Rajeev Gupta Vs ITO (ITAT Delhi)
The assessee has invoked the fundamental principles of natural justice and alleged that the same has not been followed by the Assessing Officer. Needless to say, these principles are the backbone of a judicial system and is an inseparable ingredient of fairness and reasonableness. It is contended on behalf of the assessee that the additions made in the present case towards unexplained credits under Section 68 r.w. Section 115BBE is primarily on the basis of oral evidence of third parties who have been alleged as entry operators. The assessee denies to have entered into any transactions with these parties, and therefore, considered it necessary to cross-examine the witnesses who depose before the Income Tax Authorities to the prejudice of the assessee. A reference to the decision of the Hon’ble Supreme Court in Andaman Timber Industries vs. CIT, (2015) 62 taxmann.com 3 (SC) was made to support its contention. It was thus contended that the Assessing Officer has committed a serious flaw in not abiding by the principles of natural justice which renders the assessment order to be a nullity. It is the contention of the assessee that opportunity to cross-examine the witness was specifically asked to the Assessing Officer to discredit the testimony of the witnesses. We also simultaneously note the plea of the Revenue that the statement of the witnesses were provided and denial of cross-examination in the circumstances is not absolute and does not compromise with the principles of natural justice.
The sequence of event narrated on behalf of the assessee depicts that the show cause notice and the statement of witness was served on the assessee at the fag end on 15.12.2017. The reply thereto was filed by the assessee on 26.12.2017 wherein the allegation of the Assessing Officer that the Long Term Capital Gain earned by the assessee is an accommodation entry was denied. The objection was disposed of and the assessment order was passed promptly thereafter on 29.12.2017. These sequence of events show that reasonable opportunity to the assessee as to why the matter cannot proceed without cross-examination and why cross-examination is necessary despite it is not being absolute, was not provided to the assessee at all. Such action of the Assessing Officer has resulted in somewhat arbitrariness while passing the assessment order. Under these circumstances, we deem it expedient to restore the matter back to the file of the Assessing Officer for granting proper opportunity to the assessee while framing the assessment order.
