Insights of Rule 46A of income Tax Rules-1962


When we are disagree with the assessment order passed by AO, we prefer appeal to the higher Authority, the First Appeal shall be preferred before Deputy Commissioner (Appeals) and Commissioner (Appeals).

During the appeal, one need to produce the fact of the case and the grounds of appeal while filing form 35 of first appeal. Grounds of the appeal refers to the question of fact or the question of interpretation of law, out of the various grounds one ground is production of additional evidences which are relevant for the decision of the case.

Production of additional evidences is generally a primary grounds for various appeal, therefore, lets understand additional evidences provisions govern by Rule 46A of Income Tax Rules 1962 through questions and answers;

Q1 - What is rule 46A?

Answer: Rule 46A is about the production of additional evidences before the Deputy Commissioner (Appeals) and Commissioner (Appeals).

Q2 - When rule 46A is applicable?

Answer: Only in the following four situations this rule is applicable;

  1. where the[Assessing Officer] has refused to admit evidence which ought to have been admitted ; or
  2. where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the[Assessing Officer] ; or
  3. 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
  4. 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.

Case Laws

  • CITv.Subhash Chander Agarwal[1988] 172 ITR 166 (All.). Where no opportunity was given by the Assessing Officer to the assessee to lead evidence before making certain additions, action of the first appellate authority to allow the assessee to produce additional evidence and to delete the additions after proper examination was justified.
  • Rai Kumar Srimalv.CIT[1976] 102 ITR 525 (Cal.). Where repeated opportunities were given to the assessee by the Assessing Officer to produce evidence to prove the genuineness of certain disputed cash credits but the assessee did not produce any evidence, it could not be said that the Commissioner (Appeals) exercised his discretion arbitrarily or capriciously while refusing to admit fresh evidence at the appellate stage
  • Ram Prasad Sharmav.CIT[1979] 119 ITR 867 (All.). In the matter of production of additional evidence, the assessee has to show (i) that the Assessing Officer had refused to admit the evidence, (ii) alternatively, that he was prevented by sufficient cause from producing the evidence before the Assessing Officer, (iii) that the evidence was relevant to the grounds of appeal, and (iv) that the Assessing Officer did not afford him sufficient opportunity in regard thereto

Q3 - How the additional evidences will be admitted by DCIT(A) or CIT(A)?

Answer: DCIT(A) or CIT(A) can admit the additional evidences which is relevant for the disposal of case and only after recording the reasons in writing for the admission of additional evidences. Therefore DCIT(A) or CIT(A) can not admit any additional evidences without recording the reasons in writing.

Case laws

CITv.Babulal Jain[1989] 176 ITR 411 (MP). Where Commissioner (Appeals) was acting on being invited by the assessee, there must be some explanation to show that the failure to adduce evidence earlier but sought to be adduced in first appeal was not wilful and not unreasonable.

Q4 - Whether DCIT(A) or CIT(A) can dispose the case considering additional evidences produced by appellant directly?

Answer: No, As per Rule 46A(3) DCIT(A) or CIT(A) shall not take into account any evidence produced under sub-rule (1) unless the[Assessing Officer] has been allowed a reasonable opportunity for ;

  1. to examine the evidence or document or to cross-examine the witness produced by the appellant, or
  2. to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant.

Explanations-

The mere fact that notice of hearing of the appeal was given to the Assessing Officer would not meet the requirements of this sub-rule. When a prayer for additional evidence was made, it was an independent and substantive application seeking a new right. Notice of such application was necessary to the Assessing Officer and he ought to have been afforded both an opportunity to oppose it and to test the additional evidence or counter the effect thereof or produce evidence in rebuttal. Remand report needed to be obtained from Assessing Officer.

Case laws -

CITv.Valimohmed Ahmedbhai[1982] 134 ITR 214 (Guj.). A finding by the Tribunal that an opportunity was given by the AAC to the ITO and thus the provisions of rule 46A were not violated, is a finding of fact, from which no question of law would arise

Q5 - Does this rule 46A is mandatory for DCIT(A) or CIT(A)?

Answer: Yes, if appellant could not produced the evidences during the course of assessment before AO and appellant want to submit the same in Appeal then he can do so only by way of making separate application under rule 46A in two copies to DCIT(A) or CIT(A).

Case laws -

Smt. Mohinder Kaurv.Central Government[1976] 104 ITR 120 (All.). Where Assessing Officer made additions due to non-production of confirmation letters from the creditors by the assessee, and the Commissioner (Appeals) rejected to admit the said letters produced before him as additional evidence, the Tribunal would be justified in holding that the Commissioner ought not to have rejected the additional evidence but should have directed the Assessing Officer to consider the confirmation letters.

Q6 - Whether DCIT(A) or CIT(A) is refrain from directing the appellant to produce other evidences apart from produced as per rule 46A?

Answer: No, As per rule 46A(4), this rule do not restrict the power of DCIT(A) or CIT(A) from directing 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.

Case laws -

C. Unni Krishnanv.CIT[1997] 140 CTR (Ker.) 552. Rule 46A does not deal with powers of AAC to make further enquiry or to direct ITO to make further enquiry.

The author can also be reached at camahendra001@gmail.com

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Mahendra Borhade 
on 11 February 2019
Published in Income Tax
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