2014 (11) TMI 322 - HC - Income Tax

Materials properly scrutinized or not - Whether the Tribunal has not considered the plea of the assessee that the AO has not scrutinized the materials submitted before him and made additions based on a priori considerations Held that - The case of the assessee was decided on the basis of his own sworn statements dated 29.8.2006 and 10.10.2006 and admitted documents - with regard to the undisclosed income of ₹ 52,73,920/- supported by printouts, in the sworn statement dated 29.8.2006, the assessee says that he had separate business income which was not included in his income tax returns - admission of undisclosed income is categoric and undisputed - The assessee in the sworn statement made on 10.10.2006, stated that outstanding loans to the tune of ₹ 25 Lakhs to 30 Lakhs are to be recovered with interest at the rate of 18% - This is a clear admission - This amount has also been calculated and added as undisclosed income - When there is a clear and categoric admission of the undisclosed income by the assessee himself, there is no necessity to scrutinize the documents - The document can be of some relevance, if the undisclosed income is determined higher than what is now determined by the department - loose sheets found during the search are not the sole basis for determining the tax liability - It is a piece of evidence to prove undisclosed income - The printout statements of undisclosed income is not disputed by the assessee and in his sworn statements it is accepted - outstanding loans to be recovered are in the range of ₹ 25 Lakhs to 30 Lakhs thus, the order of the Tribunal is upheld Decided against assessee.

Summary

Issues:
1. Dismissal of appeals challenging the order of the Income Tax Appellate Tribunal.
2. Alleged insufficiency of time in providing a reasonable opportunity during assessment under Section 153A and 153C of the Income Tax Act.
3. Tribunal's decision not to remand the case to the assessing officer despite passing assessment orders at the fag end of the year without looking into search materials.

Issue 1: Dismissal of Appeals:
The appellant challenged the order of the Income Tax Appellate Tribunal regarding additions made in the assessment years 2001-2002 to 2007-2008. The substantial questions of law raised included the dismissal of appeals without allowing remand based on mere assumptions. The Tribunal upheld the assessment orders passed by the authorities below, leading to the appellant's grievance that the Assessing Officer did not scrutinize the materials submitted before making additions based on sworn statements and admitted documents.

Issue 2: Alleged Insufficiency of Time:
The appellant contended that there was a clear insufficiency of time provided during the assessment under Section 153A and 153C of the Income Tax Act. The Assessing Officer completed the assessment based on admissions made by the appellant during the search and seized records. The appellant's objections were rejected on grounds that the materials submitted at the fag end of the assessment were unstructured and spread over without a clear time-frame reference. The Assessing Officer determined undisclosed income, leading to penalty proceedings.

Issue 3: Failure to Remand the Case:
The Tribunal, despite acknowledging that assessment orders were passed at the fag end of the year without considering search materials, chose not to remand the case to the assessing officer. The appellant argued that the Tribunal should have remitted the case rather than adjudicating on merits. The Tribunal relied on the appellant's sworn statements dated 29.8.2006 and 10.10.2006, where the appellant admitted to undisclosed income and outstanding loans, leading to the conclusion that no further scrutiny of documents was necessary.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the appellant's clear admission of undisclosed income and outstanding loans in sworn statements. The court found no error in the procedure followed by the Assessing Officer and dismissed the appeals, stating that the entire exercise to tax undisclosed income was straightforward and upheld the Tribunal's order.