TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 220
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....ut affording the Assessing Officer an opportunity to rebut or examine such evidence. 3. That the Ld. CIT(A) was not justified in rejecting the findings of the Assessing Officer, which were based on clear discrepancies in the assessee's financials and lack of satisfactory explanation for the source of funds. 4. That the Ld. CIT(A) misinterpreted the scope of Section 69 and wrongly held that the provisions were not applicable, despite the assessee failing to substantiate the source of the investment with credible evidence. 5. The Ld. CIT(A) erred in appreciating the requirements of invocation of the provisions of section 69. 6. Appellant craves leave to amend or alter any ground or add any other grounds. which may be necessary." 2. Succinctly stated, the assessee company which is engaged in the business of manufacturing of ceramic tiles had filed its return of income for AY 2022-23 on 26/10/2022 declaring a loss of (Rs.18,74,49,155/-). Thereafter, the case of the assessee company was selected for complete scrutiny under the Faceless Assessment Scheme-2019 for verification of certain issues, viz., (i) that the assessee company had shown high ....
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....,62,96,168/-. The AO called upon the assessee company to provide the details and source of the payments along with the confirmation from parties, copies of their returns of income, bank statements, bills/vouchers, etc., but the assessee company failed to furnish the requisite details. As the assessee company had failed to substantiate the source of the payments made to the creditors, therefore, the AO issued notices under section 133(6) of the Act to the respective parties but the payments made to sundry creditors amounting to Rs. 38,30,75,528/- (out of Rs. 62,62,96,168/-) could not be verified, therefore, he held the same as unexplained cash credits under section 68 of the Act. The AO based on his aforesaid observations determined the income of the assessee company at Rs. 35,75,01,708/- after making the aforementioned additions, viz., (i) addition of unconfirmed loans made under section 68 of the Act: Rs. 3,17,26,261/-; (ii) addition of unexplained investment under section 69 of the Act regarding investment in tangible assets: Rs. 13,01,49,074/-; and (iii) addition of unexplained cash credits under section 68 regarding unsecured loans: Rs. 38,30,75,528/-. 7. Aggrieved, the asse....
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....t. The Ld. CIT-DR submitted that in the present case the CIT(A) had admitted the aforementioned documents, i.e., additional evidence without even confronting the same to the AO and calling for his objections as required as per the mandate of Rule 46A of the Income Tax Rules, 1962, which therein rendered the order so passed by him as unsustainable in the eyes of law. 11. Per contra, Shri Pawan Kumar Chakrapani, CA, Learned Authorized Representative (for short, "Ld. AR") for the assessee company/respondent failed to rebut the aforementioned contention of the revenue that the CIT(A) had admitted the above mentioned additional evidence in violation of Rule 46A of the Income Tax Rules, 1962. 12. We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below. 13. Before proceeding further, we deem it apposite to cull out Rule 46A of the Income Tax Rules, 1962 which contemplates the set of circumstances under which additional evidence can be filed by an appellant before the CIT(A), as well as the manner in which such additional evidence can be admitted by the said ....
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....shall not take into account any additional evidence produced under sub-rule (1) of Rule 46A unless the AO has allowed a reasonable opportunity, viz., (i) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (ii) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. Although, we find that sub-rule (4) of Rule 46A of the IT Rules, 1962 carves out an exception in a case where the Commissioner (Appeals) had directed the production of any documents, 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, but the same does not apply to the case before us. We say so, for the reason that in the present case before us, the assessee company had furnished the documentary evidence, viz., PANs, copies of the returns of income and the financial statements of the parties and had prayed for admission of the same as ad....