No right to cross-examine witness if statement not relied upon in assessment under Section 153C; seized documents suffice.

ORDER :

C.SARAVANAN, J.

By this Common Order, both these Writ Petitions are being disposed of.

2. In W.P.No.2119 of 2023, the Writ Petitioner has challenged the Impugned Assessment Order dated 29.12.2022 passed under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as “Act”) by the 1^st Respondent in response to a Notice dated 24.02.2022 issued under the aforesaid provisions of the Act.

3. In W.P.No.21687 of 2023, the Writ Petitioner has challenged the consequential Impugned Penalty Order dated 29.06.2023 passed under Section 271AAC(1) of the Act by the 1^st Respondent.

4. The Impugned Assessment Order dated 29.12.2022 has been passed in the background of a search conducted at the premises of the “Searched Person” namely M/s.SRS Mining, a Partnership Firm of J.Sekar Reddy on 08.09.2016, 09.12.2016, 10.12.20216 and 12.12.2016. Pursuant thereto, the Petitioner was issued with the aforesaid Notice under Section 153C of the Act on 24.02.2022.

5. In response to the said Notice, the Petitioner had filed a Return of Income on 23.03.2022, reiterating the Return of Income that was filed earlier on 23.01.2018 under Section 139(1) of the Act.

6. In this case admittedly, during the period in dispute, the Petitioner was a sitting MLA of the Tamil Nadu Legislative Assembly and also the Minister of Municipal Administration, Rural Development and Implementation of Special Programs.

7. In the Return of Income filed on 23.01.2018 for the Assessment Year 2017-2018, the Petitioner has declared a Gross Total Income of Rs.4,92,562/- only. The aforesaid Gross Total Income consisted a sum of Rs.4,44,152/- from “Salary” and Rs.48,411/- from “Income from other Sources”.

8. Though not relevant, at the outset it may be mentioned that prima facie, the above return declaring a salary as low as Rs.4,44,152/- for the aforesaid Assessment Year by a sitting MLA of the Tamil Nadu State Assembly does not inspire confidence. This would require a re-look even otherwise.

9. In this case, the Petitioner was issued with Notice dated 06.12.2022 under Section 142(1) of the Act, which called upon the Petitioner to furnish certain details.

10. In response thereto, the Petitioner requested for copies of the Sworn Statement of one K.Srinivasulu, the then Director M/s.JSR Infra Developers Private Limited, an associated entity of the “Searched Person”, namely M/s.SRS Mining, a Partnership Firm of J.Sekar Reddy vide request dated 12.12.2022. By a Communication dated 16.12.2022, the same was also furnished.

11. Thereafter, vide Communication dated 19.12.2022, the Petitioner sought for cross-examination of the said K.Srinivasulu, the then Director of M/s.JSR Infra Developers Private Limited.

12. The said K.Srinivasulu, appears to have given statement to the effect that he had received sum of Rs.71,44,50,500/- from R.Vaithilingam, also a sitting MLA of the Tamil Nadu Legislative Assembly. It appears that the said statement was also subsequently retracted by the said K.Srinivasulu.

13. It is the grievance of the Petitioner that the Impugned Assessment Order came to be passed on 29.12.2022 under Section 153C of the Act without considering the aforesaid Communication dated 19.12.2022 for cross-examination of the said K.Srinivasulu, the then Director of M/s.JSR Infra Developers Private Limited. It is in this background, the Impugned Penalty Order dated 29.06.2023 was passed under Section 271AAC(1) of the Act.

SUBMISSIONS: -

14. The learned counsel for the Petitioner submitted that the Petitioner was entitled to cross-examine the said K.Srinivasulu, the then D