HC directed AO to allow ‘Karti P. Chidambaram’ to cross-examine persons who have given statement against him

Case details: Karti P.Chidambaram v. ACIT - [2021] 129 taxmann.com 36 (Madras)

Judiciary and Counsel Details

• • S.M. Subramaniam, J.
  • Dr. Abhishek Singhvi, Kapil Sibal, AR. L. Sundaresan, Sr. Counsel, N.R.R. Arun Natarajan, Amith Bhandari and Adith Pujari for the Petitioner.
  • A.P. Srinivas, Sr. Standing Counsel, R. Sankaranarayanan for the Respondent.

Facts of the Case

Assessee- Karti P.Chidambaram filed writ petition before the High Court contending that Assessing Officer (AO) had violated Principles of Natural Justice. While passing the assessment order, he failed to provide reasonable opportunity to the assessee in the manner known to law. Thus, the assessment orders are non-est and couldn’t have its legs to stand under the scrutiny of law.

On the other hand, revenue rebutted the contentions by stating that opportunities were granted to assessee. However, assessee did not utilize the said opportunities in a proper manner.

Assessee further said that he was granted two days to respond. He requested to grant at least two weeks to defend his case properly through his counsel/representative. Further, assessee requested a personal hearing as well as to cross-examine persons, who had given statement against the assessee. However, without any reply to such request made by the assessee, the AO passed the final order of assessment.

High Court Held

The Madras High Court held that the manner in which the orders of assessment were passed by the AO established that reasonable opportunity had not been granted to assessee. Opportunity to be granted is not a mere opportunity and it must be meaningful and reasonable.

The assessees must have time to put forth their defense statements, examine the witnesses by engaging a counsel or for personal hearing. In the instant case, the assessee was the ‘other persons’ and therefore, he requires the opportunity to rebut the contentions raised against them from and out of the materials collected from the premises of the ‘searched person’.

Thus, AO is directed to permit the assessee to represent his case, and an opportunity to cross-examine the persons, who have given statement against the assessee is to be provided.