Salary income – additions towards difference between returned income and as per 26AS – there was dispute between employee and employer therefore, it was necessary for the AO to examine and allow cross examination.

Salary income – additions towards difference between returned income and as per 26AS – Addition being difference between Form No. 16 as provided by the employer and as per ITR – Denial of natural justice – no opportunity to defend given to assessee – HELD THAT:- AO believed the Form No.16 submitted by the employer of the assessee and disbelieved the Form No.16 submitted by the assessee and treated it as false. However, before treating the same the AO should have verified the correct facts from the employer by calling him and producing records. The perusal of letter received on 23.12.2016 by the AO from Sparsh Technologies (PB-21) shows that they have not furnished individual cheque/ transfer details of the employee on the ground that that same is not traceable in the bank statement. Therefore, the gross salary paid by them and claimed to be at ₹ 87,77,543 is not ascertainable. However, this could be ascertained from individual ledger account of salary or from the payroll registers maintained by the employee. Further, the 26as part And B are not verified by the AO as the assessee has only submitted Form No. 16 with part B.

The mismatch between bank account of the assessee and salary credited by the employer needs verification to arrive at correct amount and reason for claiming deduction / exemption under chapter VIA. AO has not allowed proper opportunity of being heard nor allowed opportunity of cross examination of the employer to the assessee before accepting his supply. We find that there was dispute between employee and employer therefore, it was necessary for the AO to examine and allow crossexamination. The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society.

We restore this appeal to the file of the AO for reconsideration all grounds of appeal after allowing proper opportunity of being heard in accordance with law and allowing cross examination of the employer of the assessee to the assessee. The AO may issue summons under section 131 of the Act to the employer and ask to produce salary register and payments details and copy of bank statement to verify the payment made to the assessee – Decided in favour of assessee for statistical purposes

SHRI RAMESH A MARAND VERSUS ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7 (1) AHMEDABAD

I.T.A No.2887/AHD/2017 (Assessment Year:2014-15)