2018 (12) TMI 1990 - HC - Income Tax

Court Dismisses Petition: No Prejudice Found in Denying Cross-Examination of Hostile Witness; Evidence Copies Ordered.

The HC dismissed the Writ Petition, upholding the respondent's refusal to allow cross-examination of a hostile witness, as it did not prejudice the ... Right to cross-examine witness - hostile witness - discretion to refuse cross-examination of a hostile witness - corroboration required where part of witness evidence is relied upon - proceedings under Section 153C arising from search and seizure - remedy under Section 154(2) as amended w.e.f. 16.04.2006Right to cross-examine witness - hostile witness - discretion to refuse cross-examination of a hostile witness - corroboration required where part of witness evidence is relied upon - remedy under Section 154(2) as amended w.e.f. 16.04.2006 - Whether the respondent was obliged to permit the petitioner to cross-examine the witness K. Srinivasalu whose evidence turned hostile, and related incidental directions. - HELD THAT: - The Court found that the witness K. Srinivasalu had become hostile during examination-in-chief. The court concluded that refusal to permit cross-examination in those circumstances did not exhibit any infirmity, observing that a hostile witness generally benefits the petitioner and that if the Department sought to rely on parts of earlier statements favourable to it, it would have to furnish corroborative evidence. The Court directed that copies of the evidence be furnished to the petitioner and observed that, in view of the amendment to Section 154(2) (Act 2 of 2006 w.e.f. 16.04.2006), the petitioner remained free to pursue his statutory remedies on receipt of the evidence. [Paras 4, 5]Refusal to allow the petitioner's cross-examination was not found to be infirm; copies of the evidence were to be furnished to the petitioner and he was left to pursue remedies under the amended provision.Final Conclusion: Writ petition dismissed; no costs. Respondent directed to supply copies of the evidence to the petitioner; petitioner free to pursue appropriate remedy under the amended Section 154(2). Issues:1. Petitioner seeking a Writ of Certiorarified Mandamus to quash an order and cross examine witnesses.2. Allegations of being made a scapegoat and illegal raid by Income Tax Department.3. Notices issued under Sections 153A and 153C of the Income Tax Act.4. Request for cross examination of a witness.5. Refusal of cross examination by respondent.6. Witness turning hostile.7. Benefit of witness turning hostile.8. Provision of evidence copies to petitioner.9. Validity of respondent's order.10. Interpretation of Section 154 with respect to the case.Analysis:1. The petitioner, a former Chief Secretary, filed a Writ Petition seeking to quash an order and cross examine witnesses relied upon by the respondent. Allegations of being made a scapegoat and illegal raid were made, emphasizing the petitioner's innocence and lack of involvement in the alleged offenses.2. The Income Tax Department conducted a search and seizure operation related to the petitioner's son's affairs, leading to notices under Sections 153A and 153C of the Income Tax Act. The petitioner claimed the proceedings were baseless, citing the retraction of a key witness's statement.3. The petitioner requested to cross examine the witness, but the respondent refused, citing the witness turning hostile during examination. The petitioner's counsel argued that denial of cross examination was detrimental to the case and disadvantaged the petitioner.4. The court found the witness turning hostile could benefit the petitioner, allowing for a comprehensive evaluation of the evidence. The respondent was directed to provide copies of the evidence to the petitioner to ensure a fair proceeding.5. The court upheld the respondent's decision to refuse cross examination, stating that the witness's hostility did not adversely affect the petitioner. The court highlighted the petitioner's right to utilize the evidence received in accordance with the law, as per Section 154 of the Income Tax Act.6. Consequently, the Writ Petition was dismissed, with no costs imposed. The court emphasized the importance of following legal procedures and ensuring fairness in the examination of evidence.