Damodar Ispat Ltd v. Dy. Commissioner Of Income Tax, Central Circle 2(4) & Ors

09.01.2024Item No.04 RP/KC Ct. No.1 MAT 1689 of 2023 + IA No.CAN 1 of 2023, CAN 2 of 2023 Damodar Ispat Ltd. Vs.Dy. Commissioner of Income Tax, Central Circle2(4) & Ors. Mr. Kapil Goel Mr. Avra Mazjumder Mr. Suman Bhowmik Mr. Kausheyo Roy Mr. Samrat Das Ms. Elina Dey …..for the Appellant Ms. Smita Das De …..for the Respondents 1.Upon perusal of the averments made in theapplication for condonation of delay, we are satisfiedthat sufficient grounds have been made to condonethe delay. Hence, the application, being CAN 2 of2023, is allowed.application for condonation of delay, we are satisfiedthat sufficient grounds have been made to condonethe delay. Hence, the application, being CAN 2 of2023, is allowed. 2.This intra-Court appeal is directed against the orderdated 7[th] June, 2023 passed in WPA 10073 of 2023.The said writ petition was filed for two reliefs,namely, challenging the assessment order dated31.03.2023 passed under Section 143(3) of theIncome Tax Act, 1961 (hereinafter referred to as the“said Act”) read with Section 147 thereof and theorder of transfer of appellant’s assessment filepassed under Section 127 of the said Act. Beforedated 7[th] June, 2023 passed in WPA 10073 of 2023.The said writ petition was filed for two reliefs,namely, challenging the assessment order dated31.03.2023 passed under Section 143(3) of theIncome Tax Act, 1961 (hereinafter referred to as the“said Act”) read with Section 147 thereof and theorder of transfer of appellant’s assessment filepassed under Section 127 of the said Act. Before the learned writ Court the appellant did notchallenge the order of transfer of assessment file.Therefore, the appellant is precluded from raisingsuch ground in this appeal. Hence, the order oftransfer passed under Section 127 of the said Act issustained. 3.The challenge to the assessment order is on theground of violation of principles of natural justice.As could be seen from the assessment order theassessing officer has relied upon certain thirdparties’ statement and admittedly copies of thosestatement were not furnished to the assessee. Theassessee while replying to the show cause noticedated 10.02.2023 made a specific request forproviding copies of those statements. The assesseealso relied on various decision to support its casethat if any adverse material based upon the thirdparties’ information is relied on it is entitled tofurnish copies of those statements as also entitled tocross-examine those persons, who were deposedagainst its interest. The assessing officer does notdealt with the aspect regarding furnishing of thecopies of the statements as sought for by theassessee. With regard to the prayer for cross-examination the assessing officer opines that if theparties, who have given evidence, are to be assuredconfidentiality, the question of cross-examinationground of violation of principles of natural justice.As could be seen from the assessment order theassessing officer has relied upon certain thirdparties’ statement and admittedly copies of thosestatement were not furnished to the assessee. Theassessee while replying to the show cause noticedated 10.02.2023 made a specific request forproviding copies of those statements. The assesseealso relied on various decision to support its casethat if any adverse material based upon the thirdparties’ information is relied on it is entitled tofurnish copies of those statements as also entitled tocross-examine those persons, who were deposedagainst its interest. The assessing officer does notdealt with the aspect regarding furnishing of thecopies of the statements as sought for by theassessee. With regard to the prayer for cross-examination the assessing officer opines that if theparties, who have given evidence, are to be assuredconfidentiality, the question of cross-examination would not arise. This observation is incorrect sincethe statements given by the third parties have beenreferred to and relied upon by the assessing officerto implicate the appellant/assessee and if that be so,there is no breach of any confidentiality and theassessee is entitled to get copies of such statementand also seek for cross-examination of those personswho had given statements. However, at thisjuncture we do not propose to decide that issue andleave it to the assessing officer to take a decision onthe ground of cross-examination but, however,copies of the statements which have been relied onby the assessing officer have to be furnished to theassessee. 4.Mrs. De, learned senior counsel for the respondentswould vehemently contend that after the thirdparties’ information was obtained by thedepartment, it was made known to the assessee andthey were also given an opportunity of rebut theevidence. The fact remains that the statements havenot been shared with the appellant/assessee andmere furnishing of information gathered by thedepartment from such third parties, whosestatements have been recorded on oath. Hence, weare satisfied that there is violation of principles ofnatural justice. 5.For the above reasons, we hold that the assessmentorder impugned in the writ petition suffers fromviolation of natural justice. In the result, the appealand the application are allowed and the orderpassed in the writ petition is set aside. Theassessment order dated 31[st] march, 2023 is setaside and the matter is remanded to the assessingofficer for a fresh decision. The assessing officer isdirected to furnish copies of the statements, whichhave been referred to and relied upon by theassessing officer, within fifteen days from the date ofreceipt of the server copy of this order to theappellant/assessee after which appellant/assesseewill be entitled to put forth its objection and in theobjection the appellant is entitled to seek for cross-examination of those third parties. If such requestis made, the assessing officer shall take anappropriate decision in accordance with law withregard to cross-examination and thereafter proceedto decide the matter afresh.order impugned in the writ petition suffers fromviolation of natural justice. In the result, the appealand the application are allowed and the orderpassed in the writ petition is set aside. Theassessment order dated 31[st] march, 2023 is setaside and the matter is remanded to the assessingofficer for a fresh decision. The assessing officer isdirected to furnish copies of the statements, whichhave been referred to and relied upon by theassessing officer, within fifteen days from the date ofreceipt of the server copy of this order to theappellant/assessee after which appellant/assesseewill be entitled to put forth its objection and in theobjection the appellant is entitled to seek for cross-examination of those third parties. If such requestis made, the assessing officer shall take anappropriate decision in accordance with law withregard to cross-examination and thereafter proceedto decide the matter afresh. (T. S. SIVAGNANAM) CHIEF JUSTICE (SUPRATIM BHATTACHARYA, J.)