TMI Blog2008 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... re is justification in law to use the evidence recorded behind the back of the applicant without affording an opportunity to him to cross examine the said Mohd. Rashid and drawing an adverse inference? 2. Whether the assessment vitiated in law as the IAC assessment has not given reasonable opportunity of being heard and failed in summoning the witnesses as requested u/s 131 and his failure to consider the affidavit of Mohd. Rashid filed along with the written reply submitted on 31.12.1985.?" 2. To deal with the aforesaid questions the facts which are essential to be stated are that the assessee is an individual and carries on business of purchase and sale of silver ornaments, utensils, etc. in the name of M/s Anil Kumar Sheetal Kumar Nahata. A search was conducted by the Income-tax Department on the residential and business premises of the assessee commencing 13.12.1983 to 17.12.1983. During the search silver ornaments and utensils were seized and were found to be in excess of the accounts as per books of account. After the assessment proceeding silver ornaments amounting to 125.44 kilograms were held by the Income Tax Officer unexplained and he made an addition of Rs.3,49,22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from that what was sought to be referred were questions that arose out of the principal order that had been passed on 11.1.1988. Being of this view the Apex Court allowed the appeal and directed this Court to decide the reference. 5. At the outset it is of immense significance to understand the basic controversy of the decisions of the tribunal. The tribunal noted in paragraph 33 of the order that the Income Tax Officer had informed the assessee that he had already examined the owner of the firm Rashid Co. who had denied to have any transaction with the assessee. The tribunal further opined that whatever was the material in the statement of Mohd. Rashid was fairly communicated to the assessee and that apart it was not the case of the assessee that he did not know what Mohd. Rashid had stated. The tribunal in paragraph 38 of its original order expressed the view that the rules of natural justice are not meant for nullifying the procedures on small technicalities and also not meant to help those who adopt a very evassive attitude. They are meant to advance the cause of justice and to help a person who really wants to avail the right of defending himself. The tribunal further p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal is absolutely correct in holding that there has been substantial compliance of principles of natural justice and, therefore, no prejudice is caused to the assessee. The learned senior counsel for the Revenue canvassed that the findings of the tribunal to the effect that if statements of the witnesses are excluded the order of assessment is sustainable cannot be found fault with and, therefore the assessment order and affirmation thereof by the CIT (A) and the tribunal cannot be put at naught. 9. To appreciate the controversy involved it is apposite to refer to the chronology of events. The search of the premises in question took place on 13.12.1983 and the books of account including silver ornaments were seized. Mohd Rashid, the proprietor of M/s Rashid and Co. was summoned under Section 131 to appear on 1.10.1985. The 'Amanat Book' showed M/s Rashid and Co. issued the bills on three dates, namely, 8.12.1983, 10.12.1983 and 11.12.1983 of 40.300 kg., 50.340 kg and 34.800 kg of silver respectively amounting Rs.1,77,117/-. The assessee had filed correspondences made between it and Rashid and Co. regarding the payment of the amount. After the statement of Mohd. Rashid was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y…………… (3) Subject to any rules made in this behalf, any authority referred to in subsection (1) or sub-section (1A) may impound and retain in its custody for such period it thinks fit any books of account or other documents produced before it in any proceeding under this Act: Provided that an Assessing Officer or an Assistant Director or Deputy Director shall not- (a) impound any books of account or other documents without recording his reasons for so doing, or (b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Chief Commissioner or Director General or Commissioner or Director therefor, as the case may be." 11. On a bare reading of the said provision it is manifest that the same empowers the Income Tax Officer to enforce the attendance of any person and examine him on oath. That power has been exercised by the assessing officer in the assessing proceeding. It is contended by Mr. Shrivastava that when a witness has been examined by the assessing officer and his statement has been pressed into service, the assessee should have been allowed to cross-examine, more so, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, New Delhi. The assessee had filed objections thereto and requested to crossexamine the analyst. The assessing officer did not pay any heed to the same and proceeded to pass order of assessment. The order of assessment was assailed by the assessee before CIT (A) and a contention was raised that request to crossexamine the analyst had not been allowed . The CIT (A) accepted the contention of the assessee and concluded that the assessing officer had wrongly avoided granting permission to the assess to cross-examine the analyst and held that the order of assessment is vitiated in law. The revenue preferred an appeal before the tribunal and the tribunal dismissed the appeal on the ground that in the absence of grant of permission to cross-examine the analyst who had prepared the test report the order of assessment was vulnerable. Against the order of the tribunal the revenue approached to High Court and the High Court while dismissing the appeal filed by the Revenue has held as under (Page 108): "There is no doubt that even if the strict rules of evidence may not apply the basic principles of natural jsutice would apply to the facts of the case. The Assessing Officer placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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