Abdulrahiman Abdulkadar Vs ITO (ITAT Cochin)
The Income Tax Appellate Tribunal (ITAT) Cochin has remanded the case of Abdulrahiman Abdulkadar for fresh adjudication after finding that the Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the appeal without considering additional evidence submitted under Rule 46A of the Income Tax Rules. The case concerns an addition of ₹3,98,000 under Section 69A of the Income Tax Act, 1961, treating the amount as unexplained money for the Assessment Year 2017-18.
The assessee, a travel agency operator, had originally declared an income of ₹4,03,170 in the tax return filed on August 4, 2017. However, the Income Tax Officer (ITO), Palakkad, completed the assessment under Section 143(3), increasing the assessed income to ₹7,11,170 by adding ₹3,98,000 under Section 69A, alleging that the cash deposits in the assessee’s bank account were unexplained. Seeking relief, the assessee filed an appeal before the CIT(A) and submitted additional evidence to explain the source of the deposits.
The CIT(A) dismissed the appeal outright without admitting the additional evidence, stating that the assessee had not filed an application under Rule 46A of the Income Tax Rules, which regulates the admission of new evidence at the appellate stage. However, the ITAT found that the assessee had, in fact, filed an application under Rule 46A, which was placed on record but ignored by the CIT(A). The tribunal observed that the CIT(A) failed to apply the correct legal procedure and did not examine the merits of the additional evidence, leading to a procedural lapse in the adjudication process.
