ITAT has to consider the additional evidence application under Rule 29 before proceeding ahead with the final hearing.

ITAT has to consider the additional evidence application under Rule 29 before proceeding ahead with the final hearing.

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ITAT has to consider the additional evidence application under Rule 29 before proceeding ahead with the final hearing.

The Rule 29 of the ITAT rules reads as under:
[Production of additional evidence before the Tribunal.
29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or , if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced..
Here is a case on Rule 29 of the same as under:
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITA 211/2020 & CM APPLs.32045-32047/2020 
HL MALHOTRA AND COMPANY PVT. LTD. ….. Appellant
Through: Mr. Ajay Vohra, Sr. Advocate with  
Mr. Aniket D. Agrawal, Advocates. 
versus 
DEPUTY COMMISSIONER OF INCOME TAX  
CIRCLE 12 1 NEW DELHI ….. Respondent 
Through: Mr. Raghvendra Singh, Senior  
Standing Counsel. 
Date of Decision: 22nd December, 2020 
CORAM: 
HON’BLE MR. JUSTICE MANMOHAN 
HON’BLE MR. JUSTICE SANJEEV NARULA 
J U D G M E N T 
MANMOHAN, J : (Oral) 
  1. The petition has been heard by way of video conferencing. 
  2. On 17thDecember, 2020, this Court had admitted the appeal on the  following question of law:-
Whether the Tribunal erred in law in failing to adjudicate  upon the admissibility and consider the additional evidence  furnished by the appellant under Rule 29 of the ITAT Rules?” 
  1. As learned standing counsel for the respondent, on the last date of  hearing, had stated that this Court cannot decide the aforesaid issue without  examining the record of the Tribunal in appellant’s statutory appeal being  ITA No. 3613/Del/2015, we had summoned the said record.
RELEVANT FACTS 
  1. A perusal of the Tribunal record reveals that the appellant had filed an  application for admission of additional evidence in terms of Rule 29 of the  Income-Tax (Appellate Tribunal) Rules, 1963 (hereinafter referred to as the  ‘ITAT Rules’) on 14 th January, 2019 after serving a copy of the same on the   counsel for the Revenue, i.e., prior to commencement of final hearing before  the Tribunal. On 17th January, 2019, the Tribunal concluded its hearing in  the said appeal. Thereafter, on 22nd January, 2019, the appellant filed its   synopsis/written submissions. On 28th  February, 2019, the Tribunal passed  the impugned order without dealing with the application filed by the  appellant for admission of additional evidence under Rule 29 of the ITAT  rules.
  1. After the impugned order had been passed by the Tribunal, the  appellant preferred an application for rectification dated 8 th May, 2019 under  Section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as the  ‘Act’). The said application was heard and reserved for orders on 08th November, 2019. Thereafter, the matter was listed for clarification by the  Tribunal and the order on the said application was again reserved on 09th October, 2020. However till date no order has been pronounced by the  Tribunal on the application filed by the appellant under Section 254(2) of  the Act.
  1. In the present appeal, it has been averred that since the appellant was  awaiting the final outcome of the aforesaid miscellaneous application filed  before the Tribunal, the impugned order dated 28.02.2019 was not   challenged in appeal before this court within the prescribed period of  limitation, and hence the present appeal is barred by limitation by 498 days.  ARGUMENTS ON BEHALF OF THE APPELLANT 
  1. Mr. Ajay Vohra, learned senior counsel for the appellant states that  the appellant has been constrained to file the present appeal under Section  260A of the Act without waiting for a final order in the rectification  application filed by it, as the appellant wishes to avail the benefit of waiver  of interest and penalty under the amnesty scheme being ‘Vivad se Vishwas  st Scheme’, for which declarations have to be filed latest by 31 2020. December,
  1. Mr Ajay Vohra, learned senior counsel for appellant submits that the  Tribunal erred in failing to adjudicate upon and consider the additional  evidence furnished by the appellant under Rule 29 of the ITAT Rules before  passing the impugned order. He further submits that the Tribunal erred in  recording self-contradictory reasoning in the impugned order, inasmuch as,  on the one hand, the Tribunal has recorded the failure on the part of the  appellant to furnish necessary evidence following the order of the CIT(A),  while on the other hand, failed to even consider the additional evidence  furnished by the appellant. 
ARGUMENTS ON BEHALF OF THE RESPONDENT
  1. Per contra, Mr. Raghvendra Singh, learned senior standing counsel for  the respondent submits that as the appellant’s application for rectification  under Section 254(2) of the Act is pending consideration, this Court should  not condone the delay in the present case. He states that condonation of   delay in filing the appeal would amount to allowing the appellant to midway abandon its application under Section 254(2) of the Act. He submits that as  the grounds urged by the appellant in support of the question framed by this  Court are the same on which rectification application has been filed under  Section 254(2) of the Act, it would not be proper for this Court to hear and  decide the present appeal till the Tribunal decides the rectification  application.
  1. He further submits that the appellant’s application for production of  additional evidence before the Tribunal was not maintainable as the  conditions precedent mentioned in Rule 29 of the ITAT Rules are not  attracted to the facts of the present case. In support of his submission, he  relies upon the judgment of the Rajasthan High Court in Commissioner of  Income Tax vs. Rao Raja Hanut Singh, 2001 252 ITR 528 Raj, wherein it  has been held as under:- 
 “Thus, the only question which at best can be said to be raised  for consideration before this court is whether for allowance or  disallowance of a request for additional evidence to be produced  before the Income-tax Appellate Tribunal is a question of law. 
 Having given our thoughtful consideration, we are of the opinion  that the law is well settled by a catena of decisions of the Supreme  Court that production of additional evidence at the appellate stage  is not matter of right to the litigating party but within the discretion  of the court which is to be exercised judiciously. The question  whether the discretion has been exercised judiciously or not cannot  obviously be ordinarily a question of law unless it can be disputed  or found that in exercising that discretion, the Tribunal has ignored  some well settled legal principles in the matter of exercise of such  discretion or has acted so grossly or arbitrarily that no authority  trained and disposed to adjudicate the rights of the litigating  parties as a judicial or quasi-judicial Tribunal would exercise such  discretion in that manner.”
  1. He lastly contends that the additional evidence filed by the appellant  vide application dated 14th January, 2019, had in all probability, been  considered by the Tribunal. In support of his contention, he refers to the  Index of Additional Documents mentioned in the application for admission  of additional evidence and points out that the additional documents  mentioned therein had been referred in the written submissions filed by the  appellant with the Tribunal after the conclusion of the hearing on 22nd January, 2019. He states that the Tribunal would surely have examined and  taken into account the written submissions filed by the appellant before  passing the impugned order. 
REJOINDER ARGUMENTS 
  1. In rejoinder, learned senior counsel for the appellant states that it is  the appellant’s case that neither the appellant’s application for additional  documents nor the synopsis filed by the appellant had been considered by  the Tribunal before passing the impugned order. 
  2. As far as condonation of delay is concerned, he submits that this  Court has been adopting a liberal approach on the ground that the procedure  is handmaid of justice and the Court must always promote the cause of  substantial justice. 
COURT’S REASONING 
THE DELAY IN FILING THE APPEAL IS CONDONED AS IT IS SETTLED  LAW THAT IN THE ABSENCE OF ANYTHING SHOWING MALA FIDE  OR DELIBERATE DELAY AS A DILATORY TACTIC, THE COURT  SHOULD NORMALLY CONDONE THE DELAY AS THE INTENT OF THE  COURT IS ALWAYS TO PROMOTE SUBSTANTIAL JUSTICE
  1. He lastly submits that the scope of Sections 254(2) and 260A of the  Act are entirely different and therefore the appeal and rectification   application are separate and independent remedies.
  1. Having heard learned counsel for the parties, this Court is of the view  that the delay in filing the present appeal is liable to be condoned as the  appellant had within the limitation period prescribed under Section 254(2),  filed the rectification application on 8th May, 2019. In the said application  for rectification order had been reserved by the Tribunal on 8th November,  2019 and thereafter again on 9th October, 2020. However, as no order has  been pronounced till date and the last date for filing the declaration under  the amnesty scheme being Vivad se Vishwas Scheme (under which the  appellant may get waiver of penalty and interest) is 31st December, 2020, the  appellant, in order to avoid being prejudiced, has filed the present appeal. 16. It is settled law that in the absence of anything showing mala fide or  deliberate delay as a dilatory tactic, the court should normally condone the  delay as the intent of the court is always to promote substantial justice. [See: Collector, Land Acquisition, Anantnag & Anr v. Mst. Katiji and Others (1987) 2 SCC 107 & N. Balakrishnan Vs. M. Krishnamurthy: 1998 (7)  SCC 123].
  1. Consequently, the delay in filing the appeal is condoned. 
SCOPE OF SECTIONS 254(2) AND 260A OF THE ACT ARE ENTIRELY  DIFFERENT AND IT CANNOT BE SAID IN LAW THAT THEY ARE  PARALLEL OR MUTUALLY EXCLUSIVE PROCEEDINGS
  1. This Court is also in agreement with the submission of learned senior  counsel for the appellant that the scope of Sections 254(2) and 260A of the  Act are entirely different and it cannot be said in law that they are parallel or  mutually exclusive proceedings, i.e., if a party invokes Section 254(2), it is  mbarred in law from invoking Section 260A of the Act.
  1. Normally speaking this Court would not entertain an appeal under  Section 260A of the Act if an application for rectification under Section  254(2) of the Act is pending consideration as there is some overlap and if  the order is recalled by the Tribunal, then the initial appeal would become  infructuous. But in the present case, as the last date for availing the benefit  of amnesty scheme being ‘Vivad se Vishwas Scheme’ is 31st December,  2020 and despite all efforts, the Tribunal is not deciding the application for  rectification under Section 254(2) of the Act and learned counsel for  respondent has stoutly opposed passing of any order in the present appeal to  expedite disposal of the application filed by the appellant under section  254(2) before the Tribunal, this Court is of the opinion that if the present  appeal is not entertained, it would gravely prejudice the appellant. 
THIS COURT IS OF THE VIEW THAT IT CANNOT SECOND GUESS  WHAT ORDER THE TRIBUNAL WOULD PASS AS IT IS NOT FOR THIS  COURT BUT FOR THE TRIBUNAL TO DECIDE THE SAID  APPLICATION.
  1. As far as the argument that the appellant’s application under Rule 29  of ITAT Rules is liable to be dismissed as the conditions mentioned therein  are not attracted, this Court is of the view that it cannot second guess what  order the Tribunal would pass as it is not for this Court but for the Tribunal  to decide the said application. In fact, it has been so held by the Supreme  Court in the case of Jyotsna Suri Vs. ITAT; 179 CTR 265 (SC).  Accordingly, the respondent reliance on the judgment of the Rajasthan High  Court in CIT vs. Rao Raja Hanut Singh (supra) is misconceived on facts. 
TO HOLD THAT THE ADDITIONAL EVIDENCE FILED BY THE  APPELLANT HAD BEEN CONSIDERED BY THE TRIBUNAL WOULD BE  TO PRESUME AND ASSUME CERTAIN FACTS WHICH ARE NOT  APPARENT FROM THE RECORD. 
  1. This Court is not impressed by the submission of learned standing  counsel for the respondent that the additional evidence filed by the appellant  had in all probability been considered by the Tribunal. In the impugned  order passed by the Tribunal, there is no reference to either the additional  documents placed on record by the appellant or to the written  submissions/synopsis filed by the appellant. To hold that the additional  evidence filed by the appellant had been considered by the Tribunal would  be to presume and assume certain facts which are not apparent from the  record. 
AS THE APPELLANT HAD ADMITTEDLY FILED AN APPLICATION  FOR ADMISSION OF ADDITIONAL EVIDENCE IN TERMS OF RULE 29  OF THE ITAT RULES PRIOR TO THE DATE OF FINAL HEARING, IT  WAS INCUMBENT UPON THE TRIBUNAL TO CONSIDER THE SAID  APPLICATION BEFORE PROCEEDING AHEAD WITH THE FINAL  HEARING 
  1. This Court is further of the opinion that as the appellant had  admittedly filed an application for admission of additional evidence in terms  of Rule 29 of the ITAT Rules prior to the date of final hearing, it was incumbent upon the Tribunal to consider the said application before  proceeding ahead with the final hearing.  
  2. The Supreme Court in the case of Jyotsna Suri Vs. ITAT (supra) set  aside the order of the High Court and remanded the matter back to the file of  the Tribunal to decide the application under Rule 29 of ITAT Rules and  thereafter to dispose of the appeal on merits. The relevant observations of  the Apex Court are reproduced hereinbelow:-
“The Tribunal has disposed of the appeal by its order of 3rd  Jan., 1997, without considering the pending application under  Rule 29 of the ITAT Rules, 1963, for adducing additional  evidence. Obviously, that application was required to be  disposed of first before the Tribunal heard the appeal on merits.  The appellant also undertakes to withdraw the pending  application before the Tribunal for making a reference  under Section 256(1) of the IT Act for the above purpose. In  view thereof, we direct that the Tribunal should first dispose of  the application under Rule 29 on merits and thereafter proceed  to dispose of the appeal on merits. The order dated 3-1-1997, is,  therefore, set aside and the matter is remitted to the Tribunal  for disposal on merit in accordance with law. The order of the  High Court is set aside as above and the appeal is disposed of  accordingly. 
RELIEF 
  1. For the aforesaid reasons, the present appeal is allowed and the order  the of the Tribunal dated 28 February, 2019 is set aside; the appeal of the  appellant is restored to the file of the Tribunal for de novo hearing in  accordance with the judgment of the Supreme Court in Jyotsna Suri Vs.  ITAT (supra).
  1. However, this Court clarifies that it has not expressed any opinion on  the merits of the application to be filed by the appellant under the amnesty  scheme being ‘Vivad se Vishwas Scheme’
  2. The order be uploaded on the website forthwith. Copy of the order be  also forwarded to the learned counsel through e-mail.
  1. The original record of ITAT requisitioned vide order dated 17th December, 2020 be sent back.
MANMOHAN, J 
SANJEEV NARULA, J 
DECEMBER 22, 2020 
KA 

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