TaxTMI 
TaxTMI 
2017 (4) TMI 1187
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....in law, the learned C.I.T. (A) erred in dismissing the appeal. 2. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in dismissing the appeal and that too without giving full and proper opportunity of being heard in the matter. 3. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred dismissing the appeal and that too without appreciating fully and properly the facts of the case. 4. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in not following the directions of the Appellate Tribunal and dismissing the appeal. 5. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in not admitting additional evidences and dismissing the appeal." 3. The brief facts of the case are that the assessee is engaged in the business of offset printing & packaging and manufacturing of confectioneries. This appeal before us is against the appellate order of the ld. CIT(A) dated 13- 02-2014 which is in fact second round of litigation before the tribunal. In the first round of litigation, the tribunal in ITA no. 2767/Mum/2011 vide its or....
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.... sent to the assessee by the CA which were sent only on the last date of filing the return of income It was submitted that hence the assessee appointed new CA as he was not satisfied with the performance of CA Mr Vijay Patil. The documents for relevant period were with the old CA , Mr Vijay Patil who was not co-operating and refusing to hand over the records of the assessee , hence difficulty was faced by the assessee in producing the evidences in first round of litigation before the AO. The reply of the assessee before learned CIT(A) is as under:- "We refer to the personal hearing by the undersigned at your office on 07.01.2014 at 11.30 a.m. regarding above, mentioned subject. In this regard, we would like to bring to your notice the fact of our case for your kind consideration: We had appointed Mr. Vijay Patil as our Auditor for the financial year period 2006-07 & 2007-08. In the financial year 2007-0B our Auditor had not audited our accounts properly and sent us the papers for signing@ on the last date of filing returns. With no option left, the Directors of the company signed the papers and filed the Income-tax Return. Being dissatisfied with the auditor, we changed our a....
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....e kept at C.A.'s office. The contention of the appellant is that one Shri Vijay Patil was the auditor during F.Y. 2006-07 and 2007-08 and not satisfied with his work he was changed in the F.Y. 2008-09 and the new auditor M/s Arvind Nagda & Associates was appointed in his place. Since all the books were kept with Shri Vijay Patil, he did not hand over the records to the new AR. I find all these explanations were not supported by any evidence. Even though business is running in a loss, the appellant has not closed down the business hence, the books of accounts and other documents are supposed to be maintained at the registered office. No evidences were produced before me to show that the registered office is either shifted or it is closed and records were kept in the CA's office for safe custody. No evidence was also furnished before me to show that the books were kept in the custody of Mr. Vijay Patil, the Ex- Chartered Accountant. No such explanation was offered during the assessment proceedings before the AO highlighting this fact. Hence, according to me, the entire theory floated is only an after thought and I am inclined to accept the concocted story given by the appellant. ....
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....section (1) of section 251 or the imposition of penalty under section 271". 2.8.2 The CIT(A} can entertain any evidence other than the one produced by the appellant before the Assessing Officer provided the exceptional conditions mentioned in Clause (a) to (d) above in Rule 46A are satisfied. The facts in the present case is as under: 1. Clause (a) where the Assessing Officer refuses to admit the evidences which ought to have been admitted is not applicable to the facts in the appellant's case. In fact it is the failure on the part of the appellant to produce the complete details, during the assessment proceedings, prompted the Assessing Officer to make the impugned additions. Further, the AR has not produced any evidence before me to show that the Assessing Officer had refused to admit any evidence. 2. Conditions of Clause (b), where the appellant was prevented from sufficient cause from furnishing the evidence which was called for by the Assessing Officer is also not applicable because the AR of the appellant has not brought any evidence before me to show that the appellant was prevented from sufficient cause in furnishing the evidence in support of his contention....
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.... service of notice on him and that he himself was not running the hotel but someone on his behalf was running it. Even before the Tribunal the point relating to someone running the hotel on behalf of the assessee was withheld. Therefore, no attempt was made by the assessee either before the Income-tax Officer or the Appellate Assistant Commissioner to produce additional evidence. Therefore, the Tribunal was right in holding that the Appellate Assistant Commissioner was justified in not considering the additional evidence. 2.8.5 Reliance is also placed on Commissioner of Income-tax v, Ranjit Kumar Choudhury reported in 288 ITR 179 (Gau). The head note is reproduced below: Appeal to Commissioner (Appeals)--Powers of Commissioner (Appeals)-- Power to admit additional evidence-Scope of rule 46A- Documentary evidence not tendered before Assessing Officer-No reason for failure to adduce evidence-Documents not admissible as evidence before Commissioner (Appeals- Income tax Act, 1961, s. 250-lncome tax Rules, 1,962, r.46A. Rule 46A(1) of the Income-tax Rules; 19'62, enumerates four circumstances allowing the appellant/assessee to produce additional evidence namely, (i) if t....
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....he assessee by the said CA , Mr Vijay Patil to the assessee. He also drew our attention to the letter of ICAI dated 19-10- 2011 about action taken to get records from said erring CA Mr. Vijay Patil. The replies of said CA Mr Vijay Patil are also placed on records. The entire correspondence with ICAI and the erring CA is placed on record at page 2-10. The ld. counsel further drew our attention to the fact that the assessee has sufficient reasons which prevented assessee in presenting his case before the authorities below and submitted that prejudice is caused to the assessee by the appellate order of the ld. CIT(A) in not admitting the additional evidences by invoking Rule 46A of Income-tax Rules, 1962. Thus, the ld. counsel prayed that the matter may be restored to the file of the ld. CIT(A) with a direction to admit the additional evidences and adjudicate the matter on merits in accordance with law. It was submitted that after admitting the additional evidences, the ld. CIT(A) can call for remand report from AO in accordance with Rule 46A of 1962 Rules. 6. The ld. D.R. fairly conceded that in both the round of litigation, the additional evidences were not admitted by the ld. CI....
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....er and restore the matter back to him with a direction to decide the appeal on merits in accordance with law. Order pronounced in the open court on 15.6.2012." Thus as could be seen that the tribunal in first round of litigation set aside the matter back to the file of the ld. CIT(A) with a direction to decide the matter afresh on merits in accordance with law. We have observed that the ld. CIT(A) in the second round of litigation refused to admit the additional evidences by invoking Rule 46A of 1962 Rules. On the other hand, the assessee has produced large number of documents with respect to the complaint lodged by the assessee with The Institute of Charted Accountants of India against its erstwhile erring CA Mr Vijay Patil who was not handing over relevant records to the assessee which disabled assessee in filing evidences before the AO. Thus, in our considered view the assessee has established a reasonable cause for not presenting the evidences before the AO at the time of framing of the assessment order dated 25-11-2010 passed by the AO u/s 143(3)(ii) of 1961 Act. The Rule 46A of 1962 Act is an aid to advance justice to compute correct income which can be brought to....