Madras High Court
M/S.Vetrivel Minerals vs The Assistant Commissioner Of ... on 3 August, 2021
W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 03.08.2021
(Reserved on 22.07.2021)
CORAM :
THE HONOURABLE MRS.JUSTICE J.NISHA BANU
W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
and
connected miscellaneous petitions
W.P(MD)No.11261 of 2021:-
M/s.Vetrivel Minerals,
(V V Minerals)
Rep. by its Managing Partner,
Mr.S.Vaikundarajan ... Petitioner
vs.
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002. ... Respondent
Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, to call for the entire records relating to the
impugned proceedings of the respondent dated 24.06.2021 in PAN-
AAHFV2400N, DIN & Order
No.ITBA/REC/S/154_1/2021-22/1033945481(1) for the assessment years
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
2013-14 to 2019-20 and the consequential rectification order dated
01.07.2021 and quash the same.
W.P(MD)No.11271 of 2021:-
M/s.Vijay Cements,
Rep. by its Partner, V.Velmurugan ... Petitioner
vs.
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002. ... Respondent
Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, to call for the entire records relating to the
impugned proceedings of the respondent dated 16.06.2021 in PAN-
AAAFV1613J, DIN & Order
No.ITBA/AST/S/153A/2021-22/1033501501(1) for the Assessment Year
2017-18 and quash the same.
W.P(MD)No.11272 of 2021:-
M/s.Vijay Cements,
Rep. by its Partner, V.Velmurugan ... Petitioner
vs.
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002. ... Respondent
Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, to call for the entire records relating to the
impugned proceedings of the respondent dated 16.06.2021 in PAN-
AAAFV1613J, DIN & Order
No.ITBA/AST/S/153A/2021-22/1033509916(1) for the Assessment Year
2018-19 and quash the same.
W.P(MD)No.11273 of 2021:-
M/s.Vijay Cements,
Rep. by its Partner, V.Velmurugan ... Petitioner
vs.
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002. ... Respondent
Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, to call for the entire records relating to the
impugned proceedings of the respondent dated 16.06.2021 in PAN-
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
AAAFV1613J, DIN & Order
No.ITBA/AST/S/143(3)/2021-22/1033511435(1) for the Assessment Year
2019-20 and quash the same.
W.P(MD)No.11765 of 2021:-
M/s.Vetrivel Minerals,
(V V Minerals)
Rep. by its Managing Partner,
Mr.S.Vaikundarjan ... Petitioner
vs.
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002. ... Respondent
Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, to (i)call for the entire records relating to the
impugned proceedings of the respondent dated 24.06.2021 in PAN-
AAHFV2400N for the Assessment Year 2013-14 and quash the same;
(ii)call for the entire records relating to the impugned proceedings of the
respondent dated 24.06.2021 in PAN-AAHFV2400N for the Assessment
Year 2014-15 and quash the same; (iii)call for the entire records relating
to the impugned proceedings of the respondent dated 24.06.2021 in
PAN-AAHFV2400N for the Assessment Year 2015-16 and quash the
same; (iv)call for the entire records relating to the impugned
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proceedings of the respondent dated 24.06.2021 in PAN-AAHFV2400N
for the Assessment Year 2016-17 and quash the same; (v)call for the
entire records relating to the impugned proceedings of the respondent
dated 24.06.2021 in PAN-AAHFV2400N for the Assessment Year 2017-18
and quash the same; and (vi)call for the entire records relating to the
impugned proceedings of the respondent dated 24.06.2021 in PAN-
AAHFV2400N for the Assessment Year 2019-20 and the consequential
rectification order dated 01.07.2021 quash the same.
For Petitioner : Mr.R.Gopinath
For Respondent : Mr.T.R.Senthil Kumar
Senior Standing Counsel assisted by
Ms.K.G.Usha Rani, Standing Counsel
COMMON ORDER
W.P(MD)No.11261 of 2021 is field by the petitioner challenging
the common impugned order passed by the respondent for the
Assessment Years 2013-2014 to 2019- 2020.
W.P(MD)No.11271 to 11273 of 2021 are filed by the petitioners
challenging the individual assessment orders for the Assessment Years
2017-2018 to 2019-2020.
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2.The Assessment Orders in the above writ petitions are passed
under Section 153A of the Income Tax Act pursuant to a search
conducted on 25.10.2018 in VV group of companies. The facts in all the
cases are almost identical and the orders came to be passed pursuant to
the group search conducted by the Income Tax Department. The
ground of challenge are also identical and all the writ petitions are
disposed of by this common order.
3.The petitioners assailed the impugned orders contending that it
is in violation of the principles of natural justice, arbitrary, mechanical
and without any independent application of mind and also stating that
the Income Tax Department has not discharged the burden of proof,
proving that the income determined and sought to be taxed were not
from the materials seized during the time of search. The learned
counsel for the petitioners relied on the following judgments namely,
a.M/s. All Cargo Global Logistics Ltd., vs. DCIT(ITA Nos.5018 to
5022 & 5059/M/10 dated 23.05.2012)
b.(2015) 374 ITR 645 – Commissioner of Income Tax vs.
Continental Warehousing Corporation Ltd.
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c.(2016) 380 ITR 573 - Commissioner of Income Tax vs. Kabul
Chawla
d.(2016) 385 ITR 624 - Commissioner of Income Tax vs. St.Francis
Clay Décor Tiles
e.(2017) 390 ITR 496 - Commissioner of Income Tax vs. Ajay Gupta
f.(2017) 395 ITR 526 - Commissioner of Income Tax vs. Meeta
Gutgutia Prop. M/s.Ferns 'N' Petals
g.(2017) 397 ITR 82 – Principal Commissioner of Income Tax vs.
Best Infrastructure (India) Pvt. Ltd.
and contended that in case of assessment under Section 153(A), the
addition or disallowance can be made only from the materials found
during the time of search. The petitioners along with the written
arguments have annexed the orders of dismissal of the Special Leave
Petition preferred by the Income Tax Department in Special Leave
Petition(Civil) Diary No.18121/2018 as against the judgment reported in
395 ITR 526 in the case of Meeta Gutgutia wherein, the counsel for the
writ petitioners contended that no incriminating materials were seized
during the time of search and therefore no addition or disallowance can
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be made in an assessment under Section 153(A) of the Act and therefore
contended that the impugned assessment orders were bad in law.
4.It was also contended that the department only relied upon the
materials found in the brothers group of companies and residences and
also the assessment in the case of the petitioners was framed only by
taking into consideration the estranged brother's statement who
belonged to the other group. He would further submit that even
assuming some incriminating materials were found during the time of
search pertaining to any person other than the person searched, then the
recourse for the department is to proceed under Section 153C and not
under Section 153A by placing reliance on paragraph 10 of the Division
Bench judgment of the Delhi High Court in the case of MDLR Resorts(P)
Ltd., reported in Taxman.com 365 (Delhi) High Court held that
''10.For clarity we would like to elaborate what has been
briefly referred to above. Search warrant (i.e.Form No.45) were
printed documents in which requisite blanks i.e., names and details
have been filled by hand. Due to paucity of space in the column,
the authority issuing the search warrant had put an, (*) mark and
thereafter mentioned other names in respect of whom the search
warrant had been issued.''
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5.Further, the counsel for the petitioners also contended that the
entire assessment on the petitioners was framed on the basis of the
alleged secondary evidence of electronic records such as, Excel Sheet,
Excel work sheet, Excel note book, Excel files, e-mail communication
and Whatsapp conversation and the so called statement of the persons
recorded under Section 132(4) of the Income Tax Act. The counsel for
the writ petitioners contends by placing reliance on the judgment of the
Supreme Court in the case of Anwar PV reported in (2014) 10 SCC 473
and also in the case of Arjun Pandit Rao reported in 2020 7 SCC 1 that
since the mandatory requirement of Section 65B of the Indian Evidence
Act has not been complied with in respect of any of the electronic
records relied upon by the respondent, they being not admissible in
evidence, the assessment orders being passed on the same, cannot be
sustained in the eye of law.
6.It was further contended by the petitioners' counsel that
depriving the assessee the opportunity to cross examine the persons
whose statements were recorded under Section 132(4) of the Income Tax
Act, were used for making additions/disallowance under Section 153(A)
would amount to violation of the principles of natural justice.
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
7.The petitioners' counsel further pointed out that in spite of
specific request by the petitioners, they were not allowed to cross
examine the said persons, but the request was not even considered. The
petitioners in support of his arguments placed reliance on the decision
of the Delhi High Court in the case of PCIT vs. Anand Kumar Jain
reported in 2021 SCC Online Del 3174 and the decisions of ITAT Delhi
Bench in the case of Deputy Commissioner of Income Tax vs. M/s.Roger
Enterprises (P) Ltd., reported in 2012 SCC Online ITAT 11821 and Brij
Bhushan Singhal reported in 2018 SCC Online ITAT 2891 and the
decision in the case of D.S.Suresh by the ITAT Bangalore Bench in
ITA.No.462 and 463 Bang/2020.
8.The petitioners' counsel further contended that the petitioners
were handicapped from effectively defending the proposals of additions
and disallowance of the department in the absence of copies of the
panchanama being given to them. The petitioner pointing out various
communications of petitioners seeking for the copies of all the
panchanamas, submitted that in the absence of the said panchanamas,
the petitioners are not in a position to account as to what are all the
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seized materials and from which group, the said materials were seized
and whether the seized materials has anything incriminating and
whether the department was deliberately not considered most of the
seized materials which otherwise would prove the genuineness of the
transaction.
9.The petitioners' counsel further contended that in view of the
assessment being framed under Section 153(A) of the Income Tax Act,
the same has to be based on the incriminating materials found at the
time of search. By denying the copies of the panchanamas, the
petitioners were prevented from pointing out the materials relied by the
department which were not found at the time of search in the premises
of the petitioners.
10.The petitioners' counsel further submitted that at the time of
consolidating the search proceedings, the department contended that
the same has necessitated due to interlocking and interconnecting of
funds of various groups. That being so, without any clarity as to which
funds the alleged seized materials belong to, framing of the assessment
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orders is improper. The counsel for the petitioner also pointed out the
earlier counter filed by the department in W.P(MD)No.16869 of 2019
and contended that the department has conceded that after
centralisation, the petitioners are entitled for all the copies of seized
materials but denying the same subsequently is illegal.
11.The petitioners further contended that in the case of
W.P(MD)Nos.11271 to 11273 of 2021, the specific objections made in the
communication dated 08.03.2021 were not even considered by the
assessing officer. It was further pointed out that by the communications
dated 08.09.2020 and 13.03.2020 the department has predetermined the
liability therefore, on the wise of predetermining the issue, the
assessment orders have to be set aside. The counsel for the petitioners
pointed out various paragraphs in the show cause notice that show
cause notices that preceded the assessment orders are identical and
similar to the assessment orders and therefore, the counsel for the
petitioners pleaded for quashing of the assessment orders as it is
violative of the law laid down by the Supreme Court in the case of
Siemens Ltd., vs. State of Maharashtra and others reported in (2006) 12
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SCC 33 and Oryx Fisheries Private Limited vs. Union of India and
others reported in (2010) 13 SCC 427.
12.The petitioners also pointed out that the assessment orders are
mechanical orders passed without any independent application of mind
and it was a cut and paste one from the predetermined show cause
notice and communication dated 08.09.2020 and 13.03.2020.
13.The counsel for the petitioners also contended that as far as the
writ petitions in W.P(MD)No.11271 to 11273 of 2021, are concerned, not
only the specific objections raised by communication dated 08.03.2021
were not considered but also the statements made in paragraphs 3 and 4
of the assessment orders are completely false and the same
demonstrates the mechanical manner in which the impugned orders
came to be passed.
14.Per contra, the learned Senior Standing Counsel for the Income
Tax Department contended that panchanamas were given to the
concerned authorised persons and the petitioners' request for cross
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examination was not conducted, as the statements relied upon were
recorded under Section 132(4) during the time of search from the
employees of the petitioners and therefore it will not be given. The
learned Senior Standing Counsel also pointing out the judgment of the
Supreme Court in the case of Commissioner of Income Tax vs. Chhabil
Dass Agarwal reported in [2013] 36 taxmann.com 36(SC) and the
judgment of this Court in M.Vivek vs. Deputy Commissioner of Income
Tax, Central Circle-2(i/c), Trichy, reported in [2020] 121 taxmann.com
366 (Madras), contended that in view of the alternative remedy
available under the statute, the writ petitions are not maintainable. The
learned Senior Standing Counsel also placing reliance on the Delhi High
Court judgment MDLR Research Private Ltd., reported in 2013 40
taxmann.com 365, contended that panchanama is a document which can
either be a) preceding documenting search with or without any seizure
b) it can be a document for return of seized article or the removal of
seals and c)it can also be a document evidencing the conclusion of the
search and therefore, the petitioners cannot be aggrieved on account of
the denial of copies of panchanama.
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15.The learned Senior Standing Counsel relied on the judgment of
the Single Bench of this Court cited supra and contended that proposed
additions were not made only on the oral evidence made by the third
parties, but it was based on the materials seized during the time of
search. The learned Senior Standing Counsel placing reliance on the
counter filed by the department made extensive submissions by
reiterating the contentions found therein.
16.In response to the arguments submitted by the learned Senior
Standing Counsel for the respondent, counsel for the petitioners
submitted that in the case of violation of principles of natural justice, the
alternative remedy cannot be a bar and also placed the following
decisions for consideration of this Court.
i)(2018) 12 SCC 36, Jeans Knit (P) Ltd., vs. CIT
ii)(2020) 13 SCC 285, Maharashtra Chess Assn. vs. Union of India
iii)2021 SCC Online Ker 269, V.Gopalan vs. Chief Commissioner
of Income Tax
iv)2021 SCC Online 334, Radha Krishnan Industries vs. State of
H.P
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
v)2021 SCC Online Del 3613, ESS Advertising (Mauritius) S.N.C.
vs. Assistant Commissioner of Income Tax.
17.Further, the counsel for the petitioners contended that the
excuse given for not furnishing the panchanama is an after-thought and
the excuse is invented subsequently which can neither be sustained nor
accepted as the law in this regard is no more res integra. For the said
purpose, he argued placing reliance on the judgment of the Supreme
Court in Mohinder Singh Gill and another vs. The Chief Election
Commissioner, New Delhi and others reported in (1978) 1 SCC 405
which was followed in the cases of Chandra Ammal Educational and
Charitable Trust vs. BSNL reported in 2015 SCC Online Mad 4419,
N.Subburaj vs. District Collector reported in 2016 SCC Online Mad 4715
and Dr.Mary Nirmala Jeyaraj vs. Joint Director of Medical and Rurla
reported in 2019 SCC Online Mad 18738.
18.On considering the arguments, documents and judgments
cited by both sides, I find that the petitioners have sought for copies of
panchanamas in the 63 places searched, but however, the department
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had admittedly not given all the panchanamas to the petitioners even
though they accepted that the petitioners are entitled to the same in the
counter filed in W.P(MD)No.16869/2019.
19.In the impugned order in W.P(MD)No.11261 of 2021, in
paragraph 26.7, the respondent stated that it is practically impossible to
give all the seized copies given the volume of materials seized from each
premises. The department cannot take such stand. Whatever be the
volume of the materials seized, the assessee also having demanded the
same, the department is bound to have given all the copies. Again in
paragraph 26.8 of the impugned order in W.P(MD)No.11261 of 2021, the
department contends that it is illogical for the assessee to insist for the
copies of the materials seized from the office, factories and residences of
the Directors of M/s.Dhanalakshmi Srinivasan Sugars Pvt Ltd.
However, as pointed out by the counsel for the petitioners, the
documents seized from M/s.Dhanalakshmi Srinivasan Sugars Pvt Ltd.,
were discussed in the assessment order in paragraphs 22.4, 22.7 and
24.7. That being so, when the department using the said materials for
framing of the assessment, copies of the same should have been given to
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
the assessee. Moreover, in the typedset of papers filed by the
respondent department in page 1, wherein a communication is found
addressed by the petitioner dated 28.07.2020 wherein the petitioner has
set out the persons who are Directors/Partners in each of the concern
and it could be seen in M/s.Dhanalakshmi Srinivasan Sugars Ltd., the
members belonging to the petitioners' group are also there. In the
counter affidavit filed by the department in W.P(MD)No.11261 of 2021
in paragraph 19, the respondent department contends that copies of the
one group cannot be given to other and in paragraph 18.6 of the counter
filed in W.P(MD)No.11271 to 11273 of 2021, the assessing officer states
that if specific materials were asked, he would have taken permission
from the other group and supplied. As rightly pointed out by the
learned counsel for the petitioners, this stand was not taken by the
department before the passing of the assessment orders, but on the
contrary as found in the communication dated 17.11.2020 at pages 299,
302, 304, 306, 308 and 310, the department demanded original
panchanamas for giving copies of the seized document. Even assuming
the stand taken by the department in their counters are justifiable, in the
facts and circumstances of the case, the respondent department should
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have informed the same before passing the assessment order or atleast
should have discussed the same in the assessment order.
20.Therefore, the stand taken by the department now by way of
counter of non furnishing of panchanamas cannot be accepted. It is also
not explained as to which are the concern, the respondent department
concluded as belonging to the other group and what was the basis for
such conclusion when the petitioners in its communication dated
28.07.2021 has explained their interest in every concern.
21.Therefore, non furnishing of the panchanama to the assessee is
a violation of the principles of natural justice as it disables the
petitioners from having knowledge of the seized materials and the
alleged incriminating materials relied upon by the respondent
department.
22.On the next issue of refusal of cross examination of the persons
whose statements were recorded during the time of search under
Section 132(4) of the Income Tax Act, it is trite law that the person
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against whom a statement is used, should be given opportunity to
counter and contest the same. I am unable to accept the contention of
the learned Senior Counsel that since the statements recorded were of
persons who were employees of the assessee and therefore the assessee
cannot seek for cross examination of them. The basic principles of
jurisprudence governing the law of evidence can in no way interfered
and could not be by the Income Tax Act provisions and neither the
authorities functioning under the Income Tax Act has any discretion in
such matters. The Supreme Court in the judgment Kishan Chadn
Chellaram reported in 125 ITR 713 at page 720 which is also followed in
the judgments cited by the petitioner in the case of Deputy
Commissioner of Income Tax vs. M/s.Roger Enterprises (P) Ltd.,
reported in 2012 SCC Online ITAT 11821 and in the case of Brij Bhushan
Singal vs. Assistant Commissioner of Income Tax reported in 2018 SCC
Online ITAT 2891, held as follows:-
''It is true that the proceedings under the Income Tax Act law
are not governed by the strict rules of evidence and therefore, it
may be said that even without calling the Manager of the bank in
evidence to prove this letter, it could be taken into account as
evidence. But before the Income Tax authorities could rely upon it,
they were bound to produce it before the assessee so that the
assessee could controvert the statements contained in it by asking
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for the opportunity to cross examine the Manager of the bank with
reference to the statement made by him. ....''
23.The counsel for the petitioners also placed the recent judgment
of the Supreme Court in the case of ICDS Ltd., reported in 2020 10 SCC
529, wherein, the Apex Court has remanded back the matter on account
of the assessee being deprived of cross examination. Therefore, the
respondent either should not have relied on the statements recorded
under Section 132(4) or in case, if they want to rely on the same, they
should not have denied the opportunity to the petitioners when they
demanded of cross examining the persons who gave the statement.
When the department has taken a stand that there are two groups
which were searched by a single warrant and that the companies of one
group should not be given to another, as rightly pointed out by the
learned counsel for the petitioners, the assessing officer should not have
discussed the statement of the other group for framing the assessment
of the petitioners. This completely vitiates the entire assessment
proceedings.
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24.As contended by the writ petitioners, when the entire
assessment has been framed only on the basis of the so-called electronic
record which are said to be copies of Excel Sheet, Excel work note book
etc., non compliance of Section 65(B) of the Indian Evidence Act renders
the document inadmissible in the eye of law as held by the Supreme
Court in the judgment reported in Anvar P.V vs. P.K.Basheer and others
reported in (2014) 10 SCC 473.
''14.Any documentary evidence by way of an electronic
record under the Evidence Act, in view of Sections 59 and 65A, can
be proved only in accordance with the procedure prescribed under
Section 65B. Section 65B deals with the admissibility of the
electronic record. The purpose of these provisions is to sanctify
secondary evidence in electronic form, generated by a computer. It
may be noted that the Section starts with a non obstante clause.
Thus, notwithstanding anything contained in the Evidence Act,
any information contained in an electronic record which is printed
on a paper, stored, recorded or copied in optical or magnetic media
produced by a computer shall be deemed to be a document only if
the conditions mentioned under sub- Section (2) are satisfied,
without further proof or production of the original. The very
admissibility of such a document, i.e., electronic record which is
called as computer output, depends on the satisfaction of the four
conditions under Section 65B(2). Following are the specified
conditions under Section 65B(2) of the Evidence Act:
(i) The electronic record containing the information should have
been produced by the computer during the period over which the
same was regularly used to store or process information for the
purpose of any activity regularly carried on over that period by the
person having lawful control over the use of that computer;
(ii) The information of the kind contained in electronic record or of
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the kind from which the information is derived was regularly fed
into the computer in the ordinary course of the said activity;
(iii) During the material part of the said period, the computer was
operating properly and that even if it was not operating properly
for some time, the break or breaks had not affected either the
record or the accuracy of its contents; and
(iv) The information contained in the record should be a
reproduction or derivation from the information fed into the
computer in the ordinary course of the said activity.
15.Under Section 65B(4) of the Evidence Act, if it is desired to
give a statement in any proceedings pertaining to an electronic
record, it is permissible provided the following conditions are
satisfied:
(a) There must be a certificate which identifies the electronic record
containing the statement;
(b) The certificate must describe the manner in which the electronic
record was produced;
(c) The certificate must furnish the particulars of the device
involved in the production of that record;
(d) The certificate must deal with the applicable conditions
mentioned under Section 65B(2) of the Evidence Act; and
(e) The certificate must be signed by a person occupying a
responsible official position in relation to the operation of the
relevant device.
16.It is further clarified that the person need only to state in
the certificate that the same is to the best of his knowledge and
belief. Most importantly, such a certificate must accompany the
electronic record like computer printout, Compact Disc (CD),
Video Compact Disc (VCD), pen drive, etc., pertaining to which a
statement is sought to be given in evidence, when the same is
produced in evidence. All these safeguards are taken to ensure the
source and authenticity, which are the two hallmarks pertaining to
electronic record sought to be used as evidence. Electronic records
being more susceptible to tampering, alteration, transposition,
excision, etc. without such safeguards, the whole trial based on
proof of electronic records can lead to travesty of justice.
17.Only if the electronic record is duly produced in terms of
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Section 65B of the Evidence Act, the question would arise as to the
genuineness thereof and in that situation, resort can be made to
Section 45A opinion of examiner of electronic evidence.
18.The Evidence Act does not contemplate or permit the
proof of an electronic record by oral evidence if requirements
under Section 65B of the Evidence Act are not complied with, as
the law now stands in India.''
25.In view of the violation of the principles of natural justice and
also due to the non compliance of Section 65(B) of the Indian Evidence
Act, this Court feels that it is a fit case for setting aside the assessment
orders. The alternative remedy under the statute is in the case of
violation of principles of natural justice should be an effective one
capable of remedying the violations by providing afresh, but however, it
remains the fact that after amendment to Section 251(1)(a) of the Income
Tax Act on 01.06.2001, the CIT(Appeals) does not have the power of
remand. Therefore, in the facts and circumstances of the case, since the
petitioners have made out a clear case of violation of principles of
natural justice and the statute, this Court feels that it is a fit case for
interfering with the impugned orders. In such circumstances, plea of
alternative remedy which is also an effective one to undo the violations
committed by the respondent, cannot be sustained. This Court is well
https://www.mhc.tn.gov.in/judis/
W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
within its power to set aside the impugned orders and remand back the
same for fresh consideration. The Supreme Court in the recent
judgment reported in (2020) 13 SCC 285, Maharashtra Chess Association
vs. Union of India and others, negatived the contention of restriction on
the exercise of the powers of the High Court under Article 226 of the
Constitution of India and in this regard has held as follows:-
''19.This argument of the second respondent is misconceived.
The existence of an alternative remedy, whether adequate or not,
does not alter the fundamentally discretionary nature of the High
Court's writ jurisdiction and therefore does not create an absolute
legal bar on the exercise of the writ jurisdiction by a High Court.
The decision whether or not to entertain an action under its writ
jurisdiction remains a decision to be taken by the High Court on an
examination of the facts and circumstances of a particular case.
22.The mere existence of alternative forums where the
aggrieved party may seek relief does not create a legal bar on a
High Court to exercise its writ jurisdiction.
26.As far as W.P(MD)No.11765 of 2021, is concerned, it is said to
be filed only to overcome the technical objection raised by the
respondent and not challenging the assessment orders separately.
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
Therefore, the assessment orders impugned in the present writ petitions
are set aside and the matter is remanded back to the respondent
assessing officer for denova assessment and while doing so, the
respondent officer shall,
a)afford an opportunity of cross examination of the persons
whose statements are relied upon by the respondent for making
additions or disallowance ;
b)give the details of all the seized materials including the place of
seizure and give copies of seized material demanded by the petitioners.
In case, the department thinks that the seized materials sought for by
the petitioners does not belong to the petitioners or the petitioners'
group, communicate the same to the petitioners and in such event, in
the assessment orders that framed either on the concerns that do not
belong to the petitioners/petitioners' group or the assessment orders
that are framed on the basis of the seized materials refused to be given
to the petitioners/members of the petitioners' group, there would be no
tax liability on the petitioners or members of the petitioners' group;
c)the respondent should strictly comply with Section 65-B of the
Indian Evidence Act if the respondent wants to use the electronic
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
document by way of secondary evidence;
d)none of the statements of the other group should be taken into
consideration while framing the assessment on the petitioners or
members of the petitioners' group and if the department thinks it is
necessary to use the statement of the other group members, the
petitioners/members of the petitioners' group should be given
opportunity for cross examination, if demanded of the persons whose
statements are relied on, by the petitioners or members of the
petitioners' group.
e)In case, if the department wants to fix the tax liability on the
petitioners or on the members of the petitioners group, based on the
search conducted and materials seized during the search conducted in
the premises of the other group or in case, if the department wants to
rely on the statement recorded under Section 132(4) during search
conducted in the premises of the members of the other group, the said
assessment proceedings can only be under Section 153-C of the Act. The
limitation if any would stand extended and would start afresh for
completion of the fresh assessment proceedings.
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W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
27.The writ petitions are allowed with the above observations and
directions. No costs. Consequently, connected miscellaneous petitions
are closed.
Index : Yes / No 03.08.2021
Internet : Yes / No
bala
To
The Assistant Commissioner of Income Tax,
Central Circle-2,
Income Tax Staff Quarters Complex,
Kulamangalam Road,
Meenambalpuram,
Madurai-625 002.
https://www.mhc.tn.gov.in/judis/
W.P(MD)Nos.11261, 11271, 11272, 11273 and 11765 of 2021
J.NISHA BANU, J.
bala
Pre_Delivery common order made in
W.P(MD)Nos.11261, 11271, 11272,
11273 and 11765 of 2021
Dated : 03.08.2021
https://www.mhc.tn.gov.in/judis/
