2016 (7) TMI 273 - HC - Income Tax

Reopening of assessment - non grant of opportunity to the assessee to meet the case against him - Held that:- the monies were advanced apparently by the account payee cheque and was repaid vide account payee cheque the least that the revenue should have done was to grant an opportunity to the assessee to meet the case against him by providing the material sought to be used against assessee in arriving before passing the order of reassessment. This not having been done, the denial of such opportunity goes to root of the matter and strikes at the very foundation of the reassessment and therefore renders the orders passed by the CIT (A) and the Tribunal vulnerable. In our view the assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents. Despite the request dated 15th February, 1996 seeking an opportunity to cross examine the deponent and furnish the assessee with copies of statement and disclose material, these were denied to him. In this view of the matter we are inclined to allow the appeal on this very issue. - Decided in favour of assessee

Relied on Delhi High Court ruling in the case of CIT v. Ashwani Gupta 2010 (2) TMI 42 (Del) wherein it was held that When seized material was not provided to an assessee nor was he permitted to cross examine a person on whose statement AO relied, it would amount to deficiency, amounting to a denial of opportunity and therefore violation of principles of natural justice.