MS SEEMA SIBBAL vs. ASSISTANT COMMISSIONER OF

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WP/16324/2016HC KarnatakaKAHC01000542201627 February 2018Bench: S.SUJATHA4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The tribunal held that the department cannot shift the burden of producing Mr. Choksi for cross-examination onto the assessee. If the department relies on Mr. Choksi's statement, it must provide an opportunity for the assessee to cross-examine him.

What were the facts?

The petitioner challenged notices issued by the Income Tax Officer for assessment years 2009-10 and 2010-11. The department proposed additions to income based on the statement of one Mr. Mukesh Choksi, who allegedly admitted to making accommodation entries.

What were the issues?

Whether the burden to produce a witness for cross-examination lies with the department when their statement is used to make additions to the assessee's income.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 27TH DAY OF FEBRUARY, 2018

BEFORE

THE HON’BLE MRS.JUSTICE S.SUJATHA

WRIT PETITION Nos.16324 & 16732/2016 (T – IT) BETWEEN:

Ms. SEEMA SIBBAL W/O Dr. K.W.GOPINATH AGED ABOUT 59 YEARS, R/AT No.203, ATHENS -1, PRESTIGE ACROPOLIS HOSUR ROAD, KORAMANGALA BANGALORE-560002.

... PETITIONER

[BY SRI V.S.HARISH, ADV.]

AND:

ASSISTANT COMMISSIONER OF INCOME TAX OFFICER, CIRCLE-4(3)(1) ROOM NO.437, 4TH FLOOR, BMTC COMPLEX, KORAMANGALA BANGALORE-560095

…RESPONDENT

[BY SRI K.V.ARAVIND, ADV.)

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED NOTICES ISSUED BY RESPONDENT DATED 08.03.2016 AND DATED 18.03.2016 FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11 I.E., ANNEX-M AND M1 RESPECTIVELY.

THESE PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-

- 2 - O R D E R

Petitioner has challenged the impugned notices issued by the respondent dated 8.3.2016 at Annexure-M and Annexure-M1 dated 18.3.2016 for the assessment years 2009-10 and 2010-11, respectively.

2.

The main grievance of the petitioner is that Department proposed to make additions to the returned income on the basis of statement of one Mr.Mukesh Choksi, who is purported to have admitted to have made accommodation entries in his books, during the search conducted on 25.11.2009. The petitioner is oblivious of any statements made by Mr.Choksi. It is submitted that the respondent has relied upon the statement of Mr.Choksi, the sole basis for re-opening of the assessment of the petitioner. The Department is now shifting the burden and onus on the assessee to produce Mr.Choksi as a witness of the petitioner which

- 3 - is wholly unjustifiable. Hence, the petitioner seeks for quashing of these notices.

3.

Learned counsel Sri. K.V.Aravind appearing for the revenue would fairly submit that the burden lies on the Department to provide an opportunity to cross- examine the said Mr.Choksi only in the event the sworn statements of Mr.Choksi recorded by the Department is relied upon in the course of assessment proceedings.

4.

From the aforesaid submissions made by the learned counsel for the parties, it is not in dispute that on the request made by the assessee to provide an opportunity to cross-examine Mr.Choksi, department cannot insist the assessee to produce the witness, Mr.Choksi, shifting the burden on the assessee. It is true that cross-examination is sought by the assessee in the course of assessment proceedings, as such, the view of the revenue that, it is the responsibility of the

- 4 - assessee to produce Mr.Choksi as a witness, is wholly misconceived. Accordingly, Annexure-M is quashed.

5.

Notice dated 18.3.2016 (Annexure-M1) issued by the respondent providing a personal hearing and insisting for assessee to bring the person Mr.Choksi to cross-examine and to hear the rival contentions, if any, is unacceptable. Hence, clause (vi) of show cause notice dated 18.3.2016 at Annexure-M1 is quashed. It is made clear that the respondent shall provide an opportunity to the assessee to cross-examine the witness, Mr.Choksi, in the assessment proceedings in the event department is relying upon the statements of the said witness recorded by it to arrive at a conclusion against the assessee.

Writ petitions are disposed of accordingly.

Sd/- JUDGE ln.

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