K.A.RAUF V. THE ASST. COMMISSIONER OF INCOME TAX

WP(C)/25868/2020

AI Insights

The case involves K.A. Rauf, the petitioner, who challenged an order confirming a tax demand under the Income Tax Act. Initially, the tax assessment for the year 2008-2009 was in favor of the petitioner, but upon appeal by the revenue, the matter was remanded back to the assessing authority. The assessing authority, without allowing the petitioner to cross-examine a key witness, relied on untested evidence to confirm the tax demand. The High Court found this procedure flawed, leading to the quashing of the assessment order and directing a re-assessment after proper legal procedures.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 762880 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 24-11-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON
• Keywords: Assessment; Cross Examination; Cross-examination; Demand of tax; Income Tax
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 24TH DAY OF NOVEMBER 2020 / 3RD AGRAHAYANA, 1942 WP(C).No.25868 OF 2020(G) PETITIONER/S: K.A.RAUF AGED 62 YEARS SHELTER, JAYANTHI NAGAR HOUSING COLONY, P.T.USHA ROAD, KOZHIKKODE. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2, AAYAKAR BHAVAN (NORTH BLOCK), KOZHIKODE-673 001. 2 THE ASST. COMMISSIONER OF INCOME TAX CIRCLE 1(1), AYAKAR BHAVAN, KOZHIKODE-673 001. 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, KOZHIKODE-673 001. OTHER PRESENT: SC: CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.25868 OF 2020(G) 2 JUDGMENT The petitioner has approached this Court aggrieved by Ext.P4 order passed by the 2nd respondent confirming a demand of tax under the Income Tax Act. In the writ petition, it is the case of the petitioner that the assessment was initially done for the assessment year 2008-2009 by making reference to certain alleged lending activities of the petitioner. In an appeal that was carried by the petitioner, the first appellate authority decided the issue in favour of the petitioner. It is stated that the revenue, however, carried the matter in further appeal before the appellate tribunal and the appellate tribunal remanded the matter to the assessing authority after finding that the bank accounts of one Mohan Raj ought to have been verified and, further, that the petitioner was entitled to cross examine the said Mohan Raj. In the consequent order that was passed pursuant to the remand from the tribunal, the assessing authority found that the cross examination of Mohan Raj could not be permitted because of the non-availability of Mohan Raj for cross examination, despite summons issued to him. The assessing authority, however, proceeded to rely on the evidence tendered by Mohan Raj without testing the said evidence through cross examination at the instance of the petitioner. In my view, if the evidence relied upon by the revenue for confirming a demand against the assessee is not tested, through permitting a cross examination by the assessee, then the untested evidence cannot be relied upon against the assessee while confirming a demand against him. Inasmuch as the impugned orders of the assessing authority rely on material that was not tested, I quash Ext.P4 assessment order and direct the 2nd respondent to pass fresh orders in lieu thereof, after taking note of the observations in this judgment. The 2nd respondent assessing authority shall pass fresh orders as directed after hearing the petitioner, WP(C).No.25868 OF 2020(G) 3 within a period of three months from the date of receipt of a copy of this judgment. The petitioner shall produce a copy of the writ petition together with a copy of this judgment before the 2nd respondent for further action. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE SJ WP(C).No.25868 OF 2020(G) 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ORDER ISSUED BY THE IST RESPONDENT FOR THE YEAR 2008-09 DATED 30.12.2011. EXHIBIT P2 COPY OF APPELLATE ORDER ISSUED BY THE COMMISSIONER INCOME TAX (APPEALS), KOCHI DATED 16.6.2015. EXHIBIT P3 COPY OF COMMON ORDER ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH, KOCHI- 23.4.2018. EXHIBIT P4 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 30.12.2019. EXHIBIT P5 COPY OF LETTER SUBMITTED BY THE PETITIONER DATED 5.2.2020. EXHIBIT P6 COPY OF LETTER SUBMITTED BY THE PETITIONER DATED 25.5.2020. EXHIBIT P7 COPY OF REPRESENTATION FILED BY THE PETITIONER'S COUNSEL DATED 6.5.2020. "