KALAWATI AGARWAL

IN THE HIGH COURT OF DELHI AT NEW DELHI . 08.02.2011 . Present: Mr. Rajesh Mahna, Mr. Manu Giri and Mr. Ramanand Roy, Advocates for the appellant. Mr. N.P. Sahni and Mr. Ruchesh Sinha, Advocates for the respondent. . + ITA No. 273/2011 . 1. In this appeal preferred by the assessee we are concerned with one addition which was made by the Assessing Officer in the assessment order. This pertains to a long term capital gain on sale of shares and the Assessing Officer had made addition of `39,84,775/-. It is not necessary to spell out the reasons that prompted the Assessing Officer to make this addition as the issue involved in this appeal with relation to that addition is altogether different. 2. Suffice us to state that after going through the evidence produced before him and also the statements of certain persons, said addition was made. 3. The assessee made a request for cross-examination of those persons whose statement was recorded prior to the search operation conducted at the premises of the assessee. The Assessing Officer refused to give this opportunity. 4. When the matter was taken up in appeal by the assessee before the CIT(A), the assessee argued that the order of the Assessing Officer was violative of principles of natural justice as she was entitled to cross-examine the persons whose statements were recorded. The Authorised Representative of the assessee had also made submissions on merits contending that the addition made by the Assessing Officer was not justified. The CIT(A) noted the submissions. However, its order shows that challenge of the assessee was accepted and deletion of the aforesaid addition was made on the ground that the order of the Assessing Officer rejecting the application of the assessee for cross- examination of the persons whose statements had been recorded was not permissible and the Assessing Officer was wrong in holding that the cross- examination of the departmental witnesses should not be allowed. The revenue preferred appeal against this order of CIT(A) before the Tribunal. The Tribunal has concurred with the opinion of the CIT(A) that the Assessing Officer should have allowed the assessee to cross-examine the persons whose statements were recorded earlier. At the same time, the Tribunal also opined that since the proposals of the CIT(A) is co-terminus with that of the Assessing Officer, what the Assessing Officer has failed to do, the CIT(A) is competent to do the same and he cannot brush aside the findings recorded by the Assessing Officer only on the ground of cross-examination not allowed to the assessee. The Tribunal in these circumstances held the view that CIT(A) should have allowed the cross- examination before deleting the addition made by the Assessing Officer and should have controverted the findings recorded by the Assessing Officer by mentioning his observation and comments thereof as no such positive finding are given by the CIT(A) with regard to holding of shares by the assessee on the date of sale. The Tribunal has restored the entire matter back to the file of the Assessing Officer with directions to allow cross-examination of the witnesses by the assessee and to decide the issue fresh after giving due opportunity to the assessee. . . 5. We do not find any illegality, impropriety or irregularity in the aforesaid directions given by the Tribunal and having regard to the facts taken note of the above. 6. Mr. Mahana, learned counsel appearing for the appellant/assessee submits that once it was accepted that it was right of the appellant to cross- examine the witnesses, two submissions were relied upon. The CIT(A) was justified in deleting the addition as the said order of the Assessing Officer was non-est. No doubt if the orders suffer from non compliance with the principles of natural justice it could be set aside. Same has been done by the CIT(A) and even by the ITAT. However the Tribunal is right in holding that when it was a procedural violation conducted by the Assessing Officer the same can be taken care of by providing another opportunity to the assessee to cross-examine those witnesses and to examine the matter on merits. 7. This approach of the Tribunal is inconsonance with law as there is nothing wrong. 8. Another argument addressed by Mr. Mahana was that the CIT(A) had deleted the addition on merits as well. We are unable to discern this from the order of the CIT(A) as stated above, though the contention of the assessee in this behalf are taken note of, but the reason for deleting the addition is non grant of opportunity to cross-examine the departmental witnesses. 9. We thus do not find any merit in this appeal and are of the opinion that no substantial question of law arise. This appeal is accordingly dismissed. 10. Before we part with, we may take note of another aspect of the matter. In the impugned order, the Tribunal had noted the attendance of the counsel for the assessee as that of the Department and has stated in the order that nobody appeared on behalf of the assessee. Whereas the fact is that nobody had appeared on behalf of the Department and assessee had appeared whose attendance was wrongly recorded. On this premise, the assessee had moved an application under Section 254(2) of the Act which has been dismissed by the Tribunal vide order dated 15th October, 2010. Since no appeal is maintainable against the order passed by the Tribunal under Section 254(2) of the Act, we have not gone into the correctness or otherwise of the said order and it would be open to the assessee, if she so desires, to challenge that order by following appropriate proceedings. . . . . A.K. SIKRI, J. . M.L. MEHTA, J. FEBRUARY 08, 2011 AK . . 10 #