Principles of Natural Justice in Tax Litigation: Unraveling the Significance of Cross-Examination Rights in Tax Cases

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....on account of unaccounted interest payment on cash loans, which was subsequently deleted by the CIT(A), leading to the Revenue's appeal. Background The case emanates from search and seizure operations under section 132 of the Income Tax Act, targeting the assessee. Seized documents, including a laptop and loose papers from an employee's premises, purportedly evidenced unsecured loans and....

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....nation highlighted several procedural and evidentiary shortcomings in the AO's approach. Notably, the AO's reliance on documents seized from a third party, without giving the assessee an opportunity to cross-examine the statement of the employee or to contest the affidavit retracting his earlier statement, was problematic. The ITAT underscored the principle that the denial of cross-examina....