Directed the AO to allow cross examination of witness by the assessee

The Jharkhand High Court has directed the Assessing Officer (AO) to permit assessees to cross-examine witnesses in line with the Indian Evidence Act. This ruling came after an assessee's cross-examination process was restricted by the AO. The court affirmed the AO's power to manage proceedings but stressed adherence to legal guidelines. It ordered the recall of witnesses for questions previously disallowed and mandated effective cross-examination opportunities.

The Hon’ble Jharkhand High Court in Madhu Korah v. Income Tax Department through Director General [W.P (T) No. 538 of 2022 dated May 03, 2023] had directed the Assessing Officer ("the AO") to allow cross examination of witness by the assessee in accordance with provision of Indian Evidence Act, 1872 ("the Indian Evidence Act").

Facts

The Commissioner of Income Tax (Appeal) Jamshedpur, ("the CITA") passed 2 orders dated December 26, 2013, and August 14, 2014, permitting cross examination of witness to Madhu Korah ("the Petitioner"). Accordingly, cross-examination of some witness was done in 2019. Thereafter no further development took place. The Revenue department issued summons to the Petitioner for cross-examination of witness and the Petitioner participated in cross-examination process. However, the Assistant Commissioner of Income Tax restricted cross examination process by denying the questions asked by the Petitioner during cross examination.

Aggrieved by such restriction the Petitioner raised objections which were disposed by the Revenue Department vide Order dated January 24, 2023 ("the Impugned Order").

Being aggrieved, the Petitioner has filed this petition inter alia contending that the Petitioner should be allowed to conduct cross examination on its own or through an independent officer. 

Issue

Whether the AO has power to discard the question of the Petitioner during the cross examination?

Held

The Hon’ble Jharkhand High Court in W.P (T) No. 538 of 2022 held as under:

• Observed that, the presiding officer has power to control the proceeding. However, the officer has to follow the guidelines and the provision of the Indian Evidence Act. 
• Directed the Petitioner, to file petition for recall of the witnesses who have been earlier cross-examined and seek the answers of the question which have been initially discarded by the AO.
• Further, directed the Revenue department to provide effective cross-examination opportunity in accordance with the provisions of the Indian Evidence Act.