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TMI Blog2021 (10) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... of challenge are also identical and all the writ petitions are disposed of by this common order. 3.The petitioners assailed the impugned orders contending that it is in violation of the principles of natural justice, arbitrary, mechanical and without any independent application of mind and also stating that the Income Tax Department has not discharged the burden of proof, proving that the income determined and sought to be taxed were not from the materials seized during the time of search. The learned counsel for the petitioners relied on the following judgments namely, a.M/s. All Cargo Global Logistics Ltd., vs. DCIT(ITA Nos.5018 to 5022 & 5059/M/10 dated 23.05.2012) b.(2015) 374 ITR 645 - Commissioner of Income Tax vs. Continental Warehousing Corporation Ltd. c.(2016) 380 ITR 573 - Commissioner of Income Tax vs. Kabul Chawla d.(2016) 385 ITR 624 - Commissioner of Income Tax vs. St.Francis Clay Décor Tiles e.(2017) 390 ITR 496 - Commissioner of Income Tax vs. Ajay Gupta f.(2017) 395 ITR 526 - Commissioner of Income Tax vs. Meeta Gutgutia Prop. M/s.Ferns 'N' Petals g.(2017) 397 ITR 82 - Principal Commissioner of Income Tax vs. Best Infrastructure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placing reliance on the judgment of the Supreme Court in the case of Anwar PV reported in (2014) 10 SCC 473 and also in the case of Arjun Pandit Rao reported in 2020 7 SCC 1 that since the mandatory requirement of Section 65B of the Indian Evidence Act has not been complied with in respect of any of the electronic records relied upon by the respondent, they being not admissible in evidence, the assessment orders being passed on the same, cannot be sustained in the eye of law. 6.It was further contended by the petitioners' counsel that depriving the assessee the opportunity to cross examine the persons whose statements were recorded under Section 132(4) of the Income Tax Act, were used for making additions/disallowance under Section 153(A) would amount to violation of the principles of natural justice. 7.The petitioners' counsel further pointed out that in spite of specific request by the petitioners, they were not allowed to cross examine the said persons, but the request was not even considered. The petitioners in support of his arguments placed reliance on the decision of the Delhi High Court in the case of PCIT vs. Anand Kumar Jain reported in 2021 SCC Online Del 3174 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer. It was further pointed out that by the communications dated 08.09.2020 and 13.03.2020 the department has predetermined the liability therefore, on the wise of predetermining the issue, the assessment orders have to be set aside. The counsel for the petitioners pointed out various paragraphs in the show cause notice that show cause notices that preceded the assessment orders are identical and similar to the assessment orders and therefore, the counsel for the petitioners pleaded for quashing of the assessment orders as it is violative of the law laid down by the Supreme Court in the case of Siemens Ltd., vs. State of Maharashtra and others reported in (2006) 12 SCC 33 and Oryx Fisheries Private Limited vs. Union of India and others reported in (2010) 13 SCC 427. 12.The petitioners also pointed out that the assessment orders are mechanical orders passed without any independent application of mind and it was a cut and paste one from the predetermined show cause notice and communication dated 08.09.2020 and 13.03.2020. 13.The counsel for the petitioners also contended that as far as the writ petitions in W.P(MD)No.11271 to 11273 of 2021, are concerned, not only the spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration of this Court. i)(2018) 12 SCC 36, Jeans Knit (P) Ltd., vs. CIT ii)(2020) 13 SCC 285, Maharashtra Chess Assn. vs. Union of India iii)2021 SCC Online Ker 269, V.Gopalan vs. Chief Commissioner of Income Tax iv)2021 SCC Online 334, Radha Krishnan Industries vs. State of H.P v)2021 SCC Online Del 3613, ESS Advertising (Mauritius) S.N.C. vs. Assistant Commissioner of Income Tax. 17.Further, the counsel for the petitioners contended that the excuse given for not furnishing the panchanama is an after-thought and the excuse is invented subsequently which can neither be sustained nor accepted as the law in this regard is no more res integra. For the said purpose, he argued placing reliance on the judgment of the Supreme Court in Mohinder Singh Gill and another vs. The Chief Election Commissioner, New Delhi and others reported in (1978) 1 SCC 405 which was followed in the cases of Chandra Ammal Educational and Charitable Trust vs. BSNL reported in 2015 SCC Online Mad 4419, N.Subburaj vs. District Collector reported in 2016 SCC Online Mad 4715 and Dr.Mary Nirmala Jeyaraj vs. Joint Director of Medical and Rurla reported in 2019 SCC Online Mad 18738. 18.On consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated 17.11.2020 at pages 299, 302, 304, 306, 308 and 310, the department demanded original panchanamas for giving copies of the seized document. Even assuming the stand taken by the department in their counters are justifiable, in the facts and circumstances of the case, the respondent department should have informed the same before passing the assessment order or atleast should have discussed the same in the assessment order. 20.Therefore, the stand taken by the department now by way of counter of non furnishing of panchanamas cannot be accepted. It is also not explained as to which are the concern, the respondent department concluded as belonging to the other group and what was the basis for such conclusion when the petitioners in its communication dated 28.07.2021 has explained their interest in every concern. 21.Therefore, non furnishing of the panchanama to the assessee is a violation of the principles of natural justice as it disables the petitioners from having knowledge of the seized materials and the alleged incriminating materials relied upon by the respondent department. 22.On the next issue of refusal of cross examination of the persons whose statements were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as rightly pointed out by the learned counsel for the petitioners, the assessing officer should not have discussed the statement of the other group for framing the assessment of the petitioners. This completely vitiates the entire assessment proceedings. 24.As contended by the writ petitioners, when the entire assessment has been framed only on the basis of the so-called electronic record which are said to be copies of Excel Sheet, Excel work note book etc., non compliance of Section 65(B) of the Indian Evidence Act renders the document inadmissible in the eye of law as held by the Supreme Court in the judgment reported in Anvar P.V vs. P.K.Basheer and others reported in (2014) 10 SCC 473. ''14.Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed under Section 65B. Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the Section starts with a non obstante clause. Thus, notwithstanding anything contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. 17.Only if the electronic record is duly produced in terms of Section 65B of the Evidence Act, the question would arise as to the genuineness thereof and in that situation, resort can be made to Section 45A opinion of examiner of electronic evidence. 18.The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements under Section 65B of the Evidence Act are not complied with, as the law now stands in India.'' 25.In view of the violation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent assessing officer for denova assessment and while doing so, the respondent officer shall, a)afford an opportunity of cross examination of the persons whose statements are relied upon by the respondent for making additions or disallowance ; b)give the details of all the seized materials including the place of seizure and give copies of seized material demanded by the petitioners. In case, the department thinks that the seized materials sought for by the petitioners does not belong to the petitioners or the petitioners' group, communicate the same to the petitioners and in such event, in the assessment orders that framed either on the concerns that do not belong to the petitioners/petitioners' group or the assessment orders that are framed on the basis of the seized materials refused to be given to the petitioners/members of the petitioners' group, there would be no tax liability on the petitioners or members of the petitioners' group; c)the respondent should strictly comply with Section 65-B of the Indian Evidence Act if the respondent wants to use the electronic document by way of secondary evidence; d)none of the statements of the other grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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