CIT(A) powers under Section 250(4) upheld after bank inquiry reveals AO's factual error on time deposits

The Delhi HC upheld the Tribunal's decision dismissing the revenue's appeal against CIT(A)'s deletion of addition made under Section 69B for unexplained investment in time deposits. The CIT(A) exercised powers under Section 250(4) and conducted inquiry by issuing notice to Canara Bank under Section 133(6). The inquiry revealed the AO had committed a grave factual error regarding time deposit figures. Since CIT(A) established the source of Rs. 9.50 crores through proper evidence and the Tribunal affirmed these factual findings, no interference was warranted. The HC found no substantial question of law arising for consideration.

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Issues involved:
1. Condonation of delay in filing and re-filing the appeal.
2. Admissibility of additional evidence by the Commissioner of Income Tax (Appeals) without following the procedure laid down in Rule 46A(3) of the Income Tax Rules, 1962.

Issue 1: Condonation of Delay
The applications filed by the appellant sought condonation of a delay of 82 days in filing the appeal and 7 days in re-filing. The High Court, considering the period involved, decided to condone the delay and accordingly disposed of the applications.

Issue 2: Admissibility of Additional Evidence
The appeal concerned Assessment Year (AY) 2012-13 and revolved around the question of whether the Commissioner of Income Tax (Appeals) was correct in admitting additional evidence without following the prescribed procedure. The Assessing Officer had issued a notice under Section 148 read with Section 147 of the Income Tax Act, based on information regarding time deposits made by the assessee. The AO completed the assessment under "best judgment assessment," adding an amount under Section 69B of the Act for unexplained investments. The CIT(A) admitted additional evidence and, after inquiry, found that the actual deposits were significantly lower than initially assessed. The CIT(A) concluded that the source of funds was explained by the assessee and deleted the entire addition based on the evidence provided. The Tribunal upheld the CIT(A)'s decision, emphasizing that the CIT(A) had the authority to call for and examine evidence and make necessary inquiries. The Tribunal found no reason to reverse the factual findings made by the CIT(A) regarding the source of funds. The High Court agreed with the Tribunal's decision, stating that no substantial question of law arose for consideration, and closed the appeal.

In conclusion, the High Court upheld the Tribunal's decision regarding the admissibility of additional evidence by the CIT(A) and found no need for further interference. The appeal was closed, and the order was to be dispatched to the respondent/assessee through all modes, including email, for further action based on the digitally signed copy of the order.

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