Ita/84/2015 Of The Commissioner Of Income Tax , Trichur v. Shri E D Benny

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE SHAJI P.CHALY MONDAY, THE 17TH DAY OF AUGUST 2015/26TH SRAVANA, 1937 ITA.No. 84 of 2015 ------------------------ AGAINST THE ORDER IN ITA 612/2013 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 10.10.2014 APPELLANT/RESPONDENT/REVENUE: -------------------------------------------------- THE COMMISSIONER OF INCOME TAX , TRICHUR BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT/ASSESSEE: -------------------------------------------------- SHRI. E. D. BENNY THRISSUR - 680 741. EDASSERY CHANGAN HOUSE P.O., PALAYAMPARAMBU, CHALAKUDY R1 BY ADV. SRI.JOSEPH KODIANTHARA (SR.) R1 BY ADV. SRI.M.V.DAS R1 BY ADV. SMT.LEKSHMI SWAMINATHAN R1 BY ADV. SMT.MARIAN G.M.THARAKAN R1 BY ADV. SRI.S.JAYAKUMAR R1 BY ADV. SRI.V.S.CHANDRASEKHARAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 17-08-2015 ALONGWITH I.T.A.Nos.140, 142, 146, 147, 149, 150, 151, 156, 167, 166, 169, 170, 172, 186, 165, 180,187, 188, 189, 195, 216, 204, 205, 210, 213, 206, 207, 211, 222, 232, 190, 193, 185, 179, 148, 157,164, 173, 181, 212, 175, 219, 103, 104, 105, 106, 108, 110, 117, 126, 132, 135, 141, 168, 171, 174,177, 178, 182, 191, 194, 201, 202, 203, 208, 223, 233, 237, 234, 238, 239, 240, 241, 137, 118, 130,133, 138, 139, 125, 134, 129 & 136 of 2015, THE COURT ON THE SAME DAY DELIVERED THEFOLLOWING: I.T.A.No. 84 of 2015 APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A: TRUE COPY F THE ASSESSMENT ORDER. ANNEXURE B: TRUE COPY OF THE ORDER OF THE COMMISSIONEROF INCOME TAX (APPEALS). ANNEXURE C: TRUE COPY OF REMAND REPORT OF ASSESSINGOFFICER. ANNEXURE D: TRUE COPY OF GROUNDS OF APPEAL FILED BYREVENUE BEFORE INCOME TAX APPELLATE TRIBUNAL. ANNEXURE E: TRUE COPY OF THE ORDER OF THE INCOME TAXAPPELLATE TRIBUNAL DATED 10.10.2014. // TRUE COPY // P.A. TO JUDGE ANTONY DOMINIC & SHAJI P. CHALY, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -I.T.A.No.84, 140, 142, 146, 147, 149, 150, 151, 156,167, 166, 169, 170, 172, 186, 165, 180, 187, 188, 189,195, 216, 204, 205, 210, 213, 206, 207, 211, 222, 232,190, 193, 185, 179, 148, 157, 164, 173, 181, 212, 175,219, 103, 104, 105, 106, 108, 110, 117, 126, 132, 135,141, 168, 171, 174, 177, 178, 182, 191, 194, 201, 202,203, 208, 223, 233, 237, 234, 238, 239, 240, 241, 137,118, 130, 133, 138, 139, 125, 134, 129 & 136 of 2015 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 17[th] day of August, 2015 Antony Dominic, J. JUDGMENT The issues raised in these appeals are connected. Therefore, theseappeals were heard together and are disposed of by this common judgmenttreating, with the consent of the parties, ITA 84/15 as the leading case. 2. ITA 84/15 is filed by the Revenue, challenging the order passed bythe Income Tax Appellate Tribunal, Cochin Bench in ITA No.612/2013. Therespondent assessee is a partner in various business concerns and theother partners of these firms are the family members of the assessee. Asearch under Section 132 of the Income Tax Act (hereinafter referred as'the Act') was conducted in the business premises of various firms and theresidences of the partners on 26.3.2008. During the course of the search, various incriminating documents were found and seized and statementsof the partners were also recorded. Consequent to the search, noticesunder Section 153A of the Act were issued for the assessment years2002-2003 to 2007-2008 and notice under Section 142(1) of the Actwas issued for the assessment year 2008-2009. In response to thenotice under Section 153A of the Act, the assessee filed his returns ofincome on 10.7.2009 and on 13.7.2009, filed his regular return ofincome in response to the notice under Section 142(1) of the Act, for theassessment year 2008-2009. various incriminating documents were found and seized and statementsof the partners were also recorded. Consequent to the search, noticesunder Section 153A of the Act were issued for the assessment years2002-2003 to 2007-2008 and notice under Section 142(1) of the Actwas issued for the assessment year 2008-2009. In response to thenotice under Section 153A of the Act, the assessee filed his returns ofincome on 10.7.2009 and on 13.7.2009, filed his regular return ofincome in response to the notice under Section 142(1) of the Act, for theassessment year 2008-2009. 3. The Assessing Officer completed assessment under Section153A read with Section 144 of the Act vide his order dated 18.12.2009.The assessment in respect of the assessment year 2008-2009 was alsocompleted under Section 143(3) read with Section 144 of the Act on29.12.2009. The assessee filed appeals before the Commissioner ofIncome Tax (Appeals). In the appeals, paper books containing detailedwritten statements on various issues raised, cashflow statements filedbefore the Assessing Officer, replies filed in response to various notices I.T.A.No.84 of 2015 & connected cases : 3 : issued by the Assessing Officer and the evidences/workings in supportof various claims made in the appeals were also filed. 4. On the filing of the additional evidence before him, the Commissioner of Income Tax (Appeals) forwarded the paper booksitself to the Assessing Officer and required the Assessing Officer toexamine the new evidences/details/submissions of the assessee and togive a report. Accordingly, the Assessing Officer submitted his report, acopy of which is Annexure C in this appeal. In this report, insofar as thenew evidences that were produced before the Commissioner of IncomeTax (Appeals) are concerned, the Assessing Officer has stated thus: “20. The written submission filed by the assessee alongwith 5 paper books the whole group of individual casesand one paper book in the case of the assessee wereverified. These are fresh evidences filed by the assesseebefore the Appellate Authority. None of them were filedduring the course of assessment proceedings. Detailedinvestigations were made on the fresh evidences placedby the assessee on record. They are summarized asunder: 21. AGRICULTURAL INCOME EARNED BY THE ASSESSEE: The Inspector attached to this Circle was deputed toinspect the various agricultural land holdings of the : 4 : assessee and to verify the genuineness of the billsproduced as fresh evidences claimed by the assessee. As per this report dated 23.2.2011 submitted bythe Inspector, he visited the agricultural lands held bythe assessee on 22.2.2011 and reported as under: As per the direction of the Dy.CIT, Central Circle,Thrissur, I had visited the agricultural lands of theassessee situated in various villages and satisfied withthe documents produced by the assessee. The assesseehold approximately 13.5 acres of cultivable land indifferent villages in which 12 acres are paddy field. Theagricultural income claimed by the assessee as perbills/vouchers produced as fresh evidences were verifiedwith the original bills/vouchers with dealers and thegenuineness was verified. I have verified the originalbills/vouchers from the following dealers for the periodfrom 2.4.2010 to 3.8.2010 and found genuine. It is pertinent to state that the agricultural incomeclaimed to have earned by the assessee is for theassessment year 2010-2011 and not for the period underthe search assessment period. : 5 : 22. Receipt from sale of trees: The required particulars i.e. inflow in the cash flowstatement, details of sale of tree and agreement withpurchasers etc. were produced before the appellateauthority as fresh evidence. These were not produced atthe time of assessment proceedings. 23. Investment in immovable properties: It is pertinent to state that the agricultural incomeclaimed to have earned by the assessee is for theassessment year 2010-2011 and not for the period underthe search assessment period. : 5 : 22. Receipt from sale of trees: The required particulars i.e. inflow in the cash flowstatement, details of sale of tree and agreement withpurchasers etc. were produced before the appellateauthority as fresh evidence. These were not produced atthe time of assessment proceedings. 23. Investment in immovable properties: The investment in immovable property was ascertainedon the basis of seized documents. For the AY 2007-08,the assessee had invested Rs.7,15,887/- in immovableproperty for which he had shown only Rs.85,687/- incash flow statement. For the AY 2008-09, the assesseehad invested Rs.4,27,749/- in immovable property whereas the cash outflow as per cash flow statement isRs/5,00,558/-. This cash flow statement was producedas a new evidence which was not produced at the time ofassessment. Hence, this claim of the assessee may berejected. 24. Investment in movable properties The addition on investment in movable properties weremade on the basis of the sworn statement recorded fromthe assessee on 26.3.2008. Now the assessee had filedcash flow statements before the appellate authority toprove his claim. This may be rejected on the ground thatthis is a fresh evidence. 25. Opening Balance in the cash flow statement. The opening cash balance of Rs.25,000/- shown by theassessee in the cash flow statement can not be acceptedon the ground that the cash flow statement is a freshevidence filed before the CIT(A). He has not evenproduced the copy of his balance sheet for the financial I.T.A.No.84 of 2015 & connected cases : 6 : year ended 2001-2002 relevant to the AY 2002-03 forverification. Hence, this can not be accepted as genuine. 26. In view of the observations it is prayed that all theevidences now filed before the appellate authority arefresh and not produced at the time of assessmentproceedings. They are prima facie inadmissible in viewof provisions of Rule 46A of IT Rules 1962. Hence, theymay be rejected and assessment orders sustained.” 5. The Appellate Authority considered the matter in the light of the provisions contained in Rule 46A of the Income Tax Rules, 1962(hereinafter referred to as 'the Rules') and passed Annexure B order, inwhich after dealing with each of the justification offered by theassessee, he concluded that: “Considering these circumstances, I am of the opinionthat the appellant was prevented by reasonable andsufficientcausesfromfurnishingvariousdetails/evidences at the assessment stage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Therefore, considering the totality of the facts andcircumstances of the case, the additionalevidences/details filed by the appellant are admitted andadjudicated in this appeal.” I.T.A.No.84 of 2015 & connected cases : 7 : 6. Challenging Annexure B order, Revenue filed appeals before the Tribunal. Cross Objections were also filed by the assessee impugningAnnexure B to the extent it was against him. By Annexure E commonorder rendered on 10[th] October 2014, the appeal and Cross Objectionwere dismissed by the Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Therefore, considering the totality of the facts andcircumstances of the case, the additionalevidences/details filed by the appellant are admitted andadjudicated in this appeal.” I.T.A.No.84 of 2015 & connected cases : 7 : 6. Challenging Annexure B order, Revenue filed appeals before the Tribunal. Cross Objections were also filed by the assessee impugningAnnexure B to the extent it was against him. By Annexure E commonorder rendered on 10[th] October 2014, the appeal and Cross Objectionwere dismissed by the Tribunal. 7. In its order, the Tribunal has stated that the first commonground in all the appeals that were considered was with regard to theadmission of fresh/new evidences filed by the assessee before theCommissioner of Income Tax (Appeals) without satisfying theconditions laid down in Rule 46A of the Rules. In paragraph 4 to 9 of itsorder, the Tribunal dealt with the above contention in the light of theprovisions contained in Section 250 of the Income Tax Act and Rule46A of the Rules. In conclusion, the Tribunal held that it did not findany merit in the contention urged by the Revenue and accordingly, thecontention was rejected. Thereafter, the Tribunal examined the othercontentions and, as already stated, dismissed the appeals and cross : 8 : objections. It is aggrieved by these orders passed by the Tribunal thatthe Revenue has filed this appeal. 8. We heard the Senior Standing Counsel appearing for theRevenue and the learned Senior Counsel appearing for the respondentassessee. 9. Although in the impugned order various issues were decidedby the Tribunal, when the appeals were heard, the sole contentionraised by the Senior Counsel for the Revenue was that theCommissioner of Income Tax (Appeals), ought not have admittedadditional evidence that were produced by the assessee and that even ifit was decided to admit the additional evidence, the Commissioner ofIncome Tax (Appeals) ought to have remanded the cases leaving to theAssessing Officer, to consider the additional evidence produced and torender his findings thereon. In support of this contention, learnedSenior Counsel for the Revenue relied on the provisions contained inSection 250 of the Act, Rule 46A of the Rules, the decision of the ApexCourt in Commissioner of Income Tax v. McMillan & Co. [1958] 33 ITR I.T.A.No.84 of 2015 & connected cases : 9 : 182, Smt.Prabhavati Shah v. CIT [1998] 231 ITR 1 (Bom.) and Commissioner of Income Tax v. United Towers (I.) P. Ltd. [2008] 296 ITR106 (Delhi). 10. On the other hand, learned Senior Counsel appearing for theassessee contended that this is a case in which the grounds providedunder Rule 46A of the Rules were established by the assessee and,therefore, the First Appellate Authority was entitled to admit thedocuments in evidence. He also pointed out that before deciding toadmit the additional documents and considering the same, the FirstAppellate Authority had complied with the principles of natural justice.Therefore, according to the learned counsel, no grounds have beenmade out for interference with the orders impugned. 11. We have considered the submissions made. It is evident fromparagraph 3 of Annexure B order passed by the First AppellateAuthority itself that when the authorised representative of the assesseeappeared in response to the notice of hearing, he filed paper bookscontaining detailed written submissions on various issues raised in the I.T.A.No.84 of 2015 & connected cases : 10 : 11. We have considered the submissions made. It is evident fromparagraph 3 of Annexure B order passed by the First AppellateAuthority itself that when the authorised representative of the assesseeappeared in response to the notice of hearing, he filed paper bookscontaining detailed written submissions on various issues raised in the I.T.A.No.84 of 2015 & connected cases : 10 : appeal, cashflow statements filed before the Assessing Officer, replyfiled in response to various notices issued by the Assessing Officer andevidences/working in support of various claims made in the appeal. Onproduction of these materials, admittedly, the First Appellate Authorityforwarded the paper books to the Assessing Officer and required theAssessing Officer to examine the new evidences/details/submissionsand to give his report. 12. It was in response to that letter of the First AppellateAuthority that the Assessing Officer submitted Annexure C RemandReport. Reading of this Report shows that in paragraphs 1 to 19, theAssessing Officer has justified his conclusions in the assessment order.Thereafter, from paragraph 20 onwards, extracted above, he dealt withthe additional materials that were produced by the assessee before theFirst Appellate Authority. This report shows that insofar as theagricultural income earned by the assessee, after stating that thebills/vouchers produced by the assessee were found genuine, all thatthe Assessing Officer has stated is that the period pertains to the I.T.A.No.84 of 2015 & connected cases : 11 : assessment year 2010-2011 and not the period under the searchassessment. Insofar as the remaining issues are concerned, althougheach one of them were separately dealt with, all that he has stated isthat the claim of the assessee may be rejected for the reason that thematerials mentioned were not produced at the time of assessment. 13. It was considering this report submitted by the AssessingOfficer that the First Appellate Authority passed Annexure B order. Inthis order, the First Appellate Authority considered the circumstancespleaded by the assessee and held that the assessee was prevented byreasonable and sufficient causes from furnishing the details/ evidencesat the assessment stage. Based on that finding, the First AppellateAuthority admitted the evidence produced and adjudicated the appeal.It is this order passed by the First Appellate Authority which wasconfirmed by the Tribunal. 14. Rule 46A of the Income Tax Rules read thus: “(1) The appellant shall not be entitled to producebefore the [Deputy Commissioner (Appeals)] [or, as thecase may be, the Commissioner (Appeals), any evidence ,whether oral or documentary, other than the evidence : 12 : produced by him during the course of proceedings beforethe [Assessing Officer] except in the followingcircumstances, namely:- (a) where the [Assessing Officer] has refused toadmit evidence which ought t have been admitted;or (b) where the appellant was prevented bysufficient cause from producing the evidencewhich he was called upon to produce by the[Assessing Officer]; or (c) where the appellant was prevented bysufficient cause from producing before the[Assessing Officer] any evidence which is relevantto any ground of appeal; or (d) where the [Assessing Officer] has made theorder appealed against without giving sufficientopportunity to the appellant to adduce evidencerelevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1)unless the [Deputy Commissioner (Appeals) [or, as thecase may be, the Commissioner (Appeals] records inwriting the reasons for its admission. (3) The [Deputy Commissioner (Appeals)] [or, as thecase may be, the Commissioner (Appeals)] shall not takeinto account any evidence produced under sub-rule (1)unless the [Assessing Officer] has been allowed areasonable opportunity -- (c) where the appellant was prevented bysufficient cause from producing before the[Assessing Officer] any evidence which is relevantto any ground of appeal; or (d) where the [Assessing Officer] has made theorder appealed against without giving sufficientopportunity to the appellant to adduce evidencerelevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1)unless the [Deputy Commissioner (Appeals) [or, as thecase may be, the Commissioner (Appeals] records inwriting the reasons for its admission. (3) The [Deputy Commissioner (Appeals)] [or, as thecase may be, the Commissioner (Appeals)] shall not takeinto account any evidence produced under sub-rule (1)unless the [Assessing Officer] has been allowed areasonable 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 witnessin rebuttal of the additional evidence produced by theappellant. (4) Nothing contained in this rule shall affect the powerof the [Deputy Commissioner (Appeals)] [or, as the casemay be, the Commissioner (Appeals)] to direct theproduction of any document, or the examination of anywitness, to enable him to dispose of the appeal, or forany other substantial cause including the enhancementof the assessment or penalty (whether on his ownmotion or on the request of the [Assessing Officer] underclause (a) of sub-section (1) of section 251 or theimposition of penalty under section 271.]” 15. Reading of this provision shows except on establishing the circumstances enumerated in clauses (a) to (d) under sub rule 1, anappellant shall not be entitled to produce the Commissioner (Appeals)any evidence whether oral or documentary. Sub rule 2 mandates thatthe Commissioner (Appeals) shall not admit any evidence, unless herecords in writing the reasons for its admission. Once the documentsare so admitted, sub rule 3 comes into operation, which furthermandates that the Commissioner (Appeals) shall not take into account : 14 : any evidence produced under sub rule 1 unless the Assessing Officerhas been allowed a reasonable opportunity to examine the evidence ordocument or to cross examine the witnesses produced by the appellantor to produce any evidence in rebuttal of the additional evidence.Insofar as this sub rule is concerned, as we have already seen, onadmission of the additional evidence, the Commissioner (Appeals)forwarded the paper books itself to the Assessing Officer calling for hisreport. It was in response to the letter calling for remand report thatthe Assessing Officer submitted Annexure C report. 16. Therefore, this is a case where the Commissioner (Appeals)has allowed the Assessing Officer adequate opportunity as providedunder sub rule 3 to examine the evidence produced by the appellant. Inthe remand report that he has furnished apart from requesting for itsrejection, the Assessing Officer did not, either dispute the genuinenessof the documents nor did he ask for cross examination of the witness, orto adduce any evidence in rebuttal of the documents produced by theappellant. In other words, sub rule 3 has been fully complied with. It I.T.A.No.84 of 2015 & connected cases : 15 : was thereafter, that the First Appellate Authority proceeded toadjudicate the appeal, duly taking into account the additional evidenceproduced by the appellant. 17. One of the contentions raised in these appeals is that having admitted the additional evidence, the Commissioner (Appeals) shouldhave remanded the case to the Assessing Officer for his consideration.In our view, this contention cannot be accepted in the light of sub rule 4,a reading of which shows that it was open to the Commissioner(Appeals) to dispose of the appeal by himself or even to remit thematter to the Assessing Officer. This power of the Appellate Authority isalso evident from Section 250 of the Act, which reads thus: “250. Procedure in appeal: I.T.A.No.84 of 2015 & connected cases : 15 : was thereafter, that the First Appellate Authority proceeded toadjudicate the appeal, duly taking into account the additional evidenceproduced by the appellant. 17. One of the contentions raised in these appeals is that having admitted the additional evidence, the Commissioner (Appeals) shouldhave remanded the case to the Assessing Officer for his consideration.In our view, this contention cannot be accepted in the light of sub rule 4,a reading of which shows that it was open to the Commissioner(Appeals) to dispose of the appeal by himself or even to remit thematter to the Assessing Officer. This power of the Appellate Authority isalso evident from Section 250 of the Act, which reads thus: “250. Procedure in appeal: (1) The [Commissioner (Appeals)] shall fix a day andplace for the hearing of the appeal, and shall give noticeof the same to the appellant and to the [Assessing] Officeragainst whose order the appeal is preferred. (2) The following shall have the right to be heard at thehearing of the appeal-- (a) the appellant, either in person or by anauthorised representative; : 16 : (b)the [Assessing] Officer, either in person or by arepresentative. (3) The [Commissioner (Appeals)] shall have the power toadjourn the hearing of the appeal from time to time. (4) The [Commissioner (Appeals)] may, before disposingof any appeal, make such further inquiry as he thinks fit,or may direct the [Assessing] Officer to make furtherinquiry and report the result of the same to the[Commissioner (Appeals)] (5) The [Commissioner (Appeals)] may, at the hearing ofan appeal, allow the appellant to go into any ground ofappeal not specified in the grounds of appeal, if the[Commissioner (Appeals)] is satisfied that the omission ofthat ground from the form of appeal was not wilful orunreasonable. (6) The order of the [Commissioner (Appeals] disposing ofthe appeal shall be in writing and shall state the pointsfor determination, the decision thereon and the reason forthe decision. [(6A) In every appeal, the Commissioner (Appeals), whereit is possible, may hear and decide such appeal within aperiod of one year from the end of the financial year inwhich such appeal is filed before him under sub-section(1) of section 246A.] (7) On the disposal of the appeal, the [Commissioner(Appeals)] shall communicate the order passed by him tothe assessee and to the [Principal Chief Commissioner or] I.T.A.No.84 of 2015 & connected cases : 17 : [Chief Commissioner or [Principal Commissioner orCommissioner]” 18. Reading of sub section 4 shows that the Commissioner (Appeals) may, before disposing of any appeal, make such furtherinquiry as he thinks fit, or may direct the Assessing Officer to makefurther inquiry and report the result of the same to the Commissioner(Appeals). From the above provision, it is clear that neither theadmission of the additional materials nor the decision of theCommissioner (Appeals) to adjudicate the appeals himself rather thanremanding the same to the Assessing Officer can be faulted. 19. Learned Senior Counsel for the Revenue relied on theSupreme Court judgment in Commissioner of Income Tax v. McMillan &Co. [1958] 33 ITR 182to support his contention that when documentsare produced before the First Appellate Authority, the matter shouldhave been remanded to the Assessing Officer. In our view, this judgmentdoes not support the proposition canvassed by the learned SeniorCounsel. This judgment was rendered by the Apex Court in the I.T.A.No.84 of 2015 & connected cases : 18 : 19. Learned Senior Counsel for the Revenue relied on theSupreme Court judgment in Commissioner of Income Tax v. McMillan &Co. [1958] 33 ITR 182to support his contention that when documentsare produced before the First Appellate Authority, the matter shouldhave been remanded to the Assessing Officer. In our view, this judgmentdoes not support the proposition canvassed by the learned SeniorCounsel. This judgment was rendered by the Apex Court in the I.T.A.No.84 of 2015 & connected cases : 18 : background of the Income Tax Act,1922 and Income Tax Rules, 1922.The facts of this case show that assessment was completed and appealwas filed by the assessee. The Appellate Authority, after issuing noticeto the assessee, fixed the income of the assessee enhancing the taxliability, presumably relying on the proviso to Section 13 of the Act andRule 33 of the Rules. This was confirmed by the Tribunal and the HighCourt. In the judgment, while interpreting the provisions of Section 13of the Act, the Apex Court has highlighted the requirement ofsatisfaction by the Income Tax Officer. In our view, that finding of theApex Court does not suggest that in every case where additionalmaterials are produced before the First Appellate Authority, theAppellate Authority is bound to remit the case to the Income Tax Officerfor fresh consideration. Therefore, this judgment does not support thecontention raised by the learned Senior Counsel for the Revenue. 20. Insofar as the Bombay High Court judgment inSmt.Prabhavati Shah v. CIT [1998] 231 ITR 1 (Bom.)is concerned thatwas a case where the provisions contained in Section 250 of the Act and : 19 : Rule 46A of the Rules were dealt with. The relevant paragraphs of the judgment reads thus: “On a plain reading of rule 46A, it is clear that thisrule is intended to put fetters on the right of the appellantto produce before the Appellate Assistant Commissionerevery evidence, whether oral or documentary, other thanthe evidence produced by him during the course of theproceedings before the Income-tax Officer, except in thecircumstances set out therein. It does not deal with thepowers of the Appellate Assistant Commissioner to makefurther enquiry or to direct the Income tax officer to makefurther enquiry and to report the result of the same tohim. This position has been made clear by sub rule (4)which specifically provides that the restrictions placed onthe production of additional evidence by the appellantwould not affect the powers of the Appellate AssistantCommissioner to call for the production of any documentor the examination of any witness to enable him todispose of the appeal. Under sub-section (4) of section250 of the Act, the Appellate Assistant Commissioner isempowered to make such further inquiry as he thinks fitor to direct the Income tax officer to make further inquiryand to report the result of the same to him. Sub-section(5) of section 250 of the Act empowers the AppellateAssistant Commissioner to allow the appellant, at thehearing of the appeal, to go into any ground of appeal notspecified in the grounds of appeal, on his being satisfiedthat the omission of the ground from the form of appealwas not wilful. It is clear from the above provisions thatthe powers of the Appellate Assistant Commissioner aremuch wider than the powers of an ordinary court of appeal. The scope of his powers is coterminous with thatof the Income-tax Officer. He can do what the Income-taxOfficer can do. He can also direct the Income tax Officerto do what he failed to do. The power conferred on theAppellate Assistant Commissioner under sub-section (4)of Section 250 being a quasi-judicial power, it isincumbent on him to exercise the same if the facts andcircumstances justify. If the Appellate AssistantCommissioner fails to exercise his discretion judicially,and arbitrarily refuses to make enquiry in a case wherethe facts and circumstances so demand, his action wouldbe open for correction by a higher authority. On a conjoint reading of section 250 of the Act andrule 46A of the Rules, it is clear that the restrictionsplaced on the appellant to produce evidence do not affectthe powers of the Appellate Assistant Commissioner undersub-section (4) of Section 250 of the Act. The purpose ofrule 46A appears to be to ensure that evidence isprimarily led before the Income tax officer.” 21. This judgment also does not lead to the conclusion that in every case where additional evidence are produced, the AppellateAuthority is bound to remand the case to the Assessing Officer. 22. However, in paragraph 9 of the order passed by the Tribunal it has stated thus: “In the instant case the entire additional evidence hascome on the record of the first appellate authority because the first appellate authority decided to examinethe facts of the case in depth and adjudicate upon thematter on the basis of evidence and material thusgathered. The learned CIT(A) was empowered to do sounder the provisions of Section 250(4). The results ofenquiry conducted by him could either go to furthercement the case made out by the assessing officer or tohelp out the assessee against the findings of the assessingofficer. The mere fact that the results of the enquiriesthus conducted supported the case of the assessee andnot that of Revenue has no bearing on the jurisdictionand powers of the learned CIT(A). The learned CIT(A)has confronted the assessing officer with the evidencethus received and the material thus gathered and allowthe assessing officer to have his say in the matter videremand report dated 29.4.2013 and being done so thisdispute have no merits. We do not see any requirementin law that the first appellate authority should invariablyconsult or confront the assessing officer every time anadditional evidence that was not filed before theassessing officer comes on the record of the first appellateauthority. Where the additional evidence is obtained bythe first appellate authority on its own motion, there isno requirement in law to consult/confront the assessingofficer with such additional evidence. There may be caseswhere additional evidence is admitted by the firstappellate authority on a request or application beingmade by the assessee. In such cases sub rule (2) of rule46A requires the first appellate authority to allow theassessing officer a further opportunity to rebut the freshevidence filed by the assessee. Even that requirementcannot be said to be a rule of universal application. If theadditional evidence furnished by the assessee before the : 22 : appellate authority is in the nature of clinching evidenceleaving no further room for any doubt or controversy insuch a case no useful purpose served on performing theritual of forwarding the evidence/material to theassessing officer and obtain his report. In suchexceptional circumstances the requirement of sub-rule(3) may be dispensed with.” 23. Reading of the aforesaid finding of the Tribunal would suggest : 22 : appellate authority is in the nature of clinching evidenceleaving no further room for any doubt or controversy insuch a case no useful purpose served on performing theritual of forwarding the evidence/material to theassessing officer and obtain his report. In suchexceptional circumstances the requirement of sub-rule(3) may be dispensed with.” 23. Reading of the aforesaid finding of the Tribunal would suggest that according to it, if additional documents are summoned by theCommissioner (Appeals) and produced or if the additional evidenceproduced by the assessee are in the nature of clinching evidence leavingno further room for any doubt or controversy, it is not necessary to givean opportunity to the Assessing Officer to contradict the same. In otherwords, the finding of the Tribunal would suggest that in cases wheredocuments are summoned by the Commissioner (Appeals) and in caseswhere the documents produced are conclusive, the principles of naturaljustice are excluded. We are unable to enclose these finding of theTribunal. As held by Delhi High Court in Commissioner of Income Tax v.United Towers (I,) P. Ltd. [2008] 296 ITR 106 (Delhi), Rule 46A(4) of theRules does not specifically exclude the principles of natural justice and, I.T.A.No.84 of 2015 & connected cases : 23 : therefore, these principles are to be read into the Rules. Therefore, wedisprove the finding of the Tribunal as contained in paragraph 9 of theorder extracted above. 24. Having considered the sole contention urged, we do not find any merit in these appeals. Appeal, therefore, fail and is accordinglydismissed. 25. The issues involved in all other cases are similar. In view ofthe dismissal of the leading case ITA 84/2015, all other appeals are alsodismissed. All pending interlocutory applications in these cases stand closed. SD/- ANTONY DOMINIC JUDGE jes SD/- SHAJI P. CHALY JUDGE