AO Directed to Grant Fair Hearing & Pass Reasoned Order on All Evidence including additional documents

Mihir Bhoj Post Graduate College Vs ITO (ITAT Delhi)

The case involves Mihir Bhoj Post Graduate College appealing against an addition of ₹34,81,180/- to its taxable income by the Income Tax Officer (Exemption) Ghaziabad, which was upheld by the Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), New Delhi. The addition was based on unexplained cash deposits, and the college had filed an application for additional evidence under Rule 46A of the Income Tax Act to support its case. However, the CIT(A) rejected the application, as the college had failed to comply with earlier notices from the Assessing Officer and did not submit the required documentation in a timely manner.

The assessee’s counsel argued that the additional evidence filed was crucial for resolving the matter and should be considered for a fair adjudication. The Income Tax Appellate Tribunal (ITAT), after hearing both parties, agreed with the assessee’s arguments, acknowledging that the failure to submit the evidence earlier was due to delays in preparation, and the evidence was vital for a proper assessment. The ITAT directed the matter to be remanded to the Assessing Officer (AO) for a fresh evaluation, including the new evidence and any further submissions the assessee might make. The AO was instructed to grant a fair hearing to the assessee and pass a reasoned order based on all the evidence, including the newly admitted additional documents.

This decision highlights the importance of considering additional evidence in appeals related to tax assessments, particularly when such evidence can address core issues in the case. The remand to the AO ensures that the assessee’s right to a fair hearing is upheld and that the tax assessment is conducted with all the relevant information in consideration.

FULL TEXT OF THE ORDER OF ITAT DELHI

The instant appeal filed by the assessee is directed against an order dated 22.11.2023 passed by Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre(NFAC), New Delhi, arising out of the order dated 22.12.2017 passed by the Income Tax Officer(Exemption) Ghaziabad, whereby and whereunder the addition to the tune of Rs. 34,81,180/- on account of unexplained cash deposit made by the Assessing Officer has been confirmed.

2. The assessee before us, filed an application for additional evidences before the Learned CIT(A) under Rule 46A of the Act. As the assessee was given sufficient opportunity by the Assessing Officer to explain its case, notice under section 142(1) of the Act was issued on several occasions followed by show cause notice dated 09.10.2017, the assessee did not file the return of income nor made sufficient compliance, the Learned CIT(A) rejected the application for admission of additional evidences under Rule 46A of the Act.

3. Under this facts and circumstances of the matter, the Learned counsel appearing for the assessee submitted before us that the additional evidence filed before the CIT(A) goes to the root of the matter, required to be considered for appropriate adjudication of the issue involved therein and the same be admitted by the Bench. Such submissions has not been controverted by the Learned DR with all his fairness.

4. Having heard the Learned Counsel appearing for the parties, having regard to the facts and circumstances of the case as the assessee could not prepare the details in time and thus not been able to place though called upon to produce by the Learned Assessing Officer, as submitted by the Learned AR, the same are hereby admitted and are sent to be considered by the Learned AO afresh.

5. The issue is, thus, set aside to the file of the Learned AO with a direction upon him to consider the same and decide afresh upon considering the evidence on record, additional evidences admitted by the Bench, and any other evidence which the assessee may choose to file at the time of hearing of the matter. The Learned AO is further directed to grant an opportunity of being heard to the assessee and to pass a reasoned order.

Order pronounced in the open court on 07^th November, 2024.