DCIT, Circle - 3 Kolkata, Kolkata V. M/s. Rahee Track Technologies Pvt. Ltd., Kolkata

ITA 2196/KOL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99697 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 13-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S ALAM
• Assessee Lawyers: D S DAMLE
• Keywords: Recovery proceedings; Source of fund; Additional evidence
• Section: 68; 56

Judgement Text

I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 2 1 96 / KOL / 20 1 0 ASSESSMENT YEAR : 200 6 - 20 0 7 DEPUTY COMMISSIONER OF INCOME TAX, .... ........ . APPELLANT CIRCLE - 3, KOLKATA, 8/2, ESPLANADE EAST, DWARLI HOUSE, 2 ND FLOOR, KOLKATA - 700 069 - VS. - M/S. RAHEE TRACK TECHNOLOGIES PVT. LTD., . ..... . RESPONDE NT 45, CENTURY TOWERS, SHAKESPEARE SARANI, KOLKATA - 700 017 [PAN : AAGCS 1931 D] APPEARANCE S BY: SHRI S.S. ALAM, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI D.S. DAMLE, FC A , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : AUGUST 04 , 2 01 5 DATE OF PRONOUNCING THE ORDER : AUGUST 12 , 201 5 O R D E R PER S.V. MEHROTRA : THIS A PPEAL HA S BEEN FILED BY THE REVENU E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - I , KOLKATA D ATED 20 . 0 8 .20 1 0 FOR THE ASSESSMENT YEAR 200 6 - 0 7 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL: - 1. THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, LD. CIT(AI ERRED IN DELETING THE ADDITION OF RS.44,15,806 / - MADE U / S.40(A )IA) OF THE ACT FOR FAI L URE OF THE ASSESSEE TO PROVE DEDUCTION OF TDS ON AFORESAID PAYMENTS IN ASSESSMENT PROCEEDINGS AND BY ACCEPTING FRESH EVIDENCE AT THE APPELLATE STAGE BY VIOLATING THE PROVISION OF RULE 46A OF THE I. T. RULES, 1962. 2. THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, LD. CIT(AI ERRED IN DELETING THE ADDITION OF PROVISION FOR LEGAL I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 2 OF 8 AND PROFESSIONAL FEES AND FREIGHT INWARD OF RS.22,14,559 / - WHICH WAS NOT FOR ASCER TAINED LIABILITY. 3. THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A ) ERRED IN DELETING THE ADDITION OF LEGAL & PROFESSIONAL FEES AND FREIGHT OUTWARD OF RS.6,55,295 / - & RS.65,79,170 / - RESPECTIVELY BEING THE EXPENSES RELATED TO PRIOR PER IOD. 4. THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A ) ERRED IN DELETING THE ADDITION OF RS.16,85,845 / - UNDER THE HEAD GENERAL CHARGES BEING THE EXPENSES RELATED TO PRIOR PERIOD. 5. THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A ) ERRED IN DELETING THE ADDITION OF RS.2,81,370 / - UNDER THE HEAD SUNDRY BALANCE WRITTEN OFF BY ACCEPTING FRESH EVIDENCE AT THE APPELLATE STAGE BY VIOLATING THE PROVISION OF RULE 46A OF THE I. T. RULES, 1962. 6. THAT IN THE FACTS AND THE CIRCU M STA NCES OF THE CASE LD. CIT(A ) ERRED IN LAW IN DELETING THE ADDITION OF RS.21,607 / - FOR DELAY ED DEPOSIT OF EMPLOYEES' CONTRIBUTION OF ESI AND PF MADE AS PER PROVISION OF SECTION IS 36( 1)(VA) READ WITH SEC.2(24 ) (X ) OF THE ACT. 7. THAT LEAVE MAY BE GRANTED TO ADD, ALTER OR MODIFY ANY GROUND AS MAY ARISE IN THE COURSE OF APPELLATE PROCEEDINGS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESESE , A PRIVATE LIMITED COMPANY, IN THE RELEVANT ASSESSMENT YEAR, WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF RAILWAY TRACKS AND COMPONENTS. IT FILED ITS RETURN OF INCOME DECLARING TOTAL LOSS OF RS.38,97,476/ - . THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.1,61, 03,215/ - AFTER MAKING THE FOLLOWING ADDITIONS: - U/S. 40(A)(IA) AS DISCUSSED IN ORDER RS.44,15,806/ - CL AIM OF PROVISION AS DISCUSSED IN ORDER RS.22,14,559/ - UNRELATED PRIOR PERIOD EXPENSES AS DISCUSSED RS.72,34,464/ - UNRELATED PRIOR RS.35,37,000/ - I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 3 OF 8 PERIOD EXPENSES AS DISCUSSED DISALLOWANCE OF INTEREST U/S.36)1)(III) RS. 6,00,000/ - UNRELATED PRIOR PE RIOD EXPENSES AS DISCUSSED RS.16,85,845/ - SUNDRY BALANCES WRITTEN OFF AS DISCUSSED RS. 2,81,370/ - FILING FEES AS DISCUSSED IN ORDER RS. 10,400/ - EMPLOYEES CONTRIBUTION TO PF & ESI RS. 21,607/ - RS.2,00,00,691/ - BEFORE THE LD. CIT(APPEALS), THE ASSESSEE HAD MADE ITS SUBMISSIONS APROPOS ON VARIOUS ISSUES . THE LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE PARTLY ALLOWED THE ASSESSEE S APPEAL. 3. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. D.R. AT THE TIME OF HEARING SUBMITTED THAT THE LD. CIT(APPEALS) ALLOWED THE ASSESSEE S VARIOUS GROUNDS B Y ACCEPTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A AND WITHOUT PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(APPEALS) HAD CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER BUT EVEN AFTER A LAPSE OF NINE MONTHS THE ASSESSING OFFICER DID NOT OFFER HIS COMMENTS ON THE SUBMISSIONS FORWARDED TO HIM FOR HIS COMMENTS. IN THIS REGARD, LD. COUNSEL PO INTED OUT THAT THE BENCH VIDE ITS ORDER - SHEET NOTING DATED 08.05.2015 HAD DIRECTED AS UNDER: - THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT CIT(A) HAS CALLED FOR A REMAND REPORT BUT NOT DISCUSSED IN THE ORDER. WE DIRECT THE LD. COUNSEL TO PRODUCE THE C OPY OF THE ORDER - SHEET OF THE LD. CIT(A) FILE. HENCE, THE HEARING OF THE CASE IS I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 4 OF 8 ADJOURNED TO 04.08.2015. BOTH PARTIES ARE INFORMED ACCORDINGLY . IN COMPLIANCE LD. COUNSEL FOR THE ASSESSEE HAS FILED BEFORE US A LETTER DATED 02.12.2009 ADDRESSED TO DCIT, C IRCLE - 3, KOLKATA ALONG WITH THE COPY OF ORDER - SHEET OF THE PROCEEDING BEFORE THE LD. CIT(APPEALS). WITH REFERENCE TO THESE DETAILS, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LETTER FROM THE LD. CIT(APPEALS) WAS DULY RECEIVED IN THE OFFICE OF DCIT, CIRCLE - 3 AND THERE IS SPECIFIC NOTING IN THE ORDER - SHEET ON 02.12.2009 WHICH READS AS UNDER: - 02.12.2009 : SHRI D.S. SAHARIA, FCA AND SHRI M.A. ASGAR, LL.B APPEARED FOR THE APPELLANT. APPEAL IS PARTLY HEARD. ADJOURNED TO 16.12.2009 . SD/ - 02.12.09 PL. CALL FOR A REMAND REPORT WITHIN A FORTNIGHT . LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. CIT(APPEALS) PASSED THE ORDER ON 20.08.2010 AFTER WAITING FOR ALMOST 8 - 9 MONTHS FOR THE REMAND REPORT. 6. LD. D.R. IN HIS REJOINDER SUBMITT ED THAT THERE IS NO REFERENCE OF REMAND REPORT BEING CALLED FOR BY THE LD. CIT(APPEALS) IN HIS ORDER. 6.1. LD. D.R. SUBMITTED THAT IT IS QUITE POSSIBLE THAT THIS LETTER MIGHT NOT HAVE REACHED THE ASSESSING OFFICER AND, THEREFORE, THE MATTER SHOULD BE REST ORED TO THE FILE OF CIT(APPEALS) FOR PROVIDING OPPORTUNITY TO ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. FROM THE SUBMISSIONS MADE BY BOTH THE PARTIES, IT IS EVIDENT THAT THE LD. CIT(APPEALS) HAD CALLED FOR A REMAND REPORT ON 02.12.2009, BUT THE REMAND REPORT WAS NOT SUBMITTED BY THE ASSESSING OFFICER. IN THIS CONNECTION, IT IS PERTINENT TO NOTE THAT THE HON BLE DELHI HIGH COURT VIDE ITS DECISION DATED 15 TH NOVEMBER, 2011 IN THE CA SE OF CIT (CENTRAL - 1) VS. - MANISH BUILDWELL PVT. LIMITED IN INCOME TAX APPEAL NO. 928/2011 HAS HELD AS UNDER: - I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 5 OF 8 21. IN OUR OPINION, SUBSTANTIAL QUESTIONS OF LAW DO ARISE OUT OF THE ORDER OF THE TRIBUNAL IN RESPECT OF ITS DECISION REGARDING THE ADDITION O F RS.1,61,67,600/ - MADE UNDER SECTION 68. WE, ACCORDINGLY, RE - FRAME THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ON A PROPER INTERPRETATION OF RULE 46A OF THE INCOME TAX RULES, 1962, THE TRIBUNAL WAS RIGHT IN LAW IN TAKING A DECISION ON THE MERITS OF THE ADDITION MADE UNDER SECTION 68 WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSING OFFICER OF BEING HEARD AS ENVISAGED IN SUB - RULE (3) OF RULE 46A? 2. WHETHER ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT SINCE THE CIT (A) POSSESSES CO - TERMINUS POWERS OVER THE ASSESSMENT APART FROM APPELLATE POWERS, THERE WAS NO VIOLATION OF RULE 46A COMMITTED BY HIM ? 22. AS WE HAVE WITH THE CONSENT O F THE LEARNED COUNSEL, HEARD THEM ON MERITS, WE PROCEED TO DECIDE THE AFORESAID SUBSTANTIAL QUESTIONS OF LAW. SINCE THE CIT (A) HIMSELF REFERS TO RULE 46A AND HAS ALSO ADMITTED THAT THE CONFIRMATION LETTERS ADDUCED BY THE ASSESSEE BEFORE HIM WERE TECHNICAL LY FRESH EVIDENCE, IT IS NOT POSSIBLE TO ACCEPT THE PLEA OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE CIT (A), IN EXAMINING THE CONFIRMATION LETTERS, WAS EXERCISING HIS INDEPENDENT POWERS OF ENQUIRY UNDER SUB - SECTION (4) OF SECTION 250 OF THE INCOME TA X ACT. IT IS TRUE THAT THE CIT (A) AS FIRST APPELLATE AUTHORITY HAS CONTERMINOUS POWERS OVER THE SOURCES OF INCOME CONSTITUTING THE SUBJECT MATTER OF THE ASSESSMENT, EXCEPT THE POWER TO TACKLE NEW SOURCES OF INCOME NOT CONSIDERED BY THE ASSESSING OFFICER, AND CAN DO WHAT THE ASSESSING OFFICER CAN DO AND CAN DIRECT THE ASSESSING OFFICER TO DO WHAT HE HAS FAILED TO DO, AS HELD BY THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX, U.P. V. KANPUR COAL SYNDICATE, (1964) 53 ITR 225, BUT IN THIS CASE, TH E CIT (A) DID NOT EXERCISE THIS RIGHT. THIS POWER, WHICH IS RECOGNIZED IN SUB - SECTION (4) OF SECTION 250, HAS TO BE EXERCISED BY THE CIT (A) AND THERE SHOULD BE MATERIAL ON RECORD TO SHOW THAT HE, WHILE DISPOSING OF THE APPEAL, HAD DIRECTED FURTHER ENQUIRY AND CALLED FOR THE CONFIRMATION LETTERS FROM THE ASSESSEE EVEN IN RESPECT OF RECEIPT OF MONIES FROM CUSTOMERS BY WAY OF CHEQUES. RULE 46A IS A PROVISION IN THE INCOME TAX RULES, 1962 WHICH IS INVOKED, ON THE OTHER HAND, BY THE ASSESSEE WHO IS IN AN APPEAL BEFORE THE CIT (A). 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 TO 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 REDUC E RULE 46A TO A DEAD LETTER BECAUSE IT WOULD THEN BE OPEN TO EVERY ASSESSEE TO FURNISH ADDITIONAL EVIDENCE BEFORE THE CIT (A) AND THEREAFTER CONTEND THAT THE EVIDENCE SHOULD BE ACCEPTED AND TAKEN ON RECORD BY THE CIT (A) BY VIRTUE OF HIS POWERS OF ENQUIRY UNDER SUB - SECTION (4) OF SECTION 250. THIS WOULD MEAN IN TURN THAT THE REQUIREMENT OF RECORDING REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE, THE REQUIREMENT OF EXAMINING WHETHER THE CONDITIONS FOR ADMITTING THE ADDITIONAL EVIDENCE ARE SATISFIED, THE REQU IREMENT THAT THE ASSESSING OFFICER SHOULD BE ALLOWED A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE ETC. CAN BE THROWN TO THE WINDS, A POSITION WHICH IS WHOLLY UNACCEPTABLE AND MAY RESULT IN UNACCEPTABLE AND UNJUST CONSEQUENCES. THE FUNDAMENTAL RULE WH ICH IS VALID IN ALL BRANCHES OF LAW, INCLUDING INCOME TAX LAW, IS THAT THE ASSESSEE I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 6 OF 8 SHOULD ADDUCE THE ENTIRE EVIDENCE IN HIS POSSESSION AT THE EARLIEST POINT OF TIME. THIS ENSURES FULL, FAIR AND DETAILED ENQUIRY AND VERIFICATION. A 7 - JUDGE BENCH OF THE SUP REME COURT IN KESHAV MILLS CO. LTD. V. COMMISSIONER OF INCOME - TAX, BOMBAY NORTH, AHMEDABAD (1965) 56 ITR SC 365 HAD OBSERVED AS UNDER: - PROCEEDINGS TAKEN FOR THE RECOVERY OF TAX UNDER THE PROVISIONS OF THE ACT ARE NATURALLY INTENDED TO BE OVER WITHOUT UNN ECESSARY DELAY, AND SO, IT IS THE DUTY OF THE PARTIES, BOTH THE DEPARTMENT AND THE ASSESSEE, TO LEAD ALL THEIR EVIDENCE AT THE STAGE WHEN THE MATTER IS IN CHARGE OF THE INCOME - TAX OFFICER. 23. IT IS FOR THE AFORESAID REASON THAT RULE 46A STARTS IN A NE GATIVE MANNER BY SAYING THAT AN APPELLANT BEFORE THE CIT (A) SHALL NOT BE ENTITLED TO PRODUCE BEFORE HIM ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE ADDUCED BY HIM BEFORE THE ASSESSING OFFICER. AFTER MAKING SUCH A GENERAL STATEMENT, WHICH IS IN CONSONANCE WITH THE PRINCIPLE STATED IN THE ABOVE JUDGMENT, EXCEPTIONS HAVE BEEN CARVED OUT THAT IN CERTAIN CIRCUMSTANCES IT WOULD BE OPEN TO THE CIT (A) TO ADMIT ADDITIONAL EVIDENCE. THEREFORE, ADDITIONAL EVIDENCE CAN BE PRODUCED AT THE FIRST APPELLATE STAGE WHEN CONDITIONS STIPULATE IN THE RULE 46A ARE SATISFIED AND A FINDING IS RECORDED. RULE 46 A READS: - 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 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 ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WH ICH 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 AD DITIONAL 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 EXAMINATIO N 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 I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 7 OF 8 (WHETHER 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 SECTION 271.] WE ARE HIGHLIGHTING THESE ASPECTS ONLY TO PRESS HOME THE POINT THAT THE CONDITIONS PRESCRIBED IN RULE 46A MUST BE SHOWN TO EXIST BEFORE ADDITIONAL EVIDENCE 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 EXERCISED IN A ROUTINE OR CURSORY MANNER. A DISTINCTION SHOULD BE RECOGNIZED AND MAINTAINED BETWEEN A CASE WHERE THE ASSESSEE INVOKES RULE 46A TO ADDUCE ADDITIONAL 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 - S ECTION (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 HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES RULE 46A, IT IS INCUMBENT UPON THE CIT (A) TO COMPLY WITH THE REQUIREMENTS OF THE RULE STRICTLY. 24. IN THE PRESENT CASE, THE CIT (A) HAS OBSERVED THAT THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WAS PREVENTED BY ADDUCING THEM BEFORE THE ASSES SING OFFICER. THIS OBSERVATION TAKES CARE OF CLAUSE (C) OF SUB - RULE (1) OF RULE 46A. THE OBSERVATION OF THE CIT (A) ALSO TAKES CARE OF SUB - RULE (2) UNDER WHICH HE IS REQUIRED TO RECORD HIS REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE REQUIREMEN T OF SUB - RULES (1) AND (2) OF RULE 46A HAVE BEEN COMPLIED WITH. HOWEVER, SUB - RULE (3) WHICH 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 OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE IS NOTHING IN THE ORDER OF THE CIT (A) TO SHOW THAT THE ASSESSING OFFICER WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AM OUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS, THE END RESULT HAS BEEN THAT ADDITIONAL EVIDENCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE ASSESSING OFFICER FURNISHING HIS COMMENTS AND WITHOUT VERIFICATION. SINCE THIS IS AN INDISPENSABLE REQUIREMENT, WE ARE OF THE VIEW THAT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO THE CIT (A) WITH THE DIRECTION TO HIM TO COMPLY WITH SUB - RULE (3) OF RULE 46A. IN OUR OPINION AND WITH RESPECT, THE ERROR COMMITTED BY THE TRIBUNAL IS THAT IT PROCEEDED TO MIX UP TH E POWERS OF THE CIT (A) UNDER SUB - SECTION (4) OF SECTION 250 WITH THE POWERS VESTED IN HIM UNDER RULE 46A. THE TRIBUNAL SEEMS TO HAVE OVERLOOKED SUB - RULE(4) OF RULE 46A WHICH ITSELF TAKES NOTE OF THE DISTINCTION BETWEEN THE POWERS CONFERRED BY THE CIT (A) UNDER THE STATUTE WHILE DISPOSING OF THE ASSESSEE S APPEAL AND THE POWERS CONFERRED UPON HIM UNDER RULE 46A. THE TRIBUNAL ERRED IN ITS INTERPRETATION OF THE PROVISIONS OF RULE 46A VIS - - VIS SECTION 250(4). ITS VIEW THAT SINCE IN ANY CASE THE CIT (A), BY VI RTUE OF HIS CONTERMINOUS POWERS OVER THE ASSESSMENT ORDER, WAS EMPOWERED TO CALL FOR ANY DOCUMENT OR MAKE ANY FURTHER ENQUIRY AS HE THINKS FIT, THERE WAS NO VIOLATION OF RULE 46A IS ERRONEOUS. THE TRIBUNAL APPEARS TO HAVE NOT APPRECIATED THE DISTINCTION BE TWEEN THE TWO PROVISIONS. IF THE VIEW OF THE TRIBUNAL IS ACCEPTED, IT WOULD MAKE RULE 46A OTIOSE AND IT WOULD OPEN UP THE POSSIBILITY OF THE ASSESSEES CONTENDING THAT ANY ADDITIONAL EVIDENCE SOUGHT TO BE INTRODUCED BY THEM BEFORE THE CIT (A) CANNOT BE SUB JECTED TO THE CONDITIONS PRESCRIBED IN RULE 46A BECAUSE IN ANY CASE THE CIT (A) IS VESTED WITH CONTERMINOUS POWERS OVER THE ASSESSMENT ORDERS OR POWERS OF INDEPENDENT ENQUIRY UNDER SUB - SECTION (4) OF SECTION 250. THAT IS A CONSEQUENCE WHICH CANNOT AT ALL B E COUNTENANCED. I.T.A. NO . 2196 / KOL ./20 1 0 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 8 OF 8 25. FOR THE ABOVE REASONS, WE ANSWER THE SUBSTANTIAL QUESTIONS OF LAW FRAMED IN PARAGRAPH 21 ABOVE, IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. THE ISSUE RELATING TO THE ADDITION OF RS. 1,61,67,600/ - MADE UNDER SECTION 68 OF THE A CT IS RESTORED TO THE CIT (A) WHO SHALL COMPLY WITH THE REQUIREMENTS OF RULE 46A AND TAKE A FRESH DECISION ON THE MERITS OF THE ADDITION IN ACCORDANCE WITH LAW. 26. THE APPEAL FILED BY THE REVENUE IS DISPOSED OF ACCORDINGLY. NO COSTS . 8. WE NOTICE THA T IN THE LD. CIT(APPEALS) S ORDER, THERE IS NO MENTION OF REMAND REPORT , THOUGH IN THE ORDER SHEET THERE IS SPECIFIC MENTION OF THE SAME. THEREFORE, IN ANY VIEW OF THE MATTER, LD. CIT(APPEALS) HAS CONSIDERED THE ADDITIONAL EVIDENCE WITHOUT CONSIDERING ASSE SSING OFFICER S COMMENTS. UNDER SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(APPEALS) FOR GIVING OPPORTUNITY TO ASSESSING OFFICER T O OFFER HIS COMMENTS ON THE SUBMISSIONS MADE BY THE ASSESSEE. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST , 201 5 . SD/ - SD/ - MAHAVIR SINGH S.V. MEHROTRA ( JUDICIAL MEMBER) ( ACCOUNTANT ME MBER) KOLKATA, THE 12 TH D AY OF AUGUST , 201 5 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3, KOLKATA, 8/2, ESPLANADE EAST, DWARLI HOUSE, 2 ND FLOOR, KOLKATA - 700 069 (2) M/S. RAHEE TRACK TECHNOLOGIES PVT. LTD., 45, CENTURY TOWERS, SHAKESP EARE SARANI, KOLKATA - 700 017 (3) COMMISSIONER OF INCOME - TAX (APPEALS) - I , KOLKATA (4) COMMISSIONER OF INCOME TAX - , KOLKATA ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .