CIT(A) deletes additions on Unsecured Loans after considering additional evidence: ITAT set asides order for violation of Rule 46A [Read Order]
The tribunal observed that the CIT(A) admitted additional evidence without affording an opportunity to the Assessing Officer (AO) which was a clear violation of Rule 46A
![CIT(A) deletes additions on Unsecured Loans after considering additional evidence: ITAT set asides order for violation of Rule 46A [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/ITAT-ITAT-Raipur-CIT-deletes-additions-on-Unsecured-Loans-TAXSCAN.jpg "CIT(A) deletes additions on Unsecured Loans after considering additional evidence: ITAT set asides order for violation of Rule 46A [Read Order]")
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)], citing a violation of Rule 46A of the Income Tax Rules, 1962. Shri Virendra Kumar Agrawal (assessee) filed his return of income for the Assessment Year (AY) 2018-19, declaring a total income of Rs. 1,31,17,250. The Assessing Officer (AO) selected the...
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)], citing a violation of Rule 46A of the Income Tax Rules, 1962.
Shri Virendra Kumar Agrawal (assessee) filed his return of income for the Assessment Year (AY) 2018-19, declaring a total income of Rs. 1,31,17,250. The Assessing Officer (AO) selected the case for scrutiny under Section 143(2) of the Income Tax Act, 1961, and determined the income of the assessee at Rs. 15,66,68,438 after making substantial additions.
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The AO added Rs. 8.15 crore for personal unsecured loans and Rs. 4.25 crore for fresh unsecured loans taken during the year. The AO disallowed Rs. 59,42,862 as interest claimed under Section 57 and Rs. 37,57,883 under Section 69C.
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Aggrieved by the AO’s order, the assessee filed an appeal before the CIT(A). The CIT(A) deleted the additions after considering fresh evidence submitted by the assessee, including bank statements, loan confirmations, and lenders’ income tax returns, which were not furnished before the AO.
Aggrieved by the order of the CIT(A), the Revenue filed an appeal before the ITAT. The counsel for the Revenue argued that the CIT(A) admitted additional evidence without giving the AO a chance to examine or rebut the documents.
The counsel also argued that the admission of additional evidence violated Rule 46A of the Income Tax Rules, 1962 which states that the AO must be given opportunity to examine the additional evidence.
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The two-member bench, comprising Shri Ravish Sood (Judicial Member) and Shri Arun Khodpia (Accountant Member), observed that Rule 46A mandates that additional evidence can only be admitted under specific conditions and must be shared with the AO for verification.
The tribunal also observed that the CIT(A) failed to follow this procedure. Therefore, the order of the CIT(A) became legally unsustainable. Therefore, the tribunal set aside the CIT(A)’s order and remanded the case for reconsideration. The tribunal directed the CIT(A) to allow the AO a reasonable opportunity to examine and respond to the additional evidence.
Thereby the appeal of the Revenue was allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
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