Shanta Madan, New Delhi vs Department Of Income Tax

BEFORE SHRI G. C. GUPTA, HON'BLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. No. 1353/Del/2013 Assessment year : 2007-08 ITO, Ward 23(1), Vs. Ms. Shanta Madan, New Delhi Apartment No.002, Block D, Multistoried Buildings, 'Lagoon', Residential Apartments Complex, Ambience Island, NH-8, Gurgaon GIR / PAN:AMEPM5657L (Appellant) (Respondent) Appellant by : Shri BRR Kumar, Sr. DR Respondent by : Shri Rajiv Bhasin, CA Date of hearing : 23.02.2015 Date of pronouncement :25.02.2015 ORDER PER T.S. KAPOOR, AM:

This appeal of the Revenue has been filed against the order of Ld. CIT(A) dated 20.12.2012. The Revenue has challenged the order of Ld. CIT(A) both on merits and for violation of provisions of Rule 46A.

2. Ld. D.R. at the outset invited our attention to assessment order and submitted that despite various notices were issued on various dates, the assessee did not file necessary information. Ld. CIT(A) in spite of objection by A.O. for admission of additional evidences, admitted the same and did not confront the A.O. to offer his comments on merits. Therefore, it was prayed that the case may be remitted back to the file of A.O. for readjudication on the basis of his examination of additional evidences.

3. Ld. A.R. on the other hand invited our attention to paper book page 11 where a copy of remand report was placed and submitted that Ld. CIT(A) 2 ITA No.1353/Del/2013

has duly obtained the remand report and he had remitted the additional evidences to A.O. but A.O. instead of commenting on the same, requested that additional evidences be not accepted.

4. We have heard rival parities and have gone through the material placed on record. From the copy of remand report placed at paper book page 11 we find that A.O. was confronted for admission of additional evidences but he had not commented on merits. Ld. CIT(A) should have again confronted the A.O. to fulfill the requirement of sub-rule 3 of Rule 46A. Hon'ble Delhi High Court in the case of CIT Vs Manish Build well Pvt. Ltd. vide para 24 has answered the similar situation wherein it has been held that A.O. should have been given reasonable opportunity to examine the evidences on merits after admission of the same. Relevant part of the order of Hon'ble High Court in the case of Manish Build well Pvt. Ltd. is reproduced below:

"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 A.O. This observation takes care of d. (c) of sub-r. (1) of r. 46A. The observation of the C!T(A) also takes care of sub-r, (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rs, (1) and (2) of r. 46A have been complied with. However, sub-r, (3) which 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, has not been complied with. There is nothing in the order of the C!T(A) to show that the AO was confronted with the confirmation letters received by the ass e customers who paid the amounts by cheques and asked for comments. Thus, the end result has been that additional evidence was admitted and accepted as genuine without the A.O. 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 3 ITA No.1353/Del/2013

him to comply with sub-r, (3) of r. 46A. In our opinion and with respect, the error committed by the Tribunal is that it proceeded to mix up the powers of the C!T(A) under sub- s. (4) of s. 250 with the powers vested in him under r. 46A. The Tribunal seems to have overlooked sub-r. (4) of r. 46A [sic-so 250] which itself takes note of the distinction between the powers conferred by the C!T(A) under the statute while disposing of the assessee's appeal and the powers conferred upon him under r. 46A. The Tribunal .erred in its interpretation of the provisions of r. 46A vis-a-vis S. 250(4). Its view that since in any case the CIT(A), by virtue of his coterminous 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 r. 46A is erroneous. The Tribunal appears to have not appreciated the distinction between the two provisions. If the view of the Tribunal is accepted, it would make r. 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 C!T(A) cannot be subjected to the conditions prescribed in r. 46A because in any case the C!T(A) is vested with coterminous powers over the assessment orders or powers of independent enquiry under sub-so (4) of S. 250. That is a consequence which cannot at all be countenanced."

5. In view of above, we allow ground No.2 of Revenue's appeal and remit the matter back to the office of A.O. for re-adjudication on the basis of additional evidences filed by assessee before Ld. CIT(A). Needless to say that assessee will be provided sufficient opportunity of being heard.

6. In view of the above, appeal filed by Revenue is allowed for statistical purposes.

7. Order pronounced in the open court on 25th Feb., 2015.

Sd./- Sd./- (G. C. GUPTA ) (T.S. KAPOOR) VICE PRESIDENT ACCOUNTANT MEMBER Date: 25th Feb., 2015 Sp 4 ITA No.1353/Del/2013

Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.

5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi. True copy.

By Order

(ITAT, New Delhi).

S.No. Details Date Initials Designation 1 Draft dictated on 24/2 Sr. PS/PS 2 Draft placed before author 25,25/2 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement Sr. PS/PS 7 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to Head 8 Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order