Case Law Details
IQ City Foundation Vs ACIT (ITAT Kolkata)
We find that Assessing Officer has passed the re-assessment order u/s. 153A/ 153C / 143(3) dated 31.12.2018 without providing the copy of the statement of Shri Chandra Kant Ladia and we find that Assessing Officer by solely relying on the uncorroborated statement of Shri Chandra Kant Ladia recorded u/s. 131 of the Act on 23.09.2016 [ (taken in the course of the survey conducted u/s. 133A at the office premises of M/s. Pratibha Holdings (M/s. PHPL) on 23-09-2016) ] and without giving an opportunity to assessee to cross examine Shri Ladia, the AO has framed the reassessment u/s. 153A read with section 153C/143(3) of the Act which is per- se bad in law inter alia for violation of Natural Justice.
According to us, the Assessing Officer before framing the reassessment order dated 31.12.2018 was bound to give a copy of the statement of Shri Ladia, which was recorded during survey and which was admittedly recorded behind the assessee’s back. The Assessing Officer ought not to have kept the assessee in the dark by not furnishing the statement of Shri Ladia and should have been fair enough to give an opportunity to assessee to meet the allegation if any against the assessee which according to AO, have been discovered during survey. And further, the AO should have provided an opportunity to assessee to cross examine Shri Ladia to test the veracity of the statement of Shri Ladia, which was not done by AO before framing the reassessment order dated 31.12.2018. Therefore, there is per-se violation of Natural Justice and so the non furnishing of statement of Shri Ladia to the assessee before framing of reassessment order dated 31.12.2018 and not giving an opportunity to assessee to cross examine Shri Ladia vitiates the action of Assessing Officer to rely upon the statement of Shri Ladia to draw adverse inference against the assessee in respect of donation of Rs. 50 lakhs. For this finding of ours, we rely on the ratio of the decision of the Hon’ble Supreme Court in Andaman Timber Industries vs. CCE (2015) 62 taxmann.com 3/52 GST 355(SC), wherein that case the addition was made against the assessee (Andaman Timber Industries) by the AO by relying on the statement of two witnesses namely Sri Sreeram Tekriwal and Sri Laxmidas Panchmati.
Even though the assessee pleaded for cross-examination of these two witnesses, the AO did not give opportunity to the assessee and when the action of the AO was confirmed by the appellate authorities, the Hon’ble Supreme Court examined the omission on the part of the AO not providing opportunity to assessee to cross examine of two witnesses and held that it was a serious flaw and since the statements of those witnesses were made the basis of the impugned order this omission on the part of AO makes the order nullity inasmuch as it amounted to violation of Principles of natural justice.
FULL TEXT OF THE ITAT JUDGEMENT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
