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TMI Blog2012 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... s not dependent on the sweet will of the concerned authority. It will have to be according to law. It is justiciable. Rules of natural justice are not embodied rules. They are only means to an end and not an end in themselves. Their aim is to secure justice or to prevent miscarriage of justice. It is, therefore, not possible, to make an exhaustive catalogues of such rules. Fairness has to be ensured, whatever be the rule. If fairness is shown by the decision-maker to the man proceeded against, the form and features of the rule is not of much relevance. No arguments based on legal propositions have been advanced by the Sr. D.R. addressing the fact that where there are contradictory statements by 4 out of the 21 witnesses as to which statement should be relied upon and why, similarly how and why the statements of 21 witnesses should be given a blanket application to the remaining 55 witnesses has been left unaddressed in a zeal to canvass the confirmation of the addition sustained. The expression "natural justice" is not capable of static or precise definition. It cannot be imprisoned in the strait-jacket of cast-iron formula. All it means fairness in action. The principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever given to the assessee. It is therefore prayed that order of ld. CIT(A) upholding the action of the AO be held to be unsustainable and untenable in eyes of law. ITA 2812/Del/11: 1. Ld. CIT(A) has erred on facts and in law in deleting addition of Rs. 80,00,000/- on account of rejection of books of the assessee company u/s 145(3) of the Act ignoring that while making the addition the then AO specifically pointed out the discrepancies in the books of accounts of the assessee company. Further, the assessee received/paid freight charges in cash which are not verifiable in the absence of name and addresses of the parties on the vouchers as well as in the books of accounts maintained by the assessee company. 2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal." 2. A perusal of the record shows that the assessee disclosed an income of Rs. 46,70,500/- by way of filing a return dt. 31.10.2004 accompanied by tax audit report dt. 12.10.2004 u/s 44AB of the Income Tax Act, 1961. After issuance of notice dt. 27.7.2005 u/s 143(2) it was subjected to scrutiny a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k unions and goods are transported. There is always surplus on such booking most part of total booking of assessee during the year pertains to this category. In case of retail small load booking when even after days there is not enough goods for complete full truck load of particular directions then whatever load is there same are transported through truck hired from the market at the rate prevailing on particular date in truck unions. The trucks are always hired on full truck load basis. So when there is no full truck load and goods are transported through truck hired from market even when the load was 40% of full truck so there is a loss. These type of bookings are 20 to 25% of total booking in AY 2004-05. The loss in these types of booking is mainly the weight difference and which cannot be avoided. Goods have to be transported after wait of 3-4 days otherwise penalties are to be payable to parties by way of damage. Further there is loss of further business as well as goodwill. The facts stated above are verifiable from the booking register as well as freight register maintained by the assessee. The reasons for non-completion of full truck load in 3-4 days was lack of mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts of the assessee do not present a correct and complete picture of the assessee's business activities and business profits and the same are liable to be rejected u/s 145(3) of IT Act The books of accounts of the assessee are therefore rejected u/s 145(3) of the IT Act. While estimating the profits for the transportation business, a trading addition of Rs. 80,00,000/- is made to the results declared by the assessee, thus, not allowing the gross loss of Rs. 77,11.965/- and determining a profit of Rs. 2,88,035/- i.e. (80,00,000 - 77,11,965/-) in respect of the said business. As the assessee has concealed the particulars of his Income, he is liable for penalty u/s 271(1)(c) of the I. T. Act which are separately initiated. 2.2 Apart from the above addition of Rs. 80 lakhs the A.O. taking into consideration that the assessee claimed to have received gifts of Rs. 1,90,00,000/- from 76 persons which had lead to an increase in the capital of the assessee to that CIT(A) required the assessee to explain the same and therefore rejecting the explanation offered he proceeded to make the addition of Rs. 1,10,00,000/- in view of the fact that he had already made an addition of Rs. 80 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would not be acceded to. Shri ML Goyal, C.A. attended on 12.11.2006 and produced four donors namely Shri Surinder Kumar, Shri Satya Narain, Shri Kamal Kumar Jajoria and Shri Ashok Kumar for verification. They did not bring their original bank pass books or books of accounts. They however brought photocopies of identification papers in the shape of Election Commission ID card or driving license. Their statements were recorded in presence of Shri ML Goel, CA and the same are discussed in brief as under. ( i ) It was noticed from the statements of Shri Surinder Kumar and his father Shri Satya Narain that not only they gifted Rs. 2,50,000/- each to the assessee but their mother Mrs Saroj Devi also gifted an amount of Rs. 2,50,000/- to the assessee, Shri Jai Karan Sharma. The family of Shri Surinder Kumar consisted of Shri Surinder Kumar, his wife, his two children, aged 17 18 years, his father and his mother. They have been living in a 3 bed room flat which was stated to have been allotted to Shri Satya Narain in the year 1985. They are stated to have no other property. Even their son Shri Surinder Kumar was stated to be doing a business without a shop/ business premises. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on 20.6.2003 which was not a Diwali occasion. ( iii ) Another donor Shri Ashok Kumar stated that he was living In a house built on 43 sq.yd consisting of 2 rooms, kitchen bathroom which he bought in 2004 for an amount of Rs. 2 lakhs. He is stated to be living there with his wife, mother and 3 children. His wife was stated to be doing stitching work for tailors and other local people. His children were stated to be studying in a private school for which he was paying monthly fees of Rs. 500/-. The said donor was stated to be earning about Rs. 4000/- to Rs. 5000/- p.m. during the period relevant to the AY 2004-05. He was stated to be owning a scooty which he bought second hand for Rs. 5000/- during the current year. As regards making the gift, he was stated to be having a saving of Rs.1,00,000/- and rest he stated to have managed from outside sources. ( iv ) No other so called donor was produced for verification. Though the AR of the assessee has sent a letter dated 8.12.2006, which was received in this office on 12.12.2006, along with copies of the letters stated to have been sent to the said donors in order to appear before the Assessing Officer with the requisite detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 Sonu 2002-03 51,280 2,50,000 19 Sangeeta Rani 2002-03 81,198 2,50,000 20 Surender Kumar Singhal 2002-03 60,500 2,50,000 21 Hans Raj 2002-03 51,930 2,50,000 22 Ashok Kumar 2002-03 55,020 2,50,000 23 Vikash Gupta 2002-03 52,880 2,50,000 24 Sunita Gupta 2002-03 80,970 2,50,000 25 Kishan Chand Mittal 2002-03 1,24,100 2,50,000 26 Som Nath 2001-02 51,400 2,50,000 27 Satish Kumar 2002-03 51,950 2,50,000 28 Prem Lata 2002-03 81,185 2,50,000 29 Pawan Kumar 2002-03 52,690 2,50,000 30 Meenakshi 2002-03 81,235 2,50,000 31 Lalita Shukla 2002-03 80,890 2,50,000 32 Dharamveer 2002-03 52,205 2,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 81,400 2,50,000 63 Rakesh Kumar 2002-03 51,400 2,50,000 64 Tilak Raj 2002-03 52,600 2,50,000 65 Parvati Varshney 2002-03 2,03,553 2,50,000 66 Surinder Kapoor 2002-03 51,645 2,50,000 67 Ashok Kumar 2002-03 51,240 2,50,000 68 Anil Kumar 2002-03 1,02,480 2,50,000 69 Ajeet Singh 2002-03 51,550 2,50,000 70 Kalp Nath Pathak 2002-03 52,800 2,50,000 71 Mukesh Kumar 2002-03 1,46,750 2,50,000 72 Satbir Singh 2002-03 51,800 2,50,000 73 Rajender Kumar 2002-03 51,120 2,50,000 74 Dharminder 2002-03 52,480 2,50,000 75 Satish Kumar 2002-03 51,210 2,50,000 76 Gaurav Kumar 2002-03 51,100 2,50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pointed out; and that the A.O. has not rebutted the claim of the assessee that the GRs contained full and complete addresses of clients or made a counter claim that commodities transported were without invoices being raised or there was an understatement of truck load or of the transportation charges; that there was no basis for making the lump sum addition of Rs. 80 lakhs. 3.1 Aggrieved by this finding the department is in appeal before the Tribunal. 3.2 In regard to the issues addressed in assessee's appeal as per para 6.4 of the impugned order the contention put forth on behalf of the assessee was that the addition in question was made without affording any proper opportunity to produce the documents in support of the gifts received; that the assessee had filed confirmations from all the 76 persons confirming the gift and since most of the donors were residents of places other than Delhi the issue could be decided on the basis of documents and in the face of conformity letters of the donors it was urged that there was no occasion for treating the gifts as non-genuine. A perusal of para 6.5 shows that a reference is made to the facts that as a result of assessee's submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on oath (copy enclosed):- a. Saroj b. Krishan Lal c. Shyam Bansal d. Ashok Kumar e. Meenakshi f. Satya Narayan g. Mohan Lal Ahuja h . Neelam i. Surender Kumar j. Smt. Meena Gupta k. K. Surender Kumar Kapoor l. Kamal Kumar m. Prem Lata Virmani n. Kamlesh Ahuja o. Manoj Kumar p. Inder Ahuja q. Subhash Chander r. Rajender Aggarwal s. Kiran Bala t. Satish Kumar Dang u. Pushpa Aggarwal It has been observed from these statements that all the above persons gave a similar type of reply as under:- "That Sh. Jai Karan Sharma or a person on behalf of Jai Karan Sharma gave them the money to make a pay order from their account in favour of Jai Karan Sharma. For this purpose the above persons gets commission of Rs. 1500-200". The case has been received on transfer in this office from Circle 25(1) as the directors of concern namely M/s Chetak Transport is also director in M/s Chetak Logistics assessed in this circle. For providing the assessee the opportunity of cross examination, in context of the statement recorded on oath from donors, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the remand report has been submitted without providing any opportunity for cross examination of 21 donors whose statements have been recorded by the A.O. in the course of remand proceedings it was also stated that the manner in which statements are recorded clearly shows that they had been tutored and the submissions were recorded by the A.O. according to his own convenience; it was also argued that out of 76 donors statements of only 21 donors had been recorded and on the basis of which addition on account of all the 76 donors cannot be sustained. 3.6 However, not convinced the CIT(A) made the addition of Rs. 1,90,00,000/- vide para 7 observing as under. 7. I have carefully considered the submissions made on behalf of the appellant, findings recorded by the ld. AO, remand report submitted in the course of appellate proceedings and the comments furnished on behalf of the appellant. I have also gone through the statements recorded by the ld. AO at the time of assessment and in the course of remand proceedings. On consideration of the material placed before me, I and that the appellant has failed to establish the creditworthiness of the donors and to explain the source of funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt time was not given to the assessee to produce the 76 parties who were required by the A.O. for examining as the assessee was put to notice on 22.11.2006 to produce the 76 donors on 27.11.2006. It was emphasized that since most of these parties were out station parties the time given was not sufficient. In the face of repeated queries from the Bench in regard to the claim of genuineness of the gift of Rs. 2,50,000/- from 74 persons and one gift of each of Rs. 2 lakhs and Rs. 3 lakhs from 2 persons which in the face of the consistent orders does not appear plausible. Ld. AR vehemently stood by the stand that the claim was genuine and the assessee was not afforded sufficient opportunity to produce the donors. Relying upon the assessment order itself it was argued that the A.O. records that on 22.11.2006 the assessee was required to produce the donors on 27.11.2006. Referring to page 20 of the paper book it was his submission that the assessee responded to this vide letter dt. 21.8.2006 which fact is recorded in the assessment order. In response to a query from the Bench that the A.O. may have directed on 22.11.2006 as a result of the assessee himself providing the particulars on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgement of the Jurisdictional High Court in the case of CIT v. Nova Promoters Builders P. Ltd. rendered on 15.2.2011 in ITA 342 of 2011 on which the department may want to rely. The ld. A.R. contended that the facts are distinguishable and have no application to the facts of the present case. In the proceedings today the assessee is confining his arguments only to the fact that justice has not done and if the evidences so warrant after due examination by the A.O. or the assessee fails to produce the donors then nothing stops the A.O. from making the additions relying upon Nova Promoters Builders P. Ltd. or any other judgement. It was contended that as per the settled legal principles the opportunity to cross examine the parties should be given. 5.5 The ld. A.R. was required to address the fact that the donors are witnesses of the assessee as such on what basis can it be urged that the onus is upon the Revenue to produce them for cross examination. 5.6 In response to the same ld. A.R. urged that it is never denied that these were the assessee's witnesses and at no point of time the assessee has expressed either reluctance or hesitation to produce them. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice at every stage, however, conscious of his duty towards the Court it was submitted that in all fairness he is arguing and praying only for a restoration. 5.10 In the context of the above submission it was contended that various documents addressed before the A.O. in the original proceedings are not mentioned in the order and the assessment is made oblivious to these documents. It was reiterated that it is evident from the assessment order that the A.O. woke at the fag end of the assessment proceedings ignoring the fact that it is practically not possible for the assessee to produce 76 donors where most of the donors were from out of station. It was stated the assessee made attempt with the AO seeking that from which date the donors should be made available. Attention was invited to Paper Book page 107 wherein it is specifically stated that assessee had instructed all the donors to make themselves available for giving deposition before the A.O. and some of the donors the assessee would attempt to bring from Tuesday onwards as per the said letter dt. 8.12.2006 and some would be approaching the A.O. independently. As such AO was requested to specify the time of his convenien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004-05. "With reference to the assessment proceedings of Jai Karan Sharma, we, on behalf of assessee, further submit as under: The assessee has already submitted name and address of the each donor along with gift deed. Copy of return and details of bank account vide our letter dt. 22.11.2006 and 8.12.2006. The assessee has also produced some donors who got recorded their statement before your good self. Some of the donors have sent confirmation of the gift directly to your office in response to our letters dt. 4.12.2006 to them. But all these efforts are taking lot of time. The case is going to be time barred by 31st December, 2006 and still number of donors have to make statement before your good self. You are having vide powers u/s 131/133 of I.T. Act, 1961 to enforce the attendance of any person. So you are requested to issue the notices to the doners, who have not appeared before you in spite of our best efforts, to appeal before you with the required information. This will facilitate the completion of hearing in this case and we shall feel obliged. Thanking you. Yours faithfully, Sd/- (ML Goyal) FCA" 5.13 Referring to the same it was his stand that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be read along with the statement of fact grounds of appeal. From this you will find that no proper opportunity was given to produce the documents in support of the gift received. The A.O. has asked the assessee to produce the 76 persons, almost all residents outside Delhi. Assessee has made all efforts to produce all of them requested the A.O. to place on record the copy of documents showing the efforts made by the assessee, but the A.O. ahs refused to bring the same on record and ultimately same has to send to him by way of speed post dt. 8.12.2006. This fact is also mentioned din the order in page no.5, point no.(iv). In response of the said letter almost all the donors have given the reply and a copy of the same is marked to the assessee. But none of the reply is placed on record. In fact the order was made prior to receipt of any such reply. Please find enclose herewith following additional evidence:- Copy of letter written to A.O. directly by Donors 26 Donors Copy of letter along with bank certificate by Donors 20 Donors Copy of letter Death Certificate sent by Donor's son 1 Donor" 5.17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable time should have been given to the assessee and it is a settled proposition of law that the A.O. is an investigator first and an adjudicator later. 5.20 It was his vehement stand that thereafter the department again did not act for one long year and on 2.5.2008 the assessee received a letter annexed at paper book page 322A. It was his vehement contention that after having responded on 16th May, 2007 as far as the assessee is concerned there was nothing further to be done by him. It is only through the vague communication dt. 2.5.2008 which required the assessee to be present on a certain date for vague unstated reasons that some communication in the appeal pending before the CIT(A) was received. Referring to the same it was stated it definitely cannot be said to inform the assessee that his presence was required to cross examine the donors as is made out by the AO in the Remand Report and accepted by the CIT(A). The same is reproduced from paper book page 322A as under:- "From: ACIT, Circle 3(1), New Delhi To: Shri Jai Karan Sharma, New Delhi Sub: Appeal no.481/06-07 before CIT(A)-XXIV, New Delhi in your case for AY 2004-05 - Reg. Sir, Please refer to the subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suant to which the assessee received from the same AO of Circle 25(1) to respond to the enquiry vide letter dt. 30th April, 2007 placed at pages 331, 332 to reply by 16.5.2007. The enquiry so conducted by ACIT, Circle 3(1), New Delhi and that too after a gap of 1 year cannot be said to be a reliable evidence especially since the letter so received by the assessee spells out vague unstated reasons for assessee's presence on 15.5.2007 as is evident from page 332A of paper book which fact assessee had questioned by the assessee at page 334 and 335 of the paper book. 5.23 In this background relying upon the report of ACIT, Circle 3(1) the CIT(A) has concluded that the assessee has not cared to cross examine the persons who admittedly were examined behind his back. The evidence it was stated is not reliable and conclusive and was never confronted for this reason also the proceedings were a travesty of justice. It was submitted that even if some donors have retracted from the stated facts before the A.O. in the first round the evidence becomes more unreliable as the assessee responded that the donors could be produced and some were produced the remaining due to strike and paucity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties before the A.O. 5.26 In view of the fact that the assessee is requesting for a restoration of the grounds raised in assessee's appeal it was submitted that he would have no objection if the issue addressed in the departmental appeal is also restored back, let the entire issue be examined de novo and a view as per law be taken. 6. The Ld. Sr. D.R. vehemently opposed the stand of the assessee. It was her submission that the prayer of the assessee seeking a restoration based on various judgements and position of law as considered by various Courts is entirely misplaced, the issue has to be decided on the basis of facts as available in the present case and not as considered by different Courts in different circumstances. It was her submission that the principle laid down in Tin Box Co. is entirely misplaced and not applicable. Similarly perusing the copy of the judgement 1990(1) SCC 68 it was her submission it has no role to play in the present proceedings. 6.1 Reverting to the facts it was her stand that as per the assessment order after issuance of notice dt. 27.7.2005 the proceedings continued and there was no lapse and on 22.11.2006 as per paper book page 26 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or cross examination as is evident from page 337. 6.5 Addressing letter to the CIT(A) dt. 3rd March, 2011 placed at pages 339 it was contended that the assessee is arguing for an opportunity to cross examine the donors who have been shown to have gifted to the assessee huge amounts and not a small amount but an amount of Rs. 2,50,000/- as such these were never the departmental witnesses and if they have deposed against the assessee then the department was not required to provide any opportunity to cross examine them. Referring to page 328 it was her argument that in fact it is the fairness on the part of the department to admit the fresh evidences and in the eventuality the donors are not produced before the AO the AO was directed to "if required issue summons" and make the enquiry report available by 7th May, 2007. This fair treatment on the part of the department cannot be used by the assessee to flog the department and put the onus upon the assessee requiring the department to issue summons or make donors available for cross examination. 6.6 In the facts of the case it was her argument that the retraction by the very persons who deposed in assessee's favour before the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence the assessee has refused to place the full facts before the A.O. and the only plea taken before the CIT(A) is that the assessee should be compared with itself and by making a comparison with his own past overall G.P. without providing vouchers ;the comparison with assessee's own activity in the past is ignored. 6.9 It was further submitted that the Supreme Court in Kishanchand Chela Ram v. CIT , 125 ITR 713 (SC) laid down the principle the evidence used is to be confronted is not applicable as the persons to be examined are assessee's own witnesses. It was contended that the addition needs to be confirmed. Specific attention was invited to Page 373, Question no.6; page 344, Q.No.8; page 355 Q. 8 9; page 360 Q.6; page 361 Q.8; page 362 Q. 10 11; page 366 Q. 6 7; page 367 Q.8; page 372 Q.4; page 373 Q. 6 7; page 374 Q. 8 9; page 380 Q. 5 6, page 384 Q.5; page 385 Q.8; page 386 Q.9; page 391 Q.6; page 392 Q.8; page 408 last question, page 409 Q.1; page 412 Q.3; page 413 last two questions; page 414 first question; page 418 Q.5; page 419 Q. 6 7; page 426 second last question; page 433 Q.8; page 440 Q.7; page 447 Q.9; page 451 Q.4 6; page 452 Q.8 9; page 458 Q.7 8; pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the enquiry report was sought i.e. May, 2006 is not beyond the realms of understanding. It was urged that nothing turns on it as in the facts of the present case the assessee is pleading an opportunity wherein he shall produce the 76 donors. It was reiterated that the enquiry report in the case has been submitted before the CIT(A) by different A.O. having Circle 3(1) range who did not care to examine, call for or confronted the assessee with any information except the vague unspeaking letter giving no reasons as to why the assessee should be present before a different AO in regard to the request of a different A.O. in regard to the appellate proceedings as such the response of the assessee being bonafide has to be considered as to why his presence was being sought and addressing the fact that the jurisdiction was before a different AO is not in anyway challenge the administrative procedural powers of the department. It is only expressing confusion on the part of the assessee. The presumption entertained by the department that the assessee is presumed to know when jurisdiction changes is not supported by any evidence and this one sole opportunity for being present on a specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and overall G.P. has gone upto 14% which reasons have not been demolished. It was contended that what is the basis of addition of Rs.80 lakhs, what stopped the A.O. from making addition of Rs. 8 crores instead of Rs. 80 lakhs it was contended that the present proceedings are travesty of justice and the assessee in all fairness for this reason was requesting that both the issues can go back to the A.O. He also placed reliance upon State of Orissa v. Maharaja Shri BP Singh Deo , 76 ITR 690 (SC), CIT v. K.Y. Pillaih Sons , 63 ITR 411 (SC) and Jhandu Mal Tara Chand Rice Mills v. CIT , 73 ITR 192 (P H). 8. We have heard the rival submissions and perused the material available on record. Before considering the request of the ld. A.R. that the issue may be restored to the AO on the undertaking given that all the 76 donors shall be produced on account of the fact that there has been travesty of justice at the stage of assessment proceedings; and, during the remand proceedings/ that, where the evidences relied upon before the A.O. were not considered by the A.O. as a result of which petition for additional evidence had to be moved (P.B. pages 193-320) which was accepted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has never acted fairly with the assessee as there was undue haste at the assessment stage and relevant evidences placed by the donors at the behest of the assessee were ignored by the A.O. and in fact do not find mention in the assessment order. Consequently as a result thereof petition for filing additional evidence was moved which was admitted against which action and decision no grievance has been posed by the Revenue; that in the remand proceedings due to change of jurisdiction etc. the assessee was not meted a fair treatment; the donors were examined at assessee's back which fact has not been rebutted by the Sr. D.R.;/ that, the statements relied upon by the A.O. were provided much after submitting the Remand Report as is evidenced by the Rejoinder thereto filed before the CIT(A) which also has not been opposed by the Sr. D.R.; the gap of 1 year before the time of recording statement; and a vague communication requiring assessee's presence for unstated vague reasons by an AO having a different jurisdiction it has been urged cannot be an act of fairness. Ld. A.R. has also assailed the argument and questioned the legality of the action as to how the statements of 21 donors can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present proceedings in as much that opportunity was provided 8.6 In view of the fact that the parties have sought to vent much spleen on the issue we feel incumbent upon us to briefly touch the position qua the Indian Evidence Act, 1872. 8.7 It is trite law that Evidence Act is not strictly applicable to the income tax proceedings as the proceedings being quasi judicial proceedings as opposed to judicial proceedings the A.O. no doubt is not fettered by technical rules of evidence, however like any other judicial proceedings even in the income tax proceedings the issues are decided on the basis of evidences. 8.8 The law of evidence governs the means and the manner in which a party may substantiate his own case or refute that of the opponents. Evaluation of evidence is the measurement or the determination of its probatic value. In judicial proceedings the accurate measurement of the evidential value of facts is a condition and an endeavour towards the goal of the discovery of truth. 8.9 Evidences in income tax proceedings like judicial proceedings include both oral and documentary evidences. Oral evidences, inter alia, include statements which are made before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uations where the witness proves an unreliable witness, the portion of the statement or evidence which is verified and verifiable that part of the testimony of the witness if found credit worthy can be taken cognizance of by the Court. The Apex Court in its various judgements has held that a declaration of witness to be hostile does not ipso facto reject the evidence and it is now well settled that the portion of evidence being advantageous to both the parties may be taken advantage of but the Court before whom such a reliance is placed shall have to be extremely cautious in such acceptance. It may be worth referring to the judgement of the Apex Court in the case of the State of UP v. Ramesh Prasad Mishra and another , AIR 1992 SC 2766 wherein it was laid down that it is equally settled law that the evidence of a hostile witness would not be totally rejected if spoken in favour of the prosecution or the accused but it can be subjected to scrutiny and that portion of evidence which is consistent with the case of the prosecution or the defence may be accepted. 8.11 Having thus considered the position under law in the facts of the present case since opportunity to cross examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould a person know the case which is made against him but he must also know what evidence has been considered for drawing a presumption affecting him and he must be given a fair and reasonable opportunity to rebut the presumption. Furnishing specific and intelligible reasons for the proposed action is the concomitant of the concept of reasonable opportunity. It is necessary because the person could make an effective representation only with reference to reasons set out. Such reasons cannot be vague and too general in nature. There must be specific and based on material facts. Omission to comply with the requirement of audi alteram partem, as a general rule, vitiates a decision. When there is violation of natural justice no resultant or independent prejudice need be shown as the denial of natural justice is in itself a prejudice. Rule of law and not the rule of discretion is the basic feature of Constitution of India. 8.14 Natural justice is necessarily presumes fair play in action. The celebrated English Cases Ridge v. Baldwin [1963] 1 QB539 and in Wiseman v. Boreman [1971] AC 297 (HC) natural justice has been equated with 'fair play in action'. In Re K (H) (an Infant) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prevent miscarriage of justice. It is, therefore, not possible, to make an exhaustive catalogues of such rules. Fairness has to be ensured, whatever be the rule. If fairness is shown by the decision-maker to the man proceeded against, the form and features of the rule is not of much relevance. 8.17 Examining the arguments of fairness on the part of the department which has been canvassed vehemently by the Sr. D.R. we find that unfortunately not only at the assessment stage paucity of time has be-devilled the issue but even in the remand proceedings the huge time gap between the recording of statements - on different dates in May,2007 till the submission of the remand report i.e. 30.5.2008; wherein the case was remanded to DCIT, Circle 25(1), New Delhi vide order dt. 23rd April,2007 the vague opportunity vide letter dt. 2.5.2008 giving time on 15.5.2008 by a different AO, ACIT, Circle 3(1) New Delhi can be said to be fair to the assessee. No doubt as far as the change of jurisdiction is concerned the department cannot be faulted with as it may have been an administrative necessity and an act presumed by settled legal decision to be in public interest-however the time lag of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held against the Revenue however if that has been the cause for delay then injustice has occurred qua the assessee. 8.18 It may not be out of place to state that opportunity should be a reasonable one where time is too short for compliance or the assessee has some reasons to require more time, reasonable time should be given for compliance as held in Nedum Chezhian (Dr. K.) v. DCIT [2005] 274 ITR 37 Madras an opportunity which is earlier granted cannot justify lack of reasonable opportunity during the last occasion as held in Bhagat Dharamchand Premsagar Charitable trust v. CIT [2005] 274 ITR 443 (P H). 8.19 Thus in the above background we examine and consider the sagacity and wisdom of accepting the departmental stand of upholding the addition on the basis of legal principles discussed hereinabove and facts and arguments which we propose to deal with subsequently. 8.20 It is seen that the Sr. D.R. based on the statements of 21 witnesses which are contrary to the assessee's stated claim referring to the specific pages in the paper book referred to in the earlier part of the order would want us to uphold the entire addition. 8.21 However on giving our utmo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee who has been pleading for an opportunity to be allowed to produce the donors before the AO the said request cannot be lightly thrown aside. No arguments based on legal propositions have been advanced by the Sr. D.R. addressing the fact that where there are contradictory statements by 4 out of the 21 witnesses as to which statement should be relied upon and why, similarly how and why the statements of 21 witnesses should be given a blanket application to the remaining 55 witnesses has been left unaddressed in a zeal to canvass the confirmation of the addition sustained. 8.22 On account of these factual infirmities and legal lacunae, it is seen that fair hearing is necessary even when something is obvious. It cannot be denied on the ground that the result is obvious from the start and why force every body to go through the tiresome waste of time involved in framing the charges and giving an opportunity to be heard. The advantage of such hearing is that after discussion what appeared obvious from the start may not be so obvious, Unanswerable charges may be answered. The unalterable determinations of the authority may suffer a change. Further, the proposition that notice ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the explanation offered and materials available; and, non-reliance on facts not furnished to the affected party. 8.26 Accordingly for the reasons given hereinabove in the face of these glaring legal and factual shortcomings, we find ourselves unable to be persuaded by the powerful rhetoric of the Sr. D.R. and confirm the additions as suspicion however strong cannot take the place of facts. 8.27 Burden of proof means the duty of proving a disputed assertion or charge. It means two different things. It means sometimes that a party is required to prove an allegation before a judgment is given in his favour. It also means that on contested issue one of the two contending parties has to introduce evidence. The burden of proof in the matter of establishing a case may go on shifting, during the course of evidence, from one party to another, depending upon how far any of them by adducing sufficient evidence is successful in raising presumption in his favour. The burden of proof is of importance only where by reason of not discharging which is put on it, the party must eventually fail. Where, however, the parties have joined the issue and have led evidence, and the conflicting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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