AMIT BAJAJ ADVOCATE

ORDER

Smt. Diva Singh, Judicial Member - Both the assessee and the Revenue are in appeal against the order dt. 31.3.2011 of CIT(A)-VIII, New Delhi pertaining to the A.Y. 2004-05 wherein the assessee is agitating against the action of the CIT(A) in maintaining the additions of Rs. 1,90,00,000/- and the Revenue against the action of deleting the addition of Rs. 80 lakhs made by the A.O. The grounds raised by the respective parties read as under:-

ITA 2940/Del/2011:

It is therefore prayed that order of ld. CIT(A) upholding the action of the AO be held to be unsustainable and untenable in eyes of law.

ITA 2812/Del/11:

2. A perusal of the record shows that the assessee disclosed an income of Rs. 46,70,500/- by way of filing a return dt. 31.10.2004 accompanied by tax audit report dt. 12.10.2004 u/s 44AB of the Income Tax Act, 1961. After issuance of notice dt. 27.7.2005 u/s 143(2) it was subjected to scrutiny assessment. The assessee in the return filed had declared income under the heads salary; income from house property; income from business & profession; income from capital gain and income from other sources.

2.1 The department has challenged the addition made by the A.O. of Rs. 80,00,000/-. The reasons for doing the same as discussed by the A.O. are set out as under:-

2.2 Apart from the above addition of Rs. 80 lakhs the A.O. taking into consideration that the assessee claimed to have received gifts of Rs. 1,90,00,000/- from 76 persons which had lead to an increase in the capital of the assessee to that CIT(A) required the assessee to explain the same and therefore rejecting the explanation offered he proceeded to make the addition of Rs. 1,10,00,000/- in view of the fact that he had already made an addition of Rs. 80 lakhs in the transportation business of the assessee. The said action has been assailed by the assessee. The relevant facts are found discussed at pages 3 to 7 of the assessment order which read as under:-

3. Aggrieved by these actions the assessee went in appeal before the CIT(A). The CIT(A) considering the explanation offered on behalf of the assessee addressed in paras 4.3, 4.2 deleted the addition of Rs. 80 lakhs in para 4.5 convinced with the explanation offered that there was a change in the pattern of business of the assessee namely upto A.Y. 2003-04 the trucks/lorries used in the transportation business were owned by the assessee, whereas in A.Y. 2003-04 they were sold and the transportation contract was executed through hired trucks/lorries; that the assessee entered into a new line of business i.e. liasoning of sale of trucks as a result of which he earned commission of Rs. 1,05,00,000/-; that in regard to the complete addresses and particulars of the clients the necessary details were found mentioned in the GRs as such even though they were not separately recorded in the bills and invoices the relevant evidence is on record that all books of accounts including bills and vouchers were presented before the A.O. wherein no specific discrepancy was pointed out; and that the A.O. has not rebutted the claim of the assessee that the GRs contained full and complete addresses of clients or made a counter claim that commodities transported were without invoices being raised or there was an understatement of truck load or of the transportation charges; that there was no basis for making the lump sum addition of Rs. 80 lakhs.

3.1 Aggrieved by this finding the department is in appeal before the Tribunal.

3.2 In regard to the issues addressed in assessee's appeal as per para 6.4 of the impugned order the contention put forth on behalf of the assessee was that the addition in question was made without affording any proper opportunity to produce the documents in support of the gifts received; that the assessee had filed confirmations from all the 76 persons confirming the gift and since most of the donors were residents of places other than Delhi the issue could be decided on the basis of documents and in the face of conformity letters of the donors it was urged that there was no occasion for treating the gifts as non-genuine. A perusal of para 6.5 shows that a reference is made to the facts that as a result of assessee's submissions and filing of additional evidences the CIT(A) disposing the appeal i.e. CIT(A)-VIII, New Delhi referring to the submissions and documents filed before CIT(A)-XXIV, New Delhi wherein the earlier CIT(A) i.e. CIT(A) XXIV, New Delhi had issued certain directions to the A.O. and required him to make the following enquiries:-

3.3 A perusal of para 6.6 shows that the CIT(A) refers to the fact that the A.O. in the remand proceedings allowed necessary opportunity to the assessee vide letter dt. 30th April,2007 to produce the donors for his examination along with necessary evidences regarding sources of gifts etc. In response to the same 21 persons appeared before the A.O. whose submissions were recorded on oath and as per the Report submitted all the donors categorically stated that the gifts were made by them out of cash made available to them by Shri JK Sharma i.e. the assessee. The CIT(A) observed that since the statements given by the donors were to be utilized by the A.O. for submission of his remand report the A.O. allowed a specific opportunity to the assessee to cross examine the donors which opportunity was not availed of by the assessee.

3.4 Accordingly the A.O. as per his remand report dt. 30th May, 2008 reproduced in the impugned order gave the following report:-

3.5 As per para 6.7 the remand report was made available to the assessee in response to which it was stated that the remand report has been submitted without providing any opportunity for cross examination of 21 donors whose statements have been recorded by the A.O. in the course of remand proceedings it was also stated that the manner in which statements are recorded clearly shows that they had been tutored and the submissions were recorded by the A.O. according to his own convenience; it was also argued that out of 76 donors statements of only 21 donors had been recorded and on the basis of which addition on account of all the 76 donors cannot be sustained.

3.6 However, not convinced the CIT(A) made the addition of Rs. 1,90,00,000/- vide para 7 observing as under.

4. Aggrieved by these actions both the assessee and the department are in appeal in the present proceedings.

5. Ld. A.R. inviting attention to the assessment order page 7 contended that the assessee had returned a positive income by way of return dt. 31.10.2004 which was accompanied by financial statements and tax audit report. Notice u/s 143(3) was issued on 27.7.2005 which was duly complied with. It was vehemently argued by him that the department thereafter did not take any action and barely a few weeks before completing the assessment which presumably was becoming time barred, the first opportunity was given to the assessee by the A.O. to produce the parties as per recording in the assessment order itself on 22.11.2006.

5.1 Attention was invited to the fact the assessment order is dt. 15.12.2006. Relying upon the said order it was submitted that it would be eminently evident that sufficient time was not given to the assessee to produce the 76 parties who were required by the A.O. for examining as the assessee was put to notice on 22.11.2006 to produce the 76 donors on 27.11.2006. It was emphasized that since most of these parties were out station parties the time given was not sufficient. In the face of repeated queries from the Bench in regard to the claim of genuineness of the gift of Rs. 2,50,000/- from 74 persons and one gift of each of Rs. 2 lakhs and Rs. 3 lakhs from 2 persons which in the face of the consistent orders does not appear plausible. Ld. AR vehemently stood by the stand that the claim was genuine and the assessee was not afforded sufficient opportunity to produce the donors. Relying upon the assessment order itself it was argued that the A.O. records that on 22.11.2006 the assessee was required to produce the donors on 27.11.2006. Referring to page 20 of the paper book it was his submission that the assessee responded to this vide letter dt. 21.8.2006 which fact is recorded in the assessment order. In response to a query from the Bench that the A.O. may have directed on 22.11.2006 as a result of the assessee himself providing the particulars on the said date and the enquiries by the AO may not have started in November and may in fact have started in August/September as per some letters placed in the Paper Book by the assessee addressed to the AO it was argued by the ld. A.R. that even if it is presumed that the proceedings started in August even in that situation it was urged the assessee's stand was that on the issue no query was raised by the A.O. and there is no such allegation of the department that the letter dt. 22.11.2006 filed by the assessee has been deliberately delayed by the assessee and there is no material to that effect against the assessee. The assessment order it was urged does not conjecture on this and merely records that the assessee was required to produce them on 27.11.2006 juxtaposed with the fact that the assessment order was passed on 15.12.2006 it was his argument that sufficient time could not be provided.

5.2 Referring to the A.O. it was submitted that it can be seen that in the short time only 4 donors could be produced who all gave evidence in assessee's favour the merits of the stand of the A.O. in not believing them it was submitted need not be addressed at this stage as the prayer is being made that the issue be restored to the A.O. on the undertaking given by him on behalf of the assessee that all 76 donors shall be produced. In the circumstances looking at the over all picture to be fair the addition of Rs. 80 lakhs which had been deleted by the CIT(A) may also is restored.

5.3 In the said background assailing the evidentiary values of these statements so procured behind the assessee's back by the A.O. which have been relied upon by the CIT(A) it was submitted the first opportunity when they were being used were objected to as discussed by the CIT(A) himself in para 6.7 of the impugned order wherein the assessee has assailed the statements alleging the same to be recorded and tutored to suit the convenience of the A.O.; Objection was also posed on the ground that they were never ;confronted to the assessee. It was further argued that only 21 donors have been examined whereas gifts have been received from 76 donors. No reasons are brought on record to hold why statements of 21 donors should be used for all donors.

5.4 In the above background it was urged that the proceedings in the said case are a travesty of justice. The ld. AR's attention was invited to the judgement of the Jurisdictional High Court in the case of CIT v. Nova Promoters & Builders P. Ltd. rendered on 15.2.2011 in ITA 342 of 2011 on which the department may want to rely. The ld. A.R. contended that the facts are distinguishable and have no application to the facts of the present case. In the proceedings today the assessee is confining his arguments only to the fact that justice has not done and if the evidences so warrant after due examination by the A.O. or the assessee fails to produce the donors then nothing stops the A.O. from making the additions relying upon Nova Promoters & Builders P. Ltd. or any other judgement. It was contended that as per the settled legal principles the opportunity to cross examine the parties should be given.

5.5 The ld. A.R. was required to address the fact that the donors are witnesses of the assessee as such on what basis can it be urged that the onus is upon the Revenue to produce them for cross examination.

5.6 In response to the same ld. A.R. urged that it is never denied that these were the assessee's witnesses and at no point of time the assessee has expressed either reluctance or hesitation to produce them. However paucity of time has been pleaded, but once the department examines the donors behind his back and comes to the conclusion that the Gift Deed is not reliable then the assessee should be provided with an opportunity to cross examine the witnesses as the assessee's stand that these were tutored statements to suit the convenience of the AO which argument is reproduced in the impugned order needs to be addressed.

5.7 In the facts of the present case it was urged the assessee is not insisting upon the opportunity to cross examine the donors and is taking a categorical stand that the donors shall be produced before the A.O.

5.8 Referring to the facts it was urged that statements of 4 donors have been recorded by the A.O. himself and if they have retracted as per the CIT(A) in the remand proceedings before the A.O. the assessee ought to be confronted with the said evidence especially since the assessee has assailed the evidence as tutored evidences created for the convenience of the A.O. It was also urged that this becomes more important whereas against the statement given before the A.O. in the first round a contrary statement has been given subsequently then it is all the more necessary to provide the assessee either an opportunity to cross examine these parties so as to bring out under what duress they have given such a statement or an opportunity to produce all these parties as the assessee is consistently praying for it was his humble plea that if the opportunity to produce these parties is given to the assessee then nothing stops the A.O. to deal with the situation where there are contrary submissions by the same party and to apply whatever law is applicable as per the settled legal principles at that point of time. It was submitted that if gifts are found to be bogus then nothing stops the A.O. to do the needful as the law shall prevail. The assessee is only humbly praying for an opportunity to produce these persons as sufficient time to produce them was evidently not available.

5.9 Assailing the manner in which the proceedings were conducted by the A.O. in the original round and before the CIT(A) it was his argument that the assessee in fact would be able to demolish the action of the department and demonstrate that in the facts as they stand no addition could be made as the present case is one where there are repeated instances of travesty of justice at every stage, however, conscious of his duty towards the Court it was submitted that in all fairness he is arguing and praying only for a restoration.

5.10 In the context of the above submission it was contended that various documents addressed before the A.O. in the original proceedings are not mentioned in the order and the assessment is made oblivious to these documents. It was reiterated that it is evident from the assessment order that the A.O. woke at the fag end of the assessment proceedings ignoring the fact that it is practically not possible for the assessee to produce 76 donors where most of the donors were from out of station. It was stated the assessee made attempt with the AO seeking that from which date the donors should be made available. Attention was invited to Paper Book page 107 wherein it is specifically stated that assessee had instructed all the donors to make themselves available for giving deposition before the A.O. and some of the donors the assessee would attempt to bring from Tuesday onwards as per the said letter dt. 8.12.2006 and some would be approaching the A.O. independently. As such AO was requested to specify the time of his convenience for examining the donors who had given the gift supported by gift deed, bank details and tax returns.

5.11 It was submitted that all these evidences are available on record and stand unrebutted and uncontroverted. Inviting attention to pages 108 to 183 of the paper book it was his submission that the assessee has addressed letters to all the donors requiring them to produce the evidences in regard to the identity, PAN card, evidence of return filed, details of bank account etc. dt. 1.12.2006 and be prepared to produce these details before the A.O. Inviting attention to paper book pages 184 it was his submission that the assessee's A.R. on11.12.2006 states before the A.O. by way of this letter that all the vouchers and supporting documents have been produced again as desired and some of the donors have been personally produced along with required information. Referring to the hand written note below that letter placed at Paper Book page 184 it was stated that the donors were taken to ITO Shri JK Sharma, however entry by staff was refused as they were on strike.

5.12 Inviting attention to paper book page 185 it was his submission that the assessee also addresses a letter dated 14.12.2006 to the A.O. is stating that he had brought some donors for deposition in support of the gift deed and copy of bank details which already stood filed who could not depose due to strike of Income Tax Staff, no one could enter the office. The donors produced on the said date it was stated were Prem Lata, Lalita Shukla, Dharmender, Sanjay Shukla, Ajay Shukla, Nanda Kishore, Neelam Singhal, Parvati Bashney, Mukesh Kumar as per the list attached at page 185 who could not depose. It was his vehement argument that none of these facts are mentioned in the assessment order. Inviting attention to page 187 of the paper book letter dt. 15.12.2006 sent by speed post it was his stand that this is the date on which the assessment order was passed and the assessee's stand therein clearly shows that due to lack of time the assessee urged that the powers available to the AO may be used for summoning but the A.O. instead passed the order. The contents of the said letter are reproduced hereunder.

Sub: Assessment proceedings u/s 143(3) of the I.T. Act in case of Jai Karan Sharma for AY 2004-05.

Yours faithfully,

Sd/-

(ML Goyal) FCA"

5.13 Referring to the same it was his stand that the assessee states that in regard to each of the donors supported by evidence by way of gift deed, copy of return details of bank etc. stood already filed and the assessee has also been able to produce some donors whose statements are recorded. Some of the donors sent their confirmation directly to A.O. in response to assesseee's letter dt. 4.12.2006 and only because the case was becoming time barred the A.O. was required to issue summons u/s 131 so as to facilitate the completion of the hearing. It was his argument that the assessee is not in a position to prevail upon the A.O. to start the proceedings on time it is for the A.O. to start the assessment proceedings at his convenience and it is a common situation that at the fag end when the assessment is becoming time barred the AO's wake up and this is one of such case where justice has not been done on account of the time available. It was his submission that assessee is not ascribing any blame and is only trying to demonstrate that justice was not done. Inviting attention to the judgement of the Apex Court in the case of Tin Box Co. v. CIT 249 ITR 216 SC it was his stand that this was a case of lack of opportunity at the hands of the A.O. wherein the Court has clearly held that it is the assessment order that counted and the order had to be passed after a reasonable opportunity of being heard.

5.14 Referring to the assessment order it was his argument that only two dates at best can be said to have been given to produce the persons and that also a time of only a week or 10 days had been given and keeping the fact that there were 76 persons requiring to be produced some of whom were out of station, it was stated that evidently it is not practical that they can be produced at the same time within the time given.

5.15 Attention was invited to paper book page 193. Referring to the same it was submitted that as a result of this before the CIT(A) application for production of additional evidence was moved since there was no proper opportunity given by the A.O. the fact that the A.O. did not bring on record evidences of efforts made by the assessee of which the A.O. was kept fully appraised was also assailed.

5.16 For ready reference an extract from the same is reproduced here under.

5.17 As a result it was stated that request was made that the A.O. may send notices u/s 131 for the production of the said persons. Attention was also invited to paper book pages 321 wherein the assessee gives explanation in regard to his transportation business and the factum of acceptance of additional evidence. In the said background it was submitted that the CIT(A)-XXIV New Delhi on 23rd April,2007 passed an order wherein the additional evidence was accepted and directions were given to the A.O. to examine the additional evidence. Copy of the said order it was stated is placed at page 328 of the paper book. Attention was invited to the following extract therefrom:-

5.18 Consequent to this direction it was stated that the A.O. on 30th April, 2007 AO writes to the assessee to respond to the directions given in regard to the gift deed along with names and addresses of the persons etc. by 16th May, 2007 and was also directed to produce the donors except the donors who had already been produced during the assessment proceedings.

5.19 These donors it was stated referring to the order of the CIT(A) on admission of additional evidence were to be produced from 16th of May,2007 onwards. Referring to Paper book page 322 it was stated that the assessee responded as per letter dt. 16th May, 2007 stating that attempts were already made to produce the donors and some of them have deposed but most of them could not depose 'due to reasons best known to you' and now the donors would not come on the request of the assessee as such the AO was requested to summon them. It was his argument that it was the duty of the A.O. in terms of the principle laid down by the Apex Court in 1990 (1) SCC 68 to enforce the attendance of the parties. Referring to CIT v. Real Time Marketing P. Ltd. 306 ITR 735 (Del) it was his stand that reasonable time should have been given to the assessee and it is a settled proposition of law that the A.O. is an investigator first and an adjudicator later.

5.20 It was his vehement stand that thereafter the department again did not act for one long year and on 2.5.2008 the assessee received a letter annexed at paper book page 322A. It was his vehement contention that after having responded on 16th May, 2007 as far as the assessee is concerned there was nothing further to be done by him. It is only through the vague communication dt. 2.5.2008 which required the assessee to be present on a certain date for vague unstated reasons that some communication in the appeal pending before the CIT(A) was received. Referring to the same it was stated it definitely cannot be said to inform the assessee that his presence was required to cross examine the donors as is made out by the AO in the Remand Report and accepted by the CIT(A). The same is reproduced from paper book page 322A as under:-

Sd/-:

Dr. Prashant Kahmbra, ACIT, Circle 3(1), New Delhi"

5.21 It was his stand that the information is vague and obscure on account of the fact that it came after a year as in the assessment proceedings where the department woke up at the fag end of the proceedings herein also. Reiterating the facts it was submitted that after a year in response to letter dt. 16.5.2007, a letter dt. 2.5.2008 was subsequently received by the assessee which was coming from a different Circle i.e. ACIT, Circle 3(1) whereas AO as per the assessee's understanding the jurisdiction vested with the DCIT Circle 25(1) New Delhi as would be evident from page 8 of the assessment order as the said authority passed the AO. Inviting attention to page 333 of the paper book it was his submission that the assessee replied in response to the letter from AO received from Circle 3(1) on 15.8.2008 wherein these concerns and confessions were addressed namely:-

5.22 Admittedly it was argued no enquiry report as ordered by CIT(A) had been submitted by DCIT, Circle 25(1). As such the said letter it was submitted was time barred; it was urged that no doubt there is no statutory provision for stating so but the action definitely was beyond what can be said to be a reasonable amount of time. Not wanting to defend the bonafide belief of the assessee that the letter so issued was beyond a reasonable time it was urged that the question of wanting to know the valid jurisdiction cannot be an unreasonable concern. In this background the assessee stated that the jurisdiction may be decided and informed. Accordingly vehemently relying upon pages 328 and 329 of the Paper Book which is the order of the CIT(A)-XXIV wherein the AO of a different jurisdiction was directed by the CIT(A) vide his order dt. 23rd April,2007 to submit enquiry report latest by 7th May, 2007 and pursuant to which the assessee received from the same AO of Circle 25(1) to respond to the enquiry vide letter dt. 30th April, 2007 placed at pages 331, 332 to reply by 16.5.2007. The enquiry so conducted by ACIT, Circle 3(1), New Delhi and that too after a gap of 1 year cannot be said to be a reliable evidence especially since the letter so received by the assessee spells out vague unstated reasons for assessee's presence on 15.5.2007 as is evident from page 332A of paper book which fact assessee had questioned by the assessee at page 334 and 335 of the paper book.

5.23 In this background relying upon the report of ACIT, Circle 3(1) the CIT(A) has concluded that the assessee has not cared to cross examine the persons who admittedly were examined behind his back. The evidence it was stated is not reliable and conclusive and was never confronted for this reason also the proceedings were a travesty of justice. It was submitted that even if some donors have retracted from the stated facts before the A.O. in the first round the evidence becomes more unreliable as the assessee responded that the donors could be produced and some were produced the remaining due to strike and paucity of time could not be examined thus the statements of these donors whose statements are relied are assailed as tutored and the statements so obtained for the convenience of the A.O. These objections are found reproduced in the impugned order. Relying upon these evidences it was urged the CIT(A) decided the issue against the assessee which action is contrary to settled legal principles of law.

5.24 It was urged that greater credence has to be given to the statement recorded by A.O. in the original proceedings and in the background where the assessee is undertaking to produce all the donors it was reiterated that in the interests of substantial justice the assessee should be allowed to produce the donors and if the assessee fails the department is at liberty to proceed as per law and whatever judgements the department wants to rely upon they are at liberty to apply the same on the facts as available on record. It was urged that the prayer of the assessee in the face of the high handedness of the department is most reasonable and legitimate and the assessee in fact could have argued for deletion of the entire addition which has not been done. Reliance is placed upon Kishan Chand Chela Ram, 125 ITR 713 SC; and CIT v.Ashwani Gupta, 322 ITR 396 (Delhi) for the proposition that it is not an irregularity but in fact is an illegality which has been committed and is fatal. In this background and legal position it was prayed that let the donors be examined by the AO before arriving at a conclusion.

5.25 Inviting attention to pages 385 to 389 which is the statement of Surender Kumar who has retracted as against the statement given in the original proceedings. Similarly Satyanarayan, Kamal Kumar whose statements are found recorded at pages 371, 401 to 405, 359 and 364 who have retracted then if the second statement that is to be relied upon instead of the statement in the first round then the onus is on the department to produce the donors for cross examination and if it is a necessary evidence on which the department would want to rely upon the procedures under law must be followed. In the facts of the present case it was urged that the assessee is not insisting for restoration on the ground that department be directed to produce the donors for assessee's cross examination restoration it was urged is on the ground that the assessee's undertaking to produce these parties before the A.O.

5.26 In view of the fact that the assessee is requesting for a restoration of the grounds raised in assessee's appeal it was submitted that he would have no objection if the issue addressed in the departmental appeal is also restored back, let the entire issue be examined de novo and a view as per law be taken.

6. The Ld. Sr. D.R. vehemently opposed the stand of the assessee. It was her submission that the prayer of the assessee seeking a restoration based on various judgements and position of law as considered by various Courts is entirely misplaced, the issue has to be decided on the basis of facts as available in the present case and not as considered by different Courts in different circumstances. It was her submission that the principle laid down in Tin Box Co. is entirely misplaced and not applicable. Similarly perusing the copy of the judgement 1990(1) SCC 68 it was her submission it has no role to play in the present proceedings.

6.1 Reverting to the facts it was her stand that as per the assessment order after issuance of notice dt. 27.7.2005 the proceedings continued and there was no lapse and on 22.11.2006 as per paper book page 26 the assessee submits affidavits in support of its claim of having received gifts of Rs. 1,90,00,000/- supported by documents placed at pages 21 to 106 referring to page 26 it was her stand that the assessee therein makes a reference to a letter dt. 25.9.2006. As such the arguments that the AO has called forth for information in November and concluded in December is not correct. Definitely the assessee gave a reply on 25.9.2006 again in response to some query raised prior to this. Accordingly the AO definitely had given about 3½ months to the assessee to respond.

6.2 Referring to page 107 & 184 on which the assessee is relying that the assessee expressed that the donors were prepared to depose from 12.11.2006 and some donors may approach independently which is expressed as per letter dt. 8.12.2006 it was her stand that as per pages 184 it was urged that some donors were present but as a result of strike addressed at pages 184, 185 donors mentioned at page 186 were denied entry cannot be accepted without any evidence as there are necessary entries available in the visitors book and there is a Register outside the C.R. building where gate passes are issued. How was the entry denied, who made the entries, the procedure required for entry etc. ought to have been addressed and there is no evidence that entry was denied as a result of strike available on record. It was her argument that the claim cannot be accepted without examination all these relevant documents.

6.3 It was her argument that the department can demolish the said claim on facts also referring to Premlata mentioned at sl.no.1 at page 186 who sought entry on a specific date to depose in favour of assessee it was stated that she was examined by the A.O. in the remand proceedings as per pages 412 of the paper book wherein she claims that the money was advanced by the assessee to her. Similar position it was stated exists in the case of Neelam Singhal mentioned at sl.no.7 who also is stated to have made an effort to depose before the A.O. at pages 186 but gives a contrary statement at page 397 of assessee's paper book.

6.4 She also addressing the arguments that there was a change in the jurisdiction and the statements were recorded by another A.O. It was contended that it is an administrative procedure which the assessee can not challenge and the said Officer has given a specific opportunity for cross examination as is evident from page 337.

6.5 Addressing letter to the CIT(A) dt. 3rd March, 2011 placed at pages 339 it was contended that the assessee is arguing for an opportunity to cross examine the donors who have been shown to have gifted to the assessee huge amounts and not a small amount but an amount of Rs. 2,50,000/- as such these were never the departmental witnesses and if they have deposed against the assessee then the department was not required to provide any opportunity to cross examine them. Referring to page 328 it was her argument that in fact it is the fairness on the part of the department to admit the fresh evidences and in the eventuality the donors are not produced before the AO the AO was directed to "if required issue summons" and make the enquiry report available by 7th May, 2007. This fair treatment on the part of the department cannot be used by the assessee to flog the department and put the onus upon the assessee requiring the department to issue summons or make donors available for cross examination.

6.6 In the facts of the case it was her argument that the retraction by the very persons who deposed in assessee's favour before the A.O. worsened the situation for the assessee as in the statements recorded in the remand proceedings where they stated that the funds were made available by the assessee to make such gifts in the circumstances the preponderance of probability has been considered by the Supreme Court in Sumati Dayal v. CIT, 214 ITR 301 (SC) and Durga Prasad More, 82 ITR 540(SC) come into play and the latest judgement of Jurisdictional High Court in the case of Nova Promoters also come into play.

6.7 It was stated that pursuant to the directions of the CIT(A) the enquiry report was submitted categorically stating that 21 donors were examined, opportunity to cross examine them was made available by the A.O to the assessee in the remand proceedings who failed to avail the same. Attention was invited to page 342 which is a statement of Shyam Bansal whose name is appearing at 81 C in the report of the AO appended at page 337 wherein he deposed against the assessee. Relying upon CIT v. Tin Box Co. 249 ITR 217(SC) it was stated was misplaced as the facts are distinguishable. Similarly reliance placed upon 1991 SSC page 68 it was argued in entirely different context should not be applicable to the facts on record; CIT v. Real Time Marketing 306 ITR 35 (Delhi) it was contended was not comparable and as such entirely distinguishable on facts; same was the position in the case of CIT v. Ashwani Gupta, 322 ITR 396 (Delhi) wherein the seized material was not confronted and opportunity to cross examine the statement of the person relied upon by the Revenue was not provided, it was considered by the Hon'ble High Court it was a violation of principles of natural justice which is not a fact in the present case. Relying upon Anantha Ram Veerasinghaiah 123 ITR 457 (SC) and Kale Khan Mohammad Hanif v. CIT, 50 ITR 1 (SC) the Court lays down the proposition that entry by entry the issue has to be explained.

6.8 Addressing the issue of Rs.80 lakhs in the departmental appeal it was contended that the said issue also can be decided here and need not be linked to assessee's appeal in which a prayer for restoration is being made. Relying upon the assessment order it was contended that no evidence has been relied upon by the CIT(A). Relying further upon the assessment order it was contended that the entire trade activity as per record is done by cash and it is not supported by evidence the assessee has refused to place the full facts before the A.O. and the only plea taken before the CIT(A) is that the assessee should be compared with itself and by making a comparison with his own past overall G.P. without providing vouchers ;the comparison with assessee's own activity in the past is ignored.

6.9 It was further submitted that the Supreme Court in Kishanchand Chela Ram v. CIT, 125 ITR 713 (SC) laid down the principle the evidence used is to be confronted is not applicable as the persons to be examined are assessee's own witnesses. It was contended that the addition needs to be confirmed. Specific attention was invited to Page 373, Question no.6; page 344, Q.No.8; page 355 Q. 8&9; page 360 Q.6; page 361 Q.8; page 362 Q. 10&11; page 366 Q. 6&7; page 367 Q.8; page 372 Q.4; page 373 Q. 6&7; page 374 Q. 8&9; page 380 Q. 5&6, page 384 Q.5; page 385 Q.8; page 386 Q.9; page 391 Q.6; page 392 Q.8; page 408 last question, page 409 Q.1; page 412 Q.3; page 413 last two questions; page 414 first question; page 418 Q.5; page 419 Q. 6&7; page 426 second last question; page 433 Q.8; page 440 Q.7; page 447 Q.9; page 451 Q.4&6; page 452 Q.8&9; page 458 Q.7&8; page 457 Q.6; page 463 Q.7&8; page 474 Q.5; page 471 Q.1 & 3rd last question; page 475 Q.4 & Q2 bottom and top wherein the statements of the donors show that they have given evidence contrary to what the assessee is claiming. On the basis of these submissions placed by the assessee himself in the paper book it was contended that the shifting stands of the donors does not inspire any confidence.

7. In reply the ld. A.R. vehemently contended that the assessee had demonstrated on the basis of facts on record that it was a travesty of justice. It was his stand that the pages in the paper book in which heavy reliance is being placed by the department have been put by the assessee himself as these documents were made available to the assessee afterwards by the Commissioner and since the assessee has nothing to hide these so called documents relied upon have been consciously placed on record by the assessee. The fact remains these statements were never confronted to the assessee; secondly some of these 21 persons have already given evidence in assessee's favour a few of these 21 donors have tried to give deposition in favour of the assessee which could not be done due to some strike in the office of the A.O. The fact also remain how evidences of only 21 persons can be used to ignore the evidence of all donors. It was also his stand that these evidences were recorded at the back of the assessee and were never made available to assessee at the stage of the proceedings before the CIT(A) which argument has not been assailed by the Revenue. These evidences it was argued were made available after the hearing. The department it was reiterated has not controverted these facts.

7.1 It was also argued that when the assessee states that the enquiry report of the A.O. is time barred then the said statement is not made in regard to any statutory violation and assessee cannot be faulted for objecting to the same as it is in the context of a reasonable understanding of a common man who is communicated that reply within a week or fortnight as the report has to be sent within a specific time for all he knows after the reply sent to the authority when no communication is received his bonafide belief that it cannot be resurrected after 1 year during which no questions were raised is not an impossible assumption. The understanding of the assessee that it is belated from the date when the enquiry report was sought i.e. May, 2006 is not beyond the realms of understanding. It was urged that nothing turns on it as in the facts of the present case the assessee is pleading an opportunity wherein he shall produce the 76 donors. It was reiterated that the enquiry report in the case has been submitted before the CIT(A) by different A.O. having Circle 3(1) range who did not care to examine, call for or confronted the assessee with any information except the vague unspeaking letter giving no reasons as to why the assessee should be present before a different AO in regard to the request of a different A.O. in regard to the appellate proceedings as such the response of the assessee being bonafide has to be considered as to why his presence was being sought and addressing the fact that the jurisdiction was before a different AO is not in anyway challenge the administrative procedural powers of the department. It is only expressing confusion on the part of the assessee. The presumption entertained by the department that the assessee is presumed to know when jurisdiction changes is not supported by any evidence and this one sole opportunity for being present on a specific date without setting out as to what reasons cannot be treated as a specific opportunity to examine or confront the donors who were to be examined at the assessee's back. On these facts it was stated that these documents were available on record and also discussed in the impugned order para 6.7 despite this there was no rebuttal on the part of the department as such justice has not been done is evident from this also. The assessee it was argued has claimed all along that some of the donors were taken by the assessee before the AO who were denied entry and on record there was no rebuttal to this written stand of the assessee and oral arguments trashing assessee's arguments that this fact be demonstrated by the assessee cannot be taken to be a rebuttal as it is for the department to show that there was no strike on the said date or why the entry was denied. Heavy reliance was placed upon the judgements cited earlier.

7.2. Responding to the arguments of the ld. D.R. in the departmental appeal it was contended that the A.O. did not believe the assessee in regard to the receipt from transportation business and having made an addition of Rs.80 lakhs himself reduced it from Rs.1,90,00,000/- and the telescoping was done by the A.O. The CIT(A) has taken into consideration the fact that the assessee in the year under consideration has changed his line of business as such in the year under consideration the assessee did not have the benefit of its own fleet of trucks as in the earlier years for this reason the assessee had to resort to hiring the trucks for transportation. The fact that the assessee's booking clerk did not make the necessary notings in the receipt it was argued is not such an error warranting an addition as the evidence is supported by G.R's wherein the nature of goods transported, stations from where transported, destination to which transported, the persons who booked and who were recipients their addresses etc. are all set out. Setting out the length, date and purpose of journey the description of goods transported etc. without which the goods cannot be transported, none of these findings have been demolished by ld. D.R. and she merely contended that the CIT(A) has not looked into the facts and ignored the findings in the assessment order. It was urged that the assessee has also explained as to why his G.P. in the specific activity has gone down and overall G.P. has gone upto 14% which reasons have not been demolished. It was contended that what is the basis of addition of Rs.80 lakhs, what stopped the A.O. from making addition of Rs. 8 crores instead of Rs. 80 lakhs it was contended that the present proceedings are travesty of justice and the assessee in all fairness for this reason was requesting that both the issues can go back to the A.O. He also placed reliance upon State of Orissa v. Maharaja Shri BP Singh Deo, 76 ITR 690 (SC), CIT v. K.Y. Pillaih & Sons, 63 ITR 411 (SC) and Jhandu Mal Tara Chand Rice Mills v. CIT, 73 ITR 192 (P&H).

8. We have heard the rival submissions and perused the material available on record. Before considering the request of the ld. A.R. that the issue may be restored to the AO on the undertaking given that all the 76 donors shall be produced on account of the fact that there has been travesty of justice at the stage of assessment proceedings; and, during the remand proceedings/ that, where the evidences relied upon before the A.O. were not considered by the A.O. as a result of which petition for additional evidence had to be moved (P.B. pages 193-320) which was accepted by the CIT(A) vide order dated 23.4.2007 and the issue was restored where upon a communication dated 30.4.2007 (P.B. pages 330-331) was received by the assessee some time thereafter from the A.O. DCIT/Circle 25(1), New Delhi in response to which the assessee responded vide letter dated 16.5.2007 (P.B. page 332)/ that, thereafter after a lapse of about a year communication dated 2.5.2008 (reproduced in the earlier part of this order) copy placed at page 332-A was received by the assessee some time before 15.5.2008 from ACIT, Circle 3(1), New Delhi requiring his presence at 11 AM on 15.5.2007 referring to which the argument has been/ that, this was a non speaking, vague communication received from a different A.O. and the assessee was present before that A.O. at 5 P.M;/that wherein even going by the departmental stand in the remand report out of the total donors numbering 76, where statements allegedly of only 21 donors had been recorded, that only 4 witnesses were stated to be present at 11.00 AM on 15.5.2008. In the above factual matrix ld. AR pressing various judicial pronouncements would want us to restore the issue to the AO requesting in the interest of substantial justice that an opportunity to produce 76 donors before the A.O. be granted. The said request has been opposed by ld. Sr. D.R. who would want us to confirm the order as statements of 21 donors on record demonstrate according to her the hollowness of the assessee's claim and that there has been no violation of the principles of natural justice and in fact the department has been more than fair.

8.1 However before we address the said request on the basis of facts available on record and the arguments addressed thereon, it would be appropriate to first deal with the arguments which have heavily exercised the attention of the parties before the Bench.

8.2 The Ld. Sr. D.R. has vehemently addressed the issue that the donors were the witnesses of the assessee, as such the argument that opportunity to cross examine them has not been provided is not to be accepted on the ground that; firstly the opportunity was provided which was not availed of and, secondly under law the Revenue was not required to do so and the opportunity has been provided only as an act of "fairness" on the part of the department.

8.3 The Ld. A.R. has equally vehemently contested the issue on the ground that the department has never acted fairly with the assessee as there was undue haste at the assessment stage and relevant evidences placed by the donors at the behest of the assessee were ignored by the A.O. and in fact do not find mention in the assessment order. Consequently as a result thereof petition for filing additional evidence was moved which was admitted against which action and decision no grievance has been posed by the Revenue; that in the remand proceedings due to change of jurisdiction etc. the assessee was not meted a fair treatment; the donors were examined at assessee's back which fact has not been rebutted by the Sr. D.R.;/ that, the statements relied upon by the A.O. were provided much after submitting the Remand Report as is evidenced by the Rejoinder thereto filed before the CIT(A) which also has not been opposed by the Sr. D.R.; the gap of 1 year before the time of recording statement; and a vague communication requiring assessee's presence for unstated vague reasons by an AO having a different jurisdiction it has been urged cannot be an act of fairness. Ld. A.R. has also assailed the argument and questioned the legality of the action as to how the statements of 21 donors can be utilized to dismiss the evidences of remaining 55 (76-21=55) donors;/ that, even in the case of these 21 donors whose statements are sought to be relied upon 4 of these very donors have in the assessment proceedings give statements in assessee's favour affirming the fact of gift, as such the legality of how greater precedence can be given to a statement recorded at assessee's back as opposed to an existing statement already on record has been questioned; without conceding he has also questioned the departmental stand that opportunity to cross examination if at all can be said to be given on facts is only qua 4 witnesses out of 21 witnesses how it can be said that all the 21 donors were available for cross examination in the said factual matrix it has been urged that it is not assessee's case that restoration is being sought so as to provide an opportunity to cross examine the 21 witnesses as it would not serve any purpose, the arguments have been advanced and facts have been referred to only to make out a case that injustice has occurred as there has been a travesty of justice at every stage and in order to set the injustice right the issue may be restored on the undertaking given that the donors shall be produced before the A.O.

8.4 Considering the above arguments and counter arguments on the issue, on which much rhetoric and eloquence has been exercised by the parties before the Bench we, on consideration are of the view that in the facts of the present case we are not called upon to decide whether the AO in the remand proceedings was required to provide an opportunity to the assessee to cross examine the 21 donors whose adverse statements were recorded.

8.5 The record shows that as per the repeated written stand of the department in the Remand Report; and again in the impugned order opportunity was granted the only person aggrieved by the action of the AO in not granting the opportunity could have been the assessee. Since as per the departmental stand opportunity was provided cognizance of which fact was taken by the CIT(A) in his unnumbered para above/para 6.7 at page 11 of his order, in the absence of any ground (para 6.7) as such whether the department was required to provide an opportunity or not to the assessee to cross examine its own witnesses is an academic exercise in the facts of the present case as the issue is any way fait accompli in the present proceedings in as much that opportunity was provided

8.6 In view of the fact that the parties have sought to vent much spleen on the issue we feel incumbent upon us to briefly touch the position qua the Indian Evidence Act, 1872.

8.7 It is trite law that Evidence Act is not strictly applicable to the income tax proceedings as the proceedings being quasi judicial proceedings as opposed to judicial proceedings the A.O. no doubt is not fettered by technical rules of evidence, however like any other judicial proceedings even in the income tax proceedings the issues are decided on the basis of evidences.

8.8 The law of evidence governs the means and the manner in which a party may substantiate his own case or refute that of the opponents. Evaluation of evidence is the measurement or the determination of its probatic value. In judicial proceedings the accurate measurement of the evidential value of facts is a condition and an endeavour towards the goal of the discovery of truth.

8.9 Evidences in income tax proceedings like judicial proceedings include both oral and documentary evidences. Oral evidences, inter alia, include statements which are made before the income tax authority in relation to matter of inquiry and may include examination of the assessee himself. Documentary evidences include all documents produced before the income tax authority for his verification/inspection. Oral evidences may include admissions made by a party. Admission made by a party if used adversely against another person has as per settled legal principles to be confronted to the party who is adversely affected and needs no case law to be referred to hold that opportunity to cross examine the party is necessarily to be provided. Though in reference to criminal proceedings, confession is a form of admission consisting of direct acknowledgement of the guilt but in income tax proceedings there is, as such, no substantial difference between confessions and admissions. In civil proceedings confession is a formal admission of some allegation by the other side. Admissions in the income tax proceedings are statements by a party of the existence of a fact which is relevant to an issue in dispute. Section 17 of the Indian Evidence Act, 1872 defines admission as an oral or documentary statement which suggests any inference as to any fact in issue or relevant fact. As per section 31 of the Indian Evidence Act admissions are not conclusive proof of the matters admitted, but they may operate as estoppel under the provisions of the law as contained. When section 31 of the Evidence Act says that an admission is not a conclusive proof, it does not mean that an admission is not a sufficient proof without corroboration, it only states the effect of the conclusiveness of an admission.

8.10 Thus even though the Indian Evidence Act is not strictly applicable to the Income tax proceedings, however, in the facts of statements on oath and retraction of the same Evidence Act necessarily has to be taken into consideration. The justice system in India has various instances where witnesses may turn hostile or unreliable and S.154 of the Indian Evidence Act, 1872 does contemplate the situation where a witness turns hostile/adverse or unfavourable. The Act permits the party whose witness becomes adverse or hostile to cross examine the said witness. The position is not so that the evidence of the witness on record before he turns hostile/adverse is washed-off nor will it be correct that the adverse evidence of that hostile witness is to be ignored. Even in situations where the witness proves an unreliable witness, the portion of the statement or evidence which is verified and verifiable that part of the testimony of the witness if found credit worthy can be taken cognizance of by the Court. The Apex Court in its various judgements has held that a declaration of witness to be hostile does not ipso facto reject the evidence and it is now well settled that the portion of evidence being advantageous to both the parties may be taken advantage of but the Court before whom such a reliance is placed shall have to be extremely cautious in such acceptance. It may be worth referring to the judgement of the Apex Court in the case of the State of UP v. Ramesh Prasad Mishra and another, AIR 1992 SC 2766 wherein it was laid down that it is equally settled law that the evidence of a hostile witness would not be totally rejected if spoken in favour of the prosecution or the accused but it can be subjected to scrutiny and that portion of evidence which is consistent with the case of the prosecution or the defence may be accepted.

8.11 Having thus considered the position under law in the facts of the present case since opportunity to cross examine "the adverse witness" has been given the Revenue cannot have any grievance if the assessee assails the opportunity so given on the grounds that it was a farce as there was no reasonable opportunity to defend its case. The assessee is very much within its right to make such an assertion based on document dated 2.5.2008 placed at page 332-A of the paper book that the AO does not care to either make the assessee aware that these were adverse statements by his own witnesses nor does it make it known that out of 21 adverse witnesses, 4 witnesses were available for cross examination by the assessee on a certain date. The said objection is supported by the Rejoinder placed on record (pages 339-341 of the paper book) filed before the CIT(A) in response to the Remand Report which further makes an allegation that the statements of the 21 donors recorded at assessee's back were never made available to the assessee any time before 30th May,2008 i.e. the date of the Remand Report. As such the communication dated 2.5.2008 can in no way be called a bonafide proper communication intended to provide a genuine opportunity on 15.5.2008 to enable the assessee to cross examine the 4 witnesses out of 21 as their statements were never made available to the assessee prior to the said date. As per the unrebutted Rejoinder on record they were provided only in February, 2009 much after the submission of the Remand Report dated 30.5.2008.

8.12 It is a fundamental principle of natural justice that no material should be relied upon against a party without giving him an opportunity of explaining the same. The right to know the materials on which the AO is going to take a decision in the remand proceedings is a part of the right to defend oneself. The AO, therefore, while taking action by virtue of the powers vested in him and before making an adverse order in pursuance of such power is obliged to provide to the affected person a 'reasonable opportunity of being heard. Such requirement underscores a point that the order is not dependent on the sweet will of the concerned authority. It will have to be according to law. It is justiciable.

8.13 Reasonable opportunity does not merely mean an opportunity being given. The opportunity has to be reasonable. There should be adequate notice. The notice must be of sufficient length to enable the defence or the case to be prepared. Not only should a person know the case which is made against him but he must also know what evidence has been considered for drawing a presumption affecting him and he must be given a fair and reasonable opportunity to rebut the presumption. Furnishing specific and intelligible reasons for the proposed action is the concomitant of the concept of reasonable opportunity. It is necessary because the person could make an effective representation only with reference to reasons set out. Such reasons cannot be vague and too general in nature. There must be specific and based on material facts. Omission to comply with the requirement of audi alteram partem, as a general rule, vitiates a decision. When there is violation of natural justice no resultant or independent prejudice need be shown as the denial of natural justice is in itself a prejudice. Rule of law and not the rule of discretion is the basic feature of Constitution of India.

8.14 Natural justice is necessarily presumes fair play in action. The celebrated English Cases Ridge v. Baldwin [1963] 1 QB539 and inWiseman v. Boreman [1971] AC 297 (HC) natural justice has been equated with 'fair play in action'. In Re K (H) (an Infant) (1967) 1 All ER 226 Lord Parker described natural justice as 'duty to act fairly'. Acting fairly, therefore, is one of the various facets of natural justice. It is no longer relevant to see whether a particular function is administrative or quasi judicial. It is not so much to act judicially but to act fairly, namely, the procedure is fair, just and reasonable in the particular circumstances of the case, is the pragmatic requirement of the fair play in action. In other words, the application of the principles of natural justice that no man should be condemned unheard intends preventing the authority from acting arbitrarily affecting the rights of the concerned parties. He who shall decide anything without the other side having been heard, although he may have said what is right, will not have done what is right. In other words, justice shall not only be done but should manifestly be seen to have been done. The procedure for affording an opportunity of hearing is as important as the decision on merits. The question merely is, in all conscience, has the authority been fair in dealing with a man? If it has been arbitrary, absent minded, unreasonable or unspeaking, it cannot deny that there has been no administration of fair play.

8.15 Duty to act fairly is a part of the fair procedure envisaged under articles 14 and 21 of the Constitution. Guarantee of article 14 is violated if fair hearing is not given. Every act of the public authority or those under public obligation must be informed by reason and guided by public interest. Fair hearing is a postulate of decision-making. Fair hearing means that not only the affected should know the case which is made against him, but he must also know what evidence has been considered for drawing a presumption affecting him and is given a fair and real opportunity to rebut the presumption. Such opportunity should be real and not ritualistic, effective and not illusory, and must be followed by fair consideration of the explanation offered and the materials available, culminating in an order which discloses reasons sufficient to show that the mind of the authority has been applied relevantly and rationally and without reliance on facts not furnished to the affected party.

8.16 Rules of natural justice are not embodied rules. They are only means to an end and not an end in themselves. Their aim is to secure justice or to prevent miscarriage of justice. It is, therefore, not possible, to make an exhaustive catalogues of such rules. Fairness has to be ensured, whatever be the rule. If fairness is shown by the decision-maker to the man proceeded against, the form and features of the rule is not of much relevance.

8.17 Examining the arguments of fairness on the part of the department which has been canvassed vehemently by the Sr. D.R. we find that unfortunately not only at the assessment stage paucity of time has be-devilled the issue but even in the remand proceedings the huge time gap between the recording of statements - on different dates in May,2007 till the submission of the remand report i.e. 30.5.2008; wherein the case was remanded to DCIT, Circle 25(1), New Delhi vide order dt. 23rd April,2007 the vague opportunity vide letter dt. 2.5.2008 giving time on 15.5.2008 by a different AO, ACIT, Circle 3(1) New Delhi can be said to be fair to the assessee. No doubt as far as the change of jurisdiction is concerned the department cannot be faulted with as it may have been an administrative necessity and an act presumed by settled legal decision to be in public interest-however the time lag of about a year has occurred wherein the officer who recorded the statement of 21 witnesses could not finalise the Remand report which remained pending juxtaposed with that fact that the response dated 16.5.2007 of the assessee made to DCIT, Circle 25(1) New Delhi remained on record when coupled with the time lag of 1 year on a receipt of letter dated 2.5.2008 sent by AO designated as ACIT, Circle 3(1), New Delhi instead of DCIT, Circle 25(1), New Delhi which further does not consider it necessary to mention the purpose of presence sought on a certain date as being the sole opportunity which was to be provided to the assessee in order to cross examine 4 adverse witnesses and not 21 adverse witnesses whose adverse statements were on record which too were never confronted to the assessee to enable him to make a comment since as per unrebutted rejoinder of the Remand Report on record the statements were made available only in February,2009 in these facts submitting the Remand Report on 30th May,2008 without making any effort to confront the statement cannot be called an act of fairness. In the facts where the last communication was letter dated 16.5.2007 as such a letter after 1 year dated 2.5.2008 there can be a legitimacy of expectation that either the letter was sufficient response and if not based on normal procedures followed in regular and natural sequence the assessee necessarily would have been informed in the circumstances where the CIT(A) wanted the Remand Report by a specific date in 2007 itself, as such on account of the urgency expressed by the CIT(A) and paucity of time at the hands of the assessee the assessee responded vide letter dated 16.5.2007. The time gap of 1 year where no reason for presence is disclosed the information given being scanty and vague can neither be called fair nor an act of reasonable legitimate expectation. A person normally expects to be treated reasonably by an administrative authority more so by a quasi judicial authority and such an expectation is a legitimate expectation in Societies governed by rule of law. Legitimate expectation is the hope or desire of a person to be treated fairly and judiciously where all evidences stacked against the person are duly informed and the right to representation is allowed to be exercised. In the facts of the present case after due consideration no doubt the change of jurisdiction cannot be held against the Revenue however if that has been the cause for delay then injustice has occurred qua the assessee.

8.18 It may not be out of place to state that opportunity should be a reasonable one where time is too short for compliance or the assessee has some reasons to require more time, reasonable time should be given for compliance as held in Nedum Chezhian (Dr. K.) v. DCIT[2005] 274 ITR 37 Madras an opportunity which is earlier granted cannot justify lack of reasonable opportunity during the last occasion as held in Bhagat Dharamchand Premsagar Charitable trust v. CIT [2005] 274 ITR 443 (P&H).

8.19 Thus in the above background we examine and consider the sagacity and wisdom of accepting the departmental stand of upholding the addition on the basis of legal principles discussed hereinabove and facts and arguments which we propose to deal with subsequently.

8.20 It is seen that the Sr. D.R. based on the statements of 21 witnesses which are contrary to the assessee's stated claim referring to the specific pages in the paper book referred to in the earlier part of the order would want us to uphold the entire addition.

8.21 However on giving our utmost due consideration we find ourselves unable to subscribe to the rash conclusion canvassed by the Sr. D.R. as we find no good reason except suspicion to hold how statements of 21 witnesses can be applied as a blanket to the remaining 55 donors. Apart from the fact that no legal support has been relied upon in support of the legality of the said action it is seen that the CIT(A) has not even cared to even look into the legal consequences of such an action in fact the said aspect appears to have escaped his notice. The fact has been lost sight of as to how even in the case of the 21 adverse witnesses, where as per the stated stand of the Revenue only 4 adverse witnesses were made available how the said act can be said to be sufficient compliance of the standard of legal requirement to which the department was adhering to has also been lost sight of. It has also escaped notice that there were consequences to be considered on facts where out of these 21 adverse witnesses the AO has not believed creditworthiness and genuineness, however, the factum of gift was affirmed. Thus the adverse statements should have been made available to the assessee before the submission of the Remand Report. The impugned order and the Sr. D.R. are silent on the principle of law which is being invoked to justify the legality and the sanctity of the impugned order in the face of these above glaring factual and circumstantial peculiarities of the case. Apart form a preconceived notion of suspicition and presumption of guilt no legal basis has been addressed. The fact also remains unassailed on record that there was a strike on a certain date when some of the adverse witnesses as per page 184 and 185 of the paper book (list attached on page 186) were present to depose in assessee's favour who are part of the 21 adverse witnesses apart from oral arguments making counter allegations that let the assessee provide that there was a strike there is no finding in the impugned order. Similarly the fact that out of the 21 donors 26 donors had filed confirmatory letters directly to the AO which were admitted as fresh evidence as mentioned thereof is not there in the assessment order in the face of all these facts there is an objection recorded in para 6.7 of the impugned order and repeated ad-infinitum before us that these were tutored statements as such in order to place all relevant facts the assessee who has been pleading for an opportunity to be allowed to produce the donors before the AO the said request cannot be lightly thrown aside. No arguments based on legal propositions have been advanced by the Sr. D.R. addressing the fact that where there are contradictory statements by 4 out of the 21 witnesses as to which statement should be relied upon and why, similarly how and why the statements of 21 witnesses should be given a blanket application to the remaining 55 witnesses has been left unaddressed in a zeal to canvass the confirmation of the addition sustained.

8.22 On account of these factual infirmities and legal lacunae, it is seen that fair hearing is necessary even when something is obvious. It cannot be denied on the ground that the result is obvious from the start and why force every body to go through the tiresome waste of time involved in framing the charges and giving an opportunity to be heard. The advantage of such hearing is that after discussion what appeared obvious from the start may not be so obvious, Unanswerable charges may be answered. The unalterable determinations of the authority may suffer a change. Further, the proposition that notice need not be given of a proposed action because there can possible be no answer to it, is contrary to the well-recognised understanding of the import of the rule of hearing. That proposition overlooks that justice must not only be done but manifestly seen to be done. The appearance of injustice is the denial of justice. Where there is violation of nature justice, no resultant or independent prejudice need be shown, as the denial of natural justice is, in itself, sufficient prejudice and it is no answer to say that even with observance of natural justice the same conclusion would have been reached. Reference in this context may be made to the well known judgements of the Apex Court in Union Carbide Corporation v. Union of India AIR 1992 SC 248 and SL Kapoor V Jagmohan AIR 1981 SC 136.

8.23 A failure of natural justice at the initial stage cannot be cured by sufficiency of natural justice at the appellate stage. If the natural justice is violated at that stage, the right of appeal is no so much a true right of appeal as a corrected initial hearing. Instead of a fair trial followed by appeal, the procedure is reduced to unfair trial. Megarry, J. in Leary National Union of Vehicle Builders [1971] 1 Ch 34 observed that if one accepts the contention that a defect of natural justice in the trial body can be cured by the presence of natural justice in the appellate body, this has the result of depriving the member of his right of appeal from the expelling body. If the rules and the law combine to give the member the right to fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and a fair appeal?

8.24 As observed, the expression "natural justice" is not capable of static or precise definition. It cannot be imprisoned in the strait-jacket of cast-iron formula. All it means fairness in action. The principles will vary with varying situations of statutory bodies and rules prescribed by the Act under which they function. They yield to and change with the exigencies of different situations and do not apply in the same manner to situations which are not alike. They are neither cast in a rigid mould nor can they be put in a legal strait-jacket formula. They are not immutable, but flexible.

8.25 Thus it can be culled out that the basic requirement of fair hearing are: effective notice; fair consideration of the explanation offered and materials available; and, non-reliance on facts not furnished to the affected party.

8.26 Accordingly for the reasons given hereinabove in the face of these glaring legal and factual shortcomings, we find ourselves unable to be persuaded by the powerful rhetoric of the Sr. D.R. and confirm the additions as suspicion however strong cannot take the place of facts.

8.27 Burden of proof means the duty of proving a disputed assertion or charge. It means two different things. It means sometimes that a party is required to prove an allegation before a judgment is given in his favour. It also means that on contested issue one of the two contending parties has to introduce evidence. The burden of proof in the matter of establishing a case may go on shifting, during the course of evidence, from one party to another, depending upon how far any of them by adducing sufficient evidence is successful in raising presumption in his favour. The burden of proof is of importance only where by reason of not discharging which is put on it, the party must eventually fail. Where, however, the parties have joined the issue and have led evidence, and the conflicting evidence can be weighed to determine which way the issue could be decided, the abstract question of burden of proof becomes academic. The general proposition of law is that the law relating to burden of proof becomes relevant only where there is no evidence on either side or such evidence is equally balanced. Instead of deciding the issue of burden of proof in the facts of the present case justice demands that the decision be based on established facts which exercise needs to be done. There cannot be one general or universal proposition of law which would the guiding yard stick for all cases each case has to be decided on the basis of facts and circumstances of each case.

8.28 In the light of the detailed discussion hereinabove on facts and law we are of the view that the assessee's prayer deserves to be accepted in the interest of justice and fair play which itself is the embodiment of justice. Accordingly the issue is restored to the file of the AO with the direction to decide the same in accordance with law by way of a speaking order after giving the assessee a reasonable opportunity of being heard. In the facts of the present case we take note of the undertaking given on behalf of the assessee that all the 76 donors shall be produced before the A.O. By way of abundant caution we add that in the eventuality the assessee does not produce the donors within reasonable time in terms of the undertaking given in this forum the A.O. shall proceed as per law.

9. Accordingly assessee's appeal is allowed for statistical purpose.

10. Since the major issue addressed in assessee's appeal is restored back and though the ld. A.R. has defended the impugned order qua the departmental appeal, but however has stated that the issue may be restored in all fairness. Accordingly after considering the arguments of the ld. Sr. D.R. discussed at length in the earlier part of this order we are of the view that in the peculiar facts and circumstances it would be appropriate to restore the issue also back to the AO with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.

11. In the result the departmental appeal is also allowed for statistical purposes.

12. In the result both ITA 2940/Del/2011 by the assessee and ITA 2812/Del/2011 by the Revenue are allowed for statistical purposes.