JUDGMENT
P. Venkatarama Reddy
1. This appeal under Section 260A of the Income-tax Act, 1961, arises out of the order of the Income-tax Appellate Tribunal confirming the assessment made under Section 158BG of the Income-tax Act which is part of Chapter XIVB. An amount of Rs. 27,82,682 was taken as undisclosed income representing the unexplained cash credits and the interest thereon. The cash credits recorded in the books of account of the appellant firm were treated as bogus and the same were taken as income by applying Section 68 of the Income-tax Act, The alleged creditors were examined in the presence of the managing partner of the appellant firm. The conclusions were based mainly on the statements of the alleged creditors recorded by the Assessing Officer. Certain other factors were also taken into consideration by the Assessing Officer. The Tribunal confirmed the assessment rejecting the assessee’s objections both on the question of jurisdiction as well as on the merits of the assessment.
2. We are of the view that the following substantial questions of law do arise for consideration :
“1. Whether, on the facts and in the circumstances of the case, the resort to assessment under Section 158BG read with Sections 158BB and 158BA is within the jurisdiction of the assessing authority ?
2, Whether there was denial of reasonable opportunity to the appellant for the reason that after the creditors were examined by the Assessing Officer in the presence of the managing partner of the appellant, no opportunity was given to the appellant to explain the statements or to cross-examine them ?”
3. A contention has also been raised that the petitioner ought to have been given an opportunity before approval was granted by the Commissioner under Section 158BG. We cannot countenance the proposition that the principles of natural justice should be imported into Section 158BG. It would be wholly inappropriate to insist on the observance of the principles of natural justice while according approval under Section 158BG which is essentially in the nature of an administrative function of the Commissioner. It may be in the nature of additional safeguard as far as the assessee is concerned. But, obviously the provisions of Section 158BG, do not contemplate that the Commissioner should come face to face with the assessee while according approval for the proposed assessment under Chapter XIVA. Apart from the language of the provision, the nature of the functions confided to the Commissioner under Section 158BG is inconsistent with the application of the principles of natural justice. We do not
think that this contention raised by learned counsel for the petitioner merits further examination.
4. The I. T. T. A. is admitted.