Rule 46A compliance for additional evidence requires written reasons and opportunity to rebut; non-compliance invalidates appellate reliance.

Rule 46A permits additional evidence at the appellate stage only in exceptional circumstances and requires the Commissioner (Appeals) to record written reasons showing that those conditions are met. It also obliges that the Assessing Officer be given a reasonable opportunity to examine the fresh material and produce rebuttal evidence, as part of natural justice. On the facts stated, no speaking order admitting the additional evidence was shown and no effective opportunity to rebut it was established. The admission and use of the evidence were therefore held invalid, the Tribunal's affirmation was unsustainable, and the matter was remanded to the Commissioner (Appeals) for fresh consideration in accordance with law.

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Issues: Whether the Commissioner (Appeals) could admit additional evidence without recording reasons in writing and without affording the Assessing Officer an opportunity to examine or rebut it under Rule 46A of the Income Tax Rules.

Analysis: Rule 46A permits additional evidence at the appellate stage only in the specified exceptional circumstances. Admission of such evidence requires the appellate authority to record reasons in writing showing that the rule's conditions are satisfied. The rule also mandates that the Assessing Officer must be given a reasonable opportunity to examine the evidence and produce rebuttal material. These requirements are mandatory and reflect the rule of natural justice. On the record, no speaking order admitting the additional evidence was shown, and no effective opportunity to the Assessing Officer to test the fresh material was established.

Conclusion: The admission and use of the additional evidence were invalid for non-compliance with Rule 46A, and the Tribunal's affirmation of the appellate order was unsustainable. The Revenue succeeded on this issue, leading to remand for fresh consideration by the Commissioner (Appeals) in accordance with law.

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