Case Law Details

Case Name : ACIT, Circle 17(1) Vs. M/s Vimlesh Industries Pvt. Ltd. (ITAT Delhi)
Appeal Number : ITA No. 136/Del./2012
Date of Judgement/Order : 12/03/2012
Related Assessment Year : 2008- 09
Courts : All ITAT (5308) ITAT Delhi (1207)

U/s 250(4), the CIT (A) has the power to direct enquiry and call for evidence from the assessee. Under Rule 46A, the assessee has the right to ask for the admission of additional evidence. If the CIT (A) exercises his powers u/s 250(4) to call for additional evidence, the AO need not be given an opportunity to show-cause. However, if the CIT (A) acts on an application under Rule 46A, then the requirement of giving the AO an opportunity as per Rule 46A(3) is mandatory. The argument that in all cases where additional evidence is admitted, the CIT (A) should be considered to have exercised his powers u/s 250(4) is not acceptable as it will render Rule 46A redundant.

On facts, as the assessee had produced the evidence, the CIT (A) ought to have followed Rule 46A(3) and remanded the evidence to the AO for comments and verification (matter remanded to the CIT(A)).

INCOME TAX APPELLATE TRIBUNAL,  DELHI

ITA No. 136/Del./2012 –  (Assessment Year: 2008- 09)

ACIT, Circle 17(1)

Vs.

M/s Vimlesh Industries Pvt. Ltd.

ORDER

PER U.B.S. BEDI, J.M.

This appeal of the department is directed against the order passed by CIT(A)- XIX, New Delhi dated 21.10.2011 relevant to assessment year 2008- 09, whereby besides challenging the deletion of addition on account of purchases of Rs. 4,37,45,772 and addition on account of excess remuneration of Rs. 5,64,000, the department has also challenged the deletion of addition on account of commission paid of Rs. 5,39,585/- in the absence of confirmations having been filed by the concerned parties before the Assessing Officer.

2. At the very outset, Ld. DR submitted that with respect to all the three additions of Rs. 4,37,45,772/-, 5,64,000/- and Rs. 5,39,585/- on account of purchases, excess remuneration and commission paid respectively, the assessee did not file necessary confirmations before the Assessing Officer, but it filed such confirmation and other related material before the CIT(A) in first appeal and no doubt CIT(A) called for remand report of the Assessing Officer, who objected to admission of such additional evidence. After having admitted additional evidence, CIT(A) did not get verified all the documents filed before him from the Assessing Officer again. So, in view of the latest decision of Hon’ble jurisdictional High Court, matter requires to be sent back to the Assessing Officer for reconsideration of these issues afresh and to this move Ld.Counsel for the assessee did not object and rather submitted that matter can go back for reconsideration of the issues afresh before the Assessing Officer.

3. We have heard both the sides, considered the material on record and find that three impugned additions on different counts were made by the Assessing Officer in the absence of relevant material having been filed by the assessee and in appeal, fresh documents were filed and CIT(A) after obtaining remand report from the Assessing Officer and considering objection of the assessee, has not only concluded to admit such evidence, but also proceeded to delete the impugned additions on the basis of additional evidence without getting such evidence verified form the Assessing Officer. In the latest decision of the jurisdictional High Court in the case of CIT Vs. Manish Build well Pvt. Ltd. in I.T.A. No. 928/2011 dated 15.11.2011, the specific observations have been recorded to set aside the matter to the Assessing Officer for reconsideration which is reproduced as under:

“U/s 250(4), the CIT (A) has the power to direct enquiry and call for evidence from the assessee. Under Rule 46A, the assessee has the right to ask for the admission of additional evidence. If the CIT (A) exercises his powers u/s 250(4) to call for additional evidence, the AO need not be given an opportunity to show-cause. However, if the CIT (A) acts on an application under Rule 46A, then the requirement of giving the AO an opportunity as per Rule 46A(3) is mandatory. The argument that in all cases where additional evidence is admitted, the CIT (A) should be considered to have exercised his powers u/s 250(4) is not acceptable as it will render Rule 46A redundant. On facts, as the assessee had produced the evidence, the CIT (A) ought to have followed Rule 46A(3) and remanded the evidence to the AO for comments and verification (matter remanded to the CIT(A)).”

4. In view of above, we set aside the orders of authorities below and restore the matter back on the file of the Assessing Officer for re-consideration of all the three issues afresh after giving due opportunity to the assessee. We hold and direct accordingly.

5. As a result, the appeal gets accepted for statistical purposes.

Order pronounced in open court soon after the conclusion of the hearing on 12th March, 2012.

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