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TMI Blog2021 (10) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by Mr.A.N.R.Jayapratap Junior Standing counsel ORDER This order will govern the captioned writ petition and 'Writ Miscellaneous Petition' ('WMP') therein. 2. Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 23.09.2021, which reads as follows: 'Mr.Mukul Rohatgi, learned Senior Advocate instructed by learned counsel on record for the writ petitioner Mr.Vaibhav R.Venkatesh, and Mr.A.P.Srinivas, Senior standing counsel for the lone respondent (learned Revenue counsel) are before this Court. 2. The captioned writ petition pertains to assessment in a case of search/requisition under Section 153-A of the 'Income- Tax Act, 1961' [hereinafter 'IT Act' for the sake of brevity, convenience and clarity]. 3. The above takes us to Sections 142 and 143 of IT Act, is learned Revenue counsel say. 4. Be that as it may, prayer in the captioned writ petition is in two parts. One part or in other words, the first limb of the prayer pertains to a Mandamus qua respondent to act on four communications dated 29.07.2019, 18.02.2021, 05.04.2021, 06.05.2021. To be noted, accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner Firm. The department has issued summons to 26 Sand yard owners and all of them appeared and statement was recorded from them. All the Sand yard owners have submitted that they had no knowledge about the Petitioner Firm. In this background, the department has not taken any stand to bring it against the Petitioner Firm. In this background, the Petitioner's Firm letter, requesting cross examination of the Sand yard owners was not taken up for consideration. In view of this, the allegation of the Petitioner Firm that the department was dilly-dallying upon the issue is totally baseless.' Page No.23: 'In respect of cross examination of persons mentioned in the Schedule-B In this schedule, the Petitioner Firm requested to allow the cross examination of Shri C.Arul Pandi and Shri M.Kandhan, A.D.(Mines). Cross examination of Shri C.Arul Pandi: On 06.08.2019, a summon u/s.131 of the Act was issued to Shri C.Arul Pandi requesting him to appear on 19.08.2019. On the same day, a letter was issued to the Petitioner Firm requesting to come and cross examine Shri C.Arul Pandi on 19.08.2019. On 19.08.2019, a letter was received from S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rengthen the order. Even in the event, if Shri M.Kandhan retracts the statement, it will have no impact in determining the total income of the Petitioner Firm.' Page No.25: 'List of documents required as per Schedule-C: a. Outcome of examination of officials of vigilance and Anti Corruption Department. The respondent has referred the matter to the Department of Vigilance and Anti Corruption regarding illegal payments only to take appropriate action. The respondent has never examined the officials of Vigilance and Anti Corruption. In view of this, the question of requesting the documents relating to outcome of examination of officials of Vigilance and Anti Corruption will not arise. b. Statement of Yard owners: In response to the summons issued u/s.131 of the Act, 26 Sand yard owners appeared and answered that they had no knowledge about the Petitioner Firm. When the Sand yard owners have explicitly admitted that they had no knowledge about the Petitioner Firm and the Department has not proposed to utilize the same in the proposed assessment order and furnishing the copy of the same to the Petitioner Firm will serve any purpose. c. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Director (Mines) about the claim of illegal Sand mining. The Petitioner Firm cannot direct an Assessing Authority how to complete the assessment. The Respondent is at liberty to follow the materials which he relied upon during the course of assessment proceedings. It is upto the Petitioner Firm to see whether the principle of natural justice is followed or not. Without receiving any order from the Department, it is premature on part of the Petitioner Firm to come at a conclusion that examining the Executive Engineer (PWD) and A.D. (Mines) is basis to determine the illegal mining. The Income Tax Department is not concerning about the activities of the Petitioner Firm is legal or illegal. It is about the income admitted or not from the bussiness activities.' 11. Adverting to the counter affidavit, learned Revenue counsel submitted that aforementioned paragraph No.21 of the writ affidavit has been met at page No.10 of the counter affidavit and the same reads as follows: 'Para 21.It is also submitted that on 20.11.2020, the respondent had sent a letter to the petitioner, wherein the respondent had informed the petitioner to examine the yard ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of earlier proceedings, rejoinder filed by the writ petitioner has been placed before this Court. Continuing the submissions made in the previous listing, learned counsel for writ petitioner drew the attention of this Court to pages 50 and 80 of typed set of papers and submitted that there is a clear mention about the two individuals mentioned in Schedule B, their statements are per se adverse to the writ petitioner and therefore, writ petitioner should be permitted to be cross-examine them. Answer to the above, i.e., answer to the statements of the two individuals mentioned in Schedule B being adverse to the writ petitioner is met in the counter affidavit in pages 8 to 10. Regarding one of them, averments in the counter affidavit are as follows: 'Shri Arul Pandi was an accounts incharge of Kappur Sand yard at Villupuram. A statement u/s.132(4) was recorded from him on 03.02.2017. To provide a cross examination of Shri Arul Pandi, a summon u/s.131 of the Act was issued on 06.08.2019 with a request to appear on 19.08.2019 for cross examination. On 19.08.2019, a letter wa received from Shri Arul Pandi seeking adjournment by citing his health reasons. On 20.08.2019, one mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to strengthen the case and it is not forming part of the evidence as a basis in arriving the total income of the Petitioner Firm. At this juncture, it is significant to brought on record about the observation of the Hon'ble High Court of Judicature at Madras in the case of Shri Vivek Papisetty V DCIT, Central Circle-2(4), Chennai (the present Respondent) in W.P.No.11027 of 2019 dated 10.04.2019. The observation is as under: 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 principle of natural justice and fair play. Thus, by considering the facts, the statement of Shri M.Kandhan is not going to be used as a basis for determining the total income of the Petitioner Firm, the request of the Petitioner for allowing the cross examination of Shri M.Kandhan was not considered.' 7. Learned counsel for writ petitioner drew the attention of this Court to judgement of Hon'ble Supreme Court in Andaman Timber Industries Vs. Commissioner of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause Notice.' 8. Learned counsel for writ petitioner also went on to say that though Andaman Timber's case was rendered under Central Excise Act, the principle is being followed in IT Act cases also. 9. An order made by 'Income Tax Appellate Tribunal' ['ITAT' for the sake of brevity] being order dated 06.11.2018 in Jyoti Gupta Vs. The I.T.O, New Delhi case was also placed before this Court. 10. Discussion regarding aforementioned two case laws will be set out elsewhere in this order. 11. Learned counsel for Revenue, adverting to page no.154 of typed set of papers, elaborated on his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for allowing cross examination was denied by the Assessing Officer. The first appellate authority also did not consider it fit to allow cross-examination. This is in gross violation of the principles of natural justice and against the ratio laid down by the Hon'ble Supreme Court in the case of Andaman Timber Vs. CIT Civil Appeal No.4228 of 2006 wherein it has been held as under: According to us, 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 flow which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Revenue counsel disputes that. This Court deems it appropriate to leave at that in this case on hand leaving open the question of when rejoinder can be entertained to be decided in another case where it becomes imperative to decide the matter. Likewise in the counter affidavit, as already mentioned, there is a reference to 'Comments', this should be avoided. It is for the parties to mention their respective stated positions before the Court, so that the Court is able to embark upon an adjudication, set out its discussion and give its dispositive reasoning for arriving at a conclusion. 'Comment' by itself has a different connotations and dictionary meaning of 'Comment' reads as follows: (scanned and reproduced from New 9th Edition Oxford Advanced Learner's Dictionary) 17. Learned Revenue counsel submits that this practice will be avoided in the days to come. 18. In the considered view of this Court, stated position of the Revenue, which has been captured supra more particularly, the stated position that the sworn statements are not going to be used against the writ petitioner as set out in the counter affidavit and as captured in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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