In ITA No.1576/Del/2020-ITAT- Delhi ITAT holds that depriving Assessee of opportunity to cross-examine key witness violates natural justice
Members Anil Chaturvedi (Accountant) & Yogesh Kumar (Judicial)

Read Order: Narender Singh v. Income Tax Officer Ward-2, Model Town Rewari-123 401 (HR)

Chahat Varma

New Delhi, May 12, 2023: Depriving the assessee of the opportunity to cross-examine a key witness was deemed a violation of the principles of natural justice by the Delhi bench of the Income Tax Appellate Tribunal and the Tribunal has held that the addition made by the Revenue called for an interference.

In the present case, a search was conducted at the premises of Santosh Medical College in Ghaziabad. Information was received regarding the payment of donation/capitation fees for admission by the assessee. Despite being issued an enquiry letter to explain the source of the money, the assessee failed to provide any explanation. Consequently, the case was reopened under section 147 of the Income Tax Act, as income had escaped assessment. The assessee argued that the addition made by the AO, which was confirmed by the CIT(A), was solely based on the statement of Dr. P. Mahalingam of Santosh Medical College. He contended that his statement did not confirm that the assessee had paid a cash donation/capitation fee of Rs. 50,00,000 at the time of admission of his daughter. The assessee further highlighted the fact that the assessee was not given an opportunity to cross-examine Dr. P. Mahalingam.

The Tribunal placed reliance on Sulekh Chand Singhal vs. ACIT [LQ/ITAT/2020/5937, wherein the same college and the very same Doctor’s statement was in dispute and the assessee therein was denied with the opportunity of cross-examination. The Tribunal concluded that even in the present case, the assessee had been deprived of with the opportunity of cross-examining Dr. P. Mahalingam, which ultimately resulted in making the addition, and thus, the addition made by the Revenue was in violation of the natural justice.