Rule 46A

Rule 46A — the law in short

What the courts have decided on section Rule 46A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Manish Build Well P Ltd High CourtCuts both waysNo later treatment found
  The CIT(A) admitted my extra papers and deleted the addition. Can the department upset that on appeal?
  Yes. Where additional evidence is admitted on the assessee's own application, sub-rule (3) of Rule 46A makes it mandatory to give the AO a reasonable opportunity to examine it or cross-examine the witness. A deletion made without that opportunity cannot stand — which is different from the appellate authority's own power under s.250(4) to direct further enquiry.
• CIT v Majestic Auto Ltd High CourtHelps taxpayer
  The Assessing Officer wants to push my consultancy fee into s.35D and spread it over five years instead of allowing it as revenue expenditure. Can he, just by calling it a survey?
  Not without showing the expenditure actually falls within one of the categories in s.35D(2). The Punjab and Haryana High Court rejected the Revenue's attempt to bring a management consultant's fee for a study on reorganisation of the assessee's core business within s.35D(2)(a)(iii), 'conducting market survey or any other survey necessary for the business of the assessee', because nothing in the pleadings or the orders below showed the engagement was aimed at conducting any survey. The Tribunal's finding that the expenditure was revenue was upheld and the appeal dismissed.
• Abdulrahiman Abdulkadar v ITO ITATHelps taxpayerNo later treatment found
  The CIT(A) refused your additional evidence, saying no Rule 46A application was filed — but you filed one.
  Then the refusal cannot stand. Where the application was in fact on record, additional evidence could not be shut out on the ground that none was filed. The order was set aside and the matter remanded.
• Umeshkumar Harilal Shah v ITO, TDS-3, Ahmedabad ITATHelps departmentNo later treatment found
  I am a metal trader, not a manufacturer, and the scrap I sold never came off any process of mine. Does s.206C still catch me if I have no Form 27C?
  Yes. The Tribunal accepted as undisputed that the assessee was not a manufacturer and that the scrap he sold did not come from his own manufacturing activity, and still upheld the demand, holding that on the CBDT circular the Assessing Officer relied on there is no requirement that goods, to be eligible as scrap, be produced or manufactured by the seller itself. Because the assessee had not filed the prescribed Form 27C, the tax and interest under s.206C were rightly charged and the appeal was dismissed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.