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Facts
The assessee appealed against a CIT(A) order for AY 2011-12, primarily challenging reassessment proceedings based on a third-party statement. The assessee contended that this statement (of Madhusudhan Satyanarayan) was not provided, nor was an opportunity for cross-examination given. Furthermore, the assessee claimed inability to produce relevant documents as they were seized by the Directorate of Revenue Intelligence (DRI).
Held
The Tribunal observed that the assessment was reopened based on a statement not provided to the assessee, and without affording an opportunity for cross-examination. Consequently, the impugned order was set aside, and the case was remanded back to the Assessing Officer for a de novo assessment. The AO was directed to provide the statement, allow cross-examination if requested, and consider all documents furnished by the assessee.
Key Issues
Validity of reassessment proceedings initiated under Sections 147/148 of the Income Tax Act without providing a third-party statement and opportunity for cross-examination, and the non-consideration of documents due to DRI seizure.
Sections Cited
147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 27.06.2023, for the Assessment Year 2011-12.
The assessee has raised multiple grounds of appeal inter alia challenging validity of reassessment proceedings u/s. 147 r.w.s 148 of the Income Tax Act, 1961 [in short ‘the Act’].
(A.Y.2011-12) 3. Shri Abhinav Jain appearing on behalf of the assessee submitted at the outset that he is not pressing ground no. 3 of appeal challenging validity of reopening of assessment. He submitted that short prayer of the assessee is that the AO and the CIT(A) have failed to consider the documents furnished by the assessee during the course of assessment proceedings. He further submitted that various documents were seized by Directorate of Revenue Intelligence (DRI) in a search conducted in February to April 2011. Therefore, the assessee could not produce some of the relevant documents before the AO and CIT(A). He further stated that the AO has made addition placing heavy reliance on the statement of one Shri Madhusudhan Satyanarayan. The statement of aforesaid person was recorded at the back of the assessee. The assessee made prayer before the AO to provide a copy of statement of Madhusudhan Satyanarayan. Neither the statement of Madhusudhan Satyanarayan was provided to the assesseee, nor an opportunity to cross-examine Madhusudhan Satyanarayan was afforded to the assessee. He prayed that the appeal may be restored to AO for fresh assessment after considering the documents placed on record by the assessee and further documents that the assessee would place on record after the same are released by DRI.
Shri Dharm Veer Singh, representing the Department pointed that the CIT(A) had granted multiple opportunities to the assessee on various dates spreading over two years. However, the assessee failed to respond to the notices issued by the CIT(A). The ld. DR submitted that the assessee has already been granted sufficient opportunity by the CIT(A), hence, no useful purpose would be served in remanding the case back to the AO.