2019 (5) TMI 1062 - HC - Income Tax

Search u/s 132 - Proceedings completed without affording opportunity for cross examination - prayer in the Writ Petition is for the issuance of a mandamus directing the respondent to produce the said Mr.K.Srinivasalu for cross examination in the proceedings for assessment failing which, there should be a direction to the respondent not to rely on the sworn statements. HELD THAT - The prayer, couched as it is, is not acceptable. There can be no direction to the Income Tax Department to produce any person for cross examination. At best a request may be made by the petitioner for cross examination, which will be considered in the light of the principles of natural justice and fair play. In the present case, the petitioner has vide letter dated 01.04.2019 filed before the AO furnishing various details called for for completion of assessments, referred to the sworn statement recorded from Mr.K.Srinivasalu specifically seeking an opportunity for cross examination of the said individual, prior to completion of assessment. It is a settled position that where a request for cross examination is made prior to completion of assessment proceedings and in the event that the said statement is intended to be relied upon by the Assessing Officer, full opportunity be afforded in this regard prior to completion of assessment proceedings. Thus, seeing as a request has been made before the Assessing Authority, the same will be considered by the respondent in accordance with law. Nothing further need be said in this regard. This Writ Petition is disposed of in the above terms

Summary

Issues:
1. Opportunity for cross-examination in assessment proceedings.

Analysis:
The petitioner, an assessee under the Income Tax Act, raised concerns regarding the completion of assessment without the opportunity for cross-examination of a person whose depositions were recorded during a search. The prayer in the Writ Petition sought a mandamus directing the respondent to produce the individual for cross-examination or not to rely on the sworn statements. However, the court noted that there cannot be a direction to the Income Tax Department to produce a person for cross-examination. Instead, the court modified the prayer to seek a mandamus permitting cross-examination of the individual before finalizing the assessment proceedings.

The court emphasized that a request for cross-examination should be made by the petitioner, and if the statement is to be relied upon by the Assessing Officer, full opportunity for cross-examination must be provided before completing the assessment proceedings. In this case, the petitioner had already submitted a letter to the Assessing Officer requesting an opportunity for cross-examination of the individual in question. The court highlighted that when a request for cross-examination is made before the completion of assessment proceedings, the Assessing Officer must consider it in accordance with the principles of natural justice and fair play.

Therefore, the court disposed of the Writ Petition by directing the respondent to permit cross-examination of the individual by the petitioner before finalizing the assessment proceedings. The court clarified that the respondent would consider the request in accordance with the law, emphasizing the importance of providing a fair opportunity for cross-examination in such cases. As a result, the Writ Petition was disposed of, and the connected Miscellaneous Petition was closed without any costs being imposed.