Rule 46A(1) allows additional evidence only through four gateways, and Rule 46A(3) forbids the CIT(A) from taking that evidence into account unless the Assessing Officer has been given a reasonable opportunity to examine it and rebut it. Rule 46A(4) preserves the CIT(A)'s own power to call for evidence, and the Bombay High Court has held that the rule does not fetter his powers under section 250(4) and (5).
The four gateways in Rule 46A(1) are: the Assessing Officer refused to admit evidence which ought to have been admitted; the appellant was prevented by sufficient cause from producing evidence he was called upon to produce; the appellant was prevented by sufficient cause from producing evidence relevant to any ground of appeal; or the Assessing Officer made the order without giving the appellant sufficient opportunity to adduce evidence. Rule 46A(2) requires the Commissioner (Appeals) to record his reasons for admitting the evidence. Rule 46A(3) is the provision that decides most appeals: additional evidence shall not be taken into account unless the Assessing Officer has been allowed a reasonable opportunity to examine it or to cross-examine the witness. In practice that means a remand report. An order that admits fresh evidence behind the Assessing Officer's back is liable to be set aside and the matter restored - which is precisely the outcome the assessee was trying to avoid. Rule 46A(4) saves the appellate authority's independent power to direct production of a document or examination of a witness to dispose of the appeal, and the Bombay High Court in Smt. Prabhavati S. Shah held that while Rule 46A fetters the assessee's right to produce evidence, it does not restrain the Commissioner (Appeals) from acting under section 250(4) or 250(5) where the evidence appears necessary to examine the claim. The two routes should be pleaded together: the Rule 46A application as the primary route, the section 250(4) direction as the alternative. The common errors are filing the documents in the paperbook without any Rule 46A application, failing to explain sufficient cause on affidavit, and - fatally for the assessee who wins below - not insisting that a remand report be called for.
How wide are the first appellate authority's powers when it disposes of an appeal?
The assessing officer accepted my method of accounting. Can the first appellate authority reject it for the first time in my own appeal and enhance the assessment?
The first appellate authority has enhanced my assessment using items the Assessing Officer never looked at. Can it do that, or has it gone beyond its jurisdiction?
Can the CIT(A) use the enhancement power to tax a source of income the Assessing Officer never examined?
Can an appellate authority under the Income-tax Act throw out an appeal because the appellant did not turn up?
Can the first appellate authority tax a source of income the officer never looked at?
Can you raise a ground before the CIT(A) that you never raised before the officer?
The assessing officer ignored my partition claim and assessed the family anyway. If the Tribunal finds that illegal, can it simply cancel the assessment and stop there?
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