Sanjay Kumar Gupta, Faridabad V. ITO, New Delhi

ITA 3491/DEL/2012

• Counselvise Citation: 349120114 RSA 2012
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKARDR
• Assessee Lawyers: P N MEHTAAR
• Keywords: Unexplained investment; Gift; Opportunity of being heard; Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I & SMC BENCH BEFORE SHRI I.C. SUDHIR, JM & SHRI A.N. PAHUJA, A M ITA NO.3491/DEL/2012 ASSESSMENT YEAR: 2008-09 SHRI SANJAY KUMAR GUPTA A-2132, GROUND FLOOR, GREEN FIELD COLONY, NEAR NHPC CHOWK, FARIDABAD (HARYANA) V/S . INCOME-TAX OFFICER, WARD 37 (1), NEW DELHI [PAN : AFYPG 0494 B] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P.N. MEHTA,AR REVENUE BY MS. Y. KAKKAR,DR DATE OF HEARING 03-10-2012 DATE OF PRONOUNCEMENT 12-10-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 02.07.2012 BY THE ASSESSEE AG AINST AN ORDER DATED 30 TH APRIL, 2012 OF THE LD. CIT(A)-XXVIII, NEW DELHI R AISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS WRONG IN CONFIRMING THE ADDITION OF ` ` 2,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF JEWELLERY. 2. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION ON THE GROUNDS THAT THE JEWELLERY WAS NOT SHOWN IN THE STATEMENT OF AFFAIRS FILED FOR 2006-07 ASSESSMENT. 3. THAT THE SOURCE OF INVESTMENT IN JEWELLERY WAS P ROVED AND AS SUCH CIT(A) OUGHT TO HAVE DELETED THE ADDITI FON MADE BY THE ASSESSING OFFICER. ITA NO.3491DEL./2012 2 4. THE ADDITION MADE IS AGAINST THE LAW AND FACTS O F THE CASE. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING INCOME OF ` ` 53,498/- FILED ON 15.12.2008 BY THE ASSESSEE, A CHA RTERED ACCOUNTANT HAVING INCOME FROM BUSINESS BESIDES INCO ME FROM OTHER SOURCES, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), WAS TAKEN UP FOR SCRUTIN Y WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (A.O. IN SHORT) ASKED THE ASSESSEE TO SUBMI T HIS STATEMENT OF AFFAIRS AS ON 31.3.2007 & 31.3.2008. AFTER OBTAINING THE SAID STA TEMENT OF AFFAIRS, THE AO NOTICED THAT THE ASSESSEE REFLECTED JEWELLERY OF ` 2,50,000/- DURING THE YEAR UNDER CONSIDERATION. TO A FURTHER QUERY BY THE AO, SEEKIN G SOURCE OF PURCHASE OF JEWELLERY, THE ASSESSEE REPLIED THAT HE PURCHASED J EWELLERY FOR ` 1,03,000/- ON 5.2.2007 THROUGH HIS SAVINGS BANK ACCOUNT WITH THE ICICI BANK WHILE REMAINING WAS RECEIVED FROM HIS IN LAWS BY WAY OF GIFT ON THE OCCASION OF HIS MARRIAGE IN FEBRUARY,2007. HOWEVER, THE ASSESSEE DID NOT FURNIS H ANY EVIDENCE, BILLS FOR PURCHASE OF JEWELLERY EITHER BY HIM OR HIS IN LAWS NOR SUBMITTED QUANTITATIVE DETAILS OR VALUE WISE DETAILS OF VARIOUS ITEMS OF JEWELLERY. SINCE THE JEWELLERY WAS NOT REFLECTED IN THE STATEMENT OF AFFAIRS AS ON 31. 3.2007 NOR ANY EVIDENCE REGARDING SOURCE OF ITS ACQUISITION WAS SUBMITTED BY THE ASSESSEE, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ADDE D THE AMOUNT OF ` 2,50,000/- BY WAY OF UNEXPLAINED INVESTMENT. 3. ON APPEAL, THE LD. CIT(A) UPHELD THE ADDITION, AFTER HAVING A REMAND REPORT FROM THE AO AND COMMENTS OF THE ASSES SEE THEREON, HOLDING AS UNDER:- I HAVE GONE THROUGH THE ASSESSMENT ORDER, REMAND R EPORT OF THE ASSESSING OFFICER AND WRITTEN SUBMISSION, REJOINDER OF THE APPELLANT. THE ASSESSING OFFICER HAS CONTENDED THA T THE ASSESSEE IS A CHARTERED ACCOUNTANT AND DERIVES INCOME FROM B USINESS AND PROFESSION AND INCOME FROM OTHER SOURCES. THE ASSE SSEE HAS ALSO ITA NO.3491DEL./2012 3 CLAIMED DEDUCTION U/S 24(B) AT ` `1,50,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED T O FILE STATEMENT OF AFFAIRS AS ON 31.3.2007 AND 31.3.2008. FROM THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE IT IS NO TICED THAT THE ASSESSEE HAS SHOWN JEWELLERY OF ` ` 2,50,000/-. VIDE ORDER SHEET ENTRY DATED 31.8.2010, THE ASSESSEE WAS REQUESTED T O EXPLAIN THE SOURCES OF ADDITION/INVESTMENT OF ` `2,50,000/-. VIDE REPLY DATED 4.10.2010, A NOTE ON ADDITION TO JEWELLERY WAS FILE D. THE NOTE STATES AS UNDER I HAVE PURCHASED JEWELLERY FOR ` `1,03,000/- THROUGH MY ICICI SAVING BANK ACCOUNT ON 5.2.2007 AN D RECEIVED JEWELLERY WORTH ` ` 1,47,000/- FROM MY IN-LAWS AS A GIFT ON THE OCCASION OF MY MARRIAGE IN FEBRUARY 2007 DURING THE FINANCIAL YEAR 2006-07. IN SUPPORT OF THE CLAIM, THE ASSESSEE HA S NOT FURNISHED ANY EVIDENCE, BILLS FOR PURCHASE OF THE JEWELLERY E ITHER BY HIMSELF OR BY HIS IN-LAWS. QUANTITATIVE DETAILS OR VALUE WISE DETAILS OF THE JEWELLERY ITEMS WERE ALSO NOT FILED. IDENTITY AND C REDIT WORTHINESS OF THE DONORS HAVE ALSO NOT BEEN EXPLAINED OR PROVIDED BY THE ASSESSEE. FURTHER, THE CONFIRMATION STATES THAT TH E JEWELLERY WAS PURCHASED OR MARRIAGE WAS HELD IN FEB. 2007. THEREF ORE THE JEWELLERY SHOULD HAVE BEEN REFLECTED IN THE STATEME NT OF AFFAIRS IN THE FINANCIAL YEAR 2006-07 BUT THE STATEMENT OF AFF AIRS FOR THE PERIOD ENDING 31.03.2007 SHOWS NO JEWELLERY. THE ASSESSEE' S EXPLANATION REGARDING SOURCE OF ADDITION TO JEWELLERY DURING TH E YEAR REMAINED UNEXPLAINED. HENCE, THE AMOUNT OF RS.250000/- WAS T REATED AS UNEXPLAINED INVESTMENTS. IN THE REMAND REPORT DATED 21.03.2012 THE ASSESSING OFFICER HAS STATED THAT ADDITIONAL EVIDENCES FILED BY THE ASSES SEE IS STRONGLY OBJECTED TO. 1. AS EVIDENT FROM ORDER SHEET ENTRY DATED 31.08.2 010 THE ASSESSEE WAS REQUESTED TO EXPLAIN SOURCES OF ADDITI ON/INVESTMENT OF ` .2,50,000/-. A FINAL SHOW CAUSE IN THIS REGARD WAS ALSO ISSUED ON 29/09/2010 ASKING THE ASSESSEE AGAIN TO EXPLAIN SOURCES OF ADDITION/INVESTMENT OF ` .2,50,000/-. IT MEANS THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD. MERELY SAYING THAT THE LD. ASSESSING OFFICER HAS WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE PROOF OF INVESTMENT IN JEWELRY MADE THE ADDITIONS WHICH IS AGAINST THE LAW IS NOT TENABLE. 2 AND 3 REGARDING THE ADDITION OF JEWELLERY WORTH ` .2,50,000/- THE ASSESSEE REPLIED VIDE HIS LETTER DATED 04/10/2010 A NOTE ON ADDITION TO JEWELLERY WAS FILED AS EVIDENT FROM ASSESSMENT O RDER WHICH IS AS UNDER- ITA NO.3491DEL./2012 4 'L HAVE PURCHASED JEWELLERY FOR RS.1, 03, 000/ - TH ROUGH MY ICICI SAVING BANK ACCOUNT ON 05/02/2007 AND RECEIVED JEWELLERY W ORTH RS.1,47,000/- FROM MY IN-LAWS AS A GIFT ON THE OCCASION OF MY MAR RIAGE IN FEB, 2007 DURING THE F. Y. 2006- 07.' THE CONFIRMATION SUBMITTED BY THE ASSESSEE STATES T HAT THE JEWELLERY WAS PURCHASED OR MARRIAGE WAS HELD IN FEB , 2007. THEREFORE, THE JEWELLERY SHOULD HAVE BEEN REFLECTED IN STATEMENT OF AFFAIRS IN THE F.Y. 2006-07 BUT THE STATEMENT ENDIN G 31.03.2007 SHOWS NO JEWELLERY. HENCE THE ASSESSEE'S EXPLANATIO N REGARDING SOURCE OF ADDITION OF JEWELLERY DURING THE YEAR REM AINED UNEXPLAINED. MOREOVER, IN SUPPORT OF HIS CLAIM THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE, BILLS FOR PURCHASE OF JEWELLERY EITHE R BY HIMSELF OR BY HIS IN-LAWS. QUANTITATIVE DETAILS OR VALUE WISE DET AILS OF THE JEWELLERY ITEMS WERE ALSO NOT FILED. IDENTITY AND CREDITWORTH INESS OF THE DONORS HAVE ALSO NOT BEEN EXPLAINED OR PROVIDED BY THE ASSESSEE. FROM THE ABOVE IT IS CLEAR THAT SUFFICIENT OPPORTUN ITY WAS AFFORDED TO THE ASSESSEE FOR FURNISHING EVIDENCE/EXPLANATION DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, NO FRESH EVID ENCE MAY BE ENTERTAINED. IN THE REJOINDER TO THE REMAND REPORT THE APPELLANT HAS STATED THAT THE ASSESSING OFFICER IN HIS REPORT DT. 21.03.2012 HAS JUSTIFIED THE ADDITIONS. THE ASSESSING OFFICER AFTER RECEIVING THE EXPLANATI ON ON ADDITION TO JEWELLERY FROM THE ASSESSEE HAS ASSUMED THAT ASSESSEE HAS FAILED TO PROVIDE THE NECESSARY DETAIL S AND MADE ARBITRARY ADDITIONS TO HIS INCOME WITHOUT GIVI NG ANY OPPORTUNITY TO HIM. SINCE ALL THE BILLS RELATED TO JEWELLERY WERE AVAILABLE WITH THE ASSESSEE THE QUANTITATIVE DETAIL S COULD BE FILED AT THE TIME OF ASSESSMENT PROCEEDINGS, IF THE OPPORTUNITY WOULD HAVE BEEN GIVEN TO ASSESSEE. THE ASSESSEE HAS FILED QUANTITY AND VALUE WISE DETAILS OF THE JEWELLERY IT EMS WITH THE PREVIOUS SUBMISSION DATED 6.3.2012. BESIDE ABOVE THE ONLY OTHER GROUND THAT THE ASSESSI NG OFFICER USED TO MAKE ADDITION WAS THAT THE CONFIRMATION OF ASSES SEE STATES THAT THE JEWELLERY WAS PURCHASED OR MARRIAGE WAS HELD IN FEB 2007. THEREFORE JEWELLERY SHOULD HAVE BEEN REFLECTED IN T HE STATEMENT OF AFFAIRS IN THE FINANCIAL YEAR 2006-07 BUT THE STATE MENT OF AFFAIRS FOR ITA NO.3491DEL./2012 5 THE PERIOD ENDING 31.03.2007 SHOWS NO JEWELLERY. HE NCE THE ASSESSEE'S EXPLANATION REGARDING SOURCE OF ADDITION OF JEWELLERY DURING THE YEAR REMAINED UNEXPLAINED. THOUGH THE ASSESSING OFFICER HAS OBJECTED TO ADMISS ION OF ADDITIONAL EVIDENCE, I STILL ADMIT THE SAME AND PRO CEED TO ADJUDICATE THE ISSUE IN DISPUTE ON MERITS. IT IS P ERTINENT TO PIN POINT THE FACT THAT THE SAID JEWELLERY DID NOT REFLECT IN THE STATEMENT OF AFFAIR FOR BOTH THE FINANCIAL YEARS 2006-07 AND 200 7-08 WHICH WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT CLEARLY INDICATES THAT FULL AND TRUE PICTURE OF THE ASSESSE ES ASSETS AND LIABILITIES WERE NOT DISCLOSED TO THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM INCLINED TO SUSTAIN ADDITION OF ` `2,50,000/- MADE BY THE ASSESSING OFFICER. APPEAL ON THIS GROUND IS DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. AR ON BEHALF OF THE ASSESSEE WHILE CARRYING US THROUGH PAGE 2 & 5 OF THE PAPER BOOK SUBMITTED TH AT THE ASSESSEE PURCHASED JEWELLERY WORTH ` 1,03,000/-ON 2.2.2007 AND PAID VIDE CHEQUE DEBITED TO THE ICICI BANK A/C OF THE ASSESSEE ON 5.2.2007.REMAININ G JEWELLERY WAS RECEIVED BY WAY OF GIFT ON THE MARRIAGE OF THE ASSESSEE ON 19.2 .2007. THE COPIES OF VARIOUS BILLS WERE PLACED ON PAGE 6 TO 13 OF THE PAPER BOOK . IN THESE CIRCUMSTANCES, THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDIT ION, THE LD. AR ADDED. ON THE OTHER HAND, THE LD. DR VEHEMENTLY ARGUED THAT THE A SSESSEE HAVING FAILED TO EXPLAIN THE SOURCE OF INVESTMENT IN JEWELLERY WORTH ` 2,50,000/-, WHICH DID NOT FIND PLACE IN HIS STATEMENT OF AFFAIRES AS ON 31.3.2007 , ADDITION HAD RIGHTLY BEEN UPHELD BY THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THE ISSUE BEFORE US IS REGARDING SOURCE OF AC QUISITION OF JEWELLERY OF ` 2,50,000/- REFLECTED IN THE STATEMENT OF AFFAIRS AS ON 31.3.2008 SUBMITTED BY THE ASSESSEE. THOUGH THE ASSESSEE CLAIMED BEFORE THE AO THAT JEWELLERY WORTH ` 1,03,000 WAS PURCHASED VIDE CHEQUE DEBITED IN HIS ICICI BANK A/C ON 5.2.2007 WHILE REMAINING WAS RECEIVED BY WAY OF GIFT ON HIS MARRIAGE IN FEBRUARY,2007, ITA NO.3491DEL./2012 6 THE ASSESSEE DID NOT FURNISH EITHER DETAILS OF ITEM S OF JEWELLERY OR BILLS IN SUPPORT OF PURCHASE OF JEWELLERY BY HIM OR HIS IN LAWS. AS A RESULT, AMOUNT WAS ADDED BY THE AO BY WAY OF UNEXPLAINED INVESTMENT.. ON APPEAL , THE ASSESSEE IS STATED TO HAVE SUBMITTED A PRAYER FOR ADMISSION OF ADDITIONA L EVIDENCE. A COPY OF THE SAID PRAYER HAS NOT BEEN PLACED BEFORE US. TO A QUERY BY THE BENCH, THE LD. AR SUBMITTED THAT COPY OF BILL DATED 2.2.2007 FOR PUR CHASE OF JEWELLERY BY THE ASSESSEE FROM M/S SADHU RAM SHYAM SUNDER,WZ-492A, MAIN MARKET, BASAI DARA PUR, NEW DELHI AND VARIOUS BILLS DATED 27.1.20 05, 10.2.2005, 12.11.2005, 14.3.2006, 28.3.2006, 25.11.2006, 8.1.2007 & 10.2.2 007 ISSUED BY NAVRATNA JEWELLERS, HARIHAR, PLACED IN PAPER BOOK ON PAGES 6 TO 13, WERE SUBMITTED BY WAY OF ADDITIONAL EVIDENCE. THOUGH THE AO OBJECTED TO ADMISSION OF ADDITIONAL EVIDENCE IN HIS REMAND REPORT DATED 21.3.2012, THE LD. CIT(A) ADMITTED THE SAID ADDITIONAL EVIDENCE WITHOUT RECORDING ANY REASONS I N HER ORDER, IN TERMS OF RULE 46A(2) OF THE IT RULES,1962 NOR VERIFIED EVEN THE GENUINENESS OF THE SAID ADDITIONAL EVIDENCE. INDISPUTABLY, THE STATEMENT OF AFFAIRS AS ON 31.3.2007 DID NOT INCLUDE THE VALUE OF JEWELLERY WORTH ` 2,50,000/-.AS IS APPARENT FROM A MERE GLANCE AT THE IMPUGNED ORDER, THE LD. CIT(A) ADMITT ED ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE IN HIS APPLICATION UNDER RULE 46A OF THE IT RULES,1962,WITHOUT FOLLOWING THE PROCEDURE PRESCRIB ED THEREIN AND WITHOUT RECORDING ANY REASONS. THE LD. CIT(A) DID NOT EVEN IDENTIFY THE RELEVANT CLAUSE OF RULE 46A(1) OF THE IT RULES,1962 UNDER WHICH THE CASE OF THE ASSESSEE FELL NOR THE LD. CIT(A) CALLED FOR ANY REPORT FROM THE AO ON THE GENUINENESS OF AFORESAID DOCUMENTS AFTER ADMITTING THE SAID ADDITIONAL EVID ENCE. THE LD. CIT(A) HAS NOT EVEN IDENTIFIED THE CIRCUMSTANCES UNDER WHICH THE A SSESSEE WAS PREVENTED BY ANY SUFFICIENT CAUSE IN SUBMITTING THE AFORESAID DO CUMENTS BEFORE THE AO. THE GENUINENESS OF THE SAID EXPENDITURE NOWHERE SEEMS TO HAVE BEEN EXAMINED BY THE LD. CIT(A) NOR ALLOWED ANY OPPORTUNITY TO THE A O TO EXAMINE THE GENUINENESS OF BILLS SUBMITTED BY THE ASSESSEE. APPARENTLY, THE LD. CIT(A) NOWHERE DIRECTED THE AO TO EXAMINE THE GENUINENESS OF ADDITIONAL EVI DENCE AFTER THE LD. CIT(A) ADMITTED THE SAME EVEN WHEN THE AO OBJECTED AGAINST ITS ADMISSION NOR SHE HERSELF UNDERTOOK ANY INDEPENDENT ENQUIRIES IN THIS REGARD. THE ISSUE WHICH NOW ITA NO.3491DEL./2012 7 EMERGES BEFORE US IS AS TO WHETHER OR NOT THE LD. C IT(A) ADHERED TO PROCEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES,1962 WHIL E ADMITTING ADDITIONAL EVIDENCE. IT IS NOT EVIDENT FROM THE IMPUGNED ORDER AS TO WHY THE ASSESSEE DID NOT SUBMIT BEFORE THE AO, RELEVANT BILLS FOR PURCHA SE OF JEWELLERY. NOW WHAT ARE THE REASONS GIVEN IN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, IS NOT EVIDENT FROM THE IMPUGNED ORDER NOR THE LD. AR EXPL AINED BEFORE US. IN NUTSHELL, THE LD. CIT(A) UPHELD THE ADDITION WITHOUT FOLLOWIN G THE PROCEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES,1962 . THE LD. CIT(A ) ARRIVED AT HER CONCLUSIONS WITHOUT ASCERTAINING AS TO WHETHER OR NOT THE ASSES SEE WAS PREVENTED BY SUFFICIENT CAUSE FROM SUBMITTING THE AFORESAID ADDI TIONAL DOCUMENTS/INFORMATION BEFORE THE AO AS PER PROVISIONS OF RULE 46A OF THE IT RULES, 1962 . HERE WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF RUL E 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 ITA NO.3491DEL./2012 8 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 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, ENTAIL AN ELE MENT 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 TAXMANN.COM27(DELHI) HELD THAT THAT THE CON DITIONS 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 . ONCE THE ASSESSEE INVOKES RULE 46A AND PRAYS FOR ADMISSION OF ADDITIONAL EVIDENCE BEFO RE THE CIT (A), THEN THE ITA NO.3491DEL./2012 9 PROCEDURE PRESCRIBED IN THE SAID RULE HAS TO BE SCR UPULOUSLY FOLLOWED. A DISTINCTION SHOULD BE RECOGNIZED AND MAINTAINED BET WEEN A CASE WHERE THE ASSESSEE INVOKES RULE 46A TO ADDUCE ADDITIONAL EVID ENCE BEFORE THE CIT (A) AND A CASE WHERE THE CIT (A), WITHOUT BEING PROMPTE D 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-SECTIO N (4) OF SECTION 250. IT IS ONLY WHEN HE EXERCISES HIS STATUTORY POWER SUO MOTO UN DER THE ABOVE SUB-SECTION THAT THE REQUIREMENTS OF RULE 46A NEED NOT BE FOLLO WED. ON THE OTHER HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM I NVOKES RULE 46A, IT IS INCUMBENT UPON THE CIT (A) TO COMPLY WITH THE REQUI REMENTS OF THE RULE STRICTLY SO THAT THE RULE IS MEANINGFULLY EXERCISED AND NOT EXERCISED IN A ROUTINE OR CURSORY MANNER . 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 AO HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME. IN THE INSTANT CAS E, THERE IS NOTHING IN THE IMPUGNED ORDER OF THE LD. CIT (A) TO SHOW THAT AFT ER THE OBJECTIONS WERE RAISED BY THE AO IN HIS REMAND REPORT AGAINST ADMISSION OF ADDITIONAL EVIDENCE, THE LD. CIT(A) ASKED THE AO TO EXAMINE THE GENUINENESS OF T HE ADDITIONAL EVIDENCE AND AS ALREADY STATED, THE LD. CIT(A) DID NOT RECORD AN Y REASONS BEFORE ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE END RESULT HAS BEEN THAT ADDITIONAL EVIDENCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE AO FUR NISHING HIS COMMENTS AND WITHOUT VERIFICATION NOR THE LD. CIT(A) RECORDED HE R FINDINGS ON THE SAID ADDITIONAL EVIDENCE. SINCE IN THE CASE UNDER CONSIDERATION, TH E LD. CIT(A) DID NOT FOLLOW THE PROCEDURE LAID DOWN IN RULE 46A OF THE IT RULES,196 2 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 ,THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, VACATE THE FIND INGS OF THE LD. CIT(A) AND RESTORE THE ISSUES RAISED IN VARIOUS GROUNDS OF APPEAL BEFO RE US TO HER FILE, WITH THE DIRECTIONS TO FOLLOW THE MANDATE IN TERMS OF RULE 4 6A OF THE IT RULES, 1962 AS ALSO PRINCIPLES OF NATURAL JUSTICE AND THEREAFTER, DISPOSE OF THE MATTER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPOR TUNITY TO BOTH THE PARTIES. WITH ITA NO.3491DEL./2012 10 THESE DIRECTIONS, GROUND NOS. 1 TO 3 IN THE APPEAL ARE DISPOSED OF, AS INDICATED HEREINBEFORE. 6. GROUND NO.4 IN THE APPEAL BEING GENERAL IN NATUR E, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AND IS THEREFORE, DISMISSED. 7. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US . 8. IN THE RESULT, APPEAL IS ALLOWED BUT FOR ST ATISTICAL PURPOSES. SD/- SD/- (I.C. SUDHIR) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. INCOME-TAX OFFICER,WARD 37 (1),NEW DELHI 3. CIT CONCERNED. 4. CIT(A)-XXVIII, NEW DELHI. 5. DR, ITAT, I &SMC BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT