In Kalpesh Narsinhbhai Lathiya v. ITO, the Ahmedabad bench of the ITAT held that the assessee can produce additional evidence before the appellate authority under the provisions of the Income Tax Act and Rule 46A of the Income Tax Rules confers an obligation on the later (appellate authority) to verify the admissibility of such evidence.
The Single member was hearing a second appeal filed by the assessee, a student, against whom the AO has completed assessment on ground of unexplained cash credit. The evidence procured by the assessee during the assessment proceedings were found as not genuine. On first appeal, the assessee produced additional evidences in support of the peak credit working and the genuineness of cash credits, which were not considered by the CIT(A).
Remitting the matter back to the first appellate authority, the Member said, “The Income tax Act, by a statutory mandate, gives the right to an assessee to submit additional evidence and obliges the appellate authority to decide whether the additional evidence is admissible for consideration in terms of Rule 46A of the Income-tax Rules, which has not been done in this case resulting in a statutory mistake in the order which needs to be corrected. Be that as it may, looking at the fact that the assessee is a student and indulged in share trading activities which are claimed to be resulted into losses, no comments on merits of the facts of the case can be commented from the Bench at this level. However, looking at the facts and circumstances of the case, it is directed that the additional evidence stands admitted.”
Read the full text of the order below.
