Rule 46A(3) requires Assessing Officer verification before appellate relief is granted on additional evidence.

Additional evidence admitted in appellate proceedings cannot form the basis for deleting additions unless the Assessing Officer is given an opportunity to verify it under Rule 46A(3). Here, fresh material was produced to explain cash deposits and the earlier ex parte assessment, but the appellate authority granted relief without calling for the Assessing Officer's comments on those documents. Because the verification procedure required by Rule 46A(3) was not followed, the deletion of the additions could not be sustained on the existing record. The appellate order was therefore set aside and the matter remanded for fresh adjudication after affording the Assessing Officer an opportunity to examine the evidence.

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Issues: Whether the Commissioner (Appeals) could delete the additions after admitting additional evidence without first calling for verification by the Assessing Officer under Rule 46A(3) of the Income-tax Rules, 1962.

Analysis: The assessee had produced fresh material in appellate proceedings to explain the cash deposits and the earlier ex parte assessment. The record showed that the assessment on the old PAN and the return filed on the new PAN involved different factual matrices, and the Assessing Officer who completed the assessment had not examined the additional documents relating to the cash deposits. In these circumstances, the appellate relief was granted without obtaining the Assessing Officer's comments on the evidence newly placed before the first appellate authority. The failure to afford such verification meant that the procedure contemplated by Rule 46A(3) was not followed.

Conclusion: The deletion of the additions could not be sustained on the existing appellate record, and the matter had to be sent back for fresh adjudication after giving the Assessing Officer an opportunity to examine the additional evidence.

Final Conclusion: The appellate order was set aside and the dispute was remanded for reconsideration in accordance with law, with the revenue's challenge succeeding to that extent.

Ratio Decidendi: When additional evidence is admitted in appeal, the first appellate authority must afford the Assessing Officer an opportunity to verify it under Rule 46A(3) before granting relief on that material.

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