Powers of CIT(A) Admission of additional evidence

The judgment of the court was delivered by P. G. Agarwal, J— Heard Mr. U. Bhuyan, learned counsel appearing on behalf of the appellant, and Dr. A. K. Saraf, learned counsel for the respondent. The appeal was admitted for hearing on the following substantial questions of law— "1. Whether, on the facts and circumstances of the case, the Tribunal was justified and correct in law in holding that the Commissioner of Income-tax (Appeals) did not violate the provisions of rule 46A of the Income-tax Rules, 1962, and in upholding the decision of the Commissioner of Income-tax (Appeals) in admitting additional evidence ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified and correct in law in confirming the deletion by the Commissioner of Income-tax (Appeals) of the addition of Rs. 23,00,000 being income from undisclosed investments, when the assessee failed to discharge his primary onus of showing that the apparent was not the real ? 3. Whether, on the facts and in the circumstances of the case, is not the decision of the Tribunal perverse in upholding the order of the Commissioner of Income-tax (Appeals) ?" During the course of hearing, we find that question No. 1 is relevant and questions Nos. 2 and 3 are consequential. The respondent, Shri Parimal Kanti Chanda, hereinafter referred to as the assessee, filed his return of income for the assessment year 1998-99 and during the course of hearing, the assessee made certain disclosures as provided under the law and brought in another ten numbers of bank accounts. The Assessing Officer, however, took the view that there are two other bank accounts—one in the name of Mr. P. Sangmong and the other in the name of M/s. Nagaland General Supply and Construction Agency, Dimapur. The assessee filed his show cause and, thereafter, the Assessing Officer added Rs. 23 lakhs to the income of the assessee. Feeling aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), Guwahati, for adducing additional evidence in support of his plea raised in the appeal. The Revenue was given a notice and although time was granted no objection was filed by the Revenue and on consideration of the additional evidence, the appeal was allowed. The Revenue, thereafter approached the Income-tax Appellate Tribunal, Gauhati Bench, Guwahati in I. T. A. No. 87 (Gauhati) of 2002 and the Tribunal on consideration of the materials held that adducing of additional evidence was in accordance with law. The Tribunal also considered the merits of the matter and dismissed the appeal filed by the Revenue and hence, the present appeal. Section 250 of the Income-tax Act, provides for the procedure for hearing of appeal and it provides, inter alia, that during the course of hearing of the appeal, the appellate authority may make further inquiry as it deems fit and allow the appellant to take fresh grounds of appeals not raised by it. Rule 46A of the Income-tax Rules provides for adducing of additional evidence at the stage of appeal hearing. In the present case, we find that the assessee came up with the plea that in respect of the ground taken by him, the assessing authority did not grant sufficient opportunity to lead evidence pursuant to the show-cause notice regarding the two bank accounts referred to above. The assessee filed his objection and reply and thereafter, the assessment was made rejecting the plea and without asking him to support the plea raised by him in respect of the two bank accounts. In respect of the two bank accounts we find that the assessing authority was given sufficient opportunity and the Revenue also took time to verify the additional evidence ; but no objection was filed and thereafter, the judgment was delivered by the appellate authority and adducing of additional evidence was allowed to do substantial justice in the matter and not to thwart the evidence at the initial stage so as not to prejudice either party. Mr. U. Bhuyan, learned counsel for the Revenue was fair enough to submit that although the Revenue failed to file objection before the appellate authority before the order was passed, the objection could have been taken care of. We find that the Tribunal had considered the additional evidence and even the objections raised by the Revenue Department and the, finding as regards adducing of additional evidence, in the facts and circumstances of the present case, we hold that it was in accordance with law and did not prejudice the Revenue as sufficient opportunity was given to the Revenue to rebut the same. In view of the above, we hold that no substantial question of law as raised emerges in the present appeal. Hence, the appeal stands dismissed.