AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 695
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....ere by ignoring the facts brought on the record by the AO. 2. Without prejudice to the above, whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in ignoring violation of Income Tax Rule 46A(3) without appreciating that a) the additional evidences admitted were not forwarded to the AO and remand report was not called from him and, accordingly, AO did not get "reasonable opportunity" in terms of Rule 46A(3)? b) Normally whenever a document is proposed to be used against the assessee, it is provided in advance and about seven days are given for him to respond, however, in contrast, such opportunity was not allowed to the AO/Department in the instant: case? 3. Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) has erred in not providing reasonable 3 opportunity of being heard to the AO as provided under rule 46A(3) of IT rules 1964 to examine and rebut the claim of assessee lodged before CIT(A) for the first time. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred while deciding the appeal in favour of the appellant, failed to allude to relevant fac....
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....ion on oath. Further the onus to produce the kishan/Dala/Agent/Agent lies with assessee as the assessee firm has been in direct contact with such kishan/Dala/Agent/Agent for its business activities, since most of the notices u/s 133(6) were return un-served. The fact was brought to the notice of the assessee and asked why Rs. 2,00,23,554/- should not be added back to the total income of the assessee in contravention of provision u/s 40A(3) of the Act. In response, the counsel of the assessee submitted the written reply which is scanned as under:- xxx xxx xxx xxx xxx xxx The reply of the assessee was examined found not plausible. A plain reading of the Rule 6DD(e) makes it clear that it is applicable only to the payments in cash for the purchase of the agricultural or forest produce directly to the cultivators, growers or producers of the agricultural or forest produce alone to avail of the benefit of the said clause. Further Rule 6DD(k) is makes it clear that it is applicable only to the payments made by a person to his agent who is required to make the further payment in cash on behalf of such person. In the instant case the assessee failed to produce some ....
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....e appellant further argued that the assessing officer verified almost 9 out of 11 any test check of the purchases, such a large sampling size would be sufficient to consider the genuineness of the purchases claimed by the appellant. The appellant also argued that there was no deficiency or adverse finding by the assessing officer regarding the 92% of the verified purchases, and thus the remaining purchases should be accepted as genuine given the practical difficulties in procuring the forest produce and confirming payments from the tribals, villagers, and farmers. The appellant relied on the decisions of jurisdictional High Court and ITAT. supporting their argument that where the genuineness of payment and the party are not in dispute, no disallowance under section 40A(3) can be made. Considering the totality of facts and arguments presented by the appellant, and the fact that purchases amounting to Rs. 22.44.67.846 were verified and confirmed during the assessment proceeding, and that the remaining payments followed the same processes and procedures, I find merit in the appellant's argument. Further, there was no adverse material on record to doubt the genuin....
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....rroboratory evidence in this regard. The simple reasoning submitted by the assessee was that these purchases had been done from numerous parties and details thereof were not maintained. On this submission of the assessee, the purchases could not be treated explained, submitted the Ld. Sr. DR. Further, she also put emphasis on the fact that the purchases could not be accepted on the principle of preponderance of probability of enquiries outcome. It was categorically submitted that the assessee was duty bound to explain the genuineness of each purchase if asked to do so. The claim that the said purchases of Rs. 1,47,04,929/- done from numerous parties could not be the reason to treat these purchases genuine. She submitted that the Ld. CIT(A) erred in admitting additional evidences submitted by the assessee through a separate application filed under Rule 46A(3) of the IT Rules without providing any opportunity of being heard to the Ld. AO. Further, the purchases of Rs. 1,47,04,929/- were not established by the assessee to have been done from the parties recorded in the books of account. Hence, the result of enquiries outcome of other purchases could not explain the purchases of Rs. 1,....
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....e on the record. We do not find any merit in the contention of the Ld. Counsel that this appeal is not maintainable as the tax effect is below the threshold limit prescribed by the CBDT Circular 9/2024 as the Revenue has challenged the issue of purchases of Rs. 2,00,23,554/- not only by admitting the additional evidence by ignoring the facts as mentioned in the Ground No. 1. We therefore, will decide the case on merit. 9. The Rule 46A(3) of the IT Rules reads as under: '"46A.(3) The [Joint 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." 10. In view of the Rule 46A(3) of the IT Rules, the Ld. CIT(A) is duty bound to give an opportunity of being heard to the Ld. AO and that is why the word 'shall' has been used in this Rule. Before the Ld. CIT(A), the assess....