Documents filed on the day when assessment order passed are not additional evidence

Documentary evidences filed on the day on which assessment order was passed are not additional evidence requiring compliance Rule 46A – ITAT

In A recent judgment, ITAT Agra held that documentary evidences filed electronically on the day on which assessment order was passed are not additional evidence requiring compliance of Income Tax Rule 46A.

ABCAUS Case Law Citation:
4824 (2025) (11) abcaus.in ITAT

In the instant case, the Revenue had challenged the order passed by the CIT(A), Commissioner of Income-tax (Appeals), NFAC in deleting addition made by Assessing Officer (AO) u/s 69A as unexplained money and 69C as unexplained expenditure r/ws. 115BBE of the Income Tax Act, 1961 (the Act).

The respondent assessee had not filed his return of income for the relevant Assessment Year. An information was available with the department that the assessee made cash deposit in current account and cash withdrawals from current account during the year under consideration.

Notice u/s 148A(b) of the Act was issued to the assessee with prior approval of PCIT. The assessee did not respond to such notice. The case was reopened u/s 147 by issuing notice u/s. 148 of the Act. Assessee did not furnish return of income in response thereof. Further, statutory notices u/s. 142(1) were issued and show cause notices on various occasions were also issued.

Since the assessee remained irresponsive, the Assessing Officer completed the best judgment assessment u/s 144 of the Act and assessed total income of assessee by making addition to income in respect of cash deposits.

The CIT(A) observed that the assessee was a milk distributor, doing his business for a very small margin of profit, who made cash deposit in the bank account out of his sales made on daily basis and that amount was transferred to the suppliers on daily basis.

Further the CIT(A) observed that the AO had made the addition without considering submissions filed by the assessee through ITBA on the day when the assessment order was passed by the AO, were available to the AO at the time of passing the assessment order.

Being satisfied with respect to the source of cash deposit, the CIT(A) deleted the addition.

Aggrieved, the Revenue challenged the order of CIT(A) before Tribunal and argued that CIT(A) deleted the addition without any verification or seeking clarification from the AO as to whether the said submission was indeed accessible to him at the relevant point in time.

It was further contended that the CIT(A) did no allow the Assessing Officer a reasonable opportunity to examine and rebut the submissions/documentary evidences produced by the assessee at the time of appellate proceedings, which is in violation of Rule 46A of the Income Tax Rules 1962 (The Rules).

The Tribunal noted that the contention of the Revenue was that CIT(A) had directly considered the additional evidence filed before him under Rule 46A of the Rules, whereas additional evidence was required to be verified at the end of the Assessing Officer.

The Tribunal found that the said documentary evidences were filed by the assessee during the assessment proceedings on the same day on which the assessment order was passed. The Assessing Officer ignored such documentary evidences submitted electronically by the assessee before him. The CIT(Appeals), thus rightly considered such documentary evidences during the appellate proceedings.

The Tribunal held that CIT(Appeals), having co-terminus powers at par with the Assessing Officer, was competent to consider such evidence. Argument of Revenue cannot, thus, be accepted that such evidence be treated as evidence filed under Rule 46A of the Rules. 

Accordingly, the appeal was decided in negative against the revenue and in favour of assessee.

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