2019 (10) TMI 881

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....(UP). By that common order, the Tribunal has dismissed both the appeals filed by the assessee and allowed the appeal filed by the revenue and thus restored the assessment order. 2. All the revisions arise from assessment proceedings wherein after rejecting its books of accounts, the assessee had been subjected to best judgment assessment on trading in wood/timber and manufacture and sale of packing boxes. 3. During the assessment years in question, the assessee had disclosed itself to be a job worker engaged in the activity of sawing wood/timber. It neither disclosed nor admitted any purchase nor sale of any wood or timber. Also, it did not admit to have manufactured or sold packing boxes. However, the assessing officer initially subjecte....

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.... officer subjected the assessee to tax on sale of timber and packing boxes made/manufactured on its own account. 5. In the first appeal, the assessee specifically raised challenge of being denied any opportunity to cross-examine the persons from whom adverse inquiries had been made by the assessing officer. Such ground was also raised before the Tribunal. Both appeal authorities have glossed over the objection thus raised by the assessee and have failed to adjudicate the fundamental issue, being, whether adverse material gathered behind the back of the assessee could be relied upon without first confronting the assessee with such material and without first allowing any opportunity to the assessee to cross-examine the persons who may have m....

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....rse material is in the shape of statements of third parties, the makers of the statement should have been first offered for cross-examination to the assessee. 10. Even if the aspect of cross-examination is left aside for the moment, insofar as the inquiry that is sole basis of the adverse inference drawn against the assessee is found to have been conducted after the last date of the hearing in the assessment proceedings, no reliance whatsoever could have been placed on the same. 11. The only course open to the assessing officer would have been to fix another date, in the assessment proceedings, and to allow the assessee time to respond to the adverse material that had been brought on record in the meanwhile. In absence of such course havi....