The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that no addition could be imposed based on evidence which had not been confronted to the assessee.
The assessee, Shyam Sunder Doda had filed appeal against reassessment order passed under Section 147/143(3) of the Income Tax Act 1961 in which the assessing officer had mentioned facts about the search & seizure operation under Section 132 of the Income Tax Act carried out in the Santosh Group of Institutions and P. Mahalingam.
The statements of certain people over there were recorded and addition was made by him only on these statements and documents found and seized during the search operation.
Nivedita, who appeared on behalf of the assessee submitted that the said documents/books of accounts and statements were never confronted to the assessee by way of any show cause notice, order sheet entry or through any other manner by the Assessing Officer therefore addition based on such un-confronted statement and documents could not be held as validly sustainable.
He also relied upon the order of this bench in Shaleen Prasad vs. ITO. OM Prakash, on behalf of the revenue did not contradict this peculiar factual position.
The Bench referred the decision Shaleen Prasad vs. ITO which held that, “The Assessing Officer made addition on the basis of documents found & seized and statements of three persons recorded during the course of search & seizure operation u/s. 132 of the Act, on the third entity i.e. Santosh Group, which were found & seized and recorded on the back of the assessee and never confronted to the assessee then such addition has to be held as unsustainable & invalid and deserve to be deleted.”
A Single Bench of Chandra Mohan Garg, (Judicial Member) allowed the appeal filed by the assessee holding that the Assessing Officer was not correct and justified in making addition in the hands of assessee on the basis of document/books of accounts found & seized and statement of three persons including P. Mahalingam without confronting the same of the assessee.
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