Reopening of Completed assessment, onus lies mainly on department to confront assessee with evidence

RELEVANT PARAGRAPH

21. We have heard the parties and have perused the material on record. The learned Commissioner (Appeals) has held that the case of the Assessing Officer was based on the statement of Shri Ramesh Kumar, which was not confronted to the assessee, which was incumbent upon the department to do, since it was a case of reopening of a completed assessment. That the findings recorded by the learned Commissioner (Appeals) in this regard are purely findings of fact, the department has not been able to dispute. The statement of Shri Ramesh Kumar was never confronted to the assessee. In a case of reopening of a completed assessment, undoubtedly, the onus lies heavy on the department and it is the bounden duty of the department under the law to confront the assessee with the evidence to be used against the assessee. The assessee cannot be put to prove a negative. In reassessment proceedings, the burden is on the Revenue to establish that there had income which was escaped assessment. It has been so held in “Tin Manufacturing Co. of India vs. CIT”, 222 ITR 322 (All). Not confronting the statement of Shri Ramesh Kumar to the assessee when such statement was to be used against the assessee, is in stark violation of the basic principle of natural justice, i.e., “audi alteram partem”. Nobody can be condemned unheard. It is the mandatory requirement of law to afford every party full opportunity of hearing. It was on the basis of the statement of Shri Ramesh Kumar that the A.O. came to the conclusion that the sum of Rs.l lac was forfeited by the assessee. Non-confronting of the statement of Shri Ramesh Kumar to the assessee deprived the assessee of his right of rebutting it. The learned CIT(A) has categorically observed that the A.O. did not react on the issue of the confessional statement made by Shri Ramesh Kumar to assess Rs.l lac in his hand, though he was present at the time of hearing of the appeal before the learned CIT(A), nor did he offer any comment regarding the finding of the DDIT to assess the said amount of Rs.l lac in the hands of Shri Ramesh Kumar. It remains firmly established that no material has come on record that the agreement between Shri Ramesh Kumar and Shri Kharaiti Lai was cancelled. The fact remains that though the assessee continued to be the legal owner of the plot in question till 18-4-2000, when it was sold by Shri Kharaiti Lai to Shri Varinder Kumar, the assessee was beneficial owner of the plot only upto 14-2-1997, when he (the assessee) sold the plot to Shri Ramesh Kumar through power of attorney executed in favour of Shri Vijay Kumar. Transfer through power of attorney is, undoubtedly, a legally recognised mode of transfer of the property, as rightly noted by the learned CIT(A). Undisputedly, the transfer of the plot under consideration was through power of attorney, in February, 1997. That being so, it cannot, in any manner, be said that the capital gain arose to the assessee in the assessment year 2001-02. As such, we, concurring with the findings of fact recorded by the learned CIT(A) in the impugned order, hereby affirm such findings recorded for deleting the addition Rs .4,93,739/- and hold that it has rightly been concluded that this amount was not taxable in the assessment year 2001 -02 in the hands of the assessee.

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