ITO, New Delhi v. Sh. Anil Bareja Prop., Delhi

ITA 2474/DEL/2015 | 2008-2009
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 247420114 RSA 2015
Assessee PAN AFXPB0040F
Bench Delhi
Appeal Number ITA 2474/DEL/2015
Duration Of Justice 1 year(s) 5 month(s) 23 day(s)
Appellant ITO, New Delhi
Respondent Sh. Anil Bareja Prop., Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Department
Order Result Allowed
Bench Allotted SMC 1
Tribunal Order Date 21-10-2016
Date Of Final Hearing 23-08-2016
Next Hearing Date 23-08-2016
Assessment Year 2008-2009
Appeal Filed On 28-04-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-1 NEW DELHI BEFORE SMT DIVA SINGH JUDICIAL MEMBER I.T.A .NO.-247 4/DEL/2015 (ASSESSMENT YEAR- 2008-09) ITO WARD-58(2) ROOM NO.315 D-BLOCK VIKAS BHAVAN I.P.ESTATE NEW DELHI-110002. (APPELLANT) VS ANIL BAREJA PROP. M/S.XTRA FREIGHT FORWARDERS M-113 GROUND FLOOR JAGAT RAM PARK LAXMI NAGAR DELHI-110092. PAN-AFXPB0040F (RESPONDENT) APPELLANT BY SH.N.K.BANSAL SR.DR RESPONDENT BY NONE ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 27.02.2015 OF CIT(A)-19 NEW DEL HI PERTAINING TO 2008-09 ASSESSMENT YEAR ON VARIOUS GROUNDS. NO ONE WAS PRES ENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING HOWEVER CONSIDERI NG THE GROUND NO.2 RAISED BY THE REVENUE. IT WAS CONSIDERED APPROPRIATE TO PROC EED WITH THE PRESENT APPEAL EX- PARTE QUA THE ASSESSEE RESPONDENT ON MERIT. THE FO LLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE:- 01. THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AN D NOT IN CONSONANCE WITH THE FACTS OF THE CASE. 02. THE LD. CIT (A) HAS ERRED IN BY ACCEPTING TH E ADDITIONAL EVIDENCES ON THE GROUND THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE AS NO NOTICE WAS SERVED ON THE ASSESSEE DURING ASSESSMENT PROCEEDINGS THOUGH THE NOTICES WERE SERVED ON THE ASSESSEE THRO UGH AFFIXTURE ON THE ADDRESS AVAILABLE ON ITD SYSTEM BANK RECORDS A ND AUDIT REPORT ETC. WHICH IS VALID MANNER OF THE SERVICE OF NOTICE AS PER THE PROVISIONS OF SECTION 282 OF THE ACT. 03. THE CIT(A) HAS ERRED TO APPRECIATE THE SCOPE O F SECTION 144 OF THE ACT EXERCISED BY THE ASSESSING OFFICER. DATE OF HEARING 23.08.2016 DATE OF PRONOUNCEMENT 21.10.2016 I.T.A .NO.-2474/DEL/2015 PAGE 2 OF 10 04. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF UNVERIFIABLE DEPOSITS OF RS. 32 92 600/- DESPITE THE FACT THAT T HE ASSESSEE DID NOT PRODUCE/FURNISH THE DETAILS DURING ASSESSMENT PROC EEDINGS AS WELL AS DURING REMAND PROCEEDINGS TO SUBSTANTIATE HIS CLAIM FOR THE SOURCE OF CASH DEPOSITS RELATES TO THE FREIGHT CHARGES RECEIV ED BY HIM. 05. THE APPELLANT CRAVES LEAVE TO ADD ALLOW OR AM END ANY/ALL THE GROUNDS BEFORE OR DURING THE COURSE OF HEARING OF T HIS APPEAL. 2. LD.SR.DR INVITING ATTENTION TO THE ASSESSMENT OR DER AND THE IMPUGNED ORDER SUBMITTED THAT THE ADDITION OF RS.32 92 600/- WAS M ADE BY AN ORDER U/S 147/144 AS PER THE AIR INFORMATION. THE ASSESSEE WAS FOUND TO HAVE DEPOSITED THE SAID AMOUNT IN ITS STANDARD CHARTERED BANK PREET VIHAR DELHI AND AXIS BANK SWASTYA VIHAR DELHI. NOTICES WERE ISSUED TO THE A SSESSEE AT THE ADDRESS AVAILABLE WHICH CAME BACK WITH THE COMMENT LEFT. NOTICES U /S 133(6) OF THE I. T. ACT 1961 WERE ISSUED TO MANAGER CHARTERED BANK PREET VIHAR DELHI AND AXIS BANK SWASTYA VIHAR DELHI FOR PROVIDING THE BANK STATEME NT OF THE ASSESSEE FOR THE RELEVANT PERIOD AND THE COPY OF THE BANK OPENING FO RM. CONSIDERING THE SAME AND IN THE ABSENCE OF ANY EXPLANATION OFFERED THE ADDI TION OF THE SAID AMOUNT WAS MADE IN THE HANDS OF THE ASSESSEE. INVITING ATTENT ION TO PARA 7 OF THE IMPUGNED ORDER IT WAS SUBMITTED THAT THE CIT(A) ADMITTED FR ESH EVIDENCES UNDER RULE 46A ON THE GROUND THAT THE ASSESSMENT WAS COMPLETED EX- PARTE U/S 144. THE ADDITIONAL EVIDENCE FILED IT WAS SUBMITTED WAS OBJE CTED TO BY THE AO. HOWEVER OVER-RULING THE OBJECTION THE CIT(A) ACCEPTED THE E VIDENCE AND WITHOUT CONFRONTING THE AO WITH THE EVIDENCE DELETED THE ADDITION WITHO UT FOLLOWING THE PROCEDURAL REQUIREMENT OF RULE 46A OF THE IT RULES AS CONSIDER ED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANISH BUILDWELL PRIVATE LTD. IN ITA NO. 92 8/2011 DATED 15.11.2011. I.T.A .NO.-2474/DEL/2015 PAGE 3 OF 10 3. CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND THE SUBMISSION OF THE REVENUE I FIND THAT THE IMPUGNED ORDER HAS BEEN PA SSED BY THE FIRST APPELLATE AUTHORITY WITHOUT FOLLOWING THE PROCEDURE. FOR REA DY-REFERENCE RULE 46A IS EXTRACTED HEREUNDER:- [PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE [DEP UTY COMMISSIONER (APPEALS)] [AND COMMISSIONER (APPEALS) ]. 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRO DUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR AS THE CASE MA Y BE THE COMMISSIONER (APPEALS)] ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [ASSESSING OFFICER] EXCEPT IN THE FOLLOWING CIRCUMSTANCES NAMELY : (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIE NT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALL ED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIE NT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE OR DER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR AS THE CASE MAY BE TH E COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS A DMISSION. (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 O FFICER] HAS BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CRO SS- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PROD UCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMISSIONER (APPEALS)] [OR AS THE CASE MAY BE TH E COMMISSIONER (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APP EAL OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUES T OF THE [ASSESSING OFFICER]) UNDER CLAUSE (A) OF SUB-SECTION (1) OF SE CTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] I.T.A .NO.-2474/DEL/2015 PAGE 4 OF 10 4. ON A CONSIDERATION OF THE ABOVE RULES IT IS SEE N THAT THOUGH FILING OF FRESH EVIDENCES AT THE FIRST APPELLATE STAGE IS NOT A MAT TER OF RIGHT AND ONLY IF CIRCUMSTANCES ADDRESSED IN CLAUSE (A) (B) (C) OR (D) ON FACTS CAN BE PLEADED THEN SUB-RULE (1) OF RULE 46A PERMITS THAT THESE EVIDENC ES CAN BE ADMITTED PROVIDED THE REASONS FOR ADMISSION OF FRESH EVIDENCE ARE SET OUT IN WRITING BY THE LD.CIT(A) THUS FULFILLING THE REQUIREMENTS OF SUB-RULE (2) OF RULE 46A. HOWEVER SUB-RULE (3) OF RULE 46A NECESSITATES THAT THE EVIDENCE SHALL BE TAKEN INTO ACCOUNT BY THE COMMISSIONER (APPEALS) ONLY IF IT HAS BEEN CONFRONT ED TO THE AO AND A REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE OR CROSS-EXAMIN E THE WITNESS OR TO PRODUCE ANY EVIDENCE OR WITNESS IN REBUTTAL IS PROVIDED TO THE AO. SUB-RULE (4) MAKES IT CLEAR THAT RULE 46A DOES NOT IMPINGE ON THE POWERS OF THE CIT(A) TO DIRECT PRODUCTION OF EVIDENCE OR WITNESS SO AS TO ENABLE H IM TO DISPOSE THE APPEAL OR FOR ANY OTHER SUBSTANTIAL COURSE INCLUDING ENHANCEMENT ETC. 4.1. CONSIDERING THE FACTS AS SET OUT HEREIN ABOVE IN THE LIGHT OF THE SPECIFIC PROVISION INVOKED I FIND THAT IN THE PECULIAR FACT S AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE WITHOUT FIRST CONFRONTING THE FRESH EVIDENCES TO THE AO. IT IS SEEN THAT THOUGH B EFORE ADMITTING THE FRESH EVIDENCES THE CIT(A) REMANDED THESE TO THE AO. TH E AO AS PER RECORD OBJECTED TO ITS ADMISSIBILITY. THEREAFTER OVER-RULING THE OBJE CTION THE CIT(A) CONSIDERING THE REASONS FOR FILING FRESH EVIDENCES IN THE FORM OF BOOKS OF ACCOUNT OF THE ASSESSEE AND SUPPORTING EVIDENCES REGARDING FREIGHT CHARGES ADDRESSING CASH DEPOSITS WAS ADMITTED. THE DECISION TO ADMIT THE EVIDENCES IS UP HELD AS FACTS JUSTIFYING ADMISSION OF FRESH EVIDENCES IS NOT UNDER DISPUTE. HOWEVER THE CIT(A) HAVING SO CONCLUDED TO ADMIT ADDITIONAL EVIDENCES WAS REQUIRE D IN TERMS OF SUB-RULE (3) OF I.T.A .NO.-2474/DEL/2015 PAGE 5 OF 10 RULE 46A TO CONFRONT THE EVIDENCES TO THE AO SO AS TO ALLOW HIM AN OPPORTUNITY TO REBUT THE EVIDENCES PLACED ON RECORD WHICH OPPORTUN ITY ADMITTEDLY HAS NOT BEEN PROVIDED. THE ABOVE EXTRACTED RULES WHEN COSNDIERED IN THE LIGHT OF CIT VS MANISH BUILDWELL PVT. LTD. [2012] 204 TAXMAN 106 ( DELHI) MANDATE THAT THE CIT(A) AFTER OVER-RULING THE OBJECTION OF THE AO ON THE ADMISSIBILITY OF THE FRESH EVIDENCES WAS REQUIRED TO COMMUNICATE THE DECISION TO ADMIT THE EVIDENCE TO THE AO AND PROVIDE HIM A REASONABLE OPPORTUNITY TO REBU T THE SAME. IN THE ABSENCE OF ANY SUCH EXERCISES THE ORDER IS IN VIOLATION OF THE STATUTORY RULES AND IS OPEN TO THE CHALLENGE OF BEING PERVERSE. THE SAID VIEW IS SUPPORTED BY THE AFORE-SAID DECISION OF JURISDICTIONAL HIGH COURT. A PERUSAL O F THE SAID DECISION SHOWS THAT CONSIDERING THE NON-FULFILLMENT OF THE REQUIREMENTS SET OUT IN SUB-RULE (3) OF RULE 46A THE HONBLE COURT WAS PLEASED TO RESTORE THE IS SUE BACK TO THE CIT(A) DIRECTING THE SAID AUTHORITY TO ADDRESS THE SHORTCO MINGS. THE HONBLE COURT TOOK INTO CONSIDERATION THE OFF REPEATED ARGUMENT IN SU CH CASES BY NOTING THAT IT IS TRUE THAT THE POWERS OF CIT(A) AS FIRST APPELLATE A UTHORITY ARE CO-TERMINOUS WITH THAT OF THE AO BY DRAWING ATTENTION TO THE DISTINCT ION THAT THE POWERS OF THE CIT(A) AS FIRST APPELLATE AUTHORITY ARE CO-TERMINOUS POWER OVER THE SOURCES OF INCOME CONSTITUTING THE SUBJECT MATTER OF THE ASSESSMENT EXCEPT THE POWER TO TOUCH NEW SOURCES OF INCOME NOT CONSIDERED BY THE ASSESSING O FFICER. THE JURISDICTIONAL HIGH COURT HAS HELD THAT THE CIT(A) CAN ALSO DO AND CAN DIRECT THE ASSESSING OFFICER TO DO WHAT HE HAS FAILED TO DO AS HELD BY THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX U.P. V. KANPUR COAL SYN DICATE (1964) 53 ITR 225. THE HONBLE COURT FOUND THAT THE CIT (A) IN THE FA CTS BEFORE THE COURT WHICH FACT IS EVIDENT FROM THE FACTS OF THE PRESENT CASE ALSO THAT THE CIT(A) DID NOT I.T.A .NO.-2474/DEL/2015 PAGE 6 OF 10 EXERCISE THE POWERS RECOGNIZED IN SUB-SECTION (4) O F SECTION 250 AND HAS BEEN PETITIONED BY THE ASSESSEE TO EXERCISE THE POWER UN DER RULE 46A. THE HONBLE COURT HAS HELD THAT IN ORDER TO SHOW THAT THE POWER UNDER SUB-SECTION (4) TO SECTION 250 IS BEING EXERCISED THERE SHOULD BE MATE RIAL ON RECORD TO SHOW THAT WHILE DISPOSING OF THE APPEAL THE CIT(A) HAD DIREC TED FURTHER ENQUIRY AND CALLED FOR THE CONFIRMATION LETTERS FROM THE ASSESSEE EVEN IN RESPECT OF RECEIPT OF MONIES FROM CUSTOMERS BY WAY OF CHEQUES. RULE 46A IT WAS OBSERVED WAS A PROVISION IN THE INCOME TAX RULES 1962 WHICH IS INVOKED ON THE OTHER HAND BY THE ASSESSEE WHO IS IN AN APPEAL BEFORE THE CIT (A). ONCE THE AS SESSEE INVOKES RULE 46A AND PRAYS FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE T HE CIT (A) THEN THE PROCEDURE PRESCRIBED IN THE SAID RULE IT HAS BEEN HELD HAS TO BE SCRUPULOUSLY FOLLOWED. THE FACT THAT SUB-SECTION (4) OF SECTION 250 CONFERS PO WERS ON THE CIT (A) TO CONDUCT AN ENQUIRY AS HE THINKS FIT WHILE DISPOSING OF THE APPEAL THE HONBLE COURT HELD CANNOT BE RELIED UPON TO CONTEND THAT THE PROCEDURA L REQUIREMENTS OF RULE 46A NEED NOT BE COMPLIED WITH. THEIR LORDSHIPS HAVE HEL D THAT IF SUCH A PLEA OF THE ASSESSEE IS ACCEPTED THEN IT WOULD REDUCE RULE 46A TO A DEAD LETTER BECAUSE IT WOULD THEN BE OPEN TO EVERY ASSESSEE TO FURNISH ADD ITIONAL EVIDENCE BEFORE THE CIT (A) AND THEREAFTER CONTEND THAT THE EVIDENCE SHOULD BE ACCEPTED AND TAKEN ON RECORD BY THE CIT (A) BY VIRTUE OF HIS POWERS OF EN QUIRY UNDER SUB-SECTION (4) OF SECTION 250. THE COURT HELD THAT THIS WOULD MEAN IN TURN THAT: (I) THE REQUIREMENT OF RECORDING REASONS FOR ADMITTING THE ADDITIONAL E VIDENCE; (II) THE REQUIREMENT OF EXAMINING WHETHER THE CONDITIONS FOR ADMITTING THE ADDITIONAL EVIDENCE ARE SATISFIED; AND (III) THE REQUIREMENT THAT THE ASSESSING OFFICER SHOULD BE ALLOWED A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE ET C. CAN ALL BE THROWN TO THE I.T.A .NO.-2474/DEL/2015 PAGE 7 OF 10 WINDS A POSITION WHICH THE HONBLE COURT HELD WAS WHOLLY UNACCEPTABLE AND MAY RESULT IN UNACCEPTABLE AND UNJUST CONSEQUENCES. THE HONBLE COURT HELD THAT THE PROCEDURAL REQUIREMENTS MENTIONED IN THE RULE MUST BE STRICTLY COMPLIED WITH SO THAT THE RULE IS MEANINGFULLY EXERCISED AND NOT EXE RCISED IN A ROUTINE OR CURSORY MANNER. THE TRIBUNAL IN VIEW THEREOF IN THE FACTS BEFORE THE COURT WAS FAULTED WITH FOR OVER-LOOKING THE REQUIREMENTS OF SUB-RULE (3) OF RULE 46A AND CONFUSING IT WITH SUB-RULE (4) OF RULE 46A. ADDRESSING THE RATI ONALE FOR THE RULE THE HONBLE COURT OBSERVED THAT THE FUNDAMENTAL RULE WHICH IS V ALID IN ALL BRANCHES OF LAW INCLUDING INCOME TAX LAW IS THAT THE ASSESSEE SHOUL D ADDUCE THE ENTIRE EVIDENCE IN HIS POSSESSION AT THE EARLIEST POINT OF TIME. TH IS ENSURES FULL FAIR AND DETAILED ENQUIRY AND VERIFICATION. REFERRING TO THE DECISION IN KESHAV MILLS CO. LTD. V. COMMISSIONER OF INCOME-TAX BOMBAY NORTH AHMEDABAD (1965) 56 ITR SC 365 7-JUDGE BENCH JUDGEMENT OF THE SUPREME COURT IT WAS OBSERVED THAT THE COURT HELD THAT 'PROCEEDINGS TAKEN FOR THE RECOVERY OF TAX UNDER TH E PROVISIONS OF THE ACT ARE NATURALLY INTENDED TO BE OVER WITHOUT U NNECESSARY DELAY AND SO IT IS THE DUTY OF THE PARTIES BOTH THE DEPARTMENT AND TH E ASSESSEE TO LEAD ALL THEIR EVIDENCE AT THE STAGE WHEN THE MATTER IS IN CHARGE OF THE INCOME-TAX OFFICER.' IT WAS HELD BY THE JURISDICTIONAL HIGH COURT THAT IT IS F OR THE SAID REASON THAT RULE 46A STARTS IN A NEGATIVE MANNER BY SAYING THAT AN APPEL LANT BEFORE THE CIT (A) SHALL NOT BE ENTITLED TO PRODUCE BEFORE HIM ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY OTHER THAN THE EVIDENCE PLACED BY HIM BEFORE THE AS SESSING OFFICER. THEIR LORDSHIPS HELD THAT AFTER MAKING THE SAID GENERAL S TATEMENT WHICH WAS FOUND TO BE IN CONSONANCE WITH THE PRINCIPLE STATED IN THE A FORESAID JUDGMENT OF THE APEX COURT EXCEPTIONS HAVE BEEN CARVED OUT SETTING OUT UNDER WHAT CIRCUMSTANCES IT I.T.A .NO.-2474/DEL/2015 PAGE 8 OF 10 WOULD BE OPEN TO THE CIT (A) TO ADMIT ADDITIONAL EV IDENCE. THE COURT HELD THAT ADDITIONAL EVIDENCE CAN ONLY THEN BE PRODUCED AT TH E FIRST APPELLATE STAGE WHEN CONDITIONS STIPULATED IN THE RULE 46A ARE SATISFIED AND A FINDING IS RECORDED TO THAT EXTENT WHICH MAKES IT CLEAR IN UNAMBIGUOUS LAN GUAGE THAT FIRSTLY THE CONDITIONS PRESCRIBED IN RULE 46A MUST BE SHOWN TO EXIST BEFORE ADDITIONAL EVIDENCE CAN BE ADMITTED AND THEREAFTER EVERY PROCE DURAL REQUIREMENT MENTIONED IN THE RULE HAS TO BE STRICTLY COMPLIED WITH SO THA T THE RULE IS MEANINGFULLY EXERCISED AND NOT EXERCISED IN A ROUTINE OR CURSORY MANNER. THEIR LORDSHIPS HAVE HELD THAT A DISTINCTION SHOULD BE RECOGNIZED A ND MAINTAINED BETWEEN A CASE WHERE THE ASSESSEE INVOKES RULE 46A TO ADDUCE ADDIT IONAL EVIDENCE BEFORE THE CIT (A) AND A CASE WHERE THE CIT (A) WITHOUT BEING PRO MPTED BY THE ASSESSEE WHILE DEALING WITH THE APPEAL CONSIDERS IT FIT TO CAUSE OR MAKE A FURTHER ENQUIRY BY VIRTUE OF THE POWERS VESTED IN HIM UNDER SUB-SECTIO N (4) OF SECTION 250. IT IS ONLY WHEN THE CIT(A) EXERCISES HIS STATUTORY POWER SUO M OTO UNDER THE ABOVE SUB- SECTION THAT THE REQUIREMENTS OF RULE 46A NEED NOT BE FOLLOWED. ON THE OTHER HAND WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES RULE 46A IT IS INCUMBENT UPON THE CIT (A) TO COMPLY WITH THE REQUI REMENTS OF THE RULE STRICTLY. 4.2. IN THE FACTS OF THE CASE BEFORE THE HONBLE HI GH COURT IT WAS FOUND THAT THE CIT(A) HAD RECORDED THAT THE ADDITIONAL EVIDENCE SH OULD BE ADMITTED BECAUSE THE ASSESSEE WAS PREVENTED BY ADDUCING THEM BEFORE THE ASSESSING OFFICER. THE SAID OBSERVATION IT WAS HELD WOULD TAKE CARE OF CLAUSE ( C) OF SUB-RULE (1) OF RULE 46A. THE OBSERVATION OF THE CIT (A) IT WAS HELD WOULD A LSO TAKE CARE OF SUB-RULE (2) UNDER WHICH HE IS REQUIRED TO RECORD HIS REASONS FO R ADMITTING THE ADDITIONAL EVIDENCE. THUS THE REQUIREMENT OF SUB-RULES (1) AN D (2) OF RULE 46A IT WAS HELD I.T.A .NO.-2474/DEL/2015 PAGE 9 OF 10 HAD BEEN COMPLIED WITH. HOWEVER THE HONBLE COURT FOUND THAT SUB-RULE (3) WHICH INTERDICTS THE CIT (A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE ASSESSING OFFICER HAS HA D A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME HAD NOT BEEN COMPLIED WITH. THE COURT FOUND THAT THERE WAS NOTHING IN THE ORDER OF THE CIT (A) TO SHOW THAT THE ASSESSING OFFICER WAS CONFRONTED WITH THE CONFIRMAT ION LETTERS RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AMOUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS THE END RESULT THE HONBLE COURT HE LD WAS THAT ADDITIONAL EVIDENCE WERE ADMITTED AND ACCEPTED AS GENUINE WITH OUT THE ASSESSING OFFICER FURNISHING HIS COMMENTS AND WITHOUT VERIFICATION. I N THESE CIRCUMSTANCES THE COURT HELD SINCE THIS IS AN INDISPENSABLE REQUIREMENT WE ARE OF THE VIEW THAT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO THE C IT (A) WITH THE DIRECTION TO HIM TO COMPLY WITH SUB-RULE (3) OF RULE 46A. IN OUR OPINIO N AND WITH RESPECT THE ERROR COMMITTED BY THE TRIBUNAL IS THAT IT PROCEEDED TO M IX UP THE POWERS OF THE CIT (A) UNDER SUB- SECTION (4) OF SECTION 250 WITH THE POWE RS VESTED IN HIM UNDER RULE 46A. COMMENTING UPON THE ORDER OF THE ITAT THEIR LORDS HIPS FURTHER HELD THAT THE TRIBUNAL ERRED IN ITS INTERPRETATION OF THE PR OVISIONS OF RULE 46A VIS--VIS SECTION 250(4). ITS VIEW THAT SINCE IN ANY CASE THE CIT (A) BY VIRTUE OF HIS CONTERMINOUS POWERS OVER THE ASSESSMENT ORDER WAS EMPOWERED TO CALL FOR ANY DOCUMENT OR MAKE ANY FURTHER ENQUIRY AS HE THINKS F IT THERE WAS NO VIOLATION OF RULE 46A IS ERRONEOUS. THE TRIBUNAL APPEARS TO HAVE NOT APPRECIATED THE DISTINCTION BETWEEN THE TWO PROVISIONS. IF THE VIEW OF THE TRIB UNAL IS ACCEPTED IT WOULD MAKE RULE 46A OTIOSE AND IT WOULD OPEN UP THE POSSIBILIT Y OF THE ASSESSEES' CONTENDING THAT ANY ADDITIONAL EVIDENCE SOUGHT TO BE INTRODUCE D BY THEM BEFORE THE CIT (A) I.T.A .NO.-2474/DEL/2015 PAGE 10 OF 10 CANNOT BE SUBJECTED TO THE CONDITIONS PRESCRIBED IN RULE 46A BECAUSE IN ANY CASE THE CIT (A) IS VESTED WITH CONTERMINOUS POWERS OVER THE ASSESSMENT ORDERS OR POWERS OF INDEPENDENT ENQUIRY UNDER SUB-SECTION (4) OF SECTION 250. THAT IS A CONSEQUENCE WHICH CANNOT AT ALL BE COUNTENANCED. 4.3. APPLYING THE PRINCIPLE LAID DOWN BY THE JURISD ICTIONAL HIGH COURT I FIND THAT IN THE FACTS OF THE PRESENT CASE ALSO AS HAVE BEEN ADDRESSED AT LENGTH IN THE EARLIER PART OF THIS ORDER THE PROCEDURAL LAPSE IS PATENT A ND EVIDENT ON THE FACE OF THE RECORD ITSELF. ACCORDINGLY IN VIEW OF THE ABOVE R EASONING ON FACTS AND LAW CONSIDERING THE SUBMISSIONS OF THE LD. SR. DR AND THE PRECEDENT RELIED UPON THE IMPUGNED ORDER IS SET ASIDE AND ALLOWING THE DEPART MENTAL GROUND THE ISSUE IS RESTORED BACK TO THE FILE OF THE CIT(A) TO ADDRESS THE PROCEDURAL LAPSES AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 1 ST OCTOBER 2016. SD/- (DIV A SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT NEW DELHI