Case Law Details
We have heard both the parties and gone through the facts of the case. Indisputably, the ld. CIT(A) considered additional material in relation to two com parables and that of the assessee, which was not available before the TPO/ AO. Apparently, the ld. CIT(A) did not follow the procedure laid down under Rule 46A of the IT Rules,1962 nor allowed any opportunity to the AO. 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. Of course, the power is to be exercised judiciously and for reasons to be recorded. Moreover, 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: 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 confronted the additional material placed before him by the assessee, to the AO nor allowed any opportunity to the TPO , we have no alternative but to vacate the findings of the ld. CIT(A) and restore the matter to his file with the directions to re adjudicate the issues in accordance with law after allowing sufficient opportunity to both the parties. Subject to these directions, ground nos. 2 to 6 in the appeal are disposed of.
INCOME TAX APPELLATE TRIBUNAL. DELHI
ITA No. 31/Del/2011 – Assessment year: 2005- 06
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