Case Law Details
Madhu Korah Vs Income Tax Department through Director General (Jharkhand High Court)
Directed the AO to allow cross examination of witness by the assessee
The Hon’ble Jharkhand High Court in Madhu Korah v. Income Tax Department through Director General [W.P (T) No. 538 of 2022 dated May 03, 2023] had directed the Assessing Officer (“the AO”) to allow cross examination of witness by the assessee in accordance with provision of Indian Evidence Act, 1872 (“the Indian Evidence Act”).
Facts:
The Commissioner of Income Tax (Appeal) Jamshedpur, (“the CITA”) passed 2 orders dated December 26, 2013, and August 14, 2014, permitting cross examination of witness to Madhu Korah (“the Petitioner”). Accordingly, cross-examination of some witness was done in 2019. Thereafter no further development took place. The Revenue department issued summons to the Petitioner for cross-examination of witness and the Petitioner participated in cross-examination process. However, the Assistant Commissioner of Income Tax restricted cross examination process by denying the questions asked by the Petitioner during cross examination.
Aggrieved by such restriction the Petitioner raised objections which were disposed by the Revenue Department vide Order dated January 24, 2023 (“the Impugned Order”).
Being aggrieved, the Petitioner has filed this petition inter alia contending that the Petitioner should be allowed to conduct cross examination on its own or through an independent officer.
Issue:
Whether the AO has power to discard the question of the Petitioner during the cross examination?
Held:
The Hon’ble Jharkhand High Court in W.P (T) No. 538 of 2022 held as under:
- Observed that, the presiding officer has power to control the proceeding. However, the officer has to follow the guidelines and the provision of the Indian Evidence Act.
- Directed the Petitioner, to file petition for recall of the witnesses who have been earlier cross-examined and seek the answers of the question which have been initially discarded by the AO.
- Further, directed the Revenue department to provide effective cross-examination opportunity in accordance with the provisions of the Indian Evidence Act.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
Since common issue is involved in all these writ applications, as such the same are being heard together and disposed of by this common order.
2. The petitioner in all these writ applications has prayed for a direction upon the Commissioner of Income Tax (Appeal), Patna to dispose of the respective appeals filed before him against the respective assessment order pertaining to Assessment Year 2004-05 to Assessment Year 2010-11 after providing sufficient opportunity of hearing to the petitioner.
3. The brief history of the case is that initially the Petitioner had filed WPT 5637/2021 seeking direction upon the Revenue to expeditiously dispose the appeal preferred by the petitioner against assessment order dated 30.12.2011 for A.Y. 2010-2011. The said writ petition was disposed vide order dated 27.01.2022. Thereafter, the petitioner filed WPT Nos. 537/2022, 538/2022, 539/2022, 540/2022, 541/2022, 542/2022 & 584/2022 seeking expeditious disposal of appeals preferred by the petitioner against the assessment orders for A.Y. 2004- 2005 to A.Y. 2010-2011.
Earlier, the CIT (A), Jamshedpur had passed two orders dated 26.12.2013 and 14.08.2014 permitting cross-examination to the petitioner-assessee. Thereafter, the CIT (A), Patna-3 passed orders dated 04.12.2018 and 30.08.2021. Thereafter, cross-examination of some witnesses was done in the year 2019 and thereafter, no development took place till November, 2022, when summons was issued to the petitioner for cross-examination of witnesses. However, when the petitioner participated in the cross-examination process, the Revenue (the Respondent No. 4 particularly) started to completely restrict the cross- examination process by denying the relevant questions being asked by the petitioner in cross-examination.
Aggrieved thereof, the petitioner raised objections to the same, which objections were disposed by the Revenue vide order/ letter dated 24.01.2023. The aforesaid order/ letter dated 24.01.2023 has been inter-alia challenged by the petitioner in WPT No. 703 of 2023. In the said writ petition, the petitioner has also sought a direction upon the Respondents to allow cross-examination by the petitioner in accordance with the provisions of the Indian Evidence Act, 1872 and also in accordance with the orders dated 04.12.2018 and 30.08.2021 passed by the Respondent No. 2. Petitioner has further sought direction upon the Respondent No. 2 to either himself conduct the cross-examination proceedings or depute a competent independent officer for the said purpose who is not in any manner connected with the assessment proceedings against which appeals have been preferred by the petitioner which appeals are presently pending before the Respondent No. 2 herein. Petitioner has also prayed for direction upon the Respondents to provide copies of entire order sheets, statement of witnesses, remand reports and the other perquisites in order to enable the petitioner to effectively exercise his valuable right of cross-examination.
4. Mr. Indrajit Sinha, learned counsel for the petitioner submits that the petitioner has not been provided complete copies of statements made by the witnesses who are being cross-examined, copy of entire order sheets, remand reports, etc. despite repeated requests. The Revenue may be directed to provide the same to the petitioner before proceeding with cross-examination. The Revenue may also be directed to provide copy of statements of witnesses who were cross-examined in the year 2019. The petitioner is facing serious prejudices while cross-examining the witnesses. The Respondent No. 4 has disallowed various questions put by the petitioner to the witnesses, arbitrarily declaring them to be irrelevant. Even, the witnesses are being restricted by the Respondent No. 4 from giving complete reply to the petitioner’s questioning. The Revenue may be directed to provide effective cross-examination opportunity in accordance with the provisions of the Indian Evidence Act, 1872, without in any manner interfering or restricting the same. The Revenue is arbitrarily restricting the number of witnesses to be cross-examined to 21, rather the Revenue ought to permit the petitioner to cross-examine all the witnesses relying on whose statements and relying on whose disclosures the Revenue has done addition to the petitioner’s income in different assessment years. The Revenue also ought to permit the petitioner to cross- examine such persons who are being named by the witnesses being cross-examined. The Revenue may be directed to conduct cross-examination in accordance with law through a neutral officer without having any vested interest to protect the assessment orders passed by the Respondent No. 4 instead of the Respondent No. 4 who is himself a contesting party to the petitioner’s appeals.
Mr. Sinha lastly submits that the petitioner may be permitted to file a petition for recall of the witnesses whose names are Rohtas Krishnan, Budh Narayan Gupta, Ajay Bafna and Vikas Sinha, who have been cross-examined and discharged to put them the question which have been specifically discarded by the Assessing Office.
5. Mr. R. N. Sahay, learned counsel for the respondents submits that the petitioner may be restricted to cross-examination of the statements made by the concerned witnesses and should not be allowed to expand the scope of examination. He further submits that altogether 21 witnesses were waiting to be examined who have also been summoned and after the order passed by this Court wherein this Court at the first instance directed for examination at least 11 out of 21 witnesses; 6 witnesses were summoned and have been examined and rest are to be cross-examined pursuant to the order passed by this Court. He further submits that as a matter of fact it is not the revenue but the petitioner who is delaying the matter by raising irrelevant question and even on the date fixed they are taking adjourned even without information to the Assessing Officer, as such they may be directed to cross-examine the remaining witnesses out of 21 witnesses as expeditiously as possible so that the remand report can be sent back to the CIT (Appeal) where the appeal is lying pending for disposal.
6. Having heard learned counsel for the parties and after going through the documents available on record it is profitable to refer the order passed by this Court on 27.02.2023 wherein this Court has made it very clear that there is no doubt that the control of the proceedings lies with the Presiding Officer, the Assessing Officer herein, on how to conduct the cross-examination. As a matter of fact, adequate guidelines have also been issued by the Appellate Authority as reflected in communication dated 24.01.2023 more particularly the letter F.No.1434 dated 30.12.2022 wherein the CIT (Appeal) has specifically directed as under:-
“The issue of ‘cross examination’ has not been defined under the Income Tax Act, 1961. The proceeding before the income tax authorities being quasi-judicial in nature, the provisions of the Indian Evidence Act, 1872. Section 145 of the subject matter of Indian Evidence Act deals with the cross examination. As the Evidence Act is the law of the land, the income tax authorities are bound to abide by its provisions. I have gone through the directions of my predecessor in his remand order dated 14.08.2014 wherein he has allowed the appellant, cross examination of the witnesses whose statements have been utilized by the Assessing Officer in the assessment order. There is no ambiguity in the said directions. The Assessing officer is directed to follow the advice of my predecessor and the provisions of the Indian Evidence Act so that the order stands that test of appeal before superior appellate levels.”
7. In view of the aforesaid fact, we hereby directed the petitioner to file petition for recall of the witnesses namely, Rohtas Krishnan, Budh Narayan Gupta, Ajay Bafna and Vikas Sinha who have been cross-examined and discharged, to put them the question which have been initially discarded by the Assessing Officer.
It goes without saying that the Revenue may also be directed to provide effective cross-examination opportunity in accordance with the provisions of the Indian Evidence Act, 1872 and permit the petitioner to cross- examine such persons who are being named by the witnesses being cross-examined without in any manner interfering or restricting the same. In other words, the Revenue is hereby directed to conduct cross-examination in accordance with law and the guidelines as referred to hereinabove.
8. Consequently, these writ applications stand disposed of.
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