ORDER
Pramod Kumar, A.M.
This appeal, filed by the revenue , is directed against the order, dated 31-10-1995 passed by the learned Commissioner (Appeals) Calcutta, in the matter of order under section 144 for the assessment years 1991-92. Solitary grievance of the revenue is reproduced below :
That on the facts and in the circumstances of the case, learned Commissioner (Appeals) erred in deleting the income of the trust of Rs. 6,68,770 by way of granting exemption under section 11 of the Income Tax Act, 1961, by admitting fresh evidence in violation of rule 46A of the Income Tax Rules.
2. Brief facts of the case, as relevant for the purpose of this appeal, are that the assessment of the assessee-trust was completed under section 144 as there was no compliance of both the notices issued by the learned assessing officer. The assessing officer observed that the assessee has made donations, in odd amounts, to M/s Anandlok Hospital and that the assessee had also made a donation of Rs. 25,000 to Birla Heart Research Centre the purpose of which was not clear. On these facts, the learned assessing officer inferred that the payments are for non-charitable purposes and, accordingly, it was concluded that disability under section 13(1)(c) was attracted. Additions were made to the Nil returned income, on account of (i) Rs. 5,07,022 on account of charities and donations inferred to be not eligible for deduction as evidence for eligibility was not filed; (ii) Rs. 1,50,747 being unspent amount at the end of the year, and (iii) Rs. 11,000 being donations received towards corpus. In appeal, Commissioner (Appeals), after taking into account the submissions of the assessee as well as the learned assessing officer, deleted all the additions on merits. Aggrieved by the order of the Commissioner (Appeals), the revenue is in appeal before us.
3. We have heard the rival submissions made by Shri Mahalik, learned Departmental Representative and Shri Salarpuria, learned counsel for the assessee. We have also perused the records and deliberated upon judicial precedents on the issues in appeal before us.
4. We have noticed that sole grievance of the revenue is against violation of rule 46A by the learned Commissioner (Appeals) and that the learned Departmental Representative has not made any submissions on merits of the case. Rule 46A of the Income Tax Rules 1962, provides that the appellant shall not be entitled to produce before 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 following circumstances :
(a) where the assessing officer has refused to admit the evidence which ought to have been admitted; or
(b) where the appellant was prevented by sufficient cause from producing the evidence which was called upon to be produced 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.
In the present case, it is not in dispute that the assessment was done under section 144 of the Income Tax Act and the additions made by the learned assessing officer were based on inferences drawn by him. It, is, therefore, settled fact that sufficient inquiries were not conducted with regard to the claims made in the return of the assessee and that the case was fixed for hearing on only two dates i.e., on 29-9-1993 and on 16-3-1994, on which there was no compliance. We have also noticed that the assessee has, in first paragraph of the statement of facts filed before the first appellate authority, submitted that the notices for these two hearings were not received by them. We have also observed that first hearing was fixed on just a day before limitation under section 143(2) was to expire and thereafter next date was fixed shortly before the assessment itself was getting time-barred; between these two dates, assessment proceedings did not get any attention from the learned assessing officer. When the assessment itself was done under section 144, the assessee obviously did not have opportunity of producing the evidence before the assessing officer. On these facts, we are of the view that filing of additional evidence before the Commissioner (Appeals) was clearly covered by clause (c) above. A view may indeed be taken, as taken by Hon’ble Gujarat High Court in the case of CIT v. Vali Mohd Ahmed Bhai (1982) 134 ITR 214 (Guj), that the Commissioner (Appeals) cannot admit any additional evidence placed under rule 46A(1) unless the Income Tax Officer has been allowed a reasonable opportunity to examine the evidence, but it is not necessary to consider that aspect of the matter since in the case before us the assessing officer not only had an opportunity to examine all the evidence filed by the assessee but, availing this opportunity, he even filed a rejoinder on the same which was duly considered by the learned Commissioner (Appeals). In this regard, we may however refer to observations of Shri G. Krishnamurty, the then Hon’ble President and while articulating views on behalf of Jaipur Bench of this Tribunal in the case of Electra (Jaipur) (P) Ltd. v. Inspecting Assistant Commissioner (1988) 26 ITD 236 (Del-Trib), which are reproduced below :
“After going through the evidence placed before us, considering the facts of this and going through the orders of the authorities below, we are of the view that the assessee should not be disqualified from producing this evidence merely on the ground that the evidence was not placed before authorities below. The sole purpose of judiciary as of the revenue is to get at the truth. If the truth is that payment of commission was genuine and was dictated by the business needs, such a payment should not be disallowed merely on the ground that assessee was unable to lead proper evidence or on the ground that evidence lead was of such a nature as to create a very high degree of suspicion. There should be no objection to consider any evidence produced, to test its authenticity and relevance and then act on it. If the evidence is genuine, reliable, proves assessee’s case, then assessee should not be denied the opportunity. But on the other hand, if the evidence led turns out to be spurious, fabricated or of irrelevant nature, such consequences, as provided under the law, will ensure. It is, therefore, incorrect to shut out the assessee in the process of administration of justice from leading evidence to prove its case. The earlier inability to lead the evidence should not be held against the assessee unless it is known to the court or suggested to the court or there was evidence to the suspect that evidence was fabricated. There is no such suggestion in this case. We are therefore, of the opinion that request of the learned counsel is reasonable and request made by the department for the refusal of its admission is not proper . . . . . . . ”
5. We also find that Hon’ble Orissa High Court in the case of B.L. Chowdhury v. CIT (1976) 105 ITR 371 (Ori) have observed that by the virtue of section 250 wide provision has been made conferring jurisdiction on the first appellate authority to make such inquiry as he deem fit and that Commissioner (Appeals) does not exceed his jurisdiction if he asks or allows the appellant to file additional evidence in the matter he thinks fit. Hon’ble Bombay High Court, in the case of Smt. Prabhavati S. Shah v. CIT (1998) 231 ITR 1 (Bom), have observed that rule 46A does fetter the right of the assessee to produce evidence but it does not restrain Commissioner (Appeals) powers under section 250(4) or 250(5) of the Income Tax Act and that this rule appears to ensure that evidence is primarily led before the assessing officer. In view of this judgment of the Hon’ble Bombay High Court, if prima facie an information is necessary to examine the claim of the assessee, the Commissioner (Appeals) should consider the necessary evidence in exercise of his powers under sub-sections (4) and (5) of section 250. It is trite that rules have to be framed within the scope of main, provision and that a rule, which travels beyond or is inconsistent with or is repugnant to the provisions in the statute will be ultra vires and void. Rule 46A was introduced with effect from 1-4-1973 and as a result of insertion of section 295(2)(mm) in the Income Tax Act which empowered Board to provide for the circumstances in which, the condition subject to which and the manner in which Commissioner (Appeals) may permit an appellant to produce an evidence which the appellant did not produce or was not allowed to produce before the assessing officer. However, these powers of the Board, which have been vested in them for carrying out for the purposes of the Act, have to be exercised in such a judicious manner so as not to make any statutory provision redundant and nugatory. The rules made in exercise of these powers should also not be interpreted in such a manner as to narrow down, dilute or curtail the statutory powers, conferred on the Commissioner (Appeals), by the provisions of section 250(4) or (5) of the Income Tax Act, 1961. Therefore, a harmonious interpretation of section 250, even read with rule 46A, cannot but mean that if facts of a case warrant that, before disposal of any appeal, Commissioner (Appeals) is required to make further inquiries, either on his own or through the assessing officer, he is not denuded of the powers to do so because of the provisions of rule 46A.
6. We are conscious to the esteemed views of Hon’ble jurisdictional High Court that there has to be a reasonable explanation for nonfiling of such additional evidence before the assessing officer. Hon’ble Calcutta High Court, in the case of Raj Kumar Srimal v. CIT (1976) 102 ITR 525 (Cal), had an occasion to examine this aspect of the matter wherein Justice Sabyasachi Mukerjee (as he then was) observed :
“It is true, as contended by the counsel of the assessee, that Appellate Assistant Commissioner has very wide owers and the interest of the substantial justice he can make further enquiry and he can admit a new ground of appeal. He can also give deductions not claimed by the assessee, as was held by this court in the case of Union Coal Co. Ltd. v. CIT (1968) 70 ITR 45 (Cal). In this case, counsel for the revenue also did not dispute that in certain circumstances the Appellate Assistant Commissioner had jurisdiction to admit new grounds if it was necessary to admit new evidence. The point in this case is not whether the Appellate Assistant Commissioner is entitled to admit the new ground or evidence either suo motu or at the invitation of parties. In this case, this is apparent that the Appellate Assistant Commissioner was not acting suo motu in additional evidence. If Appellate Assistant Commissioner was acting on being invited by the assessee, there must be some ground for admitting new evidence in the sense that there must be some explanation to show that the failure to adduce evidence earlier sought to be adduced before the Appellate Assistant Commissioner was not wilful and not unreasonable If without any explanation at all, the Appellate Assistant Commissioner admits additional evidence at the invitation of the parties, he would be exercising, in our opinion, a discretion not properly. He has undoubtedly a discretion vested in him to admit additional evidence in appropriate cases but admission of evidence at the instance of an appellant without any ground or explanation would not be exercising discretion properly and in such cases the appellate authority is competent, in our opinion, to interfere in the discretion by the Appellate Assistant Commissioner.”
It is, therefore, necessary that appellate authority has to be satisfied on bona fides of the reasons of filing evidence-an aspect which has also been referred to in Electra’s case, supra. In the case before us, the assessee’s claim before the Commissioner (Appeals) has been that “adequate opportunity has not been given for hearing” and that “order under section 144 is not justified”. It was in the background of these facts that the assessee submitted some fresh evidence in the shape of section 8OG exemption certificate of Anandlok Hospital and papers supporting the corpus donations. All other papers like audit report, list of charities and donations and financial statements were already filed before the assessing officer, along with the income-tax return. It is also not revenue’s case that filing of additional evidence before the Commissioner (Appeals) smacks of any mala fides or deliberate intent to act contrary to the scheme of the Income Tax Act. We, therefore, support admittance of additional evidence by the Commissioner (Appeals).
7. We have already expressed our view, in para. 4 above, that on the given facts, filing of additional evidence before the Commissioner (Appeals) was covered by rule 46A(1)(c) of the Income Tax Rules, 1962. In the light of the subsequent deliberations, we also find that Commissioner (Appeals) admission of additional evidence was clearly within the scheme of powers vested in him under section 250(4) of the Income Tax Act because, as held by Bombay High Court in the case of Prabhavati S. Shah (supra), if prima facie an information is necessary to examine the claim of the assessee, the Commissioner (Appeals) should consider the necessary evidence in exercise of his powers under section 250(4). It is settled in law that when a statutory authority has the powers to do something, then it has a corresponding duty to exercise such powers whenever circumstances warranting exercise of such powers exist. The case before us, in our considered view, was a fit case where the Commissioner (Appeals) should have exercised his powers to. make further inquiries. We, therefore, see no legal infirmity in Commissioner (Appeals)’s proceeding on merits of the claim and admitting necessary additional evidence for that purpose. We also find support from the view taken by a co-ordinate Bench of this Tribunal in the case of Electra (Jaipur) (P) Ltd., (supra).
8. In view of the above discussions, we support the conclusions arrived at by the learned Commissioner (Appeals) and decline to interfere in the matter.
9. In the result, revenue ‘s appeal is dismissed.