ACIT, New Delhi V. M/s Nirula Handicrafts Bazar P. Ltd., New Delhi

ITA 3886/DEL/2012

• Counselvise Citation: 388620114 RSA 2012
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AROOP KUMAR SINGH
• Assessee Lawyers: V K GUPTA
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI E BENC H BEFORE SHRI I.C. SUDHIR , JM & SHRI A.N. PAHUJA, AM (APPELLANT) (RESPONDENT) ASSESSEE BY SH. V.K.GUPTA , AR REVENUE BY SH. AROOP KUMAR SINGH, 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 27.07.2012 BY THE REVENUE AGA INST AN ORDER DATED 30.03.2012 OF THE LD. CIT(A)-XVI, NEW DELHI, RAISES FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE AMOUNT OF ` . 45,76,244/- ON ACCOUNT OF DISALLOWANCE OF CREDITORS MADE BY THE A.O. DUE TO NON SUBMITTING OF CONFIRMATION, WHICH WAS SURRENDERED BY THE ASSESSEE DURING THE ASSESSMENT P ROCEEDINGS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE FILED ADDITIONAL EVIDENCE UNDER RULES 46A REGARDING CONFIRMATION OF 23 CREDITORS OF ` . 45,76,244/- DURING APPELLATE PROCEEDINGS BUT A.O. IN ITS REMAND REPORT HAS SUBMITTED THAT THE ASSESSEE COMPANY HAS SHOWN INABILITY TO FURNISH FUR THER CONFIRMATIONS DURING THE ASSESSMENT PROCEEDINGS AND CASE WAS DECIDED ON MERITS AND MATERIAL AVAILABLE ON RECORD. 3 THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL . ITA NO.3886/DEL./2012 ASSESSMENT YEAR: 2008-09 ACIT,CIRCLE-13(1), ROOM NO.-406, C.R.BUILDING, I.P.ESTATE , NEW DELHI. V/S . M/S NIRULA HANDICRAFTS BAZAR P. LTD., 1, DOCTORS LANE, GOLE MARKET,NEW DELHI [PAN : AAACN01 40M] I.T.A .NO.-3886/DEL./2012 2 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT E-RETURN DECLARING INCOME OF ` .51,71,338/- FILED ON 28.09.2008 BY THE ASSESSEE, ENGAGED IN EXPORTS OF CARPETS, HANDICRAFTS ETC., WAS REVISED ON 28.3.2009,DECLAING INCOME OF ` 1,81,76,221/- .THEREAFTER, THE RETURN SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) ISSUED ON 18.08.2009. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER[AO IN SHORT] ASKED THE ASSESSEE TO SUBMIT COMPLETE DETAILS, NAME AND A DDRESS OF SUNDRY CREDITORS EXCEEDING ` 80,000/- EACH ALONG WITH THEIR CONFIRMATIONS AS ALS O THE AMOUNT OUTSTANDING ON 31.03.2008. ON THE BASIS OF DETAILS OBTAINED FROM THE ASSESSEE, THE AO ISSUED A NOTICE U/S 133(6) OF THE ACT TO 32 PARTIES , OF WHICH 5 NOTICES WERE RETURNED BACK UNSERVED WITH THE REMARKS INCOMPLETE ADDRESS OR LEFT WITHOUT ADDRESS. IN 22 CASES, CONFIRMATIONS WERE RECEIVED WHILE IN 5 CASES , NO REPLY WAS RECEIVED. TO A FURTHER QUERY BY THE AO, SEEKING REMAINING CONFIRMA TIONS WITH THE REQUEST TO PRODUCE THE RELEVANT PERSONS, THE ASSESSEE REPLIED VIDE LET TER DATED 24.12.2010 AS UNDER :- YOUR HONOUR VIDE ORDER SHEET ENTRY DATED 13.12.201 0 HAS ASKED THE ASSESSEE TO FILE CONFIRMATION IN RESPECT OF SUN DRY CREDITORS BALANCES OUTSTANDING IN THE BOOKS OF ACCOUNTS EXCEEDING ` .80,000/-. AS REQUIRED, THE ASSESSEE HAS TRIED TO OBTAIN THE CONFIRMATION F ROM SUCH PARTIES, BUT DUE TO SHORTAGE OF TIME, NON AVAILABILITY OF CONCER NED PERSONS, DISTANCE AND CLIMATIC CONDITION IN THE CASE OF UP, PUNJAB, K ASHMIR ETC., SMALL WEAVERS, SMALL ARTISAN, SMALL TIME TRADERS BELONGS TO COTTAGE INDUSTRIES COULD NOT BE CONTACTED. YOUR HONOUR WILL APPRECIA TE THAT FROM THE LIST OF SUNDRY CREDITORS, MOST OF THE PARTIES ARE SMALL WEA VERS BASED AT SRINAGAR, KASHMIR ALSO AND THEY VISIT OUR SHOP TWO TO THREE T IMES IN A YEAR OR SO. DUE TO BAD WEATHER AT KASHMIR NOW, THEY COULD NOT B E CONTACTED, AND IN OTHER CASES NON-AVAILABILITY OF CONCERNED PERSONS E TC. NOTWITHSTANDING ABOVE DIFFICULTY, THE ASSESSEE COULD MANAGE TO FILE CONFIRMATION IN RESPECT OF 122 PARTIES EXCEEDING ` .80,000/- WHERE THE BALANCES OUTSTANDING WORKED OUT TO ` .1,68,19,565/-. AS PER LIST ENCLOSED, CONFIRMATION IN RESPECT OF 23 PARTIES COULD NOT BE FILED OWNING TO TIME CONSTRAINT, NON AVAILABILITY OF CONCERNED PERSONS ETC. THE AMOUNT OF BALANCES OUTSTANDING IN RESPECT OF 23 PARTIES WHERE CONFIRMA TIONS COULD NOT BE FILED WORKS OUT TO ` .45,76,244/-. TO BUY PEACE, TO AVOID UNDUE HARDSHIPS, LITIGATIONS AND DUE TO NON- FILING OF CONFIRMATION IN RESPECT OF ENCLOSED PARTI ES, WE HEREBY OFFER FOR TAXATION ` .45,76,244/- IN RESPECT OF 23 PARTIES SUBJECT TO TH E CONDITION THAT NO PENALTY PROCEEDINGS U/S 271(1)(C) OF ACT OR PROS ECUTION PROCEEDINGS OR ANY ADVERSE VIEW SHOULD BE TAKEN AGAINST THE ASSESS EE COMPANY. 2.1 SINCE THE ASSESSEE EXPRESSED ITS INABILITY T O FURNISH FURTHER CONFIRMATIONS NOR PRODUCED THE CREDITORS FOR CROSS-EXAMINATIONS AND U LTIMATELY OFFERED THE AMOUNT TO TAX I.T.A .NO.-3886/DEL./2012 3 TO THE EXTENT OF ` .45,76,244/-,THE AO WHILE RELYING UPON THE DECISIO N IN SUMATI DAYAL VS. CIT, 214 ITR 801(SC) ACCEPTED THE OFFER OF THE ASSESSEE AND ADDED THE AMOUNT OF ` 45,76,244/- TO TAX. 3. DESPITE SURRENDER OF AMOUNT BEFORE THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED ADDITIONAL EVID ENCE IN THE FORM OF CONFIRMATIONS OF THE 23 PERSONS, IN TERMS OF RULE 46A OF THE INCOME TAX RULES, 1962 ON THE GROUND THAT THE CONFIRMATIONS COULD NOT BE FILED DUE TO SHORTAG E OF TIME AND NON ALLOWABILITY OF OPPORTUNITY BY THE AO AGAINST THE PRINCIPLES OF NAT URAL JUSTICE. THE LD. CIT(A) ADMITTED ADDITIONAL EVIDENCE UNDER RULE 46A(1)(B) OF THE IT RULES 1962 WHILE MENTIONING THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FIL ING THE CONFIRMATIONS OF ALL THE SUNDRY CREDITORS EXCEEDING RS.80,000/- EACH AND DEL ETED THE ADDITION, AFTER HAVING A REMAND REPORT OF THE AO AND COMMENTS OF THE ASSESSE E THEREON,HOLDING AS UNDER :- AS DISCUSSED ABOVE, THE ASSESSING OFFICER MADE AN ADDITION OF ` .45,76,244/- TO THE INCOME OF THE APPELLANT ON ACCO UNT OF 23 SUNDRY CREDITORS EXCEEDING ` . 80,000, OUTSTANDING AS ON 31.03.2008, FOR NON- PRODUCTION OF THEIR CONFIRMATIONS BY THE APPELLANT BEFORE THE FINALIZATION OF THE ASSESSMENT PROCEEDINGS. ON GOING THROUGH THE S UBMISSIONS OF THE APPELLANT AS WELL AS THE COPIES OF CORRESPONDENCE B ETWEEN THE APPELLANT AND THE AO, SUBMITTED BEFORE ME, IT IS OBSERVED THA T INITIALLY THE ASSESSING OFFICER ASKED THE APPELLANT TO FURNISH CONFIRMATION S OF SUNDRY CREDITORS ABOVE PRACTICAL LIMITS. IT HAS BEEN SUBMITTED TH AT IN VIEW OF THE LARGE NUMBER OF SUNDRY CREDITORS (APPROXIMATELY 550), THE ASSESSING OFFICER WAS REQUESTED BY THE APPELLANT TO RAISE THE CUT-OFF LIM IT OF SUNDRY CREDITORS WHOSE CONFIRMATIONS WERE TO BE FILED. THE ASSESSIN G OFFICER ENHANCED THE LIMIT TO ` .50,000/- AND THEN TO ` .80,000/-. THE APPELLANT FURNISHED BEFORE THE AO. CONFIRMATIONS OF AS MANY AS 302 PARTIES, INCLUD ING SUNDRY CREDITORS AS ON 31.03.2008 BELOW THE LIMIT OF ` 80,000/- PRESCRIBED BY THE AO CONFIRMATIONS OF 122 SUNDRY CREDITORS ABOVE ` 80,000/- WERE FILED AND CONFIRMATIONS OF 23 PARTIES TO WHOM AMOUNTS PAYABLE EXCEEDED ` 80,000/- REMAINED TO BE FILED ON 24.12.2010 BY THE APPELLANT FOR THE REASON THAT MOST THE THESE PARTIES WERE FROM OUTSIDE DELHI, MAINLY F ROM JAMMU & KASHMIR,, BEING SMALL TRADERS BELONGING TO THE UNORGANIZED SE CTOR. IT HAS BEEN SUBMITTED THAT OWING TO THE SHORTAGE OF TIME PROVID ED BY THE ASSESSING OFFICER TO FILE THE CONFIRMATIONS OF SO MANY PARTIE S (MANY OF THEM LOCATED OUTSIDE DELHI IN JAMMU & KASHMIR) AND ALSO BECAUSE OF THE EXTREME COLD CONDITIONS IN JAMMU & KASHMIR AT THAT TIME OF THE Y EAR, CONFIRMATIONS OF ALL THE CREDITORS ABOVE ` .80,000/- COULD NOT BE OBTAINED BY THE APPELLANT FO R FILING BEFORE THE AO. ACCORDINGLY, I AM OF THE VIE W THAT THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE CONFI RMATIONS OF ALL THE SUNDRY CREDITORS EXCEEDING ` . 80,000/- IN THE TIME PROVIDED BY THE AO AND THAT THE CASE OF THE APPELLANT IS COVERED BY RULE 46(1)(B). THE ADDITIONAL EVIDENCE I.T.A .NO.-3886/DEL./2012 4 FILED BEFORE ME BY WAY OF CONFIRMATION OF THESE 23 SUNDRY CREDITORS IS BEING, THEREFORE, ADMITTED. SINCE CONFIRMATIONS OF 23 SUN DRY CREDITORS TOTALING TO ` .45,76,244/- WERE FILED DURING THE COURSE OF APPELL ATE PROCEEDINGS FOR THE FIRST TIME, THE MATTER WAS REMANDED TO THE AO WHO V IDE LETTER DATED 14.07.2011 HAS SENT HIS REPORT. THE APPELLANT HAS SUBMITTED REJOINDER TO THE SAME AS FOLLOWS :- QUERY:-(A) ALL PAYMENTS HAVE BEEN MADE IN CASH IN P RIOR DATES AGAINST PURCHASES MADE IN LATER DATES. REPLY:- NO DETAILS OF SUCH PAYMENTS HAVE BEEN MENTI ONED BY THE LD. A.O. GENERALLY NO SUCH NATURE OF PAYMENT WAS THERE EXCEP T IN EXCEPTIONAL CIRCUMSTANCES WHERE GOODS WERE TO BE PU RCHASED AGAINST SPECIFIC ORDERS ETC. HERE, IT WILL NOT BE OUT OF PLACE TO MENTION THAT THE SAME QUERY WAS ALSO RAISED DURING THE ASSESSMENT PROCEEDINGS AND REPLIED VIDE PARA 3(A) LETTER DATED 20.12.2010. COPY OF THE SAME IS ENCLOSED HEREWITH VIDE ANNEXURE NO. L PAGES NO. 126 TO 127. QUERY:-(B) IN SEVERAL ACCOUNTS IN THE LEDGER OF SUN DRY CREDITORS, ONLY PAYMENTS HAVE BEEN MADE AGAINST OPENING BALANCE AND NO PURCH ASES HAVE BEEN MADE DURING THE YEAR. REPLY:- IF AMOUNT IS PAYABLE AGAINST THE OPENING BA LANCE B/F, LEGALLY PAYMENT WAS TO BE MADE, FURTHER PURCHASE NOT COMPUL SORY FOR MAKING PAYMENT AND NOTHING WRONG IS THERE. GOODS U SED TO BE PURCHASED AS PER THE REQUIREMENTS, CONSIDERING THE DEMAND OF GOODS WITH SUPPLIER, QUALITY, ETC. SAME QUERY WAS RAISED DURING THE ASSESSMENT PROCEE DINGS AND REPLIED VIDE PARA 3(B) LETTER DATED 20.12.2010. CO PY ENCLOSED HEREWITH VIDE ANNEXURE NO. L PAGE NO. 127. QUERY:-(C) NOTICES U/S 133(6) ISSUED TO VARIOUS PAR TIES ON SPECIFIC ADDRESSES AS PROVIDED BY THE ASSESSEE. HOWEVER, IN TWO CASES, V IZ., M/S CHIRAG ENTERPRISES, JAIPUR, THE NOTICE CAME BACK WITH REMA RK INCOMPLETE ADDRESS AND M/S LIBAS IMPEX, NEW DELHI, THE NOTICE HAS BEEN RETURNED WITH REMARKS NO SUCH FIRM. THE ASSESSEE , IN RESPONSE TO SHOW CAUSE NOTICE IN THIS RESPECT, EXPRESSED ITS IN ABILITY TO PRODUCE THE PERSONS FOR CROSS-EXAMINATION. REPLY:- RESPECTED MADAM, THE SAME QUESTION WAS ALSO RAISED DURING THE ASSESSMENT PROCEEDINGS. THE NOTICES WERE RETURNED WITH REMARKS INCOMPLETE ADDRESS AND NO SUCH FIRM. AGAINST T HE QUERY RAISED REPLY WAS FILED VIDE OUT LETTER DATED 24.12.2010. COPY OF THE SAME HAVE ALREADY BEEN FILED VIDE OUR LETTER DATED 06.06 .2011 AND VIDE ANNEXURE NO. K PAGE NO. 122 TO 125 AT PARA NO.1. DURING THE ASSESSMENT PROCEEDINGS CONFIRMATION COP Y OF ACCOUNTS WERE FILED AND POINTED OUT ABOUT THE WRONG ADDRESS ON THE ENVELOPS SENT BY THE DEPARTMENT TO THE ABOVE PARTIES, FURTHE R ADDRESSES WERE ALSO FURNISHED, COPY OF BILLS RAISED WERE ALSO FILED HAVING TELEPHONE NO.S, IN THE CASE OF M/S LIBAS IMPEX EMAI L ADDRESS & WEBSITE ALSO. BOTH THE PARTIES ALSO REGISTERED UND ER VAT ACT IN THEIR RESPECTIVE STATES. MERE RETURN OF LETTER SENT BY T HE DEPARTMENT I.T.A .NO.-3886/DEL./2012 5 CANNOT GIVE THE RISE OF CAUSE FOR CONCEALMENT OF IN COME. HOWEVER, IT WILL NOT BE OUT OF PLACE TO MENTION THAT OUT EXP LANATION WAS ACCEPTED BY LD. A.O. AND NO ADDITION MADE. QUERY:- AGAINST THE CONTENTION OF LD. A.O. THAT:-AS SESSEE HAS ITSELF EXPRESSED ITS INABILITY TO FURNISH FURTHER CONFIRMA TIONS. REPLY:- IN THIS RESPECT, WE SUBMIT HERE AS UNDER :- AS STATED IN OUT EARLIER REPLY FILED VIDE LETTER DA TED 06.06.2011, TOTAL CREDITORS FOR AMOUNTING TO ` . 4.7 CRORES CONSISTING OF 550 PARTIES, AMOUNT RANG ING BETWEEN MERE RS. 1000/- TO ` .29.85 LACS WERE REQUIRED BY THE A.O. AS PER QUESTION AT S.NO.5 VIDE QUESTIONNAIRE DATED 19.10.2010(COPY FILED VIDE OUT LETTER DATED 06.06.2011 AT S.NO.9) MENTION ED TO FILE CONFIRMATIONS ABOVE PRACTICAL LIMITS. LATER ON LD. A.O. ORDERED TO FI LE ADDRESSES AND CONFIRMATIONS OF CREDITORS EXCEEDING ` . 50,000/-. APPELLANT FILED ADDRESSES AS DESIRED. AND REQUESTED TO ENHANCE THE LIMIT TO FILE CONFIRMATION S FOR CREDITORS OF RS.80,000/- AND ABOVE, AND ACCEPTED THE SAME VIDE ORDER SHEET DATED 13.12.2010. INCOME TAX ORDER PASSED ON DATED 24.12.2010 IN 9 WORKING DAYS EXCLUDING 2 WEEKLY OFF. 5 LETTERS WERE FILED DATED 15.12.2010, 16.12.2010, 20 .12.2010, 23.12.2010 & 24.1222.2010. APPELLANT COMPANY FILED TOTAL CONFIRMATION 302 WHI CH INCLUDES 122 CREDITORS EXCEEDING ` . 80,000/- AND ABOVE (OUT OF ONE 145 CREDITORS OF R S.80,000/- AND ABOVE). CONFIRMATIONS ONLY FOR 23 CREDITORS COU LD NOT BE FILED. REGARDING FILING OF CONFIRMATIONS, REPLY FILED IN O UT LETTERS-DETAILS MENTIONED BELOW:- A). YOUR HONOR IS REQUESTED TO KINDLY GRANT US ONE WEEK TIME TO ENABLE US TO FILE THE REMAINING CONFIRMATIONS. IT WILL NOT BE O UT OF PLACE TO MENTION THAT CREDITORS BELONG TO THE WEAVER COMMUNITY, SMALL TIM E TRADERS, BELONG TO THE COTTAGE INDUSTRIES SECTOR AND FROM UNORGANIZED SECTOR. BELONGS TO KASHMIR (J & K) AND THIS IS THE WINTER WEATHER, TEM PERATURE IS VERY LOW AND USUALLY IN THOSE DAYS USED TO GO FOR BUSINESS PURPO SES OUTSIDE OF KASHMIR, THEIR FAMILIES ALSO SHIFT TO OTHER CONVENIENT AREAS . HENCE, REQUESTED TO WAIVE THE REQUIREMENT OF FILING THE REMAINING CONFI RMATIONS OF ACCOUNTS. OTHERWISE THEY ARE BONA FIDE CREDITORS. PARA 1 OF LETTER DATED 23.12.2010 COPY ENCLOSED VIDE ANNEXURE NO. M PAGE NO.128 TO 129 . B). ON THE LAST DATE OF HEARING FURTHER ASKED TO F URNISH ADDRESSES OF THE ALL CREDITORS AND FILING OF CONFIRMATIONS OF ALL THE SU NDRY CREDITORS EXCEEDING ` . 80,000/-. MOST OF THE CREDITORS ARE FROM THE WEAVE R COMMUNITY, SMALL TIME TRADERS BELONGING TO THE COTTAGE INDUSTRIES SECTOR AND FROM UNORGANIZED SECTOR OF MINI SUPPLIERS OF TRADING GOODS. THE CRE DITORS ARE RANGING FROM MERE ` 2,000.00 OR EVEN BELOW THE SAME. TOTAL CREDITORS C ONSIST OF APPROXIMATELY 550 CREDITORS. YOUR HONOURS HAVE RED UCED THE FIGURE TO ` 80,000.00. IN SUCH A SHORT SPAN OF TIME CONFIRMATI ON OF 302 CREDITORS HAVE BEEN FILED. INCLUSIVE OF LESS THAN THE LIMITS PRES CRIBED. PHOTOCOPY OF THE LETTER DATED 24.12.2010 HAVE BEEN FILED VIDE OUR RE PLY FILED BEFORE YOUR HONOR VIDE LETTER DATED 06.06.2011 COPY ENCLOSED VI DE ANNEXURE NO. K PAGE 122 TO 125. CONFIRMATIONS OF 23 CREDITORS (SURRENDER):- WHIC H COULD NOT BE FILED I.T.A .NO.-3886/DEL./2012 6 HAVE ALREADY BEEN FILED VIDE OUR LETTER DATED 06.06.2011 BEFORE YOUR HONOR ALONG WITH THE COPY OF THEIR ACCOUNTS FOR THE NEXT FINANCIAL YEAR 2008-09 VIDE ANNEXURE NO. 1 PAGE 87 TO 118, FROM THE SAME IT MAY BE OBSERVED THAT AGAINST THE OPENING BALANCE AMO UNT WERE ALSO PAID, PURCHASES MADE AND THE SAME CANNOT BE TREATED AS BO GUS AND INGENUINE, THE SAME WERE THE REGULAR SUPPLIERS. --------------------------------------------------- ------- FIND ENCLOSED HEREWITH A STATEMENT GIVING T HE NAMES OF THE CREDITORS SURRENDERED ALONG WITH AMOUNTS OUTSTANDIN G AS ON 31.03.2007, 31.03.2008 AND 31.03.2009 VIDE ANNEXURE NO. N PAGE NO.130 FROM THE SAME IT MAY BE SEEN THAT MOST OF THE CASES AS ON 31.03.2008 HAVE BEEN PAID OFF IN THE NEXT YEAR AND CREDITOR S ARE ADMITTING THE SAME. HENCE, THE AMOUNT OUTSTANDING AS ON 31.03.2008 CANNOT BE TREATED AS BOGUS WHICH IS AGAINST THE NATURAL LAW OF JUSTIC E, UNLAWFUL, AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. LD. A.O HAVE NOT GIVEN ANY ADVERSE COMMEN TS AGAINST THE EVIDENCES/CONFIRMATIONS FILED AS PART OF ADDITIONAL EVIDENCE. THERE WERE THE REASONS WHICH PREVENTED TO SUBMIT THE CONFIRMATIONS. RESPECTED MADAM, REASONS WERE BEYOND THE CONTROL. HENCE, CONFIRMATIONS COULD NOT BE FILED. THERE WAS NO REASON TO TREAT THE UNCONFIRMED AS BOG US. HENCE, NO ADDITION CAN BE MADE. COPY OF ACCOUNT IN THE BOOKS OF THE APPELLANT OF TH E 23 PARTIES:- FIND ENCLOSED HEREWITH OF THE COPY OF ACCOUNT IN THE BOO KS OF THE APPELLANT OF THE 23 PARTIES. VIDE ANNEXURE NO. O PAGE NO.1 TO 27 FRO M THE SAME, IT MAY BE OBSERVED THAT THEY WERE REGULAR SUPPLIERS, IN MOST OF THE CA SES AMOUNT PAID AGAINST THE OPENING BALANCE, PURCHASES MADE AND AMOUNT PAID ALS O AGAINST THE SAME. CONFIRMATIONS OF ACCOUNT HAVE ALREADY BEEN FILED VI DE OUT LETTER DATED 06.06.2011 VIDE ANNEXURE NO. H PAGE 63 TO 86. 1). REAL OPPORTUNITY OF BEING HEARD THE AMOUNT WAS SURRENDERED DUE TO WANT OF CONFI RMATION AND THE SAME COULD NOT BE FILED DUE TO SHORTAGE OF TIME. HENCE, NO REAL OPPORTUNITY OF HEARD WAS GIVEN. ADDITION C ANNOT BE MADE. 2). NO ORDER CAN BE PASSED AGAINST THE PRINCIPLE OF THE NATURAL LAW OF JUSTICE :- LD. A.O. HAVE RELIED THE CASE OF SUMATI DAYAL V /S CIT(SC) 214 ITR 801. THE RATIO GIVEN IN THE ABOVE CASE, ARE MENTI ONED BELOW:- THE WORD MAY HAS BEEN USED IN ALL OF THE SECTIO NS, THEREBY GIVEN THE DISCRETION TO THE ASSESSING OFFICER TO TREATED A PARTICULAR SUM AS INCOME OR NOT. THEREFORE, EVEN IF THE ASSESSEE DOES NOT P ROVIDE AN EXPLANATION, OR PROVIDES ONE I.E UNSATISFACTORY, IT IS NOT NECESSAR Y IN ALL CASES FOR THE AMOUNT TO BE TREATED AS THE ASSESSEES TAXABLE INCO ME. KANGA PALKHIWALA AND VYAS, 9 TH EDITION, PAGE NO-1266. IN VIEW OF THE ABOVE, YOUR HONOR IS REQUESTED O KI NDLY ACCEPT THE ADDITIONAL EVIDENCE AND DELETE THE ADDITION MADE & OBLIGE. 4.3 AFTER CAREFUL CONSIDERATION OF THE DISCUSSION I N THE ASSESSMENT ORDER, THE SUBMISSION OF THE APPELLANT ALONG WITH THE ADDI TIONAL EVIDENCES, I.T.A .NO.-3886/DEL./2012 7 THE REMAND REPORT OF THE A.O AND THE REJOINDER OF T HE APPELLANT TO THE SAME, I AM OF THE VIEW THAT THE APPELLANT WAS PREVE NTED BY SUFFICIENT CAUSE FROM PRODUCING THE CONFIRMATIONS OF THE 23 SU NDRY CREDITORS ABOVE ` . 80,000/- BEFORE THE ASSESSING OFFICER. FOR THE R EASONS DISCUSSED IN PARA 4.2 ABOVE, THE ADDITIONAL EVIDENC E HAS BEEN ADMITTED BY ME. IN HIS REMAND REPORT ON THE ADDITI ONAL EVIDENCE SO FILED, THE ASSESSING OFFICER HAS OBJECTED TO THE AD MISSION OF THE ADDITIONAL EVIDENCE. BESIDES, HE HAS STATED THAT I N SOME CASES THE PAYMENTS HAVE BEEN MADE IN CASH, IN SOME CASES ONLY PAYMENTS TO THE OUTSTANDING SUNDRY CREDITORS HAVE BEEN MADE DUR ING THE YEAR WITHOUT THERE BEING ANY PURCHASES AND THAT IN CASE OF 2 PARTIES, NAMELY, M/S CHIRAG ENTERPRISES, JAIPUR AND M/S LIBA S IMPEX, NEW DELHI, THE NOTICES COULD NOT BE SERVED. THE APPELL ANT HAS SUBMITTED THAT THESE QUERIES WERE RAISED BY THE A.O AND REPLI ED TO BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS. AS REGARD S PAYMENTS MADE TO CERTAIN PARTIES IN CASH, IT IS SEEN THAT SU CH PARTIES ARE FEW IN NUMBER AND APPEAR TO BE SMALL TRADERS BELONGING TO THE UNORGANIZED SECTOR OF COTTAGE INDUSTRIES. REGARDING THE CONTEN TION OF THE A.O THAT NO FURTHER PURCHASES WERE EFFECTED DURING THE YEAR FROM CERTAIN SUNDRY CREDITORS, IT HAS BEEN POINTED OUT BY THE AP PELLANT THAT IF AMOUNTS WERE OUTSTANDING TO CERTAIN PARTIES FROM WH OM PURCHASES WERE MADE IN EARLIER YEARS, PAYMENTS HAD TO BE MADE TO THEM EVEN IF NO FURTHER PURCHASES FROM THEM WERE MADE DURING THE YEAR. THE COMPLETE ADDRESSES OF THE 2 PARTIES, M/S CHIRAG ENT ERPRISES, JAIPUR AND M/S LIBAS IMPEX, NEW DELHI, FROM WHOM NOTICES I SSUED BY THE A.O CAME BACK UNSERVED, WERE PROVIDED BY THE APPELL ANT TO THE A.O DURING ASSESSMENT PROCEEDINGS AND NO ADVERSE INFERE NCE IN RESPECT OF THESE PARTIES HAS BEEN DRAWN BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER. ASSESSMENTS OF THE APPELLANT FOR ASSESSMENT YEARS 2005-06 AND 2007-08 WERE COMPLETED U/S 143(3) ON THE RETURNED INCOMES. MOST OF THE PARTIES WHO WERE APP EARING AS SUNDRY CREDITORS AS ON 31.03.2008 WERE STATED TO BE REGULA R SUPPLIERS OF THE APPELLANT. WHEN THE PURCHASES OF THE APPELLANT HAV E BEEN ACCEPTED IN THE EARLIER YEARS AS WELL AS IN THE YEAR UNDER A PPEAL AND SUBSEQUENT YEAR, THE SUNDRY CREDITORS AS ON 31.03.2 008 CANNOT BE TREATED AS INCOME OF THE APPELLANT, AS DONE BY THE A.O. THE ADDITION MADE TO THE INCOME ON THIS SCORE IS, THEREFORE, DEL ETED. THIS GROUND OF APPEAL IS ALLOWED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR WAS WHILE CARRYING US THROUGH T HE FINDING OF THE AO SUBMITTED THAT THE ASSESSEE HAVING SURRENDERED THE AMOUNT TO TAX, COULD NOT BE SAID TO BE AGGRIEVED WITH THE ORDER OF THE AO AND, THEREFORE, THE LD. C IT(A) WAS NOT JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE WITHOUT ALLOWING ANY OPPORTUNIT Y TO THE AO ,EVEN WHEN SUFFICIENT OPPORTUNITY HAD BEEN ALLOWED DURING THE ASSESSMENT PROCEEDINGS TO FILE THE I.T.A .NO.-3886/DEL./2012 8 CONFIRMATIONS. IN ANY CASE, SINCE THE AO DID NOT H AVE OCCASION TO EXAMINE THE GENUINENESS OF THE CONFIRMATIONS, THE MATTER SHOULD BE RESTORED BACK. 5. ON THE OTHER HAND, THE LD. AR ON BEHALF OF THE A SSESSEE RELIED UPON THE FINDINGS OF THE LD. CIT(A).TO A QUERY BY THE BENCH AS TO WHA T PROMPTED THE ASSESSEE TO FILE APPEAL WHEN THE ASSESSEE ITSELF SURRENDERED THE AMO UNT TO TAX AND HOW COULD THE ASSESSEE BE AGGRIEVED, THE LD. AR DID NOT REPLY. TH E LD. AR MERELY ADDED THAT THE AO DID NOT PROVIDE SUFFICIENT OPPORTUNITY TO SUBMIT TH E CONFIRMATIONS. AFTER MUCH DISCUSSION, TO A FURTHER QUERY BY THE BENCH, THE LD . AR REPLIED THAT THE ASSESSEE HAS NO OBJECTION IF THE MATTER IS RESTORED BACK , AS CONTE NDED BY THE LD. DR. 6.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE SURRENDERED AN AMOUNT OF ` . 45,76,244/- IN RELATION TO 23 CREDITORS ,WHEN THE AO ASKED THE ASSESSEE TO FURNIS H THE CONFIRMATIONS OF ALL THE CREDITORS EXCEEDING ` .80,000/- EACH. THERE IS NOTHING IN THE LETTER DA TED 24.12.2010 OF THE ASSESSEE, AS EXTRACTED IN THE ASSESSMENT ORDER ,THAT IT DESIRED FURTHER TIME TO SUBMIT THE CONFIRMATIONS OF REMAINING 23 CREDITORS AND INSTEAD, THE ASSESSEE SUO MOTU OFFERED THE AMOUNT TO TAX. THOUGH THE LD. AR RELIED UPON A DECISION DATED 22.9.1971 OF THE HONBLE APEX COURT IN PULLANGODE RUBBER PRODUC E CO. LTD. VS. STATE OF KERALA IN CIVIL APPEAL NO.10 OF 1969,WHERE IT WAS OBSERVED T HAT AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CAN NOT BE SAID THAT IT IS CONCLUSIVE AND THAT IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT I T IS INCORRECT, T HERE IS NO SUCH DISPUTE WITH THIS PROPOSITION OF LAW. IN THE INSTAN T CASE, NEITHER BEFORE THE LD. CIT(A) NOR EVEN BEFORE US, THE LD. AR ATTEMPTED TO SHOW AS TO HOW THE SURRENDER WAS INCORRECT AND WHAT PROMPTED THE ASSESSEE TO FILE APPEAL WITHO UT EVEN RETRACTING THE SURRENDER. EVEN AFTER SURRENDER OF THE AMOUNT, THE ASSESSEE AP PROACHED THE LD. CIT(A) AND FURNISHED ADDITIONAL EVIDENCE IN TERMS OF RULE 46A OF THE IT RULES,1962. THERE IS NOTHING IN THE IMPUGNED ORDER AS TO WHY THE ASSESSEE OFFERE D THE AMOUNT TO TAX SUO MOTU AND THEN PREFERRED THE APPEAL. THE LD. CIT(A) DID NOT C ARE TO ASCERTAIN AS TO HOW THE ASSESSEE IS AGGRIEVED WITH THE FINDINGS OF THE AO W HEN IT ITSELF OFFERED THE AMOUNT TO TAX. THE AO IN HIS REMAND REPORT DATED 14.07.2011 SUCCINCTLY POINTED OUT THAT SINCE THE ASSESSEE ITSELF EXPRESSED ITS INABILITY TO FURN ISH FURTHER CONFIRMATIONS AND PRODUCE THE PERSONS FOR CROSS-EXAMINATION AND OFFERED THE A MOUNT OF RS. 45,76,244/- TO TAX. I.T.A .NO.-3886/DEL./2012 9 THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AO DID NOT ALLOW SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO SUBMIT CONFIRMATIONS. WHEN THE ASSE SSEE EXPRESSED ITS INABILITY TO FURNISH FURTHER CONFIRMATIONS OR TO PRODUCE THE PER SONS, IT OFFERED THE AMOUNT TO TAX; AND THE AO ACCEPTED THE SAID OFFER AND COMPLETED THE AS SESSMENT. IN THESE CIRCUMSTANCES, HOW CONDITIONS STIPULATED IN CLAUSE (B) OF RULE 46 A(1) OF THE IT RULES,1962 COULD BE SAID TO HAVE BEEN FULFILLED, IS NOT EVIDENT FROM THE IMP UGNED ORDER. EVEN OTHERWISE THERE IS NOTHING TO SUGGEST AS TO WHETHER OR NOT THE LD. CIT (A) EXAMINED THE GENUINENESS OF ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE NOR T HE AO SEEMS TO HAVE BEEN ASKED TO VERIFY ITS GENUINENESS. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE LD. CIT(A) ADMITTED ADDITIONAL EVIDENCE SUBMITTED BY TH E ASSESSEE IN ITS APPLICATION UNDER RULE 46A OF THE IT RULES,1962,WITHOUT FOLLOWING THE PROCEDURE PRESCRIBED THEREIN. AS IS APPARENT FROM THE FINDINGS IN THE ASSESSMENT ORDER, THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY BY THE AO TO SUBMIT THE CONFIRMATIONS. THE LD. CIT(A) WITHOUT TAKING COGNIZANCE OF THE FACT THAT THE ASSESSEE ITSELF SUR RENDERED THE AMOUNT TO TAX, PROCEEDED TO ADMIT ADDITIONAL EVIDENCE, WITHOUT ALL OWING ANY OPPORTUNITY TO THE AO.. IN THIS SITUATION, HOW THE ASSESSEE COULD BE SAID TO B E AGGRIEVED WITH THE FINDINGS OF THE AO, IS NOT EVIDENT FROM THE IMPUGNED ORDER. THE ASS ESSEE IN ITS APPLICATION SUBMITTED THAT THE AO REFUSED TO GRANT TIME TO ENABLE IT TO S UBMIT THE BALANCE CONFIRMATIONS. THE LD. CIT(A) WITHOUT ASCERTAINING THE VERACITY OF THI S STATEMENT ADMITTED ADDITIONAL EVIDENCE. BEFORE ADMITTING THE ADDITIONAL EVIDENCE, THE LD. CIT(A) DID NOT ALLOW ANY OPPORTUNITY TO THE AO OR CONFRONTED HIM WITH THIS STATEMENT OF THE ASSESSEE. IN NUTSHELL, THE LD. CIT(A) DELETED THE ADDITION WITHO UT FOLLOWING 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 ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM SUBMITTING THE AFORESAID ADDITIONAL DOCUMENTS/INFOR MATION 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 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 THAN THE EVIDENCE PRODUC ED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING 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 I.T.A .NO.-3886/DEL./2012 10 (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSIN G 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 E VIDENCE 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 CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HAS BEEN ALLOWED A REASONABL E OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXAMINE THE WITNES S 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 EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDIN G THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQ UEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271..' 6.1 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 SUFFICIENT CAUSE . IN HAJI LAL MOHD. BIRI WORKS' CASE [2005] 275 ITR 496 (ALL), BY MAKING AN ELABORATE DISCUSSION ON RULE 4 6A OF THE RULES IN PARAGRAPH 10 AT PAGE 500 AND 501, IT WAS H ELD THAT UNDER RULE 46A THE AUTHORITY IS NOT PERMITTED TO ACT WHIMSICALLY WHILE EXERCISING THE JURISDICTION UNDER IT .IN THE CASE UNDER CONSIDERATION, THE ASSESSEE PLACED B EFORE THE LD. CIT(A),CERTAIN ADDITIONAL EVIDENCE AND ADMITTEDLY, THE SAID DOCUME NTS WERE NOT SUBMITTED BEFORE THE AO. THE POWERS OF THE CIT(A) IN TERMS OF RULE 46A TO ADMIT FRESH EVIDENCE, ENTAIL AN ELEMENT OF DISCRETION WHICH IS REQUIRED TO BE EXERC ISED IN A JUDICIOUS MANNER. THE POWERS OF THE CIT(A) TO ADMIT ADDITIONAL EVIDENCE ARE NOT ONLY IN SITUATIONS WHERE THE EVIDENCE COULD NOT BE PRODUCED BEFORE LOWER AUTHORI TIES OWING TO LACK OF ADEQUATE OPPORTUNITY BUT ALSO IN SITUATIONS WHERE THE FRESH EVIDENCE WOULD ENABLE THE CIT(A) TO I.T.A .NO.-3886/DEL./2012 11 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 CONDITIONS PRESCRIBED IN RULE 46A MUST BE SHOWN TO EXIST BEFORE ADDITIONAL EVIDENCE IS ADMITT ED AND EVERY PROCEDURAL REQUIREMENT MENTIONED IN THE RULE HAS TO BE STRICTLY COMPLIED W ITH SO THAT THE RULE IS MEANINGFULLY EXERCISED . ONCE THE ASSESSEE INVOKES RULE 46A AND PRAYS FOR AD MISSION OF ADDITIONAL EVIDENCE BEFORE THE CIT (A), THEN THE PROCEDURE PRE SCRIBED IN THE SAID RULE HAS TO BE SCRUPULOUSLY FOLLOWED. A DISTINCTION SHOULD BE RECO GNIZED 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-SECTION (4) OF S ECTION 250. IT IS ONLY WHEN HE EXERCISES HIS STATUTORY POWER SUO MOTU UNDER THE ABOVE SUB-SECTION THAT THE REQUIREMENTS OF RULE 46A NEED NOT BE FOLLOWED. ON T HE OTHER HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES RULE 4 6A, IT IS INCUMBENT UPON THE CIT (A) TO COMPLY WITH THE REQUIREMENTS OF THE RULE STR ICTLY 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 RULE 46A INTERDICTS THE CIT (A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNL ESS THE AO HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME. IN THE INSTANT CASE, THERE IS NOTHING IN THE IMPUGNED ORDER OF THE LD. CIT (A) TO SHOW THAT AFTER THE OBJECTIONS WERE RAISED BY THE AO IN HIS REMAND REPORT DATED 14.7.20 11 AGAINST ADMISSION OF ADDITIONAL EVIDENCE, THE LD. CIT(A) ASKED THE AO TO EXAMINE TH E GENUINENESS OF THE ADDITIONAL EVIDENCE. THUS, THE END RESULT HAS BEEN THAT ADDITI ONAL EVIDENCE 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 , WE FIND ME RIT IN THE CONTENTIONS OF THE LD. DR AND THEREFORE, 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, 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, DISPO SE OF THE MATTER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH T HE PARTIES, BRINGING OUT CLEARLY AS TO HOW I.T.A .NO.-3886/DEL./2012 12 THE ASSESSEE IS AGGRIEVED WITH THE FINDINGS OF THE AO AFTER SUOMOTU SURRENDER OF THE AMOUNT AND HOW THE CONDITIONS STIPULATED IN RULE 46 A OF THE IT RULES,1962 ARE FULFILLED. WITH THESE DIRECTIONS, GROUND NO. 2 IN THE APPEAL I S DISPOSED OF, AS INDICATED HEREINBEFORE. AS A COROLLARY, GROUND NO.1 RAISED IN THE APPEAL DOES NOT SURVIVE FOR OUR ADJUDICATION AT THIS STAGE. 7. NO ADDITIONAL GROUND HAS BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL, ACCORDINGLY, THIS GROUND IS DISMISSE D. 8. NO OTHER PLEA OR ARGUMENTS WAS MADE BEFORE US. 9. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATI STICAL PURPOSES. SD/- SD/- (I.C. SUDHIR) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AMIT COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. ACIT,CIRCLE-13(1), ROOM NO.-406,C.R.BUILDING, I. P.ESTATE , NEW DELHI. 3. CIT CONCERNED 4. CIT(A)-XVI, DELHI. 5. THE DR, ITAT, E BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT