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TMI Blog2023 (4) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... ers [ 2022 (8) TMI 423 - SUPREME COURT] Selective supply of the documents would be unfair simply for the reason that the petitioners must know the entire context in which the statement has been made. Apart from that, there may be other portions of the statement that might well support the assessee that it must not be denied. Typically, seizures give rise to several issues for consideration in the assessment of a searched entity. Not all of them would have relevance to a third party in respect of whom also, incriminating material might be found. The Scheme of the Income- Tax Act provides for two modes of assessment in such situations; an assessment under Section 153A in the case of the searched person and Section 153C in the case of the third party. In the present case, the petitioner was in receipt of notices under Section 153C and has filed returns. The status as a third party to the search assessment is not in dispute. Thus, and in these circumstances, it is incumbent upon the authorities to handover such allegedly incriminating materials that have been found by the Revenue in the course of the search and which have been handed over by the Assessing Officer of the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Counsel accepts notice for the respondent and seeks a days' time to obtain instructions and file a counter. 2. Seeing as the matter is time barring as on 31.03.2023, instructions will be obtained on whether the documents as set out in paragraph 16 (4 (a to e)) of affidavit filed in W.P.No.9274 of 2023 have been furnished. 3. Since he states, on instructions, that the Assessing Officer does not intend to rely upon the statements of Rajendra Kothari and Suresh Kumar Khatri, let the same be reduced to writing and filed by way of affidavit. 4. List on 29.03.2023 at the end of admission list. 4. Today, when it is called, written instructions furnished by the assessing authority are placed on file. The Officer has extracted therein the request of the petitioner for documents and in addition, the petitioners draw attention to their representations. Read together, the following are the materials that have been sought for by the assessees, apart from opportunity to cross-examine the two individuals as aforesaid. i. Copies of Satisfaction note made by the assessing officer of the searched party and also my Jurisdictional AO so as to assume the jurisdiction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioner. In the case of T.Takano, the Hon'ble Supreme Court considered the impact of a disclosure for the purposes of adjudication. 9. The following principles have been culled based on the discussion therein: 50. The following principles emerge from the above discussion: 50.1 A quasi-judicial authority has a duty to disclose the material that has been relied upon at the stage of adjudication; and 50.2 An ipse dixit of the authority that it has not relied on certain material would not exempt it of its liability to disclose such material if it is relevant to and has a nexus to the action that is taken by the authority. In all reasonable probability, such material would have influenced the decision reached by the authority. 50.3 Thus, the actual test is whether the material that is required to be disclosed is relevant for purpose of adjudication. If it is, then the principles of natural justice require its due disclosure. 10. Inter alia, they also took note of their earlier judgments in the case of Natwar Singh v Director of Enforcement (2010) 13 SCC 255, wherein, the Court had held that all material which was 'relevant' to the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process. 62.5 The right to disclosure is not absolute. The disclosure of information may affect other third-party interests and the stability and orderly functioning of the securities market. The respondent should prima facie establish that the disclosure of the report would affect third-party rights and the stability and orderly functioning of the securities market. The onus then shifts to the appellant to prove that the information is necessary to defend his case appropriately. 62.6 Where some portions of the enquiry report involve information on third-parties or confidential information on the securities market, the respondent cannot for that reason assert a privilege against disclosing any part of the report. The respondents can withhold disclosure of those sections of the report which deal with third-party personal information and strategic information bearing upon the stable and orderly functioning of the securities market. 63. The Board shall be duty-bound to provide copies of such parts of the report which concern the specific allegations which have been levelled against the appellant in the notice to show cause. However, this does not entitle the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y decision is as follows. The primary premise upon which an assessment must be formulated is bearing in mind the principles of natural justice. The submission of the Revenue that the necessary documents, as intended to be relied upon have been supplied and that they would suffice, is unacceptable seen in light of the observations of the Apex Court in the aforesaid two judgments. 15. Selective supply of the documents would be unfair simply for the reason that the petitioners must know the entire context in which the statement has been made. Apart from that, there may be other portions of the statement that might well support the assessee that it must not be denied. 16. Typically, seizures give rise to several issues for consideration in the assessment of a searched entity. Not all of them would have relevance to a third party in respect of whom also, incriminating material might be found. The Scheme of the Income- Tax Act provides for two modes of assessment in such situations; an assessment under Section 153A in the case of the searched person and Section 153C in the case of the third party. 17. In the present case, the petitioner was in receipt of notices under Section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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