TaxTMI 
TaxTMI 
2026 (5) TMI 942
X X X X Extracts X X X X
X X X X Extracts X X X X
....n as emanating in the reasons for reopening for issuance of notice u/s. 148 of the Income Tax Act, 1961 (for short 'the Act'), which were in the possession of the Department only was never shared with the assessee. The said reasons recorded as per Annexure to notice u/s.148 of the Act is extracted as follows: 3. Referring to the aforesaid reasons, the Ld. Counsel for the assessee submitted that firstly, what were those credible informations in the possession of the Department that the assessee had made cash deposits of Rs. 6,42,195/- in the bank account of M/s. Malhotra Electronics Private Limited, New Delhi, was never shared with the assessee. Secondly, the copy of ledger account of M/s. Malhotra Electronics Private Limited, New Delhi w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns have been made by the A.O. Meaning thereby, confidential documents have been used behind the assessee for making additions without allowing the assessee to provide response regarding the same or without allowing the assessee to rebut these informations and therefore, this is nothing but violation of principles of natural justice. 5. Similarly, the Ld. CIT(Appeals)/NFAC also has stated in its order that these documents were confronted to the assessee. However, confrontation of these documents during assessment proceedings means that such documents were placed before the assessee only for short time during assessment proceedings which time is limited and it is unreasonable that during such short spell the assessee should peruse all docu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble High Court has held and observed as follows: "31. Thus, in the light of the decisions of the Delhi and the Bombay High Courts, as referred to above, the non-supply of the material, especially the documents of entry in the books of M/s Sanmatri Gems Pvt. Ltd. and the statement of Deepak Jain recorded under Section 132 (4) of the Act, is sufficient to vitiate the proceedings. 32. It may be noted that the statement recorded under Section 132 (4) of the Act can be used in evidence for making the assessment only if such statement is made in context with other evidence, or material discovered during search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....022 and TAXC No.7 of 2022, dated 03.08.2022, had upheld the findings of the Tribunal observing that information and statement which were used against the assessee without enabling the assessee to put forth his defence, such procedure defeats the rules of natural justice of doctrine of audi alteram partem. 8. The Hon'ble Supreme Court in the case of CIT Vs. Amitabh Bachhan (2016) 384 ITR 200 (SC) while upholding the mandatory requirement for adhering to the principles of natural justice, in any proceedings by a quasi-judicial authority also referred to the decision in the case of the C.I.T., West Bengal, II, Calcutta Vs. M/s. Electro House, (1972) 82 ITR 824 (SC), wherein it was held and observed that a breach of principles of natural jus....