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Section 250 of the Income-tax Act, 1961 - Commissioner (Appeals) - Procedure of - Assessment year 2004-05 Evidence produced by assessee cannot be considered by Commissioner (Appeals) on merits unless Assessing Officer is given an opportunity to cross-examine witnesses [In favour of revenue] Rule 46A of the Income-tax Rules clearly stipulates that the Commissioner (Appeals), for the reasons to be recorded, can admit the evidence produced by the assessee in the appeal. However, a perusal of rule 46A(3) clearly shows that the Commissioner (Appeals) cannot take into account any evidence produced under sub-rule (1), unless the Assessing Officer has been allowed a reasonable opportunity to cross-examine the witnesses produced by the assessee. Therefore, the evidence produced by the assessee cannot be considered by Commissioner (Appeals) on the merits unless the Assessing Officer is given an opportunity to cross-examine the witnesses. When the assessee is not able to produce the said evidence or the witnesses before the Assessing Officer, the Commissioner (Appeals) has to convince himself about the reasonable cause shown by the assessee for not producing them before the Assessing Officer and for placing them before the appellate authority for the first time. In a case where the Commissioner (Appeals) is convinced about the reasonable cause, then he has to follow the procedure contemplated under rule 46A(3) by providing sufficient opportunity to the Assessing Officer to examine the evidence or documents or to cross examine the witnesses, as the case may be. Where the Assessing Officer had not been given an opportunity to cross-examine the witnesses produced by the assessee and, therefore, the Tribunal had observed that rule 46A had been violated, then directions issued by the Tribunal thereafter, stating that as the assessee was not in a position to produce the witnesses, the same could not be insisted upon so as to enable the Assessing Officer to cross examine them could not be sustained. K. Subramaniam for the Appellant.V. S. Jeyakumar for the Respondent. JUDGMENT M. M. Sundresh, J.- The Revenue has come up on appeal challenging the order of the Tribunal whereby the…

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