2024 (1) TMI 1285 - HC - Income Tax

Validity of assessment order u/s 147 r.w.s. 144B - appellant had not been granted an opportunity to cross-examine person Mukesh Banka whose statement was recorded u/s 131 - Mukesh Banka refused to co-operate with the department by not responding to the summons - HELD THAT - There are two ways by which the department can resolve the issue. Firstly by issuing fresh summons to Mukesh Banka and fixing a fresh date for cross-examination or the second methodology that can be adopted is to ignore the statements recorded by Mukesh Banka by affording a fresh opportunity to the assessee by way of personal hearing through video conferencing or in person and thereafter consider the materials placed by the assessee and proceed to take a decision in accordance with law. Therefore by not providing an opportunity to cross-examine Mukesh Banka the authority is precluded from relying upon the statement recorded from the said person. The appeal is allowed and the application is disposed of. The order passed in the writ petition is set aside and consequently the assessment order is set aside and the matter stands remanded back to the assessing officer for fresh consideration. The assessing officer is directed to issue fresh summons to Mukesh Banka and ensure his presence and permit the appellant to cross-examine the said person.

Summary

Issues: Challenge to assessment order u/s 147 read with 144B of Income Tax Act for not being granted opportunity to cross-examine witness u/s 131.

Summary:
The Calcutta High Court, in an intra-Court appeal, addressed the challenge against an assessment order under Section 147 read with Section 144B of the Income Tax Act, 1961. The appellant contested that they were not given the chance to cross-examine a witness, Mukesh Banka, whose statement was recorded under Section 131 of the Act. The Single Bench had dismissed the writ petition, leading to the current appeal.

The Court noted that the assessee's request for cross-examination of Mukesh Banka was initially accepted by the department. However, due to technical issues with the video conferencing link, the assessee missed the opportunity. Subsequent attempts for cross-examination were hindered by Mukesh Banka's non-cooperation, leading to the assessing officer relying on his statements without allowing the cross-examination.

The Court emphasized that the department should either provide a fresh opportunity for cross-examination of Mukesh Banka or disregard his statements and allow the assessee a fair chance to present their case. Failing to provide the opportunity for cross-examination would prevent the authority from relying on Mukesh Banka's uncontroverted statements.

Consequently, the Court set aside the assessment order and remanded the matter back to the assessing officer. The officer was directed to issue fresh summons to Mukesh Banka, ensure his presence for cross-examination, and allow the appellant to submit additional replies. The decision should be made based on the materials available on record, excluding Mukesh Banka's statements if he refuses to cooperate.

In conclusion, the appeal was allowed, the assessment order was set aside, and the matter was remanded for fresh consideration, emphasizing the importance of providing a fair opportunity for cross-examination in such proceedings.