Appeal allowed due to procedural lapses in admitting evidence. Remanded for fair hearing and compliance with Rule 46A.

The Tribunal allowed the Revenue's appeal for statistical purposes, setting aside the order due to procedural lapses in admitting additional evidence at the appellate stage without giving the Assessing Officer a reasonable opportunity to rebut. The case was remanded to the CIT(A) to address the procedural deficiencies and issue a speaking order after affording the assessee a fair hearing. The decision emphasized strict adherence to Rule 46A requirements, as highlighted in a previous High Court ruling.

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Issues Involved:
1. Admission of additional evidences at the appellate stage.
2. Procedural compliance under Rule 46A of the Income Tax Rules, 1962.

Detailed Analysis:

1. Admission of Additional Evidences at the Appellate Stage:
The Revenue challenged the CIT(A)'s decision to admit additional evidences at the appellate stage. The assessee had submitted fresh evidences during the appeal, citing health problems that caused her to temporarily relocate, leading to non-compliance with notices. The CIT(A) admitted these evidences, overruling the Assessing Officer's (AO) objections and provided partial relief by reducing the addition from Rs. 33,66,000 to Rs. 2,50,000.

2. Procedural Compliance under Rule 46A:
The Tribunal examined the procedural compliance under Rule 46A of the Income Tax Rules, 1962. Rule 46A(2) permits the admission of fresh evidence if justified reasons are provided in writing by the CIT(A). However, Rule 46A(3) mandates that the AO must be given a reasonable opportunity to examine and rebut the additional evidence. The Tribunal found that although the CIT(A) remanded the fresh evidences to the AO, the AO's objections were overruled without providing him the opportunity to rebut the evidences, violating Rule 46A(3).

The Tribunal referred to the Jurisdictional High Court's decision in CIT vs. Manish Buildwell Pvt. Ltd., emphasizing that the procedural requirements of Rule 46A must be strictly followed. The High Court held that the CIT(A)'s powers under Section 250(4) of the Income Tax Act to conduct further enquiry do not negate the procedural mandates of Rule 46A when additional evidence is introduced by the assessee.

The Tribunal concluded that the CIT(A) erred by not confronting the fresh evidences to the AO after overruling his objections. The CIT(A) should have communicated the decision to admit the evidence to the AO and provided him a reasonable opportunity to rebut it. The Tribunal set aside the impugned order and restored the issue to the CIT(A) to address the procedural lapses and pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.

Conclusion:
The appeal of the Revenue was allowed for statistical purposes, and the order was pronounced in the open court on 19th August 2016.

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