Date Of Judgment 25-06-2018, Ita v. The Commissioner Of Income Tax & Another

IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 25 DAY OF JUNE 2018 PRESENT THR HON’BLEK DR.JUSTICE VINBBT KOTHARI ANT) THR HON’BLE MRS..JUSTICK S.SUJATHA I.T.A. No.36/2017 BETWEEN : GOPAL S. PANDIT PROP. PANDIT DEVBLOPBRS‘EMPORIUM’, COMMERCIAL COMPLEX, —II] FLOOR, OLD PUMP WELL ROAD,KANAKANADY,MANGALORE - 575 OO2. |. APPEHLLANT| (BY SRI R.CHANDRASHEKAR, ADV.) AND : 1.|THE COMMISSIONER OF _INCOME TAX, C.R. BUILDING, MANGALORE - 575 OO1. «|THERE DEPUTLY COMMISSIONOF INCOME TAX, CENTRAL CIRCLE,OF INCOME TAX, CENTRAL CIRCLE, MANGALORE - 575 OO1. |~ RESPONDENTS (BY SRI JEEVAN J. NEE RALGI, ADV.) THIS INCOMB TAX APPBAL IS FILED UNDER SECTION|260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER|DATED 27.07.2016 PASSED IN ITA NO.1187/BANG/2013, FOR:THEASSESSMENTYEAR-2006-2007,PRAYING1. FORMULATE SUBSTANTIAL QUESTION OF LAW AS STATED:ABOVE. 2. ALLOW THE APPEAL AND MODIFY THE ORDER OF. TO | THERE INCOME TAX APPELLATE TRIBUNAL DATED 27.07.2016 IITA NO.1187/BANG/2013 AND DIRECT TO THE SECOND.RESPONDENT TO PASS APPROPRIATE ORDER IN ACCORDANCHWITH LAW. THIS APPEAL COMING ON FOR ADMISSION, THIS DAY,|Dr. VINEET KOTHARI, J., DELIVERED THE FOLLOWING: JU DGMENT Mr. R.Chandrashekar,Adv. for Appellant - Assessee_Mr. Jeevan R. Neeralgi,Adv. for Respondents —Revenue In the present Appeal filed by the Assessee againstthe Order of the learned Income Tax Appellate Tribunal, Annexure-A dated2/.07.2016,the following twopurported substantial questions of law have beensuggested by the Assessee._ l.Whether,OF|the factsandin|the circumstances of the case, the AppellateTribunal was correct in holding that JointCommissioner while granting an approvalu/s.153D of the Act, to an order passedu/s.153A of the Act, no opportunity need tobe provided to the Appellant? [TIWhether,Onlthe factsandIn the circumstances of the appellant’s case, theAppellate Tribunal is right in holding the seized material corroborates the income fixedunder the head “Pooja” though seizedmaterial does not disclose such income from“Pooja”? ? As far as first issue 1S concerned, we havealready dismissed the connected Appeal of the Assesseelisted today before us, namely,|I.T.A. No.34/20171n |the case of.‘Gopal. V. Pandit v. The Commissioner of Income Tax & Another’ in which we have held that inthe absence of specific provision in Section|153Dot theIncome Tax Act, 1961, |'Act’ for short] the presentAuthority, namely, Joint Commissioner is not expectedto give an opportunity of hearing to the Assessee beforegiving an approval to the Drait Assessment Order to bepassed by the lower Authority, namely, DeputyCommissioner. The relevant portion is quoted below forready reference. eSHaving heard the learned Counsel|for the parties, we are satisfied that theinternal guidelines issued by the Central Date of Judgment 25-06-2018, ITA No.36/2017 Gopal S. Pandit Vs The Commissioner of Income Tax & another . 4/8 Income Tax & Another’ in which we have held that inthe absence of specific provision in Section|153Dot theIncome Tax Act, 1961, |'Act’ for short] the presentAuthority, namely, Joint Commissioner is not expectedto give an opportunity of hearing to the Assessee beforegiving an approval to the Drait Assessment Order to bepassed by the lower Authority, namely, DeputyCommissioner. The relevant portion is quoted below forready reference. eSHaving heard the learned Counsel|for the parties, we are satisfied that theinternal guidelines issued by the Central Date of Judgment 25-06-2018, ITA No.36/2017 Gopal S. Pandit Vs The Commissioner of Income Tax & another . 4/8 Board of Direct Taxes, as urged by thelearned Counsel for the Assessee, bereft of|the statutory provisions in SectionYT53. ofthe Act cannot bind the approving Authority,namely, the Joint Commissioner to comply|with the principles of natural Justice by the|said Authority. The Assessing Authorityundoubtedly has of course given adequate|and reasonable opportunity of hearing to the|Assessee and all objections on merits wereconsidered by him. Merely because, Section|YT53of the Act requires a prior approval of|the Draft Assessment Order by the _ higheAuthority, namely, the Joint Commissioner inthe present case, because the AssessmentOrder was passed by the Authority below the|rank|of|theJointCommiussioner,theprovisions of the Act do not mandate that afresh round of opportunity of hearing shouldbe given to the Assessee by such Authority,|namely, Joint Commissioner also even for|approving Draft Assessment Order. It is not a|case where the Assessee did not have any|opportunity of hearing before any of the|Authorities to defend his case and some. 5/8 assessment of tax has been made againsthim fastening the liability of tax against the|Assessee. The Assessing Authority as wellas the two Appellate Authorities who have|concurrent powers of assessment as are|available with the Assessing Authority, have|admittedly heard the Assessee on the merits|of the case. Therefore, we are of the opinion|that no substantial question of law in this|regard can be said to be arising on the basis|of the office guidelines which are for internal|purposes of the Department. They are noteven Statutory instructions issued u/s. 119 of|the Act, which tf beneficial to Assessee have|been held to be binding on the Authorities ofthe Department. The Assessee has also notbeen able to point out any prejudice caused to|him on account of approving Authority not|giving him an opportunity of hearing.” 3.Even as far as second question raised beforeus iS concerned, we are of the opinion that the samedoes not give rise to any substantial question of law as.it is a matter of estimate based on the relevant material| Date of Judgment 25-06-2018, ITA No.36/2017 Gopal S. Pandit Vs The Commissioner of Income Tax & another . 6/8 seized during the course of search and the statementrecorded of the Assessee u/s. 132/4] of the Act as towhat was the income of the Assessee who was workingas Priest during the relevant period.| 4The relevant findings of the learned Tribunalare quoted below for ready reference. “O77. Wehaveheardthe|learnedAuthorised Representative as well as learnedDepartmental Representative and considered therelevant material on record. The first objection bythe learned Authorised Representative is that theoriginal assessment was completed under Section143(3) and that the original assessment wascompleted under Section 143(3) and in _ threassessment under Section 153A, no addition|can be made except based on seized material. Wefind that the Assessing Officer has placed a copyof the seized material at page 10 of theassessment order which clearly shows differententries recorded by the assessee including anentry of Mandir and Pooja of Rs.35 lakhs for theFLY.2005-06. Therefore, the addition made by theAssessing Officer is not based merely onstatement recorded under Section 132(4) of the 7/8 “O77. Wehaveheardthe|learnedAuthorised Representative as well as learnedDepartmental Representative and considered therelevant material on record. The first objection bythe learned Authorised Representative is that theoriginal assessment was completed under Section143(3) and that the original assessment wascompleted under Section 143(3) and in _ threassessment under Section 153A, no addition|can be made except based on seized material. Wefind that the Assessing Officer has placed a copyof the seized material at page 10 of theassessment order which clearly shows differententries recorded by the assessee including anentry of Mandir and Pooja of Rs.35 lakhs for theFLY.2005-06. Therefore, the addition made by theAssessing Officer is not based merely onstatement recorded under Section 132(4) of the 7/8 Act. It is pertinent to note that the assessee in theStatement had estimated the undisclosed incomeof Rs.75 lakhs for 3 assessment years underconsideration which matches the figures andamounts shown in the seized document relatingto Pooja income of Rs.35 lakhs, Rs.20 lakhs andRs.20 lakhs for the Assessment Year 2006-07 to)2008-09 respectively. We find that there is noambiguity in the statement of assessee regardingthe Pooja income which has been _ clearlcorroborated by the seized material. Thus whenthere is a sufficient evidence seized materialwhich corroborates the statement of the assesseerecorded under Section 132(4) on 23.2.2009 thenthe subsequent retraction of the statement by theassessee without any corroborating evidencecannot be accepted as the assessee has notexplained the statement and how the incomeShown in the seized material is not correct.Therefore mere retraction of statement withoutexplaining circumstances as well as corroboratingevidence, it cannot be accepted being an afterthought. Accordingly, we do not find anysubstance in this ground of the assessee and the|Same is dismissed.” Date of Judgment 25-06-2018, ITA No.36/2017 Gopal S. Pandit Vs The Commissioner of Income Tax & another . 8/8 5.Having heard the learned Counsel for the parties, we are satisfied that no substantial question of law arises. The Appeal of the Assessee is lable to bedismissed and the same is accordingly dismissed. No COSTS. AN /- Sd/-.JUDGE| Sd/-.JUDGE|