Haji Lal Mohd. Biri Vs CIT (Allahabad High Court)
The Allahabad High Court considered a reference made by the Income Tax Appellate Tribunal (ITAT) under Section 256(1) of the Income-tax Act, 1961, on whether the Tribunal was justified in setting aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] on the ground that the mandatory requirements of Rule 46A of the Income-tax Rules, 1962 had not been followed while admitting additional evidence.
Background of the case: The dispute related to Assessment Year 1974-75. The assessee, an individual, had disclosed income from salary, house property, business, and beneficial interest in a waqf. During assessment, the Inspecting Assistant Commissioner made additions of Rs. 1,93,183 in the biri account, Rs. 5,16,279 towards wrapper, label and labelling expenses, Rs. 2,00,850 towards alleged excess tobacco consumption, and Rs. 1,50,000 as unexplained cash credit in the name of one individual.
Proceedings before the CIT(A): During the appellate proceedings, the assessee produced additional evidence. Relying upon this fresh evidence, the CIT(A) deleted all the disputed additions. The Revenue challenged the order before the Tribunal. The Tribunal found that the CIT(A) had admitted additional evidence, including a certificate from Hind Tobacco Company, without recording reasons in writing as required by Rule 46A(2) and without providing the Assessing Officer a reasonable opportunity to examine or rebut the additional evidence. Consequently, it set aside the CIT(A)’s order on these issues and remanded the matter for fresh adjudication in accordance with Rule 46A.
