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TMI Blog2025 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961) being without jurisdiction as it is mainly/chiefly based on stated material as emanating from search action w/s 132 on "other person", so it is framed in violation of mandate of special and specific provision of section 153C of 1961 Act, 2. No incriminating material unearthed from assessee's own search action u/s 132: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law as entire asst. is framed u/s 153A, without any requisite "incriminating material" being unearthed from assessee's own search u/s 132 of 1961 Act for subject unabated year without which entire assessment order is invalid; 3. Total Violation of principle natural justice: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law as entire asst. is framed in total violation of principle of natural justice for non-confrontation of relied upon material (statements etc) and lack of cross examination being offered to assessee as pleaded at asst. and first appeal stage. 4. Wrongful sustenance by ld CIT-A of impugned additions as made in impugned asst.: That both the assessment orders of Ld AO and first appellate order of Id CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial as emanating from search action u/s 132 of the Act on other person and by this reason only it is in violation of provisions of section 153C of the Act. He further submitted that no incriminating material unearthed from assessee's own search action u/s 132 and entire assessment order framed u/s 153A of the Act without requisite incriminating material for unabated year in questioned. The Ld. AR also submitted that non-confrontation of relied upon materials and lack of cross examination being offered to assessee / appellant was also raised before CIT(A). 3. Per contra, the Ld. DR contended that Revenue is relying upon statement on oath of Shri Sajan Kumar Jain, Chairman of M/s Sarvo Technologies Ltd, recorded u/s 132(4) of the Act during the course of search proceedings conducted on 18.11.2015 at his residence. It is also submitted that on dated 18.11.2015 search action in the case of Shri Sajan Kumar Jain, their other group concerns / family members and Shri Pradeep Kumar Jindal, who is an accommodation entry provider and it is evident from the copy of punchnama and during search proceedings statements recorded on oath of both Pradeep Kumar Jindal and Sajan Kumar Jain. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g no relevance with the assessee / appellant company as these excels sheets are inadmissible and these documents /statements were seized / recorded during the course of proceedings of Pradeep Kumar Jindal, but in no case of assessee / appellant company. The Ld. AO used these documents against assessee means the Ld. AO was under belief that these documents belongs to the assessee and hence no ground for assessment u/s 153A of the Act, which should have been u/s 153C of the Act. The Ld. AR expressed grievances that the Ld. CIT(A) while deciding appeal not discussed the issue as raised by assessee / appellant. The Ld. CIT(A) observed that assessee /appellant was allowed cross examination of person concerned but he did not avail the opportunity and found that statements / documents relied upon by the Ld. AO same are not only belongs to but pertains to the assessee /appellant. 8. The Ld. AR further submitted that in this case sole question to be adjudicated that whether unabated years i.e. FY 2010-11 and F.Y. 2011-12, in the search proceedings dated 18.11.2015 no any incriminating material unearthed from assessee's own search action can addition u/s 68/69C of the Act be sustained on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat above relied orders distinguishable as having different fact because in instant case Sajan Kumar Jain was confronted with incriminating statement on oath and declined opportunity given by the authorised officer to cross examination. The Ld. DR admitted this fact that while controverting with the statements of Pradeep Kumar Jindal, Sajan Kumar Jain gave either vague reply or decline to answer but only giving vague reply or decline to answer does not make ground to form adverse inference against him, unless corroborated with other cogent & strong documentary evidences. From perusal of assessment order dated 29.12.2017, it reveals that on the hearing day, 15.12.2017, Sajan Kumar Jain sought adjournment for a week by filing application to that effect but request was rejected by stating that assessment is going to be time barred. Facts mentioned as above clearly indicates that there was no any denial of cross examination by assessee rather assessee pleaded for some time which was declined. There is difference between denial and sought some time. In our humble opinion application was rejected on 18.12.2017 and thereafter impugned assessment order passed on 29.12.2017, after almost 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son searched (as referred to in Section 1534), then the only legal recourse available to the department was to proceed in terms of Section 1530 of the Act by handing ever the some to the AO who has jurisdiction over Such person. Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). As noted above, the Assessee had no opportunity to cross-examine the said witness, but that apart, the mandatory procedure under section 153C has not been followed. On this count alone, we find no perversity in the view taken by the ITAT. Therefore, we do not find any substantial question of low that requires our consideration." 13. Facts being identical, basis of addition are also similar and the assessee's considered by the Hon'ble High Court are members of same group. Therefore, respectfully following the aforementioned judgment of the Hon'ble Jurisdictional High Court of Delhi, we have no hesitation in quashing the captioned assessment orders and decide the appeals in favour of the assessee's." 12. In the case of Anand Kumar Jain (supra), it is relevant to mention here that in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial discovered during the search which would corroborate said statements, do not grant the Ld. AO the authority to make an assessment. Relevant paras 20, 21, 22, and 23 are hereby reproduced as under: "20. However, it is an undisputed fact that the statement recorded under Section 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of Kailashben Manharlal Chokshi v. CIT, the Gujarat High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph no. 26 of the said decision has been reproduced here-in-below:- 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132(4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment." 14. In the case of Andaman Timber Industries vs. CCE 2015 SCC online SC 1051, Hon'ble Apex Court held that not providing the opportunity of cross -examination to the assessee amounts to gross violation of the principles of natural justice and the same will render the order passed null and void. In the case of state of Kerala vs. K.T. Shaduli Grocery Dealer (1977) 2 SC 777, Hon'ble Supreme Court held that tax authorities being quasi-judicial authorities are bound by the principles of natural justice. 15. In the case of Abhisar Buildwell (supra), Hon'be Supreme Court held that in case no incriminating material is found during the search conducted u/s 132 of the Act, the Ld. AO will have no j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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