2019 (1) TMI 1465 - AT - Income Tax

Tribunal Upholds Assessee's Right to Cross-Examination in Tax Appeal Decision

The Tribunal allowed the admission of the additional/revised ground in the appeal for the assessment year 2014-15, ruling in favor of the assessee. The ... Addition u/s 68 - non providing opportunity of cross examination of the person relying on whom addition is made - Held that:- We find considerable cogency in the contention raised by the assessee’s counsel that addition was made on the basis of statement of Sh. Vikrant Kayan, but the assessee was not granted the opportunity to cross examine Sh. Vikrant Kayan, which ground was also raised before the Ld. CIT(A). It is of the considered view that assessee has raised ground no. 3 (wrongly mentioned as ground no.5) before the Ld. CIT(A) in the appeal requesting for granting reasonable opportunity of being heard. CIT(A) in his impugned order has reproduced the plea of the Assessee that while making the addition of ₹ 11,78,216/- the AO has relied on statement of Sh. Vikrant Kayan without providing opportunity to the assessee for cross examination of such person. In view of above, there is no doubt that assessee has raised the ground of providing opportunity of cross examination of Sh. Vikrant Kayan before the CIT(A) and also by way of revised/additional ground before the Tribunal. See SMT. JYOTI GUPTA VERSUS THE I.T.O, DELHI [2018 (11) TMI 1353 - ITAT NEW DELHI] and ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2015 (10) TMI 442 - SUPREME COURT] - Decided in favour of assessee Issues:Admission of additional/revised ground in appeal for assessment year 2014-15 - Opportunity of cross-examination denied - Violation of principle of natural justice.Analysis:The appeal was filed against the order passed by the Ld. CIT(A) for the assessment year 2014-15. The assessee sought admission of an additional/revised ground in the appeal, emphasizing that the AO erred by not providing a reasonable opportunity for cross-examination of a key witness, Sh. Vikrant Kayan. The Ld. counsel argued that the denial of this opportunity was against natural justice principles. The Ld. DR opposed the admission of the additional/revised ground.Upon review, the Tribunal found merit in the contention raised by the assessee. It was noted that the AO had relied on the statement of Sh. Vikrant Kayan without granting the assessee the opportunity for cross-examination, as highlighted in the plea before the Ld. CIT(A). Referring to a similar case decided by ITAT, SMC, Delhi Bench, the Tribunal observed that denial of cross-examination violated the principle of natural justice and the law established by the Hon'ble Supreme Court. The Tribunal cited the case of Andaman Timber vs. CIT, emphasizing the importance of allowing cross-examination to ensure fairness in the proceedings.In light of these findings and following the precedent set by the ITAT, SMC, Delhi Bench and the Supreme Court, the Tribunal ruled in favor of the assessee. The addition in dispute was deleted, and the appeal was allowed. The decision was based on upholding the principles of natural justice and ensuring a fair opportunity for cross-examination, as mandated by legal precedents.Therefore, the Tribunal admitted the additional/revised ground raised by the assessee, emphasizing the importance of providing a fair opportunity for cross-examination in line with established legal principles and previous judicial decisions. The appeal was allowed, and the addition made by the AO was deleted, underscoring the significance of upholding natural justice in tax proceedings.