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Judgment
Per Renu Jauhri, Accountant Member:
The above captioned appeal is preferred by the Revenue against the order dated 29.05.2025, passed by CIT(A)/NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for A.Y. 2017-18.
The Revenue has raised following grounds of appeal:
"1.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 2,60,00,000/- on account of share warrants u/s 68 of the Act.
2.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the addition made by the AO on account of disallowance of Expenses amounting to Rs. 8,96,90,520/-.
3.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the addition made by the AO on account of disallowance of Expenses amounting to Rs. 35,40,140/-.
4.The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal."
The department has also filed additional grounds vide letter dated 19.12.2025 which are as under:
'1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in admitting additional documentary evidence submitted by the assessee for the first time during the appellate proceedings without calling for a mandatory remand report from the Assessing Officer and without recording any satisfaction as required under Rule 46A(1) of the Income-tax Rules,1962. The failure of the Ld. CIT(A) to comply with the procedure prescribed under Rule 46A(3) vitiates the appellate order. The omission to raise this ground in the original Form 36 was inadvertent, and since the issue is legal in nature.
2.The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal."
We first take up the additional legal ground raised by the Revenue.
Brief facts are that the assessee filed its return declaring loss of Rs.11,63,40,846/- on 31.10.2017. Return was revised on 30.10.2018 at same loss. The case was selected for scrutiny and assessment completed at a loss of Rs.1,85,16,186/- after making various additions.
Aggrieved the assessee preferred an appeal before the Id. CIT(A). Vide order dated 29.05.2025, Id. CIT(A) allowed the assessee's appeal after examining the additional evidences submitted by the assessee. Aggrieved, the Revenue is in appeal before the Tribunal. Besides the issues on merit, the Revenue has raised an additional ground regarding admission of additional evidence under Rule 46A without giving the AO an opportunity to give his submissions on the same.
Before us, Id. DR has vehemently argued that the additional evidences filed before the Id. CIT(A) were considered without seeking any remand report from the AO and hence provisions of Rule 46A were violated. He has placed reliance on the decision of the Hon’ble jurisdictional High Court in the case of CIT, Central-1 Vs. Manish Buildwell (P) Ltd. (2011) 16 taxmann.com 27 wherein it has been held that where additional evidence was admitted and accepted as genuine at the first appellate stage, without Assessing Officer furnishing his comments and without verification, requirements of Rule 4A(3) were not satisfied and, therefore, order of the Commissioner (Appeals) could not be sustained.
On the other hand, Id. AR has submitted that details called for by the Id. AO were duly submitted. The assessee filed addition evidences before Id. CIT(A) to further strengthen his claims. The jurisdiction of Id. CIT(A) being co-terminus with AO, he was justified in considering the additional evidence and allowing relief to the assessee.
We have heard the rival submissions and perused the material available on record. Admittedly, the assessee had filed certain additional evidences before the Id. CIT(A). There is no mention in the appellate order regarding any remand report sought from the AO by the Id. CIT(A). In view of the provisions of Rule 46A and in the light of the decision of the Hon'ble jurisdictional High Court in case of Manish Buildwell (supra), we are of the considered view that the Id. CIT(A) ought to have sought a remand report from the AO before considering the additional evidences and allowing relief to the assessee on its basis. We, therefore, deem it appropriate to restore the appeal back to Id. CIT(A) for fresh adjudication after giving requisite opportunity to the Id. AO to verify the additional evidence.
In the result, the appeal of the Revenue is allowed for statistical purposes.