TaxTMI 
TaxTMI 
2022 (6) TMI 1144
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....rn of income was processed u/s 143(1) of the Income Tax Act, 1961 (in short 'Act'). There was no regular assessment u/s 143(3). A search action took place on 09.01.2018 in the case of Podar group. During the year under consideration, the assessee was working with Podar group as a Consultant Chartered Accountant looking after statutory compliances and as financial advisory. Subsequent to the search action on the Podar group, the Assessing Officer (hereinafter in short "AO") issued a notice u/s 153C of the Act on 21.09.2019 and in compliance thereof the assessee filed his return of income on 07.10.2019 declaring total income at Rs. 5,14,440/-. Thereafter the AO issued statutory notices u/s 143(2) and 142(1) of the Act. The submissions called for by the AO were duly submitted. The Assessing Officer was not satisfied with the submissions and thereafter, passed the assessment order u/s 153C r.w.s. 143(3) dated 23.12.2019 wherein, the AO has made an addition of Rs. 2,00,250/- in respect of alleged commission income in the hands of the assessee. 4. Aggrieved with the above order, the assessee preferred an appeal before the CIT(A) on the following grounds: - "1. On the facts an....
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....ising any objections at the time of assessment proceedings and thus the ground has little or no merit now. Further it was held that there is no need for giving any cross examination to the assessee since even as per assessee's own statement recorded during the course of survey u/s 133A, the fact of donations being returned back was admitted and besides, the assessee had never sought any such cross examination. The Ld. CIT(A) was of the view that the statements of others persons are only supporting in nature and the contention that the AO simply relied on the statements of Shri Jayesh Zanani and Shri N K Sodhani is not totally correct. Thus, the challenge to jurisdiction was dismissed. 7. As regards the merits of the case, relating to addition, Ld. CIT(A) relied on the findings of the AO and observed that the assessee in his own statement recorded during the survey action on 11.01.2018 and 12.01.2018 accepted that he was getting commission at the rate of 0.15% of the amount of total donation in nature of bogus accommodation entries provided to the Podar group. Thus, it cannot be said that there was no incriminating material found against the assessee. Hence, the Ld. CIT(A) confir....
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....tice issued u/s 153C of the Act as void for want of jurisdiction, delete the additions made and confirmed by the Ld.CIT (A) and thus render justice to the appellant." 9. During the course of hearing before us, the Authorized Representative of the assessee brought to our notice that the assessee was covered vide survey u/s 133A and his statement was recorded u/s 131 on 12.01.2018 which was later retracted on 03.04.2018. The Ld. AR contended that addition cannot be made merely on the basis of statement alone and that such statement is corroborated by cogent material / incriminating material no addition is sustainable under law. It was submitted before us that such statement now being relied upon by lower authorities was extracted under intense mental pressure when assessee was made to admit that he had earned commission for facilitating alleged bogus donations. Such addition made by the AO without any material in corroboration thereof has been sustained by CIT(A) unjustly. The Ld. AR has brought to our notice, the very basis of such addition being the alleged donation has been deleted by the Hon'ble ITAT in the case of Hemadri Machine Tools Private Limited (ITA No 714/M/20) [place....
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....assessee having received commission income. 13. Besides, we find it significant that the Revenue does not have a case nor was it satisfactorily brought to our notice by the Revenue that during the course of search some money, bullion, jewellery or books of accounts or other documents found from the persons searched belonged to the assessee or have a bearing on the determination of total income of the assessee. In our view there is thus lack of jurisdiction on the Assessing Officer of the assessee to enter jurisdiction u/s 153C of the Act. We are not convinced that there was any incriminating material found in the search that has a bearing on determination of total income of the assessee. It is not the case of Revenue that the valuable articles, or books of accounts or documents found in the course of search reflect or disclose any unaccounted income in the hands of the assessee herein. In fact, we find that Revenue has no case that any information contained therein relates to receipt of commission income in the hands of the assessee herein. In any case, the Assessing Officer has made addition only on the basis of the statement of the assessee recorded u/s 131 during survey in th....
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....r passed by the AO not sustainable." 16. 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, and such opportunity 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 that the matter has been decided in accordance with law, as cross examination is an integral part and parcel of the principles of natural justice." Further, Constitution Bench of the Hon'ble Supreme Court of India in State of M.P. v. Sadashiuva Vishampayan reported in AIR 1961 SC 1623, has also confirmed the principle that, the rules of natural justice require that a party should be given the opportunity of cross-examining a witness. 17. There has been gross violation of the principles of natural justice and bearing in mind the above judicial precedents, we have no hesitation in holding that there was gross violation of principles of natural justice and fair play as the additions has been made without providing an opportunity t....