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TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 570
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.... case are that the assessee filed its return declaring income of Rs. 6,44,246/-. The assessee showed to have received share application money to the tune of Rs. 95,36,000/-. The Assessing Officer, vide question no. 18 of the questionnaire dated 28.8.2008, required the assessee to furnish the details of share application money introduced during the year with name/address/proof of identity/PAN /confirmation etc. of each of the subscribers. The assessee furnished only a bare list of persons who had paid share application money amounting to Rs. 95.36 lac vide its letter dated 10/20.10.2008. Neither any PAN details nor addresses or any other particulars of the share applicants were given. Vide order sheet entry dated 24.10.2008, the assessee was again asked to furnish complete details/proofs of identity/confirmations and copies of Income-tax Returns. Despite several reminders, the assessee failed to furnish such details till the last date of hearing. In the light of these facts, the Assessing Officer made addition of Rs. 95.36 lac u/s 68 of the Act. 5. During the course of first appellate proceedings, the assessee filed additional evidence in the form of names and addresses of the shar....
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.... of the Act was issued. On 10.10.2008 and subsequently on 15.10.2008, 20.10.2008 and 31.10.2008, the assessee filed part details. The hearing was adjourned on the assessee's request to 6.11.2008. The assessee did not attend on 6.11.2008. A last opportunity was given vide letter dated 11.11.2008 requiring the assessee to furnish the details and produce books of accounts with bills/vouchers etc. on 18.11.2008. The assessee failed to attend on that date also. Thereafter, a final opportunity was given to the assessee vide letter dated 26.11.2008 fixing the date of hearing as 3.12.2008. The Authorized Representative appeared on the scheduled date and again filed only part details. Neither the books of accounts nor any supporting bills/vouchers were produced before the AO. That is how, the AO finalized the assessment on the basis of whatever little material was available on record and made addition, inter alia, u/s 68 of the Act. It is apparent from the above narration of facts that the Assessing Officer gave countless opportunities to the assessee for submitting the required details so that the assessment may be completed in a proper manner. Except for part compliance made four times in....
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....ail worth the name of such share applicants including their PAN Nos. or addresses etc. The ld. CIT(A) appears to have been swayed by the assessee's point of view and treated the entire additional evidence as a gospel truth without feeling any need of verification, more specifically when the assessee had adopted completely unreceptive attitude before the AO. He decided the issue as if the Assessing Officer had also examined the entire evidence and had not adversely commented on it. We will discuss infra (paras 8.1 to 8.3 of this order) the infirmity rendering the admission of the additional evidence by the ld. CIT(A) as illegal, when the Assessing Officer opposed its admission tooth and nail without deliberating upon the merits of such additional evidence. 7.1. Now we turn to the view taken by the AO in the remand report that the additional evidence be not admitted as the prescription of subrule (1) of rule 46A was not satisfied. A perusal of this sub-rule transpires that an assessee can file additional evidence, inter alia, under clause (b) on the ground that he was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Offic....
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....ded extending co-operation to the AO during the course of assessment proceedings. The theory of the 'dispute amongst the directors' propounded by the assessee before the ld. CIT(A) to make it look like a reasonable cause in terms of rule 46A, therefore, falls to the ground. 8.1. Be that as it may, it is seen that the ld. CIT(A) sent the details furnished by the assessee to the AO asking for the remand report. As discussed above, the Assessing Officer strongly objected to the admission of such additional evidence by contending that the case was not covered under any of the four clauses of rule 46A(1). It was also stated in the remand report that more than adequate opportunities were granted to the assessee to comply with the requirements and hence there could be no reason to accept that the assessee was prevented by a reasonable cause in producing such evidence called for during the course of assessment proceedings. The remand report has been reproduced on pages 2 and 3 of the impugned order, from which it is manifest that the AO simply objected to the admission of additional evidence in the light of the fact that there was a complete failure on the part of the assessee during the ....
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....'a reasonable opportunity' means an effective opportunity and not a mere eye wash. Adverting to the facts of the instant case, it can be seen that the AO objected to the admission of additional evidence in the remand report on a preliminary issue of the assessee's case being not covered within any of the four clauses of sub-rule (1) of rule 46A. As he opined that the additional evidence was not liable to be admitted, he naturally could not have delved into vetting of such evidence. The ld. CIT(A) rejected such contention and did not consider it expedient to inform the Assessing Officer that he was going to admit the additional evidence as in his opinion the case was covered under clause (1)(b) of rule 46A(1) and that the Assessing Officer may examine such additional evidence on merits and also produce any evidence or document or any witness in rebuttal of such additional evidence produced by the appellant, if any. By not communicating to the Assessing Officer about the rejection of his request and proceeding to admit the additional evidence without giving any further opportunity to examine the additional evidence on merits, the ld. CIT(A) violated the prescription of sub-rule (3) o....
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.... aspects of rule 46A, which do not cohere with the factual scenario prevailing before us. We further want to make it clear that the Assessing Officer would make the assessment afresh as per law uninfluenced by any observations made in this order touching the merits of the case, which have been made simply to demonstrate that the ld. CIT(A) was not justified in accepting the additional evidence and then deleting the additions without affording a reasonable opportunity to the Assessing Officer. 11. Before parting with these grounds, we consider it apposite to deal with the contention of the ld. AR that the powers of CIT(A) are coterminus with those of Assessing Officer inasmuch as he can also do what Assessing Officer can do. Relying on a couple of decisions, he tried to justify the action of the ld. CIT(A) in deleting the addition on appreciation of additional evidence filed before him by arguing that it fell within his domain to admit additional evidence since the appellate proceedings are continuation of the assessment proceedings. This contention, in our considered opinion, is partly correct. There is not and cannot be any dispute about such proposition laid down by the Hon'ble ....
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.... further fact that such sum was paid during the previous year, we are of the considered opinion that the ld. CIT(A) was justified in allowing this claim. This ground is not allowed. 14.1. Ground No. 4 of the appeal is against the deletion of addition of Rs. 37,04,440/- made by the A.O by disallowing Marketing expenses. The Assessing Officer observed that the amount of Marketing expenses increased from Rs. 91.56 lac in the preceding year to Rs. 1.85 crore in the current year. The assessee was called upon to file details of such expenses. Only summary sheet of such expenses under broader heads was given without producing any supporting bills/vouchers. Considering these facts, the Assessing Officer made disallowance @ 20% of Marketing expenses, which resulted into an addition of Rs. 37,04,440/-. The ld. CIT(A), on the basis of details furnished before him as additional evidence, came to hold that no disallowance was called for. 14.2. Having heard the rival submissions and perused the relevant material on record, it is observed that the assessee did not furnish supporting bill/vouchers of such expenses before the AO for examination. Since, the ld. CIT(A) has deleted the addition by r....