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2018 (12) TMI 1265 - AT - Income TaxAddition u/s 68 - not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order - denial of natural justice - Held that - We find that the case laws relied upon by the Ld. DR are on the merits of the case, however, the ground argued before the Tribunal is relating to confirmation of addition which was made on the basis of material collected at the back of the assessee without giving his an opportunity to rebut/cross examine the same which is in violation of the principle of natural justice, hence, the same are not applicable here. We find considerable cogency in the contention raised by the assessee s counsel that addition was made on the basis of material collected at the back of the assessee without giving him an opportunity to rebut/cross examine the same, which was also raised before the CIT(A), who did not adjudicate the same and wrongly upheld the AO s order, which is not proper and is against the principle of natural justice as well as law laid down in the case of Andaman Timber vs. CIT 2015 (10) TMI 442 - SUPREME COURT wherein held as not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. - Decided in favour of assessee.
Issues:
1. Non-compliance with CBDT instruction on issuing appellate order within 15 days. 2. Rejection of rectification application by AO. 3. Partial confirmation of additions made by AO. 4. Errors in calculating tax payable. 5. Applicability of sections 234B, 234C, and 234D. 6. Lack of opportunity for cross-examination of entry providers. Analysis: 1. The appeal raised concerns about the non-compliance with CBDT instruction on issuing appellate orders within 15 days. The appellant argued that the Ld. CIT(A) failed to follow this instruction, impacting the timeliness of the decision-making process. 2. The issue of the rejection of the rectification application by the AO was contested. The appellant claimed that the AO erred in rejecting the rectification application under section 154 on both legal and factual grounds, which was a point of contention in the appeal. 3. The Ld. CIT(A) partly confirmed the additions made by the AO, leading to a dispute. The appellant challenged this decision, highlighting errors in the assessment process and the disallowance of certain amounts claimed by the assessee. 4. Errors in calculating the tax payable were raised as an issue. Both the Ld. CIT(A) and AO were accused of inaccuracies in determining the tax liability of the assessee, leading to further legal challenges. 5. The applicability of sections 234B, 234C, and 234D was questioned in the case of the appellant. It was argued that these provisions were not relevant to the appellant's situation, leading to a legal dispute regarding the tax implications. 6. The lack of opportunity for cross-examination of entry providers emerged as a critical issue during the hearing. The appellant contended that the AO's reliance on information without allowing cross-examination violated principles of natural justice, citing legal precedents to support their argument. In conclusion, the Tribunal, following legal precedents and considering the facts and circumstances of the case, allowed the appeal of the assessee. The deletion of the disputed addition and the setting aside of lower authorities' orders were based on the violation of natural justice principles, as established in relevant legal judgments, leading to a favorable outcome for the appellant.
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