2018 (6) TMI 1660 - HC - Income Tax

Denial of natural justice - Joint Commissioner while granting an approval u/s.153D to an order passed u/s.153A gave no opportunity to be provided to the Appellant - HELD THAT - As in the case of 'Gopal. V. Pandit 2018 (7) TMI 51 - KARNATAKA HIGH COURT in which as regards first question, we have held that in the absence of specific provision in Section 153D of the Income Tax Act, 1961 the present Authority, namely, Joint Commissioner is not expected to give an opportunity of hearing to the Assessee before giving an approval to the Draft Assessment Order to be passed by the lower Authority, namely, Deputy Commissioner. Seized material corroborates the income fixed under the head Pooja - Whether seized material does not disclose such income from Pooja ?- HELD THAT - We have held that the same does not give rise to any substantial question of law as it is a matter of estimate based on the relevant material seized during the course of search and the statement recorded of the Assessee u/s. 132 4 of the Act as to what was the income of the Assessee who was working as Priest during the relevant period. Unexplained expenditure - HELD THAT - Margins are not recorded in the books of accounts therefore those were considered by the Assessing Officer as payment out of books. As it is apparent from these numbers written in the margin that a proper care was taken for distinguishing the amounts in thousands by putting a point . before the number as in the case of last number written as 0.5. Therefore the other numbers written in the margin with the dates clearly indicates the payment made by the assessee in lakhs. Therefore we do not find any error or illegality in the orders of the authorities below on this issue and confirm the addition

Summary

Issues:
1. Opportunity of hearing to the Assessee before granting approval u/s.153D of the Act.
2. Corroboration of income under the head "Pooja" based on seized material.
3. Treatment of a sum of ?19 lakhs as unexplained expenditure assessable in a specific year.

Analysis:

Issue 1:
The Appellate Tribunal was correct in holding that the Joint Commissioner, while granting approval u/s.153D of the Act, did not need to provide an opportunity of hearing to the Appellant. The High Court dismissed the connected Appeal of the Assessee, emphasizing that the Act does not mandate a fresh round of hearing for the Assessee by the approving Authority (Joint Commissioner) after the Assessing Authority and Appellate Authorities have already heard the Assessee on the merits of the case. The Court ruled that no substantial question of law arises concerning the lack of opportunity for the Assessee in this context.

Issue 2:
Regarding the corroboration of income under the head "Pooja" based on seized material, the High Court upheld the Tribunal's decision. The seized material, including entries related to "Mandir and Pooja," supported the income fixed by the Assessing Officer. The Court noted that the Assessee's statement under Section 132(4) matched the figures in the seized document, indicating income from "Pooja." The Court emphasized that the retraction of the statement without sufficient explanation or corroborating evidence could not be accepted. Therefore, the Court found no substance in the Assessee's argument and dismissed the appeal on this ground.

Issue 3:
The High Court addressed the treatment of a sum of ?19 lakhs as unexplained expenditure assessable in a specific year. The Assessing Officer considered this amount as ?19 lakhs based on seized material, despite the Assessee's claim that it represented only ?19,000. The Court reviewed the arguments presented by both parties and confirmed the addition of ?19 lakhs as sustained by the CIT [Appeals]. The Court found no error or illegality in the orders of the authorities below on this issue, leading to the dismissal of the Assessee's appeal.

In conclusion, the High Court found no substantial question of law in the issues raised by the Assessee and dismissed the appeal accordingly, without imposing any costs.