Additional evidence before ITAT is exceptional; material from pending third-party assessments cannot bypass the block assessment scheme.

Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 is an exceptional provision and does not give either party an automatic right to produce additional evidence before the Tribunal. Admission is confined to cases where the Tribunal needs the material to decide the matter, where substantial cause is shown, or where the lower authorities decided without sufficient opportunity. The Department's proposed evidence related to third-party assessments still pending and had been collected after completion of the assessee's assessment, so its admission would have shifted the Tribunal into the role of the Assessing Officer and undermined the block assessment scheme. The request for additional evidence was therefore rightly refused.

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Issues: Whether the Department was entitled to have additional evidence admitted under rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 in support of the case that the gifts received by the assessee were not genuine.

Analysis: Rule 29 is an exceptional provision and the parties are not entitled as of right to produce additional evidence before the Tribunal. The rule permits admission only where the Tribunal requires the material to enable it to pass orders or for any other substantial cause, or where the income-tax authorities have decided the case without giving sufficient opportunity to the assessee. The proposed material had been collected after completion of the assessee's assessment and related to the separate assessments of third parties which were still pending. Admission of such material would have required the Tribunal to step into the role of the Assessing Officer and effectively pre-empt the statutory function of assessment. In the context of block assessment, the statutory scheme also limits reopening and revised-return remedies, and the attempted use of additional evidence would have bypassed that framework.

Conclusion: The Department's request for admission of additional evidence was rightly refused.

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