Case Law Details
Pravir Polymers Private Limited Vs ITO (Bombay High Court)
Introduction: The Bombay High Court recently issued a significant order in the case of Pravir Polymers Private Limited Vs. ITO, directing a fresh consideration by the Commissioner of Income Tax (Appeals) [CIT(A)] due to the violation of Rule 46A. This article delves into the details of the case, exploring the background, legal provisions, and the court’s crucial observations.
Detailed Analysis: The petitioner, Pravir Polymers Private Limited, faced a reopened assessment based on information from the Investigation wing, alleging that the lenders were merely name lenders. The Assessing Officer added the amount under section 68 of the Income Tax Act. The petitioner, in appeal, presented additional evidence, leading to the CIT(A) deleting the addition.
However, the Revenue filed an appeal before the Tribunal, questioning the admission of additional evidence without raising Rule 46A violation. The Tribunal allowed the Revenue’s appeal, stating that the CIT(A) didn’t follow the prescribed procedure under Rule 46A. The petitioner sought rectification under section 254(2), but the Tribunal rejected it, citing the non-consent of the petitioner’s counsel to produce the lenders.
The petitioner then moved the High Court through a writ petition, challenging the Tribunal’s orders. The High Court, in its judgment dated December 18, 2023, quashed the Tribunal’s orders, emphasizing the necessity for adherence to Rule 46A. The Court directed the CIT(A) to decide the appeal afresh, ensuring due process and compliance with Rule 46A.
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