Material collected behind the back of assessee, AO must provide opportunity of cross-examination

Anita Singhania Vs DCIT (ITAT Kolkata)

Conclusion: AO had to confront assessee with the material collected behind the back of assessee, if he chosen to use the material against assessee and that he should provide assessee an opportunity of cross-examination. Not having done so made the evidence in question bad in law.

Held: Assessee submitted that search and seizure operation u/s 132(1) was conducted on assessee on 03.02.2017 and that the same was concluded on 05.03.2017. He submitted that during the courses of search and seizure no incriminating material was found or seized. It was submitted that seized material was not incriminating material, as all the documents, information were forming part of official documents and regular books of accounts. He contended that none of this material that was found/seized during the course of search operation could  be termed as incriminating material. AO had not furnished to assessee, copies of the statement recorded from various persons including Anil Kumar Khemka and hence this material could not be used against the assessee as it was a material collected behind back to assessee. He further submitted that no opportunity to cross-examine the person by Revenue was allowed and these statements of these persons were illegally used by AO against assessee. Thus, AO as well as CIT(A) had erred in holding that these papers were incriminating materials. AO relied on certain statements recorded from persons during post search operation. Material collected during post search operation could not be considered as incriminating material found or seized during the course of search. It was held that AO had to confront assessee with the material collected behind the back of assessee, if he chosen to use the material against assessee and that he should provide assessee an opportunity of cross-examination. Not having done so made the evidence in question bad in law. Thus, search assessment made by AO was not justified.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

This is an appeal filed by the assessee directed against the order of Commissioner of Income Tax (Appeals) -20, Kolkata dated 14.08.2019 passed u/s 250 of the Income Tax Act, 1961 ‘the Act’ for the assessment year 2012-13. The facts of the case are brought out by the Ld. CIT(A) which is extracted below:

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