TaxTMI 
TaxTMI 
2026 (1) TMI 1256
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....sources. The appellant has filed the return of income u/s 139(4) of the Act for A.Y. 2020-21 on 31st March, 2021 declaring a total income at Rs. 2,11,46,750/- offered to tax at the rate of 10% as per the Article 12 of India - Switzerland Double Taxation Avoidance Agreement ('DTAA') while claiming credit of Tax Deducted at Source ('TDS') of Rs. 21,14,675/- against the tax liability on total income. The return of income has been processed vide the intimation dated 9th December, 2021 issued u/s 143(1) of the Act by ACIT (CPC), Bengaluru (AO). In the said intimation, the total income of the appellant has been assessed at INR 2,11,46,750/- and the credit of TDS amount of Rs. 21,14,675/- has not been granted. As a result, the demand of Rs. 27,07,820 including interest was raised for A.Y. 2020-21. 3. Aggrieved by the said intimation, the appellant had filed an application for rectification u/s 154 of the Act before the AO. The said application was dismissed and credit of TDS amount of Rs. 21,14,675/- has not been granted. The appellant challenged the said order u/s 154 of the Act by the Ld. CIT(A) who has dismissed the appeal vide the impugned order. 4. The only issue raised is that....
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....has therefore, opposed to admit the additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. 7. We have considered the rival submissions and have perused the order of ITA No. 4113/Mum/2023, Dated 05.06.2024 of the Hon'ble Mumbai Tribunal under identical issue of additional evidence was decided. The relevant part of this order is extracted as under: "19. The assessee/appellant has sought permission of the additional evidence under Rule 29 of Appellate Tribunal Rules, 1963. Therefore, let us examine the Rule 29 of the Appellate Tribunal Rules, 1963. "Production of additional evidence before the Tribunal: - 29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be reco....
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....order dated 17.04.2021 has been pleased to hold that if additional evidence is to be considered and allowed by the Tribunal, the parties to the proceedings or the affected party should be well aware of the said material/additional evidence, before the same is considered by the Hon'ble Tribunal. Para 19 of the judgement of the Hon'ble High Court of Karnataka in ITA No. 506 of 2018 referred (supra) is relevant and reproduced as under: "19. In the considered opinion of this Court, keeping in view Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 and also keeping in view the fact that the material on the basis of which the order has been passed was not furnished to the appellant at any point time, the order passed by the Tribunal is certainly violative of principles of natural justice and fair play as the appellant was not afforded an opportunity to rebut fresh evidence especially when such evidence was based on Google study." 8. We have examined the contents of the application for additional evidence to find out the reasons for not producing the said evidence before the Lower Authorities. It is stated in the application is as under: - "The present applica....
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.... 2020-21) as per section 199 read with Rule 37BA of Income-tex Rules, 1962 (the Rules) * During the subject proceedings, neither the AO nor Ed. CTT(A) specifically asked the Appellant to produce give evidence to substantiate that royalty income pertained as A 2020-21. * Considering the objections raised by the CIT(A) that reason for offering the royalty income in AY 2020-21 is not clear, the Appellant would like to produce/rely upon the following documents as additional evidences with respect to Ground 5-f of the Grounds of Appeal: a) Invoice of the royalty issued by the Appellant he the AY 2020-21 (Annexure A) b) Relevant extract of audited financials of the lndian party being payer of royalty i.e.Hasbro India Toys Private Limited for AY 2020-21 ("ΗΙΤΡL') (Annexure B) c) Relevant extract of audited financials of HITPE for AY 2021- 22 (Annexure C) The said additional evidences further reinforces the submission of the Appellant that royalty in pertains to AY 2020-21 and accordingly, the same was offered to tax by the Appellant in AV 2020-21 itself. * The Appellant also submits that the non-filing of the ....
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....sion on the part of one of the parties to lead evidence. In the case of CIT v. Virgin Securities & Credits Lad: 332 ITR 396 (Delhi), the Hon, jurisdictional High Court held that the CIT(A) may admit additional evidence, after obtaining a remand report from the assessing officer, if the evidence sought to be adduced by the applicant is crucial to the disposal of the appeal. Hon'ble ITA T Delhi have also held in the case Of Electra (Jaipur) (R) Lid v. IAC (1988) 26 ITD 236 that if the evidence is genuine, reliable, proves the assessee's case, then the assessee should not be denied the opportunity. Similarly it was held in Dwarka Prasad v. ITO 63 ITD 1 (TM) that additional evidence if in the interest of justice, and renders assistance to the authority in passing order, may be admitted. Other similar rulings are 68 TTJ 722, 231 ITR 1, 21 SOT 218, 293 [TR 53, 94 ITO 79 etc. In View of the guidance available in the afore-cited judicial pronouncements, I hold that the additional evidence as mentioned in para 2.3 above are admissible u/r 46A and are taken on record." * The judgment of Hon'ble Delhi ITAT in case of Electra (Jaipur) (P) Ltd vis Inspecting Assistant Commi....
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....te that the royalty income pertained to A.Y. 2020-21. 10. It is therefore, stated that due to that bonafide belief, the documents could not be produced and the end of justice requires that the assessee be permitted to file documents under Rule 29 of the ITAT Rules, 1963 and the additional evidence may accordingly be admitted. 11. The tax has already been deposited by the assessee. The Only question is that the relevant documents were not produced during the assessment proceedings or before the first appellate authority due to the bonafide belief/ misconception. There is nothing brought on record by the revenue which may show any Act or omission on the part of assessee or the omission was not bonafide, as nothing malafide has been alleged for brought to our notice on the part of the assessee for not producing additional evidence/ relevant evidence in support of royalty income being earned for the relevant A.Y. 2020-21. 12. In these facts and circumstances, we are of the considered opinion that the assessee/ appellant should not be penalized for mere technical lapse on their part by not filing the relevant document at the relevant time. Further, no prejudice is going to be c....