TaxTMI 
TaxTMI 
2020 (1) TMI 1027
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....11.2015. The search action pertaining to the above Hospital Group. The residence premises of the assessee located at 23-24, Dixit Enclave, Narmada Road, Jabalpur was also covered under section 132 of the Act. The assessee filed return of income for the A.Y. 2016-2017 under appeal declaring total income of Rs. 50,82,050/-. The assessee derives income from business, rental income and income from other sources. The A.O. issued statutory notices which were complied with by the assessee. The A.O. referred to letter of the assessee Dated 05.01.2016 in which under different heads assessee made the surrender of income which includes surrender of Rs. 2.50 crores on account of undisclosed income in respect of the loose papers found during the course of search at the residential premises and at the business premises. During the course of search, various loose papers were found and seized from the premises of the assessee which were confronted to assessee during the course of post-search enquiry and assessee on that account has surrendered Rs. 2.50 crores as undisclosed income on account of incriminating loose papers. The relevant portion of the letter of the assessee Dated 05.01.2016 is scann....
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....s filed at page-97 of the PB in which the A.O. requested for grant of approval under section 153D in which A.O. has mentioned that he has verified the material and only draft order have been sent to the JCIT for approval. PB-96 is approval of JCIT Dated 22.12.2017 which letter have been received on 22.12.2017 only. He has submitted that JCIT did not examine any material and he believed that all the facts have been verified by the A.O. No material was produced before him including the assessment record. Thus, no relevant documents were produced before JCIT before granting approval under section 153D of the I.T. Act. Approval have been granted on the same day on 22.12.2017 despite the fact that A.O. was having his office at Jabalpur and JCIT was holding his Office at Bhopal in which there is a significant distance. No record have been produced before JCIT, only draft order have been sent. The A.O. in his letter did not mention if he has forwarded any assessment record before JCIT for his perusal before granting approval under section 153D. No statement of assessee have been recorded under section 132(4). The JCIT did not see any seized material or submission of the assessee brought o....
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....r of the assessee Dated 22.11.2015. PB-76 is letter of the assessee Dated 05.01.2016 and no statement of assessee have been recorded during the course of search. Learned Counsel for the Assessee submitted that A.O. was not stopped to make any enquiry. The A.O. has made detailed enquiry and all the queries of the A.O. have been responded to. The A.O. did not refer to any loose paper in the assessment order to prove that addition is based on any incriminating material. There is no evidence of any constant touch between A.O. and the JCIT. He has, therefore, submitted that approval granted under section 153D is invalid and bad in Law and as such assessment order is liable to be declared as null and void. There is no basis to make any addition on merit as well. 4. On the other hand, Ld. D.R. relied upon the impugned orders and submitted that there is always constant touch between the A.O. and JCIT. The JCIT has monitored the assessment. There is no disclosure of assessee during the course of search of Rs. 2.50 crores because no statement was recorded during the course of search. The assessee filed written letter Dated 05.01.2016 after discussion with the A.O. in post-search invest....
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....f income, therefore, it amounts to retraction from the earlier letter Dated 05.01.2016. The Hon'ble Allahabad High Court in the case of CIT vs., Dilbagh Rai Arora [2019] 308 CTR 502 (All.) held as under : "If the person can explain with supportive evidence, material or otherwise that the admission by him earlier under s. 132(4) is not correct or contain a wrong statement or that a true state of affairs is different from that represented therein, addition cannot be made solely relying on statement under s. 132(4)." 5.1. The Hon'ble Punjab & Haryana High Court in the case of Krishan Lal Shiv Chand Rai vs., CIT [1973] 88 ITR 293 (P&H) held that "it is an established principle of Law that a party is entitled to show and prove that an admission made by him was in fact not correct and true." 5.2. The Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co., vs., State of Kerala & Another [1973] 91 ITR 18 (SC) held that "assessee should be given an opportunity to show that admission is incorrect or does not show correct state of facts." 5.3. Since in the present case the letter Dated 05.01.2016 was qualified and subject to documents to be supplied by the A.O, i....
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....e above observations, the draft assessment orders are hereby approved, as required under the provisions of section 153D of the Income Tax Act in the following cases of JHRC & Metro Group : S.No. Name of the Assessee PAN Draft Order u/s. A.Yrs. 1. Shri Tara Chand Khatri AIJPK7280K 153A 2010-11 to 2016-17 2. Shri Ghanshyam Das Khatri AHMPK5704A 153A 2010-11 to 2016-17 4. It should be ensured that the final assessment orders are passed and served on the assessee well in time. A copy of the final assessment order should be submitted this office for record. Sd/-Alpesh Parmar Joint Commissioner of Income Tax Central Range, Bhopal." 6.2. The letter of the A.O. requesting for grant of approval under section 153D is filed at page-97 of the PB. In the said letter the A.O. has merely stated that he has verified the seized material and given an opportunity to the assessee before passing the draft assessment order. He has referred to draft assessment order only and sought approval from the JCIT and the Office of the A.O. is situated at Jabalpur. The JCIT is having his Office at Bhopal. Nothing is brought on record if any material....
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....Delhi Tribunal), in which in paras 11 to 14 the Tribunal held as under : "11. On Ground No.1.3, Learned Counsel for the Assessee submitted that no proper sanction as required under section 153D have been received, therefore, assessment order is illegal and bad in Law. Learned Counsel for the Assessee referred to page 46 of the assessment order and submitted that Addl. CIT, Central Range, Chandigarh communicated the sanction under section 153D to the A.O. on 31st January 2014 and the assessing officer on the same day i.e., 31st January 2014 passed the assessment order. He has referred to page-48 of the paper book, which is copy of Fax message dated 5th February 2014 in connection with the communication of sanction/approval of Addl. CIT. PB-31 is the reply filed before A.O. by assessee on 29th January 2014. PB-469 is the reply to the RTI application filed by assessee dated 6th June 2018, in which no specific reply have been given by the Department as to by which mode the assessment record was forwarded by A.O. to Addl. CIT as no such record available and how the sanction/approval was communicated to the assessing officer. PB-46 is letter of the assessing officer to the Addl.....
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....val in this case though not conveyed to the Assessing officer on time, but, is also given in a mechanical manner. Learned Counsel for the Assessee relied upon Judgment of the Honorable Bombay High Court in the case of Pr. CIT vs Smt. Shreelekha Damani in Income Tax Appeal No. 668 of 2016 dated 27th November 2018. He has submitted that the draft assessment order was sent from Faridabad to Chandigarh on 30th January 2014 and it is not clarified as to how it was sent, whether through messenger or courier or any other valid mode. Therefore, no time was left to consider the assessment record. Since last reply is filed on 29th January 2014, therefore, there was no application of mind by the assessing officer or the Addl. CIT to pass the assessment order within the time. Learned Counsel for the Assessee also relied upon order of ITAT, Jodhpur Bench in the case of Smt. Indira Bansal vs., ACIT (2018) 192 TTJ 968 (Jodh.). Learned Counsel for the Assessee, in the circumstances, submitted that since last reply was filed on 29th January 2014, which contains more than 500 pages, therefore, it is highly improbable that assessing officer who is stationed at Faridabad, would have ....
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....ear referred to in clause (b) of sub-section (1) of Section 153A or assessment year referred to in clause (b) of sub-section (1) of Section 153B except with the prior approval of Joint Commissioner." Therefore, for passing the impugned assessment order, the assessing officer who is in the rank of DCIT shall have to obtain prior approval of JCIT. The Learned Counsel for the Assessee referred to PB-31, which is last reply filed before assessing officer on 29th January 2014. The assessing officer written a letter to the Addl. CIT, Chandigarh on 30th January 2014 sending a draft assessment order for his consideration and approval in terms of Section 153D of the Income Tax Act, copy of which is filed at page 46 of the PB. The assessing officer is stationed at Faridabad. However, the Addl. CIT is stationed at Chandigarh. The Addl. CIT, Chandigarh granted approval under section 153D of the Income Tax Act on 31st January 2014, copy of which is, filed at page 47 of the paper book and the same reads as under : "No.Addl.CIT/Central/Chd./2013-14/616. Office of the Addl. Commissioner of Income Tax, Range Central, Chandigarh. Dated the 31st J....
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....reelekha Damani. ..Respondent. Mr. A.R. Malhotra a/w Mr. N.A. Kazi for the appellant Mr. Jehangir Mistri, Senior Counsel a/w Mr. Atul Jasani for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. DATED : 27th NOVEMBER, 2018. P.C. 1. This appeal is filed by the Revenue challenging the judgment of Income Tax Appellate Tribunal ("the Tribunal" for short) dated 19th August, 2015. 2. Following question was argued before us for our consideration "Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that there was no 'application of mind' on the part of the Authority granting approval ? 3. Brief facts are that the Tribunal by the impugned judgment set aside the order of the Assessing Officer passed under Section 153A of the Income Tax Act, 1961 ("the Act" for short) for Assessment Year 2007-08. This was on the ground that the mandatory statutory requirement of obtaining an approval of the concerned author....
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.... 31st December, 2010. Hence, there was not enough time left to analyze the issues of draft order on merit. Therefore, the order was approved as it was submitted. Clearly, therefore, the Additional CIT for want of time could not examine the issues arising out of the draft order. His action of granting the approval was thus, a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectly justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted or the approval granted must be recorded. Nevertheless, when the Additional CIT while granting the approval recorded that he did not have enough time to analyze the issues arising out of the draft order, clearly this was a case in which the higher Authority had granted the approval without consideration of relevant issues. Question of validity of the approval goes to the root of the matter and could have been raised at any time. In the result, no question of law arises. 8. Accordingly, the Tax Appeal is dismissed." ....
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....during the course of hearing to the effect that if Addl. CIT has gone through the assessment record, before accepting the draft assessment order. Thus, there was no application of mind on the part of the Addl. CIT before granting approval. The Addl. CIT, Chandigarh has merely gone through the draft assessment order as per PB-47. Therefore, the contention of Learned Counsel for the Assessee is justified that the approval was granted in a most mechanical manner without application of mind and such approval was intimated to assessing officer only on 5th February 2014, after passing of the assessment order on 31st January 2014. The above decisions are clearly applicable to the facts and circumstances of the case. In view of the above discussion, we are of the view that no valid approval/sanction have been granted by the Addl. CIT, Chandigarh before passing the assessment order in the matter. The requirement of Section 153D of I.T. Act, 1961, are not satisfied in this case. We accordingly hold that entire assessment order is vitiated and is null and void. We, accordingly, set aside the orders of the authorities below and quash the assessment order in the matter. Resultantly all....