING/INTERPRETING THE OBVIOUS FROM BANK STATEMEN T. 4.2 THE SUMMARIZED ANALYSIS OF THE BANK ACCOUNT A LONG WITH BRIEF EXPLANATIONS SUBMITTED BY THE APPELLANT ARE REPRODU CED HEREUNDER: NO . PARTICULARS AMOUNT (IN ` ]) REMARKS 1 RENT CHEQUES FOR H-81 SOUTH EXTENSION 2,11,257 RENT AFTER TDS-H-81 SOUTH EXTENSION- INCOME DDMITTED IN RETURN ` ` 3,18,332/- 2 SECURITY RENT H 81 86,250 SECURITY RENT OF H 81 SOUTH EXTENSION FROM VAG SECURITIES & VAG INFOTECH 3 LOAN MR. RAJ KUMAR JAIN 25,000 LOAN MR. RAJ KUMAR JAIN ITA NO.1923/DEL./2011 4 BY BANK TRANSFER WHO IS ALSO ASSESSED BY THE SAME A.O. CONFIRMATION ENCLOSED. 4 LOAN MR. M.P. JAIN (MAHAVIR PD. JAIN) 10,000 LOAN MR. M.P. JAIN BY BANK TRANSFER WHO IS ALSO ASSESSED BY THE SAME A.O. CONFIRMATION ENCLOSED. 5 LOAN MRS. KUSUM LATA JAIN 2,50,000 /- LOAN MRS. KUSUM LATA JAIN BY BANK TRANSFER WHO IS ALSO ASSESSED BY THE SAME A.O. CONFIRMATION ENCLOSED. 6 RECEIPT FOR ADJUSTMENT OF BASEMENT RIGHTS H 81 2,50,000 /- RECEIPT FOR ADJUSTMENT OF BASEMENT RIGHTS H 81 SOUTH EXTENSION. ALSO PAID `4,93,750/- FOR THE SAME PURPOSE. DEED COPIES ENCLOSED. 7 INTEREST CREDITED BY BANK 3,580 INTEREST CR BY BANK ADMITTED AS INCOME IN THE RETURN AT ` `3,580/-. 8 REIMBURSEME 1,02,814 REIMBURSEME ITA NO.1923/DEL./2011 5 NT OF MEDICAL INSURANCE NT RECEIVED ON A/C OF MEDICAL INSURANCE AND INSURANCE RECEIPTS ARE NOT TAXABLE. COPY OF LETTER ENCLOSED. TOTAL 9,38,901 IT HAS BEEN SUBMITTED THAT THE CREDIT SIDE OF THE B ANK A/C WITHOUT OPENING COMES TO ` `9,38,901/- AND NOT ` ` 93,890/- AS TAKEN BY ASSESSING OFFICER. 4.1 I HAVE CONSIDERED THE SUBMISSIONS, THE BANK STA TEMENTS ALONG WITH THE STATEMENT OF AFFAIRS AS ON 31.3.2005 AND 31.3.2006, THE INCOME AND EXPENDITURE ACCOUNT AND COMPUTATION OF TAXABLE INCOME ON RECORD ALONG WITH THE OTHER DOCUMENTS. I) RENTS RECEIVED IN THE BANK A/C ON ACCOUNT OF H 8 1 NDSE/SOUTH EXTENSION PART I BY CHEQUES OF ` ` 2,11,257/- AFTER TDS IS LOWER THAN ADMITTED RENTAL OF ` ` 3,18,332/- AGAINST H 81 THUS ADDING IT AGAIN AS CREDIT/DEPOSIT SIDE OF BANK A/C IS TAXING THE SAME AMOUNT FOR THE SECOND T IME. THEREFORE, IT IS DIRECTED TO BE DELETED- RELIEF ` ` 2,11,257/-. II) THE SECURITY/ADVANCE RENT FOR H 81 RECEIVED ` ` 86,250/- FROM VAG SECURITIES & VAG INFOTECH ARE SUPPORTED BY RENT DEEDS SIGNED BY THE TENANT AND ARE OF NEAR SUCH DATES, TH E SECURITY RECEIVED OF ` `86,250/- IS DIRECTED TO BE DELETED AS REFUNDABLE SECURITY DOES NOT CONSTITUTE INCOME RELIEF ` `86,250/- III) CONFIRMATION OF LOANS FROM FAMILY MEMBERS/CLOS E RELATIVES NAMELY MR. RAJ KUMAR -` ` 25,000/- ALONG WITH THEIR PAN ETC. HAVE BEEN SUBMITTED AND IT IS SEEN THAT ARE BEING A SSESSED BY THE SAME AO. THE CONFIRMATIONS BEING IN ORDER, THE ADDITIONS ARE DELETED. RELIEF ` ` 2,85,000/- IV) IT IS SEEN FROM THE COMPUTATION OF TAXABLE INCO ME THAT THE ASSESSEE HAS ADMITTED BANK INTEREST AT ` ` 3,580/- AS INCOME FROM OTHER SOURCES WHICH IS THE SAME AMOUNT OF THE INTEREST CREDITED BY BANK AT ` `3,580/-. THEREFORE IT IS DIRECTED TO BE DELETED AS ALREADY SHOWN IN TAXABLE INCOME. RELIEF - ` ` 3,580/-. ITA NO.1923/DEL./2011 6 V) THE ASSESSEE HAS EXPLAINED THAT SHE HAD MADE ADJ USTMENTS WITH OTHER OWNERS OF BASEMENT OF H 81 SOUTH EXTENS ION, HER RIGHTS IN BASEMENT OF H 81 SOUTH EXTENSION BY CHANG ING THE DEMARCATION, WHICH IS SUPPORTED BY DOCUMENTS. SINC E IT IS A RECEIPT AGAINST AN EQUAL PAYMENT MADE IT DOES NOT C ONSTITUTE INCOME AND EVEN IF A LONG TERM CAPITAL GAIN IS COMP UTED ON TRANSFER/ADJUSTMENT OF BASEMENT RIGHTS H 81 SOUTH EXTENSION, THEN ALSO IT IS EXEMPT U/S 54 OF THE INC OME-TAX ACT ON ACCOUNT OF ACQUISITION OF SIMILAR RIGHTS IN A HOUSE PROPERTY. THE CONTENTIONS OF THE ASSESSEE HAVE FOR CE AND, THEREFORE, IT IS DELETED. RELIEF ` ` 2,85,000/- VI) THE APPELLANT HAS STATED ` ` 1,02,814/- RECEIVED AS REIMBURSEMENT ON A/C OF MEDICAL INSURANCE AND INSUR ANCE RECEIPTS ARE NOT TAXABLE. HOWEVER, THERE ARE NO SU PPORTING DOCUMENTS IN THE PAPER BOOK THOUGH STATED TO BE THE RE. HENCE THIS ADDITION OF ` ` 1,02,814/- IS CONFIRMED. 3.1 AS REGARDS CLAIM OF AGRICULTURAL INCOME, THE LD. CIT(A) CONCLUDED AS UNDER: 5.1 I HAVE GONE THROUGH THE SUBMISSIONS AND EVI DENCES SUBMITTED. SINCE THE AGRICULTURAL LAND HOLDINGS AR E OLD AND THE INCOME FROM IT HAS BEEN ACCEPTED IN PAST INCLUDING A.Y. 2005-06 (ACCEPTING INCOME OF ` ` 1,12,250/- ) BY THE CIT(A), AND THERE IS NO CHANGE IN THE HOLD INGS WHICH HAS BEEN BROUGHT ON RECORD. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE AGRICUL TURAL INCOME AND INCLUDE IT FOR RATE PURPOSES ONLY. 3.2 REGARDING CASH OF ` 1,26,100/- FOUND DURING THE COURSE OF SEARCH, THE LD. CIT(A) HELD AS UNDER: 7.1 THE ASSESSING OFFICER HAS ADDED A SUM OF ` `1,26,100/- FOUND BY THE INCOME TAX DEPARTMENT ON 10.11.2005 DURING SEARCH OPERATIONS ON 10.11.2005 O N MR. RAVINDER KUMAR JAIN, MR. RAJ KUMAR JAIN AND MR. RAJ ESH KUMAR JAIN AT THEIR RESIDENTIAL PREMISES AT H 78 SO UTH EXTENSION PART I, WHO ARE ALL PARTNERS OF M/S BENGA LI SWEET CENTER, WHO ALSO LIVE IN THE SAME PREMISES ALONG WI TH THEIR SPOUSES AND PARENTS. ONE OF SUCH DOCUMENTS (ANNEXU RE 5 PAGE 27 OF PAPER BOOK) STATES AS THE CASH FOUND IN ROOM OF ITA NO.1923/DEL./2011 7 MR. RAVINDER KUMAR JAIN, AND MRS. VANITA JAIN FOR ` `1,26,100/-. IT IS ON ACCOUNT OF THIS DOCUMENT THAT THE ADDITION OF ` 1,26,100/- HAS BEEN MADE. .. 7.12 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND PERUSED THE PANCHNAMAS AS WELL AS THE COMPUTATIONS OF INCOME AND WEALTH OF THE GROUP SUBMITTED IN THE PAP ER BOOK. THE EXCESS CASH FOUND OVER THE EXPLAINED CASH AS OF FERED TO BE ADMITTED AT THE TIME SEARCH (AS PER PAGE 59 OF P APER BOOK) HAVE BEEN ADMITTED AS INCOME BY MR. RAVINDER KUMAR, MR. RAJ KUMAR AND MR. RAJESH KUMAR IN THEIR TAX RETURNS FOR ASSESSMENT YEAR 2006-07. IT IS ALSO CORRECT THAT AN AMOUNT OF ` `1,26,100/- HAS ALSO BEEN ADDED IN THE HANDS OF MR. RAVINDER KUMAR JAIN IN HI S ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07. THE EXPLANATION FOR CASH FOR THE GROUP OF ASSESSEES AS A WHOLE HAS BEEN CONSIDERED AND DISCUSSED IN THE APP EAL ORDER IN APPEAL NO.235/07-08 OF BENGALI SWEET CENTE R ALSO AND THE CASH FOUND IS COVERED BY THE EXPLAINABLE CA SH ETC. IN THESE CIRCUMSTANCES THE ADDITION OF ` ` 1,26,100/- MADE BY THE AO ON ACCOUNT OF THE CASH IS DELETED. THE ASSE SSEE GETS A RELIEF OF ` `1,26,100/-. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). AT THE OUTSET, THE LD . DR WHILE REFERRING TO GROUND NO.2 IN THE APPEAL CONTENDED THAT THE LD. CIT(A) WA S NOT JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE IT RULES,1962 EVEN WHEN THE AO ALLOWED A NUMBER OF OPPORTUNITIES TO THE AS SESSEE. THE LD. DR VEHEMENTLY ARGUED THAT THE LD. CIT(A) DID NOT RECOR D HIS REASONS, IN WRITING, BEFORE ADMITTING ADDITIONAL EVIDENCE NOR ALLOWED AN Y OPPORTUNITY TO THE AO AS STIPULATED IN RULE 46A OF THE I.T. RULES, 1962. THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT OPPOSE THESE SUBMISSIONS OF THE LD ..DR. TO A QUERY BY THE BENCH, THE LD. AR ADMITTED THAT THOUGH THE ASSESSEE HAD FILED AN APPLICATION U/S 46A OF THE IT RULES,1962, THE LD. CIT(A) DID NOT FO LLOW THE MANDATE OF THE SAID ITA NO.1923/DEL./2011 8 RULE NOR ALLOWED ANY OPPORTUNITY TO THE AO. SINCE T HE SAID APPLICATION DID NOT FORM PART OF PAPER BOOK SUBMITTED BY THE ASSESSEE, THE LD. AR ASSURED TO SUBMIT A COPY OF THE SAID APPLICATION BEFORE US. INTER ALI A, THE LD. DR WAS REQUESTED TO SUBMIT A COPY OF DECISION OF THE ITAT IN THE CASE OF SHRI MAHABIR PRASAD JAIN I.T.A. NOS.2967 TO 2973/D/08 REFERRED TO IN THE GRO UNDS OF APPEAL BEFORE US. AFTER DISCUSSION, BOTH THE PARTIES AGREED THAT THE MATTER IS REQUIRED TO BE RESTORED TO THE FILE OF LD. CIT(A) FOR RE-ADJUDICA TION IN ACCORDANCE WITH LAW FOR FOLLOWING THE PROCEDURE ENSHRINED IN RULE 46A OF TH E IT RULES,1962 AND PROVISIONS OF SEC. 250(4) OF THE ACT. 5.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE DID NOT APPEAR BEFORE TH E AO DESPITE REPEATED OPPORTUNITY FOR HEARING VIDE NOTICE DATED 1.2.2007 ,3 RD OCTOBER, 2007, QUESTIONNAIRE DATED 10.10.2007 OR EVEN SUBSEQUENT NOTICE ISSUED U/S 143(2) AND 142(1) OF THE ACT ON 21.11.2007 AND 28.11.2007. NO REASONS HAVE BEEN ADDUCED BEFORE US NOR THESE ARE EVIDENT FROM THE IM PUGNED ORDER AS TO WHY THE ASSESSEE DID NOT APPEAR BEFORE THE AO. IN THE RESUL T, ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT ON THE BASIS OF MATER IAL ON RECORD. ON APPEAL, THOUGH THE ASSESSEE APPEARS TO HAVE SUBMITTED AN AP PLICATION UNDER RULE 46A OF THE IT RULES,1962,FOR ADMISSION OF ADDITIONAL EVIDE NCE , THE LD. CIT(A) DID NOT FOLLOW THE PROCEDURE LAID DOWN UNDER THE SAID RULE NOR CONFRONTED THE SAID EVIDENCE TO THE AO. THE LD. CIT(A) DID NOT CARE T O RECORD ANY REASONS BEFORE ADMITTING ADDITIONAL EVIDENCE NOR APPEARS TO HAVE A SCERTAINED THE GENUINENESS OF THE SAID EVIDENCE. NOW WHAT ARE THE REASONS GIVE N IN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE AND WHY THE ASSESS EE DID NOT RESPOND TO VARIOUS NOTICES ISSUED BY THE AO, HAS NOT BEEN EXPL AINED BEFORE US. AS ALREADY STATED, THE LD. CIT(A) ALSO DID NOT RECORD ANY REAS ONS FOR ADMISSION OR OTHERWISE OF ADDITIONAL EVIDENCE NOR ALLOWED ANY OPPORTUNITY TO THE AO. IN NUTSHELL, THE LD. CIT(A) DELETED THE VARIOUS ADDITIONS WITHOUT FOLLOW ING THE PROCEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES,1962 . THE LD. CIT(A ) ARRIVED AT HIS CONCLUSIONS WITHOUT ASCERTAINING AS TO WHETHER OR NOT THE ASSES SEE WAS PREVENTED BY ITA NO.1923/DEL./2011 9 SUFFICIENT CAUSE FROM SUBMITTING THE AFORESAID ADDI TIONAL DOCUMENTS/INFORMATION BEFORE THE AO AS PER PROVISIONS OF RULE 46A OF THE IT RULES, 1962 NOR ANY SUCH SUFFICIENT CAUSE HAS BEEN MENTIONED BEFORE US BY TH E LD. AR. EVEN A COPY OF THE REQUEST MADE FOR ADMISSION OF ADDITIONAL EVIDENCE H AS NOT BEEN PLACED BEFORE US DESPITE SPECIFIC DIRECTIONS. HERE WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF RULE 46A OF THE IT RULES 1962, WHICH READ AS UNDER: (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 TH AN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASS ESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY:-- (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMI T 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 RELEVAN T 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 A DDUCE 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 C OMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3)THE DEPUTY COMMISSIONER(APPEALS) OR, AS THE CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HA S 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 WITN ESS 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 EXAMI NATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTH ER SUBSTANTIAL CAUSE INCLUDING ITA NO.1923/DEL./2011 10 THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETH ER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECT ION 271..' 5.1 IT IS EVIDENT FROM THE AFORESAID PROVISIONS THAT THE LD. CIT(A) CAN TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-R. (1)(B) & (C) OF RULE 46A OF THE IT RULES, 1962 IF THE ASSESSEE WAS PREVENTED BY SUFF ICIENT CAUSE . IN HAJI LAL MOHD. BIRI WORKS' CASE [2005] 275 ITR 496 (ALL), BY MAKING AN ELABORATE DISCUSSION ON RULE 46A OF THE RULES IN PARAGRAPH 10 AT PAGE 500 AND 501, IT WAS HELD THAT UNDER RULE 46A THE AUTHORITY IS NOT PERMI TTED TO ACT WHIMSICALLY WHILE EXERCISING THE JURISDICTION UNDER IT .IN THE CASE U NDER CONSIDERATION, THE ASSESSEE PLACED BEFORE THE LD. CIT(A),CERTAIN ADDITIONAL EVI DENCE AND ADMITTEDLY, THE SAID DOCUMENTS WERE NOT SUBMITTED BEFORE THE AO. THE POW ERS OF THE CIT(A) IN TERMS OF RULE 46A TO ADMIT FRESH EVIDENCE, ENTAILS AN EL EMENT OF DISCRETION WHICH IS REQUIRED TO BE EXERCISED IN A JUDICIOUS MANNER. THE POWERS OF THE CIT(A) TO ADMIT ADDITIONAL EVIDENCE ARE NOT ONLY IN SITUATION S WHERE THE EVIDENCE COULD NOT BE PRODUCED BEFORE LOWER AUTHORITIES OWING TO LACK OF ADEQUATE OPPORTUNITY BUT ALSO IN SITUATIONS WHERE THE FRESH EVIDENCE WOULD E NABLE THE CIT(A) TO DISPOSE OF THE APPEAL OR FOR ANY OTHER SUBSTANTIAL CAUSE. OF COURSE, THE POWER IS TO BE EXERCISED JUDICIOUSLY AND FOR REASONS TO BE RECORDE D. HERE WE MAY POINT OUT THAT THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. MANISH BUILD WELL (P.) LTD.,16 TAXMAN.COM27(DELHI) HELD THAT THAT THE COND ITIONS PRESCRIBED IN RULE 46A MUST BE SHOWN TO EXIST BEFORE ADDITIONAL EVIDEN CE IS ADMITTED AND EVERY PROCEDURAL REQUIREMENT MENTIONED IN THE RULE HAS TO BE STRICTLY COMPLIED WITH SO THAT THE RULE IS MEANINGFULLY EXERCISED AND NOT EXE RCISED IN A ROUTINE OR CURSORY MANNER. A DISTINCTION SHOULD BE RECOGNIZED AND MAIN TAINED BETWEEN A CASE WHERE THE ASSESSEE INVOKES RULE 46A TO ADDUCE ADDIT IONAL EVIDENCE BEFORE THE CIT (A) AND A CASE WHERE THE CIT (A), WITHOUT BEING PROMPTED BY THE ASSESSEE, WHILE DEALING WITH THE APPEAL, CONSIDERS IT FIT TO CAUSE OR MAKE A FURTHER ENQUIRY BY VIRTUE OF THE POWERS VESTED IN HIM UNDER SUB-SEC TION (4) OF SECTION 250. IT IS ONLY WHEN HE EXERCISES HIS STATUTORY SUO MOTO POWER UNDER THE ABOVE SUB- SECTION THAT THE REQUIREMENTS OF RULE 46A NEED NOT BE FOLLOWED. ON THE OTHER ITA NO.1923/DEL./2011 11 HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES RULE 46A, IT IS INCUMBENT UPON THE CIT (A) TO COMPLY WITH THE REQUI REMENTS OF THE RULE STRICTLY. THE HONBLE HIGH COURT HELD THAT SUB-RULE (3) OF RU LE 46A INTERDICTS THE CIT (A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE ASSESSING OFFICER HAS HAD A REASONABLE O PPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME.IN THE INSTANT CASE, TH ERE IS NOTHING IN THE ORDER OF THE LD. CIT (A) TO SHOW THAT THE AO WAS CONFRONTED WITH THE ADDITIONAL EVIDENCE. THUS, THE END RESULT HAS BEEN THAT ADDITIONAL EVIDE NCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE AO FURNISHING HIS C OMMENTS AND WITHOUT VERIFICATION. SINCE IN THE CASE UNDER CONSIDERATION , THE LD. CIT(A) DID NOT FOLLOW THE PROCEDURE LAID DOWN IN RULE 46A OF THE IT RULES ,1962 NOR EVEN RECORDED ANY FINDINGS AS TO WHETHER OR NOT THE ASSESSEE WAS PREV ENTED BY SUFFICIENT CAUSE FROM PRODUCING THE SAID EVIDENCE/DOCUMENTS BEFORE T HE AO, WE FIND MERIT IN THE UNDISPUTED CONTENTIONS OF THE LEARNED DR AND THEREF ORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, VACATE THE FINDINGS OF THE LD. CIT(A ) AND RESTORE THE ISSUES RAISED IN VARIOUS GROUNDS OF APPEAL BEFORE US TO HIS FILE, WI TH THE DIRECTIONS TO FOLLOW THE MANDATE IN TERMS OF RULE 46A OF THE IT RULES, 1962 AS ALSO PRINCIPLES OF NATURAL JUSTICE AND THEREAFTER, DISPOSE OF THE MATTER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES . WITH THESE DIRECTIONS, GROUND NOS. 2 TO 6 IN THE APPEAL ARE DISPOSED OF, AS INDI CATED HEREINBEFORE. 6. GROUND NO1 IN THE APPEAL BEING GENERAL IN NA TURE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITION AL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.6 IN THE APPEAL, ACCORDINGLY, BOTH THESE GROUNDS ARE DISMISS ED. 7. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. ITA NO.1923/DEL./2011 12 8. IN THE RESULT, APPEAL IS ALLOWED BUT FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT SD/- (C.M. GARG) SD/- (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER NS COPY OF THE ORDER FORWARDED TO :- 1 SMT. VANITA JAIN, H-82, SOUTH EXTENSION, PART -I, NEW DELHI 2. DEPUTY. CIT, CENTRAL CIRCLE-12, ROOM NO.330, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI 3. THE CIT CONCERNED 4. . CIT (APPEALS-I), NEW DELHI 5. THE DR, ITAT,H BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI