In Income Tax Officer v. Mehrasons Jewellers Pvt. Ltd, the Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that the Commissioner of Income Tax(Appeals) cannot accept additional evidence filed by the Assessee under rule 46A of the Income Tax Rules 1962 without making any enquiry.
The assessee in the present case M/s Mehrasons Jewellers Pvt. Ltd has filed its return of income for the assessment year and declared a loss of Rs. 29,90,704 and the same was processed under section 143(1) of the Income Tax Act 1961.
During the year under consideration, a search was conducted in the business premises of Mr. Suresh Kumar Gupta who is engaged as an entry operator and provided accommodation entries to various beneficiaries through a large number of shell companies managed by him. During the Assessment period, it has noticed by the Assessing Officer (AO) that the Assessee Company was also Beneficiaries Company who has received accommodation entries from Sh. S.K.Gupta and his associates.
Thereafter, the AO issued notice under section 147/148 of the Act for re-opening the assessment based on the information received from the investigation wing. While completing the assessment under section 144 of the Act the AO has made an addition of Rs. 95,00,000 on account of unexplained cash credit after verifying the materials available on record.
On appeal, the CIT(A) granted relief to the Assessee by deleting the addition made by the AO by verifying the additional documents submitted by the Assessee. Aggrieved by the order of the authority the Revenue carried the matter before the Tribunal and contended that the CIT(A) deleted the addition without considering the facts as pointed out by the AO. Further, he argued that the authority accepted the additional evidence filed by the Assessee without calling remand report from the AO.
After analyzing the above-narrated facts and circumstances of the case, the Tribunal bench comprising Judicial Member Bhavnesh Saini and Accountant Member L.P. Sahu objected the action of the CIT(A) and held that the CIT(A) has no right to accept the additional evidence submitted by the Assessee under rule 46A without making any enquiry.
The division bench further observed that in the present case the CIT(A) has decided the issue only on the basis of the additional documents filed by the Assessee which has been not certified by the Income Tax Officer or any authorized authority. There is no clear from the order of the ld. CIT(A) that what type of documents were submitted before him by the assessee and on those documents whether the CIT(A) has conducted an inquiry or not. The Remand report was also not called by the Assessing officer whereas the assessee has filed additional evidence under Rule 46A which has been accepted by him without conducting any further inquiry.
While allowing the appeal of the Revenue the bench directed the CIT(A) for deciding the appeal afresh after giving the reasonable opportunity of being heard to the Assessing Officer.
