If additional evidence does not fit any of the four gateways in Rule 46A, is the CIT(A) powerless to look at it?
The Bombay High Court held that Rule 46A fetters the assessee's right to produce evidence but does not fetter the CIT(A)'s own powers under s.250(4) and s.250(5). Where the appellate authority considers evidence necessary to examine the claim, it can direct an inquiry or the production of documents even though the assessee could not have brought the evidence in as of right.
Decided by the High Court (Bombay High Court — judgment delivered by B.P. Saraf, J.) on 1998-02-20, reported as (1998) 231 ITR 1 (Bombay); (1998) 148 CTR (Bom) 192. It bears on section 250, section 251 of the Income Tax Act 1961, in Appeals and Evidence & Burden of Proof matters.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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Additional evidence was sought to be brought on record in the first appeal. The Commissioner (Appeals) approached the question purely through Rule 46A and treated the four gateways in sub-rule (1) as exhaustive of what could be looked at. The High Court was asked whether the rule exhausted the appellate authority's powers or whether s.250(4) and s.250(5) survived alongside it. The Court held the statutory powers survived.
Question No. 3 was answered in the negative and in favour of the assessee (para 11). On a conjoint reading of s.250 and rule 46A, the restrictions placed on the appellant to produce evidence do not affect the powers of the appellate authority — the judgment speaks throughout of the Appellate Assistant Commissioner — under sub-section (4) of s.250 (para 6); rule 46A exists to ensure that evidence is primarily led before the Income-tax Officer. Where the evidence is prima facie necessary to decide the controversy, the Appellate Assistant Commissioner should consider it in exercise of his powers under sub-sections (4) and (5) of s.250, which he had failed to do (para 9). The Court held on a second and independent ground that even under rule 46A the assessee should have been allowed to produce the additional evidence, the case falling within clause (c) of sub-rule (1) because he had had no occasion to collect it earlier and had never been told that the creditors were unavailable (para 10). The reference was disposed of with a direction that the addition of Rs 40,000 be examined afresh in the light of the evidence produced.
Rule 46A is subordinate legislation that regulates a party's right to adduce evidence; it exists to ensure evidence is primarily led before the Assessing Officer. Sections 250(4) and 250(5) are statutory powers of the appellate authority to make further inquiry or to direct the Assessing Officer to make one. A rule cannot cut down a section, and sub-rule (4) of Rule 46A itself preserves the appellate authority's power to direct production of documents or examination of witnesses. The two therefore operate in different fields - one on the party, one on the authority.
On a conjoint reading of Section 250 of the Act and Rule 46A of the Rules, it is clear that the restrictions placed on the appellant to produce evidence do not affect the powers of the Appellate Assistant Commissioner under Sub-section (4) of Section 250 of the Act.
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Handle my notice → Ask a CA on WhatsAppThe Bombay High Court held that Rule 46A fetters the assessee's right to produce evidence but does not fetter the CIT(A)'s own powers under s.250(4) and s.250(5). Where the appellate authority considers evidence necessary to examine the claim, it can direct an inquiry or the production of documents even though the assessee could not have brought the evidence in as of right. This was decided by the High Court (Bombay High Court — judgment delivered by B.P. Saraf, J.) and bears on section 250, section 251 of the Income Tax Act 1961. It is reported as (1998) 231 ITR 1 (Bombay); (1998) 148 CTR (Bom) 192. If it applies to you, the first step is this: File the Rule 46A application first, with the sub-rule (1) gateway identified and an affidavit on why the evidence was not filed before the AO.
Additional evidence was sought to be brought on record in the first appeal. The Commissioner (Appeals) approached the question purely through Rule 46A and treated the four gateways in sub-rule (1) as exhaustive of what could be looked at. The High Court was asked whether the rule exhausted the appellate authority's powers or whether s.250(4) and s.250(5) survived alongside it. The Court held the statutory powers survived. The matter was decided on 1998-02-20 by the High Court (Bombay High Court — judgment delivered by B.P. Saraf, J.). On those facts the High Court held as follows. Question No. 3 was answered in the negative and in favour of the assessee (para 11). On a conjoint reading of s.250 and rule 46A, the restrictions placed on the appellant to produce evidence do not affect the powers of the appellate authority — the judgment speaks throughout of the Appellate Assistant Commissioner — under sub-section (4) of s.250 (para 6); rule 46A exists to ensure that evidence is primarily led before the Income-tax Officer. Where the evidence is prima facie necessary to decide the controversy, the Appellate Assistant Commissioner should consider it in exercise of his powers under sub-sections (4) and (5) of s.250, which he had failed to do (para 9). The Court held on a second and independent ground that even under rule 46A the assessee should have been allowed to produce the additional evidence, the case falling within clause (c) of sub-rule (1) because he had had no occasion to collect it earlier and had never been told that the creditors were unavailable (para 10). The reference was disposed of with a direction that the addition of Rs 40,000 be examined afresh in the light of the evidence produced.
Rule 46A is subordinate legislation that regulates a party's right to adduce evidence; it exists to ensure evidence is primarily led before the Assessing Officer. Sections 250(4) and 250(5) are statutory powers of the appellate authority to make further inquiry or to direct the Assessing Officer to make one. A rule cannot cut down a section, and sub-rule (4) of Rule 46A itself preserves the appellate authority's power to direct production of documents or examination of witnesses. The two therefore operate in different fields - one on the party, one on the authority. In the words reproduced by the source cited on this page: "On a conjoint reading of Section 250 of the Act and Rule 46A of the Rules, it is clear that the restrictions placed on the appellant to produce evidence do not affect the powers of the Appellate Assistant Commissioner under Sub-section (4) of Section 250 of the Act."
It was decided by the High Court on 1998-02-20 and is reported as (1998) 231 ITR 1 (Bombay); (1998) 148 CTR (Bom) 192. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 250, section 251, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Question No. 3 was answered in the negative and in favour of the assessee (para 11). On a conjoint reading of s.250 and rule 46A, the restrictions placed on the appellant to produce evidence do not affect the powers of the appellate authority — the judgment speaks throughout of the Appellate Assistant Commissioner — under sub-section (4) of s.250 (para 6); rule 46A exists to ensure that evidence is primarily led before the Income-tax Officer. Where the evidence is prima facie necessary to decide the controversy, the Appellate Assistant Commissioner should consider it in exercise of his powers under sub-sections (4) and (5) of s.250, which he had failed to do (para 9). The Court held on a second and independent ground that even under rule 46A the assessee should have been allowed to produce the additional evidence, the case falling within clause (c) of sub-rule (1) because he had had no occasion to collect it earlier and had never been told that the creditors were unavailable (para 10). The reference was disposed of with a direction that the addition of Rs 40,000 be examined afresh in the light of the evidence produced. It arises in Appeals and Evidence & Burden of Proof matters, on section 250, section 251 of the Income Tax Act 1961, and was decided by Bombay High Court — judgment delivered by B.P. Saraf, J.. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. In the alternative, ask the CIT(A) to exercise s.250(4)/(5) and call for the document or direct the AO to make an inquiry - this route does not depend on the gateways. Explain why the evidence is necessary to decide the claim, not merely helpful; that is the trigger the Bombay High Court identified. Whichever route is used, insist that the AO be confronted with the material so the order cannot be attacked under Rule 46A(3). If the CIT(A) refuses even to consider the alternative s.250(4) route, take that refusal as a separate ground before the ITAT.
Still good law. A separate check for later treatment found the decision being applied by Tribunal benches for the proposition that Rule 46A does not restrain the CIT(A)'s independent powers under s.250(4)/(5), and treated in practitioner literature as the leading authority on that distinction. No overruling or superseding amendment to s.250(4) or Rule 46A was found. That finding was checked against a published source, which is linked on this page, on 2026-08-19. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Bombay High Court income-tax reference under s.256, decided 20 February 1998, [1998] 231 ITR 1 (Bom), assessment year 1971-72; the judgment is numbered 1 to 12 and its locators are its own. The coram on this page is incomplete, and deliberately so: the only judge named anywhere in the text of the judgment is B.P. Saraf, J. Indian Kanoon's automatically generated 'Bench' and 'Author' lines name 'R.P. Desai', a name that appears nowhere in the judgment, and no name has been taken from that line. A 1998 reference would ordinarily have been heard by a Division Bench, so a second judge probably sat; an editor with 231 ITR 1 should complete the coram from the report. The key quote previously carried on this page - "r. 46A does fetter the right of the assessee to produce evidence but it does not restrain CIT(A)'s powers under s. 250(4) or 250(5) of the IT Act", sourced to a taxtmi blog page - is not in the judgment. It is a law report's abbreviated headnote, and its give-away is that the judgment speaks throughout of the Appellate Assistant Commissioner and never of the CIT(A). It has been replaced with the Court's own conclusion at para 6. The facts on this page are thin but nothing in them is false: the assessment year is 1971-72, two loans were treated as income from undisclosed sources because summonses on the creditors could not be served, and the assessee sought to prove before the Appellate Assistant Commissioner that a Rs 40,000 loan from Champaklal Dalpatrai had been received and repaid by cheque. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Question No. 3 was answered in the negative and in favour of the assessee (para 11). On a conjoint reading of s.250 and rule 46A, the restrictions placed on the appellant to produce evidence do not affect the powers of the appellate authority — the judgment speaks throughout of the Appellate Assistant Commissioner — under sub-section (4) of s.250 (para 6); rule 46A exists to ensure that evidence is primarily led before the Income-tax Officer. Where the evidence is prima facie necessary to decide the controversy, the Appellate Assistant Commissioner should consider it in exercise of his powers under sub-sections (4) and (5) of s.250, which he had failed to do (para 9). The Court held on a second and independent ground that even under rule 46A the assessee should have been allowed to produce the additional evidence, the case falling within clause (c) of sub-rule (1) because he had had no occasion to collect it earlier and had never been told that the creditors were unavailable (para 10). The reference was disposed of with a direction that the addition of Rs 40,000 be examined afresh in the light of the evidence produced.
TaxSphere, “Smt. Prabhavati S. Shah v CIT”, https://taxnotice.vittsphere.com/caselaw/case/prabhavati-s-shah-v-cit-250-4-versus-rule-46a/ (validity last checked 2026-08-19)
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