2018 (7) TMI 51 - HC - Income Tax

High Court: No hearing needed for Draft Assessment Order approval under Income Tax Act Section 153D. Internal guidelines not binding.

The High Court held that the Joint Commissioner is not required to provide a hearing to the Assessee before approving the Draft Assessment Order under ... 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 far as first issue is concerned, we have already dismissed the connected Appeal of the Assessee listed in the case of 'Gopal. V. Pandit v. The Commissioner of Income Tax & Another’[2016 (8) TMI 208 - ITAT BANGALORE] in which we have held that in the absence of specific provision in Section 153D 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:- No 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] as to what was the income of the Assessee who was working as Priest during the relevant period - when there is a sufficient evidence seized material which corroborates the statement of the assessee recorded under Section 132(4) on 23.2.2009 then the subsequent retraction of the statement by the assessee without any corroborating evidence cannot be accepted as the assessee has not explained the statement and how the income shown in the seized material is not correct - decided against assessee. Issues:1. Whether Joint Commissioner needs to provide an opportunity of hearing to the Assessee before granting approval u/s.153D of the Income Tax ActRs.2. Whether the seized material corroborates the income fixed under the head 'Pooja' even if the seized material does not disclose such incomeRs.Analysis:Issue 1:The High Court dismissed the Appeal filed by the Assessee against the Order of the Income Tax Appellate Tribunal. The Court held that the Joint Commissioner is not required to provide an opportunity of hearing to the Assessee before granting approval to the Draft Assessment Order under Section 153D of the Income Tax Act. The Court emphasized that internal guidelines without statutory provisions cannot bind the approving Authority to comply with the principles of natural justice. The Court noted that the Assessee had ample opportunity to present objections on merits before the Assessing Authority and the two Appellate Authorities. The Court concluded that no fresh round of hearing is mandated for the Joint Commissioner even for approving the Draft Assessment Order.Issue 2:Regarding the second issue, the Court found that it does not give rise to any substantial question of law. It was considered a matter of estimate based on relevant seized material and the Assessee's statement recorded under Section 132(4) of the Act. The Court referred to the findings of the Tribunal, which highlighted that the addition made by the Assessing Officer was not solely based on the statement but on seized material showing entries related to 'Pooja' income. The Court noted that the Assessee's estimated undisclosed income matched the figures in the seized document, indicating clear corroboration. The Court emphasized that the Assessee's subsequent retraction of the statement without adequate explanation or corroborating evidence could not be accepted. Therefore, the Court dismissed the Assessee's grounds, finding no substance in the argument.In conclusion, the High Court found no substantial question of law in both issues raised by the Assessee. The Appeal was dismissed, and no costs were awarded.