TaxTMI 
TaxTMI 
2006 (11) TMI 144
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....er dated March 8, 2004, passed by the Income-tax Appellate Tribunal, Gauhati Bench (for short, "the Tribunal" ), in I. T. A. No. 4 (Gauhati)/2004, for the assessment year 1998-99 is hit by the provision of law laid down under section 46A of the Income-tax Rules, 1962 (for short, " the Rules" ). 4. It is submitted on behalf of the Revenue that the Tribunal while dismissing the appeal preferred by the Revenue and thereby confirming the order dated November 12, 2003, passed by the Commissioner of Income- tax (Appeals) (for short, " the CIT" ), failed to construe and interpret the provisions of rule 46A in its true perspective and resultantly arrived at an erroneous decision and that too on the basis of irrelevant considerations. According to him, the xerox copies of the sale bills and the receipts of an amount of Rs. 6,38,000, which was initially added by the assessing authority to the capital account under the cover of sale proceeds of utensils, being remained unexplained, was allowed to be adduced as an additional evidence by the appellate authority, i.e., Commissioner of Income-tax without following the procedural law prescribed under sub-rules (1), (2) and (3) of rules 46A. ....
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....3) The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity- (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271." 8. A common reading of the provisions of law aforesaid would go to show that the Commissioner (Appeals) may exercise two options in disposing of the appeal under section 250 of the Act ; firstly....
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....view of the above legal position, there is no doubt that the procedure of rule 46A(1) as regards the production of additional evidence needs to be guided and controlled by sub-rules (2) and (3) of rule 46A. In other words, if additional evidence is permitted to be produced, then firstly there must be reasons to be recorded in writing and secondly reasonable opportunity has to be given to the assessing authority to refute and reject such production. 12. Now coming to sub-rule (4) of rule 46A, it would go to show that this power can be exercised by the Commissioner (Appeals) suo motu when there is no such available documents placed before the appellate authority for purposeful and effective adjudication of the appeal. On that occasion only by exercising the power bestowed upon him by sub-rule (4) of rule 46A of the rules read with section 250(4) of the Act which empowers him to make further inquiry as he thinks fit, the Commissioner (Appeals) shall direct for production of any document or examination of any witness, to enable him to dispose of the appeal or for any other substantial cause including the enhancement of the assessment or penalty. 13. None the less, relying heavily....
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....long, under section 68(2) of the VDIS 1997. Rs. 1. 48.320 kgs. silver utensils 8,215 2. 278 gms gold utensils 3,058 3. 32.610 kgs. silver utensils 7,012 4. 462 gms gold utensils 3,234 5. 194 gms gold utensils 1,940 It needs to be made clear that the genuineness of the declaration is neither questioned nor doubted. The genuineness of the declaration has already been accepted. There is no doubt that the assessee is having the gold and silver utensils as declared under the VDIS. The question is whether the assessee has sold the above utensils and received the sale proceeds in the extent of Rs. 6,38,000. The sale transaction of the utensils are not proved. No evidence or proof of the sale transactions could be furnished by the assessee in spite of opportunities offered. The amount claimed as sale proceeds of the utensils is a big sum of money and the assessee should have proved the genuineness of sale receipts with material evidence. But he failed to do so. In the circumstances, I could not accept the alleged sale transactions of the utensils as genuine. The cash brought in and added to the capital account under the cover of sale proc....
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....f the sale bills and receipts of the amount by the party were filed. The fact that the assessee possessed those utensils was not disputed by the Assessing Officer. The sale bills clearly stated sale of the utensils and the transaction was done through bank accounts of both the party. It is not the case of the Assessing Officer that the utensils sold were not the ones disclosed under the VDIS by the assessee. In such circumstances, I agree with the learned authorised representative that there is no justifiable reason without any materials on the contrary, to disbelieve sale of the utensils. The addition is deleted." 18. This finding clearly goes to reveal that the said xerox copy of the sale proceeds and receipts was, at no point of time, ever called for by the appellate authority himself. In other words, it would go to show that the said document was produced by the assessee in order to prove the sale proceeds of the amount of Rs. 6,38,000 before the Commissioner of Income- tax. It also appears from the above finding that the assessee/respondent informed the appellate authority for the first time that those utensils were sold to one M/s. Rara Brothers and that too all the transa....
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....hrough bank draft, the same being transparent and open, the transaction did not cast any doubt or suspicion and that being the position, xerox copies were validly accepted. 21. However, this court, after close reading and careful perusal of sub-rule (4) of rule 46A, is hesitant to be persuaded by the submission of Mr. Joshi. According to us, this sub-rule (4) would operate only when no such additional evidence has been adduced before the appellate authority and this power, given to the appellate authority under sub-rule (4) of rule 46A, can be exercised of his own, if he is of the opinion that it is necessary for disposal of the appeal to direct the production of any document or the examination of any witness. It is to be noted that rule 46A(4) does not permit to do away with the procedural law prescribed under sub-rules (1), (2) and (3) of rule 46A, once additional evidence is produced. It is pertinent to refer herein to Order 41, rule 27, Civil Procedure Code, which is almost in pari materia with rule 46A(1). It also does not allow the appellant to adduce any additional evidence until and unless such exceptional circumstances, as provided therein, are set out before the appell....
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....elp the assessee/respondent herein rather it would support the plea of the Revenue/appellant. 27. Given the facts and circumstances of the case at hand and also having carefully considered the aforesaid submissions of learned counsel appearing for the rival parties as well as upon perusal of the impugned appellate judgments and orders, it is found that without recording any valid or plausible reason, the Commissioner of Income-tax allowed the assessee to produce the additional evidence. More so, no opportunity of hearing was ever given the Revenue/appellant. It is admitted that the assessee produced the xerox copy of the sale bill and receipt only before the Commissioner of Income-tax when no such document was placed before the assessing authority as reflected from the order dated March 31, 2001. It was categorically held by the assessing authority therein that the sale transactions of the utensils were not proved in spite of opportunities afforded. 28. That being the position, we are constrained to hold that the appellate authority acted in violation of rule 46A and the acceptance of the xerox copy of the sale proceeds as additional evidence de hors rule 46A of the Rules, be....