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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI RAMIT KOCHAR
Aforesaid appeal by the assessee is directed against the order dated 22nd February 2012, passed by the learned Commissioner (Appeals)–31, Mumbai, for the assessment year 2008–09.
When the case was called for hearing, neither the assessee nor any of his authorized representative appeared before us to argue the appeal.
2 Shri Sunil R. Shah From the order sheet entry, it is noticed, on 2nd December 2015 3. also, no one appeared for the assessee and fresh notice through RPAD was issued to the assessee fixing the date of hearing on 7th March 2016. The service of the said notice is evident from the acknowledgement kept on record. Thus, it is clear that assessee is not interested in representing his case. We, therefore, proceed to dispose off the appeal on merit qua the appellant assessee after hearing the learned Departmental Representative.
Briefly stated the facts are, assessee an individual is carrying on business as wholesale and semi wholesale dealer in textile and fabrics under the name and style M/s. Rushabh Fabric. Assessee filed his return of income for the assessment year under consideration declaring total income of ` 2,90,320. It appears, subsequently, the Assessing Officer being of the opinion that income chargeable to tax has escaped assessment, re–opened assessment under section 147 by issuing notice under section 148 of the Act. During the assessment proceedings, Assessing Officer noticed that in course of a survey conducted in case of one Shri Rakesh Kumar Gupta, and his family members, it was found that the said person was engaged in providing accommodation bills only. During the survey, it was also found that the assessee had availed such accommodation bills from Shri Rakesh
3 Shri Sunil R. Shah Kumar Gupta, and his group concerns. When this fact was confronted to the assessee, he replied that he had purchased goods from the concerned parties and in support of such claim furnished copy of purchase bills. The Assessing Officer, however, relying upon the statement recorded from Shri Rakesh Kumar Gupta,, and his family members in course of survey held the purchases made by the assessee as bogus and added back to the income of the assessee. Being aggrieved of such addition made by the Assessing Officer, assessee preferred appeal before the learned Commissioner (Appeals).
Before the learned Commissioner (Appeals), assessee contesting the addition submitted that though in course of assessment proceedings, assessee had specifically requested the Assessing Officer to allow him a opportunity to cross–examine Shri Rakesh Kumar Gupta, but the Assessing Officer without affording such opportunity has completed the assessment. Of–course, assessee also challenged the validity of re–opening under section 147 of the Act as well as on the merits of the addition. Learned Commissioner (Appeals) on the basis of submissions made by the assessee called for a remand report and after considering the same was of the view that as the Assessing Officer had confronted the statement recorded from Shri Rakesh Kumar Gupta, assessee’s contention that he was not afforded
4 Shri Sunil R. Shah reasonable opportunity is not acceptable. Ultimately, he agreed with the Assessing Officer that the purchases made by the assessee are bogus, however, he quantified such bogus purchases to ` 37,26,996.
We have heard the learned Departmental Representative and perused the material on record. As could be seen in ground no.5, assessee has challenged the validity of assessment framed without providing an opportunity to cross examine Shri Rakesh Kumar Gupta, and his family members. It is evident from the orders of the Departmental Authorities the vary basis for considering the purchases made by the assessee from Shri Rakesh Kumar Gupta, and group concern to be bogus or non–genuine is the statement recorded from Shri Rakesh Kumar Gupta, and his family members in course of survey action. It is also evident that during the assessment proceedings, when the statements were confronted to the assessee, he specifically requested the Assessing Officer for providing him an opportunity to cross examine Shri Rakesh Kumar Gupta, and his family members. However, no such opportunity was granted to the assessee by the Assessing Officer. Even during the remand proceedings also, as it appears, the assessee was never granted any opportunity to cross– examine the concerned persons whose statements were relied upon. Though, the assessee has specifically raised the issue of denial of 5 Shri Sunil R. Shah cross–examination before the learned Commissioner (Appeals), he has not dealt with it with the seriousness it deserves. It is salutary principle of law if a statement of third party is proposed to be used in detriment to assessee’s interest, rule of natural justice demands assessee must be given opportunity to cross–examine the person whose statement is being used against him. In the present case, no doubt, the statement of Shri Rakesh Kumar Gupta, and his family members was being used by the Assessing Officer for treating the purchases as bogus. However, though the assessee had specifically requested for cross–examining concerned parties, his request has not been considered at all and opportunity to cross examine has been denied. In the aforesaid circumstances, definitely, there is violation of rules of natural justice as the assessee has been deprived of an opportunity to cross–examine the parties whose statements were used against him. That being the case, we are inclined to set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to the file of the Assessing Officer for adjudicating all the issues afresh. The Assessing Officer, if intends to utilize the statement of Shri Rakesh Kumar Gupta, or any other party, then he must afford an opportunity to the assessee to cross–examine them before utilizing such statement against the assessee. Further, we make it clear, it will be open for the assessee to raise all other issues,
6 Shri Sunil R. Shah including the validity of re–opening, before the Assessing Officer. The Assessing Officer is directed to consider all the submissions of the assessee and pass a reasoned order. At the same time, assessee is also directed to co–operate in finalizing the proceedings by responding to the notices to be issued by the Assessing Officer.
In the result, appeal stands allowed for statistical purposes. Order pronounced in the open Court on 11.03.2016