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Judgment
PER AMITABH SHUKLA, AM
This appeal filed by the assessee is directed against the order of Ld. Commissioner of Income Tax(Appeals)-3, Gurugram, dated 06.02.2026 arising out of assessment order dated 27.11.2019 passed under section 143(3) of the Act for the Assessment Year 2017-18. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has filed following grounds of appeal:-
1)The order of Ld. CIT(A) under Section 250(6) of the Income-tax Act, 1961 (‘the Act’) is bad in law and against the principles of natural justice and merits to be remanded back for fresh adjudication as it has been passed without even perusing and considering the entire submissions and detailed explanations to grounds of appeal filed by the Appellant
2)The Ld. CIT(A) has erred in ignoring the additional grounds of appeal filed by the Appellant during appellate proceedings and neither accepting nor rejecting such additional ground of appeal
3)The Ld. CIT(A) has erred in disallowing the additional evidence filed by the Appellant under Rule 46A which had been furnished with just and sufficient cause and went to the root of the addition made during the assessment proceedings.
4)The Ld. CIT(A) has erred in upholding the addition of Rs.5,91,51,590/- under Section 69A despite the amount already appearing recorded in books of accounts in express violation of provision of Section 69A and leading to double taxation
5)The Ld. CIT(A) has erred in confirming the addition of Rs.5,91,51,590/- under Section 69A despite adequate evidence that the regular cash deposits by the Assessee was completely in line with facts of the case and its nature of business and the assessment order suffered from incurable infirmities
6)The Ld. CIT(A) has erred in confirming the disallowance of Rs.29,10,753/- towards tour and travelling expenses incurred wholly for business purposes without appreciating that the impugned addition suffers from incurable infirmities and is therefore liable to be deleted in its entirety.
At the outset, the ld. Counsel for the assessee submitted that its primary grievance against the order of ld. CIT(A) is that, the appellate authority did not consider the additional evidences under Rule-46A of the IT Rules, which it had purported to have filed during the appellate proceedings. The ld. Counsel accordingly requested that the matter may kindly be considered for remission back to the ld. CIT(A) with the directions to allow the assessee admission of its additional evidences so as to adjudicate the matter afresh. Before us, the appellant assessee has filed a copy of the request made before the ld. CIT(A), Gurugram-3 for admission of additional evidences under Rule-46A (supra).
The ld. DR placed reliance upon the orders of the authorities below.
We have heard rival submissions in the light of material placed on records. We have noted from page no.3 that the assessee had attempted to file an additional ground of appeal before the ld. CIT(A) requesting for admission of additional evidences. We have further noted from para-5.3 on pages 14 and 15 of the appellate order that the ld. CIT(A) has declined to admit the additional evidences filed by the assessee on the premise that the ld. Assessing Officer had given several opportunities which were not complied during assessment stage. For the purposes of the clarity, we wish to extract para-5.3 of the impugned order.
“With regard to request for additional grounds of appeal, it is observed that during the appellant proceedings, the appellant has furnished summary sheet showing month wise gross receipts, cash receipts and cash deposited showing income and cash deposits and also the patient-wise details sought to be admitted as additional evidence. However, from perusal of AO order, it is seen that numerous opportunity of being heard, keeping in view of principle of natural justice where accorded by the AO when the appellant failed to furnish such documents and presentation of such documents at this stage appears to be after thought and is unreliable. The appellant has failed to fulfill any of the conditions stipulated under rule 46A to admit the additional evidences during the appeal stage and hence its request cannot be entertained and is accordingly, rejected.”
Rule-46A of the Income Tax Rules postulate that an appellant can request for admission of additional evidences subject to satisfaction of conditions stipulated therein. At this stage, we deem it necessary to reproduce the statutory prescription of Rule-46A of Income Tax Rules, 1962.
Production of additional evidence before the 83[Joint Commissioner] (Appeals) and Commissioner (Appeals).
46A. (1) The appellant shall not be entitled to produce before the 83[Joint Commissioner] (Appeals) or, as the case may 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 sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or
(c)where the appellant was prevented by sufficient 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 order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.
(2)No evidence shall be admitted under sub-rule (1) unless the 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission.
(3)The 84[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.
(4)Nothing contained in this rule shall affect the power of the 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, 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.
Thus, it is clear that a Commissioner of Income Tax(Appeals) is entitled to admit as additional evidence, any evidence which the assessee was asked by the Assessing Officer during assessment proceedings and which could not be produced for justified reasons. The ld. CIT(A) is also empowered to admit any evidence which it was prevented by sufficient cause and which is relevant to the contest raised through grounds of appeal. We have further noted from the order of the ld. CIT(A) extracted hereinabove, that he has primarily rejected appellants application on the premise that appellant had willfully concealed submission of evidences and that those produced now were a case of an afterthought and therefore unreliable.
We have noted from the conclusion drawn by the ld. CIT(A) extracted hereinabove that the same is untenable and incorrect. The ld. Counsel for the assessee in its petition filed before the ld. CIT(A), a copy of which has been provided to us, categorically submitted that the issue before the Assessing Officer was justification of cash deposits made during the demonetization. It is the case of the assessee that it primarily deals in IVF procedures and that the cash deposits had a direct linkage with the IVF patients treated by the assessee. It has been submitted that the assessee had, in the absence of any specific show-cause coming from the Assessing Officer qua the cash deposits, assumed that the Assessing Officer was satisfied and hence did not provide the ld. Assessing Officer, the data of IVF patients treated by the assessee. It has been submitted that this was done so as to withhold identity of IVF patients as the same is social taboo. The assessee submitted that in view of the addition made by the ld. Assessing Officer, it attempted to provide the data under Rule-46A to the ld. CIT(A) so as to establish that the cash deposits made during the demonetization had a direct linkage with the IVF patients treated by the assessee.
We have noted that the assessee thus had within meanings of clause (c) of Rule-46A, sufficient cause for not providing the data and that the appellant assessee was well within his rights to have requested for its admission before the Ld. First Appellate Authority. We have also noted that the rejection by the ld. CIT(A) is mere sketchy and cryptic dismissal heavily alluding towards a non-application of mind. In the interest of justice, we are therefore of the considered opinion that the issue deserves to be remitted back for readjudication by the ld. CIT(A) in the light of evidences purported to be filed under Rule-46A. Accordingly, we set-aside the appellate order and remit the matter back to the file of the ld. CIT(A) for readjudication de novo in accordance with law and after giving a due opportunity of being heard to the assessee. The ld. CIT(A) is directed to admit and considered the additional evidences filed under Rule-46A by the assessee during the original appellate proceedings. The appeal of the assessee is therefore allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.