TaxTMI 
TaxTMI 
2019 (3) TMI 1118
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.... The notice u/s 143(2) was issued on 26.07.2016. Main issue taken up in assessment was exemption of long term capital gains arising from sale of shares of M/s Jacksons Investment Limited of Rs. 12,15,733/-. During assessment proceedings assessee has filed documents supporting exemption u/s 10(38) namely bank statements , broker notes, etc. Purchase and sale took place through doubtless banking channel. Notably no books of accounts were there before AO and Ld CIT(A) during assessment and first appellate proceedings. AO made the addition u/s. 68 of the Act by treating the share sale proceeds as unexplained cash credit u/s 68 of the Act and made the addition of Rs. 12,55,733. This was action of the AO was challenged by assessee before Ld CIT(A), who vide his impugned order dated 21.8.2018 by affirming the addition u/s 68 and dismissed the assessee's appeal. Thus feeling aggrieved with order of Ld CIT(A) this appeal is filed by assessee before this Tribunal. 3. During the course of hearing before this Tribunal Ld Counsel for the assessee, Shri Kapil Goel, Advocate has argued mainly on two aspects of the case firstly on applicability of section 68 of the Act to share sale proceeds on....
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....orted the invocation of section 68 of the Act on the broader principle of burden to give satisfactory explanation on part of assessee and thus argued for confirming the orders of AO and Ld CIT(A) . Ld DR has taken support of section 292B of the Act pleading for error if any being curable and has requested for confirming addition in section 69/69A of the Act requesting for use of wider discretion available to the tribunal. Ld DR has further highlighted that mere lack of cross examination is not fatal to revenue's case and same is at best a irregularity only . Ld DR has further exhorted before me that such kind of cases does not deserve any sympathy of the tribunal as entire transaction are proved to be sham and bogus. Continuing with his arguments Ld DR preyed that grounds raised by Ld AR are devoid of merits and does not carry any legal weight. Finally Ld DR has relied on case laws referred in orders of AO and Ld CIT(A) praying for dismissal of all these appeals. 6. I have heard both the parties and perused the records. On due consideration of the entire conspectus of the case, I proceed to adjudicate the appeals on aforesaid three grounds. The first issue of applicability of se....
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....gal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act. (2) Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall,- (i) if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year; or (ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees, during such previous year; or (iii) where the profits and gains ....
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....uced below for sake of ready reference: "..27. The appellants' case is that the diaries, which were seized, were regularly maintained in the regular course of business as regular books of account, which contained all the transactions entered into by the appellants. It reflected a true state of accounts constituting the real cash book. As such his case squarely falls within Explanation 5 to Section 271(1)(c) of the Act. 28. In order to appreciate the scope of Clause (1) to Explanation 5, it would be necessary to understand the words in which they are appearing under the said Explanation. Before concentrating on the specific meaning thereof, in the light of the legislative intent behind Clause (1), let us see, what do you mean by "books of account". If "books of account" is considered in isolation, then, it may mean books in which merchants, traders and businessmen generally keep their accounts and are maintained for recording (a) all receipts and expenses with matters relating thereto; (b) all sales and purchases; and (c) the assets and liabilities. They are the documents and ledgers which must be prepared and kept by the business entity including the profit an....
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....on of books of account inserted in the Income-tax Act is examined in contrast to the definition given under Section 34 of the Evidence Act, it will be clear that the stringent requirements of Section 34 are not to be found in the said definition. Obviously, for the simple reason that the purpose of both the legislations are different. So far as the cases at hand are concerned, they relate to the assessment years 1984-85 to 1988-89 ; much prior to the period of introduction of the definition which was introduced for the first time under the Finance Act, 2001. 33. In order to appreciate the submissions keeping in view the facts of the present cases, one has to concentrate not only on the bare term "books of account" but also on the words in whose company the said term is appearing. The extracted subclause appearing hereinbelow will have to be understood properly and appropriate meaning will have to be assigned keeping in mind the backdrop in which the concept of "books of account" is referred to in Sub-clause (1) of Clause (b) of Explanation 5. The words used are : "such income is, or the transactions resulting in such income are recorded . . . in the books of accou....
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....anting grant of immunity from penalty. The legislative intent is to admit only those books of account maintained by the assessee on his own behalf as by their very nature and circumstances are maintained for the purposes of drawing the source of income. Therefore, when books of account are tendered for claiming the benefit of Explanation 5 to Section 271(1)(c) of the Act, it must be shown to be a book, that book must be a book of account, and on the top of it that must be one maintained for the purposes of drawing the source of income under the Income-tax Act. These essential requirements must be carefully observed while implementing tax legislation in the country where secret and parallel accounts based on frauds and forgery are extremely common and responsibility of keeping and maintaining accounts for the purposes of the tax legislation is honoured in the breach rather than the observance." 6.4 Above dictum leaves no room for any possible doubt that credit in bank account simply or any other raw information available to AO can't be loosely called as books of account u/s 68 of the Act. 7. Secondly it requires "..opinion" on part of "assessing officer" vis a vis explanation ....
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.... submitting to their wishes or instructions. The effect then is that the discretion conferred by parliament is exercised, at least in part, by the wrong authority, and the resulting decision is ultra vires and void. So strict are the courts in applying this principle that they condemn some administrative arrangements which must seem quite natural and proper to those who make them.....". "Ministers and their departments have several times fallen foul of the same rule, no doubt equally to their surprise....": 8. After this detailed analysis of various ingredients of section 68 of the Act, I have no hesitation to accept the jurisdictional plea raised by Ld AR that invocation of section 68 in extant facts sans valid and proper books of account of assessee is invalid and accordingly addition made by AO as sustained by Ld CIT(A) is held to be incorrect and reversed. Signification of correct assumption of jurisdiction is highlighted in the following decisions of Hon'bl e Delhi and Madras High Court: IN THE HIGH COURT OF DELHI AT NEW DELHI + WRIT PETITION (CIVIL) No. 5937/2016 Reserved on : 10th May, 2018 Date of decision: 30th November, 2018 SHAH E NAAZ JUDGE....
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....ecision in accordance with law. No Court or tribunal, statutory authority can assume jurisdiction, in respect of a matter which the statute does not confer on it. Error on jurisdictional fact, renders the order, ultra vires and bad. In the case on hand, as rightly submitted by Mr.Gopal Subramanium, learned Senior Counsel, that in the light of sections 2(11) and 50 of the Black Money Act, 2015, jurisdictional fact to enquire does not exist and that the Principal Director of Income Tax/first respondent herein, has assumed jurisdiction that he can enquire into the matter under Section 55 of the Act, by issuing a show cause notice." 8.1 Accordingly plea of Ld DR that section 292B may cure the defect of wrong invocation of section 68 can't be accepted being jurisdictional error and same is the view of Hon'ble Delhi high court in case of JCB case reported at 398 ITR 189 wherein it is held that: "19. As already noted, the final assessment order of the AO stood vitiated not on account of mere irregularity but since it was an incurable illegality. Section 292B of the Act would not protect such an order. This has been explained by this Court in its decision dated 17th July 2015 p....
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....Act has been held can't be applicable to mere share sale which is not akin to receipt of gift, loan, share capital, advance etc is view of: The Hon'ble Delhi Bench of the Tribunal in the case of ITO vs Jatin Investment Pvt. Ltd. In ITA No.4325 & 4326/Kol/2009 order dated 27.05.2015 held as follows :- "11. In his rival submissions, the Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee was having investment in shares etc. which were duly shown on the asset aside of the balance sheet, out of those investments some were sold and few new were purchased and if there was any gain on the sale the same was offered for taxation. It was further submitted that in earlier year under similar circumstances, the case was reopened u/s 147 of the Act and the addition made by the AO was deleted by the I.T.A.T. It was further submitted that the assessee sold the shares which were earlier purchased in different years and duly shown in the balance sheet of the respective years and that the assessee had shown the sale proceeds in the books of accounts, the investments were reduced after making the sales. It ....
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....ing and Capital Pvt. Ltd. vide order dated 9th August, 2010 upheld the order dated 30.7.2009 of the ITAT in ITA no. 1788/Del/2007 for the assessment year 2000-2001 wherein the order of the Ld. CIT(A) making the similar deletion was upheld by observing in para 6 as under :- "We are of the view that the assessee had produced copies of accounts, bills and contract notes issued by M/s. MKM Finsec Pvt. Ltd., and had been maintaining books of account as per Companies Act. The assessee had also demonstrated the purchase and sale of shares over a period of time as seen from the balance sheet's. In our opinion, the Assessing Officer has simply acted on the information received from the Investigation Wing without verifying the details furnished by the assessee. The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained." 14. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del./2009 of ....
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....re accordingly dismissed" 8. Applying the proposition of law laid down in the case law to the facts of the case, we delete the addition made u/s 68 of the Act for the reasons cited above." While I was writing this order, I found that this hon'ble tribunal in following two recent decisions has been pleased to delete the similar additions after considering the entire conundrum of the matter: Lalit Kumar Aggarwal in ITA No. 3509/Del/2018 : Asstt. Year : 2014-15 DELHI BENCH 'SMC', NEW DELHI Date of Pronouncement: 24.01.2019 Held "..21. I find that on examining the same and after making inquiries, no defect in the said documentary evidences could be brought on record by the revenue. The addition in question was made merely on the basis of suspicion and surmises. No material has been brought on record to show that the assessee was involved in the racket which was unearthed by the Investigation Wing of the department. The revenue could not point out that in anywhere in the statement of Sh. Sanjay Vora and/or Sh. Praveen Kumar Agarwal, the name of the assessee was stated by them. Therefore, simply because some persons were involved in generation of bogus....
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....ocuments filed by the assessee. Case law relied: Hon'ble Bombay High Court in the case of CIT Vs. Mukesh Ratilal Marolia, in ITA No.456/Del/2007 Order dated 07.09.2011; Hon'ble Jharkand High Court at Ranchi in the case of CIT vs. Arun Kumar Agarwal (HUF) & Ors, Tax Appeal No. 13 of 2011, since report in [2013] DTR (Jharkhand) 219 order dated 13.07.2012; Hon'ble Gujarata High Court in the case of CIT-I Vs. Maheshchandra G. Vakil [2013] 40 taxman.com 326 (Gujarat) Hon'ble Gujarata High Court in the case of CIT-I Vs. Himan M. Vakil [2014] 41 taxman.com 425 (Gujarat); Hon'ble Punjab & Haryana High Court in the case of Prem Pal Gandhi (supra) finally Held that "...The various other decisions relied on the Ld. Counsel for the assessee also support his case. Under these circumstances and in view of our above discussion we are of the considered opinion that the addition made by the Assessing Officer u/s 68 of the Act which has been sustained by the CIT(A) is not justified under the facts and circumstances of the present case. We, therefore, set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition..." 8.5 So respectfully applying ratio of above p....
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....find that the assessee has demanded the cross examination only in respect of the alleged transactions of loans and not for the entire business of the entry providers providing the bogus entries. Undisputedly, the statement of Shri Anand Sharma was recorded by the Investigation Wing Kolkata at the back of the assessee, even the proceedings by the Investigation were conducted at the back of the assessee, therefore, the said statement of Shri Anand Sharma cannot be the sole basis of assessment without giving an opportunity of cross examination to the assessee. The Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CCE (supra) while dealing with the issue of violation of principles of natural justice for not providing the opportunity of cross examination of the witnesses whose statements were relied on by the AO has held in para 6 to 9 as under :- Once the assessee has disputed the correctness of the statement and wanted to cross examine the witness which was not given by the AO as well as ld. CIT (A), then the orders passed based on such statement are not sustainable in law. The Hon'ble Delhi High Court in case of CIT vs. Ashwani Gupta, 322 ITR 396 (Delhi) whi....
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....vestigation wing of the tax department as per which the transaction under consideration is a bogus loan transaction. The said information received from the investigation wing thus overweighed the mind of the Assessing officer. The Assessing officer stated that the primary onus is on the assessee to establish the genuineness of the transaction claimed by it and if the investigation done by the department leads to doubt regarding the genuineness of the transactions, it is incumbent on the assessee to produce the parties alongwith necessary documents to establish the genuineness of the transaction. In response, the assessee submitted that Shri Bhanwarlal Jain is not known to him and regarding various incriminating documentary evidences seized during the course of search and statements recorded of Shri Bhanwarlal Jain and other persons, he specifically requested the AO to provide copies of such incriminating documents and statement of all various persons recorded in this regard and provide an opportunity to the assessee to cross examine such persons. However, the AO didn't provide to the assessee copies of such incriminating documents and statements of various persons recorded and allo....
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....a third party, can the said information be used against the assessee without sharing such information with the assessee and allowing an opportunity to the assessee to examine such information and explain its position especially when the assessee has requested the same to the Assessing officer. 2.10 In this regard, the Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC) (Copy at Case Law PB 812-818) has held that "The rule of law on this subject has been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Sinqh where it was stated that while proceeding under sub-section (3) of section 23, the Income-tax Officer, though not bound to rely on evidence produced by the assessee as he considers to be false, yet if he proposes to make an estimate in disregard of that evidence, he should in fairness disclose to the assessee the material on which he is going to find that estimate; and that in case he proposes to use against the assessee the result of any private inquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilized to such an extent as to put the as....
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....his Court by its order, dated 16-8-1979 that, according to the ITO, this letter was traced by him and even then it was not shown by him to the assessee but it was forwarded to the Tribunal and it was for the first time at the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case that this letter was shown to the assessee. It will, therefore, be seen that, even if we assume that this letter was in fact addressed by the manager of the bank to the ITO, no reliance could be placed upon it, since it was not shown to the assessee until at the stage of preparation of the supplemental statement of the case and no opportunity to cross examine the manager of the bank could in the circumstances be sought or availed of by the assessee. It is true that the proceedings under the income-tax law are not governed by the strict rules of evidence and, therefore, it might be said that even without calling the manager of the bank in evidence to prove this letter, it could be taken into account as evidence. But before the income-tax authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the stat....
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....e additions made by the AO on the basis of such statement without any tangible material is not sustainable in law and liable to be deleted. Accordingly the addition made by the AO is also deleted on merits apart from the legal issue decided in favour of the assessee. APPELLATE TRIBUNAL, FOREIGN EXCHANGE MANAGEMENT ACT AT NEW DELHI Date of Decision:-13.04.2018 (1) FPA-FE-01/DLI/2018 Shri Ashwani Kumar Mehra ... Appellant Versus Shri A.H. Khan Directorate of Enforcement, Delhi ... Respondent CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN SHRI G.C. MISHRA : MEMBER JUDGEMENT FPA-FE-01/DLI/2018, FPA-FE-03/DLI/2018, FPA-FE- 04/DLI/2018 & FPA-FE-05/DLI/2018 "54. "The Hon‟ble Supreme Court of India in the case of Ayaaubkhan Noorkhan Pathan v. State of Maharashtra & others reported in (2013) 4 SCC 465, has inter alia held that the opportunity of cross-examination be made available, but it should be one of effective cross-examination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held th....
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....ion of India 159 (2009) DLT 780, while deciding a case under Foreign Exchange Regulation Act, 1973 had observed that: ―18. It is well settled that where an action under the statute entails civil consequences, then even if an opportunity of being heard may not be explicitly set out in the applicable legal provisions, the adherence to the principles of natural justice has to be read into such a statute. 19. There can be no dispute that the action permitted under section 61 of the FERA, 1973 certainly results in drastic penal consequences... (iv) The Hon'ble Supreme Court of India in Ramesh Ahluwalia Vs. State of Punjab & Ors. 2012 (10) SCALE 46 had observed that: ―18. This is in conformity with the principle that justice must not only be done. Actual and demonstrable fair play must be the hallmark of the proceedings and the decisions of the administrative and quasi judicial courts. In particular, when the decisions taken by these bodies are likely to cause adverse civil consequences to the persons against whom such decision are taken. IV-A The Hon'ble Supreme Court of India in Ashiwin S. Mehta and Anr. Vs. Union of India (UOI) and Ors. ....
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....i). In Lakshman Exports Ltd. v. Collector of Central Excise, (2005) 10 SCC 634, the Apex Court, while dealing with a case under the Central Excise Act, 1944, considered whether to grant permission for cross-examination of a witness. In that case, the assessee had specifically asked to be allowed to crossexamine the representatives of the concerned firm, in order to establish that the goods in question had been accounted for in the firm‟s books of accounts and excise duty had been paid thereof. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. (vii). In K.L. Tripathi v. State Bank of India & Ors., AIR 1984 SC 273, the Hon‟ble Supreme Court has held that in order to sustain a complaint of violation of the Principles of Natural Justice on the ground of denial of opportunity to crossexamine, it must be established that some prejudice has been caused to the party by the procedure followed. A party which does not want to controvert the veracity of the evidence on record or does not want to controvert the testimony gathered behind its bac....
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.... to submit to cross-examination‖ (xi). Hon‟ble High Court in Mehar Singh Vs. The Appellate Board Foreign Exchange 1986 (10) DRJ 19, while dealing with a case under the Foreign Exchange Regulation Act, 1973, decided the appeal in favour of the Appellants on the short ground that the applications made to the Director of Enforcement and before the Appellate Board during the pendency of the appeal to summon four witnesses for cross-examination, were not dealt with by the authorities below. It was held: ―5. Non-summoning of the said witnesses for purposes of cross-examination has resulted in miscarriage of justice.‖ 55. In the nature of the seriousness of present case, the right to cross examination would have been given in view of gravity of the matter." INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ―G‖: NEW DELHI ITA No. 1415 to 1417/Del/2018 (Assessment Year: 2013- 14 to 2015-16) Shri Brij Bhushan Singal Date of pronouncement 07/12/2018 It is not in dispute that assessee has furnished all the details such as purchase bills, allotment details, demat accounts, bank statements , details of pay....
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....effective exercise of this right has been prevented by the enquiry officer by not giving to officer relevant documents, to which he is entitled, that inevitably would be that the enquiry had not been held in accordance with the rules of natural justice. The Hon'ble Supreme Court thereafter, referring to the another decision of the Hon'ble Supreme Court held that the importance of giving an opportunity to the public officer to defend himself by crossexamining witness produced against him is necessary for following the rules of natural justice. Further, the decision of the Hon'ble Supreme Court in case of Anadaman Timber industries vs. Commissioner of Central Excise (2015) 281 CTR 241 (SC) has held as under :- ―According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid tw....
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....nation of the witnesses whose statements are used by the learned assessing officer against the assessee for making the addition. The assessee has contested the truthfulness of the statement of the witnesses recorded by the assessing officer. The truthfulness is also tested by the changing stands frequently. It is also not for the assessing officer to decide that no opportunity is necessary because he is not aware what could be the purpose for the cross-examination asked by the assessee. Therefore not granting of opportunity of the crossexamination of the brokers Sri RK Kedia, Manish Arora, Ankur Agarwal, directors of the companies who have purchased shares from the assessee through electronic platform of the Bombay stock exchange/ NSE and various other people as were mentioned in the assessment order is fatal to the assessment made by the assessing officer. We are also conscious of the decision of the Hon'ble Supreme Court in case of M. Pirai Choodi vs. ITO 334 ITR 262, wherein the Hon'ble Supreme Court while considering the decision of the Hon'ble MP High Court in 302 ITR 40 has held that not granting an opportunity of cross examination to the assessee is merely an regularity and ....
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....d based on the various judicial precedent relied upon, we do not agree that document seized from third-party can be used for making addition in the hands of the assessee without assessee being granted an opportunity of cross-examination of those parties. IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI 'E' BENCH, NEW DELHI ITA No. 2576/Del/2010 Assessment year: 2003-04 Lords Distillery Limited, COMMON GRIEVANCE NO. 2 NO CROSS EXAMIANTION OF SHRI R.K. MIGLANI WAS ALLOWED BY THE REVENUE The ld. DR concluded by stating that ,in effect, Shri R.K. Miglani was an employee of the member of the UPDA and, therefore, there was no necessity for his cross examination. 64. The contention of the ld. DR that since Shri R.K. Miglani was related to the member distilleries of UPDA, therefore it was not necessary to allow cross examination is not acceptable. The Hon'ble High Court of Delhi in the case of Shri S.N. Aggarwal 293 ITR 43 has held as under: "11. In the present case the Assessing Officer has placed reliance on the statement of Smt.Sarla Aggarwal, daughter of the assessed while arriving at the conclusion, that the entries belong to the transactions of the ....
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.... framed u/s 153C of the Act is in gross violation of the principles of natural justice and deserve to be tagged as nullity. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: 'F', NEW DELHI ITA No. 5662/Del/2018 AY: 2014-15 Veena Gupta Date of Pronouncement: 27/11/2018 12.1 It is pertinent to note that assessee, vide letter dated 21/12/16 had asked Ld. AO to provide material based upon which various allegations have been levied by Ld. AO. These factors from para 20 of assessment order, wherein assessee raised objections, one of which is opportunity to cross examine, in case of any evidence used against assessee. 12.3 To our surprise, Ld. AO without providing any material evidence, report on which he was relying and not granting an opportunity to cross examine the persons on whose statement he arrived at certain presuppositions, made addition in the hands of assessee. This is evident from para 22 of assessment order. 13. Before Ld. CIT (A) assessee once again raised plea of crossexamination granted to assessee and materials not based upon which the submissions have been made has not been provided for examination. Even t....
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.... alleges that all the documents have been handed over by DDIT(Inv) to the assessee and hence, they were not being provided. It is not clear as to what documents were provided by DDIT(Inv). Even if it was so, then it was incumbent upon the Assessing Officer to provide the documents, which were in his possession and which he was seeking to rely on in order to complete assessment against assessee. The assessee has time and again asked for the copies of documents and even was ready to pay copying charges but the Assessing Officer had blatantly refused to give the documents on the premise that they have already been received by assessee. But no such evidences of such documents being handed over by DDIT(Inv) has been filed on record. Another aspect to be noted is that the Assessing Officer is relying on statements of two persons, the assessee had sought cross-examination of the said persons and of many evidences also, which have not been provided by Assessing Officer. Another aspect of the issue is that the Assessing Officer has purely relied on the statement of Shri Pravin Kumar Jain of having provided accommodation entries in order to first initiate re-assessment proceedings and then a....
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....e assessment but none of the cross-examinations have been allowed. The nonallowance of cross-examination has been held by the Hon'ble Supreme Court in M/s. Andaman Timber Industries Vs. Commissioner of Central Excise in Civil Appeal No.4228 of 2006, judgment dated 02.09.2015 to be most fatal. The facts of present case are similar, wherein no crossexamination has been allowed though the assessee has time and again asked for the same. Even if we accept the reasoning of Assessing Officer that seized documents have been supplied to the assessee but no cross-examination of witnesses has been provided to the assessee. In such scenario, invoking of jurisdiction under section 147/148 of the Act gets affected as the assessee has a right to file objections to reopening of assessment and such a right of assessee has been violated. The learned Authorized Representative for the assessee has pointed out that in the absence of getting the documents relied upon and in not allowing cross-examination of witnesses, the assessee was not in a position to file objections against reopening of assessment. The jurisdiction is conferred upon the Assessing Officer for making re-assessment in the....
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....itnesses on whose statements the Assessing Officer relied upon to record reasons for reopening assessment, was provided to the assessee, hence the assessee was prevented from filing the objections to reopening of assessment. In such scenario, even if the assessee was well aware of reasons for reopening but the failure to provide opportunity to file objections to the reopening of assessment violates the governing principle of law and hence, reassessment order needs to be quashed and set aside. 25. The Hon'ble Bombay High Court in Agarwal Metals and Alloys Vs. ACIT (2012) 346 ITR 64 (Bom) has propounded such a view in turn relying on the judgment of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. Vs. ITO (supra). The learned Authorized Representative for the assessee has raised various issues of change of opinion in the case of Shri B.N. Agarwal, wherein original assessment was completed under section 143(3) of the Act. However, since we have decided the issue on the other aspects of case and held the assessment order invalid and bad in law, we are not addressing the same. It may be pointed out herein itself that since the Assessing Officer did not provide copies of sta....
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.... these notices as placed in paper book, we could find the back material being confronted to assessee as specifically requested by assessee. We note here that the Tribunal in various decisions specially one which is referred by Ld counsel for the assessee extensively in case of Moti Adhesives (ITA 3133/Del/2018) in order dated 25/06/2018 copy placed before us, has been consistently holding while taking support from Hon'ble Apex court leading decision in Andaman Timber Industries case (Civil Appeal No. 4228 OF 2006) reported at 127 DTR 241 that violation of principle of natural justice (here withholding of back material referred in reasons which is specifically requested for repeatedly) is a serious flaw and results in nullity of the order so passed, which is squarely applicable to present case." All the above decisions squarely answers the serious wrong impression in mind of revenue authorities on principle of cross examination may be compromised or eschewed and excluded from income tax assessment proceedings where entire assessment is otherwise plagiarized and heavily influenced by statements recorded by investigation wing which cant be taken on board unless tested on terr....