EKK Infrastructure Limited Vs ACIT (Kerala High Court)
The Kerala High Court has dismissed a writ petition filed by EKK Infrastructure Limited challenging the denial of its request to cross-examine witnesses in an Income Tax Act, 1961 proceeding. The company had sought to contest Exhibit-P3 and Exhibit-P4 notices and Exhibit-P7 communication, arguing that cross-examination was crucial to its defense. The dispute arose from an Income Tax Department search conducted on November 16, 2023, which led to proceedings under Section 142(1) of the Act for the assessment years 2017-18 and 2023-24. Despite the petitioner’s objections, the assessing authority rejected the cross-examination request, citing that the individuals involved were its own Directors and employees, rather than third parties requiring cross-examination.
During the hearing, the petitioner’s counsel relied on the Supreme Court ruling in C.D.S Limited vs. Commissioner of Income Tax (2021) 15 ITR OL 281 (SC) to argue that cross-examination is a necessary element of fair proceedings. However, the court noted that the judgment does not mandate cross-examination in every case and that its applicability depends on specific facts. The court also referred to precedents in M.K. Thomas vs. State of Kerala [40 STC 278] and State of J&K vs. Bakshi Ghulam Mohammad [AIR 1967 SC 122], where it was held that statements from company Directors and employees do not automatically require cross-examination.
