SH. TIRATH SINGH, PHAGWARA V. INCOME TAX OFFICER, WARD -3, PHAGWARA

ITA 703/ASR/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6242 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. Nos. 703 & 704/Asr/2017 Assessment Years: 2009-10 & 2013-14 Tirath Singh S/o Sh. Sewa Singh, VPO – Khajurla, Phagwara [PAN: BUJPS 3072E] Vs. Income Tax Officer Ward 3, Phagwara (Appellant) (Respondent) Appellant by : None Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 03.03.2022 Date of Pronouncement: 23.03.2022 ORDER Per Dr. M. L. Meena, AM: These appeals have been filed by the Assessee against the impugned order dated 16.08.2017, passed by Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar, in respect of the Assessment Years 2009-10 & 2013-14. 2. The assessee has raised the following grounds of appeal in ITA No. 703/Asr/2017:- “1. That the assessment framed is illegal, unjustified and uncalled for. 2 ITA Nos.703&704/ASR/2017 Tirath Singh v. ITO 2. That the learned CIT(A) and Assessing Officer has erred in law and facts in making addition of Rs.3208000/- on account of cash deposits in bank. 3. That the Learned CIT(A) has erred in law in dismissing the appeal on account of admission of additional evidence. 4. That the assessee craves leave to add/alter any of the ground of appeal on or before the ppeal is finally heard and disposed off.” 3. Grounds of appeal in ITA No. 704/Asr/2017: “1. That the assessment framed is illegal, unjustified and uncalled for. 2. That the learned CIT(A) and Assessing Officer has erred in law and facts in making addition of Rs.4251000/- in the income of assessee as unexplained cash credit. 3. That the learned CIT(A) and Assessing Officer has erred in law and facts in making addition of Rs.444816/- in the income of assessee on account of short term capital gain. 4. That the learned CIT(A) and Assessing Officer has erred in law and facts in making addition of Rs.68349/- in the income of assessee on account of bank credit interest. 5. That the learned CIT(A) is not justified in dismissing the appeal on account of admission of additional evidence. 6. That the assessee craves leave to add/alter any of the ground of appeal on or before the appeal is finally heard and disposed off.” 4. There is a common issue involved in both the appeals where the assessee has challenged the impugned orders on account of non- admission of additional evidence. 5. At the outset, we mentioned that none appeared from the assessee however a written submission has been filed dated 03.03.2022 stating 3 ITA Nos.703&704/ASR/2017 Tirath Singh v. ITO therein a common grievance of the assessee in both the appeals that the CIT appeal was not justified in not admitting additional evidence filed by the assessee in the form of statement of account vis-a-vis balance sheet, J forms in proof of the source of cash deposits in the bank account and documents of the purchase of property. The appellant assessee has contended that the learned AT CIT appeal has grossly added in rejecting the application filed for admission of additional evidence to decide appeal on merits in both the assessment years under consideration. Accordingly, it is requested to admit the additional evidence and remand the matter back to the file of the CIT appeal to pass a speaking order on merits in respect of both the assessment years. 6. The learned DR supported the order of the CIT appeal and submitted that in order to admit additional evidence assessee was required to made out a case falls under clauses b c and d of rule 46A. He contended that additional evidence cannot filed as a matter of right. Since the assessee has failed to prove that he was prevented by reasonable cause to produce the same evidences before the AO, the learned CIT appeal was justified in rejecting the additional evidence. 7. We have heard the ld. DR at length and gone through the facts of the case and written submission filed by the assessee. Admittedly, the assessee has filed additional evidence before the ld. CIT(A). The additional evidences for both the assessment years under appeal were rejected for the reasons that the same were not produced before the AO during the course of assessment proceedings as the assessee has failed to prove reasonable cause which prevented him in furnishing such document evidences as required under rule 46A. The appellant assessee contended 4 ITA Nos.703&704/ASR/2017 Tirath Singh v. ITO that the rejection of the additional evidence by the learned CIT appeal and passing order by non-appreciation of facts of the case is against the principles of natural justice. 8. Considered additional material in respect of the two assessment years under consideration and that of the assessee, being agriculturist, the ld. CIT(A) to have considered the additional evidences under Rule 46A of the IT Rules,1962 and allowed an opportunity to the assessee to present its case. The powers of the CIT(A) to admit additional evidence are not only in situations 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 enable the CIT(A) to dispose of the appeal or for any other substantial cause. Although, the power is to be exercised judiciously and for reasons to be recorded. In our view, the rules of natural justice are not codified nor are they unvarying in all situations, rather they are flexible. They may, however, be summarized in one word as fairness. In other words, what they require is fairness by the authority concerned. Of course, what is fair would depend on the situation and the context. Lord Esher M.R. in Voinet vs. Barrett (1885) 55 L.J. QB 39, observed: “Natural justice is the natural sense of what is right and wrong.” In view of the foregoing and in the interest of natural justice, especially when the ld. CIT(A) have not appreciated the additional material placed before him by the assessee, and swayed by the report of the AO that not to admit additional evidence as it was not produced before him during the course of assessment proceedings without any reasonable cause is required under rule 46A. 5 ITA Nos.703&704/ASR/2017 Tirath Singh v. ITO 9. From the above, it is evident that additional material in respect of the two assessment years under consideration is vital to decide the issues of cash deposits in the bank and the investment in the property. Accordingly, we direct the learned CIT appeal to admit the additional evidence and decide the appeals on merit. Accordingly, we vacate the findings of the ld. CIT(A) in respect of both the assessment years under consideration and restore the matter to his file with the directions to re adjudicate the issues on merits, in accordance with law after allowing sufficient opportunity to both the parties. 10. In the result, both the appeals filed by the assessee are allowed for statistical purpose. Order pronounced in the open court on 23.03.2022. Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member Date: 23.03.2022 Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T True Copy By Order