Voluntarily Filed Returns Cannot Be Revised Through Additional Evidence Under Rule 29 ITAT Rules: Kerala High Court

Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 permits the Tribunal to admit additional evidence for any substantial cause.

Justices A. Muhamed Mustaque and Harisankar V. Menon stated that since returns have been presented by the respective appellants, declaring the respective figures as income from other sources, at the belated stage of the second appeal to the Tribunal, if the venture of the appellants is accepted, that would lead to the revision of the returns voluntarily filed, which is not possible under the statute.

In this case, an amount was seized from the possession of three passengers. The custody of the entire amount was taken over by the officials.

Later, Sravan Kumar Neela and Uma Maheswara Rao Chinni submitted letters declaring the entire cash seized from them as their income from other sources.

The returns were also filed accordingly, and the amounts returned by the respective assessees were treated as unexplained income under Section 69A of the Income Tax Act, and tax under the provisions of Section 115BBE of the Act was demanded. The respective assessees preferred appeals before the Commissioner of Income Tax (Appeals).

Sravan Kumar Neela filed some additional evidence in the form of financial/bank statements of a partnership firm, and the income tax returns of some of the family members to explain the source of the income.

The first appellate authority did not accept the additional evidence adduced since that would, in effect, lead to the revision of his returned income, which could not be permitted.

Separate appeals were filed before the Income Tax Appellate Tribunal, contending essentially that the source of the cash was properly explained and the provisions of Section 69A of the Act ought not to have been applied.

The Tribunal, by the impugned order, refused to act on the additional evidence produced as above, thereby dismissing the appeals.

The assessee argued that such additional evidence could be produced before the Tribunal under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963.

The bench looked into Rule 29 of the ITAT Rules and observed that the Tribunal requires to accept such additional evidence only in a situation where the assessee was prevented from adducing such evidence by the assessing authority.

The bench stated that the Income Tax Appellate Tribunal can accept additional evidence filed before it. However, it is not as if such evidence once produced requires to be accepted by the Tribunal and acted upon.

The bench further opined that the additional evidence in the form of affidavits produced before the Tribunal is the result of an afterthought alone. The Tribunal is justified in refusing to act on the afore basis.

In view of the above, the bench dismissed the appeals.

Case Title: Sravan Kumar Neela v. Assistant Commissioner of Income Tax

Case Number: ITA NO. 58 OF 2024

Counsel for Appellant/Assessee: Abraham Joseph Markos, Isaac Thomas, P.G. Chandapillai Abraham, John Vithayathil and Alexander Joseph Markos

Counsel for Respondent/Department: Navaneeth N. Nath, Susie B Varghese, Navaneeth N. Nath and Jose Joseph

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