Dept. goes Hitech- Submits Linkedin Profile as additional Evidence and ITAT admits the same – Delhi ITAT Explain Rules on admissibility of additional Evidence
In the petition for admission of additional evidence it is submitted on behalf of department that the Linkedin Profile of employees of Assessee are available in public domain and down loaded from the web site of internet and the source is indicated against the same. It is further stated that these documents, refer to certain material facts and will help in advancing the cause of justice. Therefore, it is prayed that the same be admitted as additional evidence to the proceedings under consideration.
CIT(DR) pointed out that the information in the Linkedin profile cannot be said to be hearsay. The information in the Linkedin profile is neither false nor modest. Under such circumstances there is no harm in relying on the information contained in the Linkedin profile so far as it relates to education, experience, employment profile and also nature of job performed by persons.
Ld. CIT(DR) further pointed out that on account of non production of documents and relevant information, the assessing officer could not carry out the correct analysis for the purpose of determination of ALP and, therefore, the assessee’ s one of the alternate claim that the payment had been made at arm’s length to different entities cannot be verified. He submitted that for computing the arm’s length price comparison with a realistic and correct data is to be carried out which had not been done by the assessee. For proper analysis all the functions performed by persons it is necessary that details regarding functions carried out by employees are available on record for which Linkedin profile will be very useful.
As regards the submissions of ld. Sr. counsel, regarding verification of the information contained in the Linkedin profile, ld. CIT(DR) submitted that these arguments have no basis as far as the information on the education, employment history and job profile of the person is concerned. These have been employees of GE and, therefore, GE can only prove that any information is false.
As regards the submissions of ld. Sr. Counsel of there being inordinate delay in producing the evidence, ld. CIT(DR) pointed out that this information was searched on the internet in the month of February 2014 and was not available with the Revenue prior to that time. Ld. CIT(DR) submitted that the assessee did not object to various facts before the assessing officer or the CIT(A) and has been objecting for the first time before the Tribunal. Further he did not file the TP orders for A.Y. 2004-05 to 2008-09 before the lower authorities and the claim based on these orders are being made for the first time before the Tribunal.
As regards the two US cases relied upon by ld. Sr. counsel, ld. CIT(DR) submitted that the evidence of Linkedin profile referred in two US cases was discussed in different context and has nothing to do with the use of facts available in the Linkedin profile in the present case.
Ld. CIT(DR) further submitted that no fresh opportunity need to be given to the assessee to file rebuttal evidence. The assessee is shifting its stand. Earlier on 20-2-2014, it sought time to file factual rebuttal to the contents of Linkedin profile and after three and half months it has not filed a single factual rebuttal.
We have considered the rival submissions and have perused the record of the case. Before we proceed to consider the detailed arguments advanced before us by both the sides, it would be useful to consider various provisions dealing with powers of the Tribunal for admission of additional evidence. Section 254(1) provides that the Tribunal may, after giving both parties to the appeal an opportunity of being heard, “pass such orders therein as it thinks fit”. Section 255 deals with the procedure before the Appellate Tribunal in discharge of its powers and functions. Section 255(6) reads as under:
(6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code (45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898)..
A bare perusal of this section makes it clear that the Tribunal has all the powers vested in it which are vested in the income-tax authorities with reference to section 131. This takes us to section 131 which deals with the powers regarding discovery, production of evidence etc. Thus, the Tribunal has all the powers which are vested with the income-tax authorities regarding discovery, production of evidence etc.
Section 131(1) reads as under:
Power regarding discovery, production of evidence, etc.
131. (1) The [Assessing] Officer, [Deputy Commissioner (Appeals)], [Joint Commissioner] [, Commissioner (Appeals)] and [Chief Commissioner or Commissioner] shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath;
(c) compelling the production of books of account and other documents; and
(d) issuing commissions.
Thus, the powers of Tribunal in dealing with appeals are expressed in the widest possible terms and Tribunal has wide powers including the powers of compelling the production of books of a/cs and other documents. 7.4. Rule 29 of the ITAT Rules reads as under:
“29. Production of additional evidence before the Tribunal- The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case ‘without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.”
The basic ingredient for exercising powers under Rule 29 for admission of additional evidence is that Tribunal should come to the conclusion that a particular document would be necessary for consideration to enable it to pas orders or for any other substantial cause. The document can be brought to the notice of Tribunal by either party.
The Tribunal is final fact finding body and, therefore, the powers have been conferred on it u/s 131 and Rule 29 to enable it to record a factual finding after considering the entire evidence. For dispensation of justice wide powers have been given to Tribunal.
At the time of admission of additional evidence the Tribunal is required to examine whether prima facie the evidence is relevant to the facts in issue or not. As per section 3 of the Evidence Act, one fact is set to be relevant to another when the one is connected with the other in any of the ways referred to in the provisions of Evidence Act relating to the relevancy of facts. The fact in issue u/s 3 of the Evidence Act means and includes any fact from which either by itself or in connection with other facts the existence/ non-existence nature or extent of any right, liability or possibility asserted or denied in any suit or proceedings necessarily follows.
Section 5 of the Evidence Act deals with the relevancy of facts. As per this section, evidence may be given in any suit or proceeding of the acceptance or non-acceptance of every fact in issue and of such other facts as are herein declared to be relevant and of no others.
Section 11(2) of the Evidence Act, 1872 reads as under:
11. When facts not otherwise relevant become relevant, – Facts not otherwise relevant are relevant –
If by themselves or in connection with other facts they make the existence or non-existence of any fact in issue or relevant fact highly probable or improbable.
In the present appeal there are primarily three issues for consideration, viz.
(i) validity of reopening u/s 148;
(ii)Whether there is PE or not (which is primarily a factual finding to be recorded by Tribunal after due appreciation of facts on record) (iii)Attribution of profits.
As far as the second issue regarding existence of PE is concerned, that is a factual finding to be recorded on the basis of evidence on record and, if Tribunal considers that additional evidence is relevant to the fact in issue, which is existence or not of PE, then in order to advance the cause of justice, the additional evidence should be admitted. In order to enable the Tribunal to decide disputes before it in a lawful, fair and judicious manner, it necessarily is required to look into and consider such and other material having a direct nexus and bearing on the subject matter of the appeal.
(Submitted by CA Prarthana Jalan – Analyzed by CA Sandeep Kanoi)
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