TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 909
X X X X Extracts X X X X
X X X X Extracts X X X X
....sen. 4. Learned Counsel for the Assessee mainly argued in ITA.No.1813/Del./2019 in respect of Shri Sanjay Duggal as a lead case and references also made to all the remaining appeals as well. 5. Ld. CIT(A) recorded the facts of the case in detail under the Head "Background of the Case" in the impugned order which refers to the factual position in respect of all the above Assessees. The background of the facts are as under : 5.1. A search and seizure operation was conducted on 29.12.2015 against Shri Rajnish Talwar [who was Ex- General Manager (Sales) ] of M/s. Jagatjit Industries Ltd., [M/s. JIL]. Shri Sanjay Duggal [who was Ex.DGM (Sales) of JIL], their family Members and MAPSKO Group. The basic issue of search and seizure was deposit of huge money in the bank accounts of M/s. Alfa India which is proprietary concern of Shri Arun Duggal brother of Shri Sanjay Duggal and transfer of huge amounts from bank accounts of M/s. Alfa India to various bank accounts maintained by Shri Rajnish Talwar and his family Members and Shri Sanjay Duggal and his family Members. 5.2. These accounts were maintained in various branches of South India Bank. As per the submissions made by the Assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Talwar Rohini South IndianBank 8. 555.53.204 Sanjay Duggal Faridabad South Indian Bank 9. 555.53.205 Arun Duggal Faridabad South Indian Bank 10. 555.53.206 Neeru Duggal Faridabad South Indian Bank 11. 555.53.207 Nany Duggal Faridabad South Indian Bank 12. 555.53.208 Poonam Duggal Faridabad South Indian Bank 13. 555.53.209 Neha Duggal Faridabad South Indian Bank 5.5. In view of the large value transactions in these accounts, the South Indian Bank branch authorities had requested the account holders to submit copies of their respective PAN Cards. But every time the customers either pretended that they have no PAN card or refused to provide the PAN details. It was found by the bank authorities that the above mentioned individuals were having PAN cards. Subsequent to the request of the bank officials for the information regarding source of the funds in the account, the proprietor of the current account, i.e., M/s. Alfa India closed the A/c No. xxxx2431 on 09.08.2012. The current account in the name of M/s Alfa lndia received large value credits by way of proceeds of collection cheques. All this money was transferred to 14 different bank accounts, where....
X X X X Extracts X X X X
X X X X Extracts X X X X
....identified and similar pattern was observed that cheques deposit from liquor distributors and ultimately transferred to the bank accounts of members of Duggal & Talwar families, from where cash was withdrawn. The details of the three new bank accounts of M/s Alfa India, discovered during the post survey period which were maintained with South India Bank, Gurgaon, Faridabad and Rohini, New Delhi i.e., A/c. Nos.xxx0213, xxxx0004 and xxx2186 respectively. In the post search and survey period, enquiry was conducted from various parties such as M/s Jagatjit Industries Limited, Shri Sanjay Duggal, Shri Rajnish Talwar, different liquor distributors of Haryana etc., 5.10. The enquiry was conducted to identify/determine the accuracy of the events/processes, in relation to cheque deposits into the bank accounts of M/s. Alfa India and withdrawal of cash/utilization of cash. The purpose of the enquiry was to highlight the role of different persons/ entities, in relation to events relating to M/s. Alfa India. The statement given by Sh. Rajnish Talwar and Sh. Sanjay Duggal were analyzed to determine the credibility of the statement given by them in relation to cheque deposits into the bank acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een M/s Om Prakash Singla AOP & M/s Jagatjit Industries Limited. v. Sh. Sanjay Duggal stated that sales were under-reported or under-invoiced in the books of account of M/s Jagatjit Industries Limited and the payments made to M/s Alfa India was to against such (out of books) portion of these sales transactions. vi. The AO has also noted, from the perusal of books of account of M/s Jagatjit Industries Limited, that the sales were not under-reported or under-invoiced. The collection for the sales made by the M/s. Jagatjit Industries Limited was ensured by means of collection of cheque and giving of rebate and discount to the liquor distributors. It is also noted by the AO that receipt in the bank account of M/s Alfa India has not been recognized as collection receipt in the books of account of M/s Jagatjit Industries Limited." 5.13. In the impugned order, the statement Dated 29.12.2015 of Shri Sanjay Duggal before DDIT (Inv.) is reproduced seeking explanation of assessee with regard to M/s. Alfa India in the business for promotional activities and to explain modus operandi adopted for making unaccounted sales by JIL in which it was explained that M/s. JIL used to sell liquor pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....beneficiary to whom pay-off/gift were made was provided by Sh. Rajnish Talwar/ Sanjay Duggal. The A.O. has further noted that Shri Talwar's claim cannot be cross verified due to non-furnishing of details by him in this regard. As per the AO, no evidence of gift purchased for distribution to key person/ sales team of distributors of M/s Jagatjit Industries Limited, was provided by Shri Rajnish Talwar. The AO also observed that it seemed odd, that gifts were procured by Head Office of M/s Jagatjit Industries Limited, as claimed by him (Sh. Talwar). The AO has also noted that no details i.e. identity and other details were provided with respect to sales team responsible for administration of gifts in the manner, claimed by Shri Rajnish Talwar, at M/s Jagatjit Industries Limited. The AO also observed that otherwise also, gifts purchased in cash, needs to be disallowed as per Section 40A(3) of the Income Tax Act, in the hands of respective family members from whose account, cash has been withdrawn, if the claims of Sh. Rajnish Talwar were to be believed. The A.O. observed that amount in excess of Rs. 53 Crores has been withdrawn through the mechanism of M/s Alfa India. However, no recor....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... regarding rebate and discount finalization and communication and apparently, have not stated the truth about their involvement in rebate and discount structure and administration, followed at JIL. ii) The result has been excessive credit in one set of accounts which has been used to square off the debit balance of parties, from which payments have been collected in the bank accounts of M/s Alfa India, against sales made to these parties by M/s Jagatjit Industries Limited. The enquiries have revealed that collection/deposit into the bank account of M/s Alfa India was done at the instructions of Sh. Sanjay Duggal & Sh. Rajnish Talwar and was based upon, fraud instructions. Representatives on behalf of liquor concerns, who have made payment into the bank account of M/s Alfa India, have contradicted the version of Sh. Sanjay Duggal and Sh. Rajnish Talwar that instructions for payment into the bank accounts of M/s Alfa India, were received from Sh. Vinod Kumar Banga. M/s Jagatjit Industries Limited has denied any role/link with M/s Alfa India or any instruction available with the distributors, with regard to payment to be made into the bank accounts of M/s Alfa India (purportedly bel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e rebate and discount value in the books of account of dealers and books of account of M/s Jagatjit Industries Limited, with respect to rebate and discount provided by M/s Jagatjit Industries Limited, after closure of M/s Alfa India bank account in the South Indian Bank, C.R. Park Branch, New Delhi. It is to be noted that Duggal and Talwar family closed their bank accounts, because of alarm raised by bank, on account of huge fund movement involving M/s Alfa India account and non-furnishing of PAN by Duggal and Talwar family. vi) With regard to role of dealers/distributors of M/s Jagatjit Industries Limited, making payment into the bank account of M/s Alfa India, their role appears to be suspicious, as to why they made payment into the bank accounts of M/s Alfa India, particularly in the light of undated instructions and hand written instructions. It is also to be noted that, many of the distributors, did not even produce the instructions in relations to M/s Alfa India purportedly sent by M/s Jagatjit Industries Limited. It is unbelievable that crores of Rupees was paid into the bank accounts of M/s Alfa India by these parties, without discussing/ confirming with management ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s" (SPS) sheets and quantity of rebate and discount for each of the customers of Jagatjit Industries Limited is calculated on the basis of quantity of stock (no. of case) lifted multiplied by discount per brand. The covering letter of the SPS sheets is signed by Sh. Rajnish Talwar (State Sales Head, Haryana) and Sh. Vinod Kumar Banga (C.O.O., Director Sales) upto financial year 2013-14. The actual sheets reflecting the computation bears the signature of accountant of Kundli Depot and Sh. Sanjay Duggal, in addition to signature of Sh. Rajnish Talwar and Sh. Vinod Kumar Banga. x) It may not be out of place to mention here that, that Sh. Sanjay Duggal was DGM Sales, M/s Jagatjit Industries Limited between Year 2010-12 and RSM Sales between Year 2008-2010. Sh. Rajnish Talwar during the period, i.e. between 2008-2014 was Sales Head, Haryana. As such both were in the complete knowledge of the rebates and day working of the JIL. xi) There is inconsistency in the statement of Sh. Sanjay Duggal, during the course of search, u/s 132(4) at his residential premise, with regard to deposits in the bank account of M/s Alfa India. There was variance in the statement with regard to source - i) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claimed by Sh. Rajnish Talwar), was provided by Sh. Rajnish Talwar, so that facts could be verified by this office. xvii) It is highly improbable that HO/Head Office of M/s Jagatjit Industries Limited was buying the gifts instead of field offices/sales team. xviii) Sh. Sanjay Duggal is not aware about the utilization of cash (withdrawn through the mechanism of M/s Alfa India), a part of which has been utilized for gift administration, as claimed by Sh. Rajnish Talwar. It is to be noted that Sh. Sanjay Duggal was working just under Sh. Rajnish Talwar. xix) Third parties like Sh. Sohan Lai Singla and Sh. Ramesh Khurana have cited the role of Sh. Sanjay Duggal and Sh. Rajnish Talwar, contradicting the role of Mr. Vinod Kumar Banga, in relation to instructions for payment into the bank accounts of M/s Alfa India, as claimed by Sh. Sanjay Duggal and Sh. Rajnish Talwar." 5.18. The A.O. has recorded that the copies of the statement of Current Bank A/c.Nos.xxx0213 and xxx2431 were belonging M/s. Alfa India in which the credits were coming, along with copies of the statement of bank account of M/s. Alpine and M/s. KCC (Prop. of them is Shri Rajnish Talwar) have already been supplie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealers specially Shri Sohan Lal Singla [AOP], Shri Om Prakash Singla [AOP] and others as per directions of JIL. Shri Sanjay Duggal specifically admitted that M/s. Alfa India did not provide any goods or services in lieu of receipt of these funds. The relevant portion of the statement is reproduced in the appellate order. This statement of Shri Sanjay Duggal was confronted to Shri Rajnish Talwar who agreed with the version of Shri Sanjay Duggal that management of JIL was directing some parts of payments due to JIL to M/s Alfa India, Shri Rajnish Talwar, Shri Sanjay Duggal and the family Members of these two families. Shri Rajnish Talwar also admitted that no goods or services were ever provided by him or his family members or M/s Alfa India to these AOPs who are liquor wholesalers. Shri Rajnish Talwar added that these amounts were paid to him for funding pay-offs for sales promotions as per established trade practice. Shri Rajnish Talwar also stated that in order to window-dress the whole arrangement, he and his wife have shown income from trading in cloths in the A.Ys 2013-2014 and 2014-2015. The relevant portion of the statement is reproduced in the impugned order. 5.22. Copies ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t sale of house. (v) Addition on account of unsecured loans + interest. (vi) Addition on account of long term capital gains + Commission paid on the same. 5.25. In the case of Shri Rajnish Talwar and Group in A.Y. 2010-2011 following additions are made. (i) Addition on account of foreign travel expenses. (ii) Unexplained bank deposits received from M/s. Alfa India under section 68 of the I.T. Act. (iii) Addition under section 10(31A) HRA. (iv) Interest from Bank deposits Enhancement : (i) Addition under section 2(22)(e) as loan received from the connecting company in which investment made out of the amount. (ii) Enhancement to the addition under section 68 of the I.T. Act. (iii) Other additions/enhancements (i) Addition under section 68 of the I.T. Act. (ii) Addition on account of interest on bank amount. (iii) Addition under section 2(22)(e) of the I.T. Act. (iv) Addition on account of Commission paid on obtaining accommodation entries. (v) Addition on account of share capital/premium. 5.26. The details of Assessee-wise income returned and assessed by the A.O. in respect of 52 Assessees are as under : S.No. ITA No. A.Y. Name of the Assessee R....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 17 1622/Del/2019 2010-11 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 4,79,450/- 4,34,07,330/- 18 1623/Del/2019 2011-12 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 41,49,650/- 2,44,72,270/- 19 1624/Del/2019 2012-13 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 49,58,820/- 4,13,26,760/- 20 1625/Del/2019 2014-15 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 5,97,300/- 8,47,300/- 21 1626/Del/2019 2015-16 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 3,01,790/- 23,01,790/- 22 1627/Del/2019 2013-14 Ratna Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi PAN No. ACGPT9955M 15,07,160/- 41,71,650/- 23 1797/Del/2019 2010-11 Neha Duggal, 3E-42, NIT, Faridabad, Haryana PAN No. AWKPD5551F 47,770/- 67,49,970/- 24 1798/Del/2019 2011-12 Neha Duggal, 3E-42, NIT, Faridabad, Haryana PAN No. AWKPD5551F 49,240/- 41,38,270/- 25 1799/Del/2019 2012-13 Neha Duggal, 3E-42, NIT, Fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5/Del/2019 2014-15 Rajnish Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi. PAN No. AAZPT8964F 15,40,950/- 22,90,950/- 45 1616/Del/2019 2015-16 Rajnish Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi. PAN No. AAZPT8964F 11,66,720/- 1,34,54,431/- 46 1617/Del/2019 2016-17 Rajnish Talwar, C/o Kapil Goel, Adv., F-26/124, Sector-7, Rohini, Delhi. PAN No. AAZPT8964F 28,55,810/- 34,05,810/- 47 1823/Del/2019 2012-13 Duggal Estate Pvt. Ltd., 3/E-42, NIT, Faridabad, Haryana. PAN No. AACCD1642A 29,53,300/- 1,02,08,300/- 48 1824/Del/2019 2011-12 Duggal & Sons Buildwell P. Ltd., H-1140, Nehru Colony, NH-3, Faridabad, Haryana. PAN No. AACCD5891M 2,07,520/- 1,80,57,520/- 49 1825/Del/2019 2011-12 Duggal & Sons Buildwell P. Ltd., H-1140, Nehru Colony, NH-3, Faridabad, Haryana. PAN No. AACCD5891M 1,88,000/- 1,65,08,000/- 50 1826/Del/2019 2012-13 Duggal & Sons Buildwell P. Ltd., H-1140, Nehru Colony, NH-3, Faridabad, Haryana. PAN No. AACCD5891M 3,96,230/- 1,82,46,230/- 51 1827/Del/2019 2015-16 Duggal & Sons Buildwell P. Ltd., H-114....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame the valid assessments under section 153A for want of valid approval under section 153D of the I.T. Act, 1961, as is raised in the grounds of appeals raised in the main appeals. One of the additional ground raised in the case of Shri Sanjay Duggal is reproduced as under : "That assessment framed u/s. 153A/ 143(3) for the period under consideration is void ab initio being passed on basis of invalid and incomplete and inchoate (consolidated) approval u/s 153D by Add CIT Central Range 1 New Delhi (as last line of approval as provided to asses see vide RT1 Applications indicates and highlights order so approved is not final and same can be subject matter offurther change by Ld AO after granting of said approval as seemingly some acts were yet to be ensured to be done by Ld A O in completion of assessment) and ergo assessment framed as confirmed by Ld CIT-A deserves to be quashed and assessment may be declared as nullity" 6.2. Learned Counsel for the Assessee submitted that the additional ground is legal in nature and arising out of the record without reference to any undisputed question of fact. The additional ground would go to the root of the matter and would clearly show tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Law and is apparently invalid without application of mind. The assessees later on have also filed separate applications in all the appeals raising an additional ground of appeal challenging the validity of approval under section 153D of the I.T. Act, 1961, by JCIT. It is not in dispute that all the material is available on record with regard to additional ground of appeal. The additional ground is legal in nature and goes to the root of the matter in determining the validity of the assessments framed under section 153A of the I.T. Act, 1961. All material are available on assessment record and no additional evidences are required for taking decision of the new ground of appeal raised by the assessee. Both the parties during the course of arguments have not disputed any question of fact. The Hon'ble Punjab & Haryana High Court in the case of VMT Spinning Co. Ltd., vs., CIT 389 ITR 326 (P&H) following the decision of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd., 229 ITR 383 (SC) on identical facts and circumstances directed to admit the additional ground of appeal and remanded the matter to the Tribunal for adjudicating upon the additional ground on its merits.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve for deciding the issue on merits. In view of the above, the request of the assessees for admission of additional/ new ground is allowed. 9. Learned Counsel for the Assessee submitted that approval under section 153D is based on non-application of mind and without any independent enquiry and overlooking/ ignoring important/significant aspect of earlier assessments being made in the hands of M/s. JIL etc., He has submitted that under section 153D of the I.T. Act, 1961, prior approval of JCIT is required for assessment to be framed in the cases of search and considering the provisions of Section 153D along with the provisions contained under section 153A of the I.T. Act, 1961, following are the striking features of these provisions :- I. The assessee is to given separate notice for assessments for each year as specified under section 153A of the I.T. Act. II. That assessee is to file separate ITR for each year as specified in Section 153A. III. Separate assessment orders are to be passed for each year as specified in Section 153A. IV There is an important concept mentioned in Section 153A of abated and non-abated assessments which is peculiar to the Scheme of Assessment un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with due and proper application of mind for each year separately. However, in the present case, the JCIT has given approval under section 153D for all the years together involved in search. The Approving Authority has completely in a mechanical and ritualistic given approval as an idle formality and empty ritual. In one line the Approving Authority has given blank go-ahead to pass Orders under section 153A etc., without even taking minimum possible pains to take appropriate note of year-wise amount of assessed income as computed. The rationale of word "Each" as specifically referred to in Sections 153D and 153A deserves to be given effective/proper meaning so that underlying legislative intent as per Scheme of Assessment of Sections 153A to 153D is fulfilled. He has submitted that it is well settled Law that taxing statute, must be constructed strictly. The legislative intent behind Section 153D can be discerned/ gathered from the CBDT Circular No.3/2008 Dated 12.03.2008 in which it is highlighted that approval of the Approving Authority is mandatory. Therefore, the Approving Authority should apply their mind on the material on the basis of which the A.O. is making assessment and a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. The credits appearing in the bank accounts of the assessees have generated into some assets, loans, share capital, capital gains etc., and further investments which have been added twice or thrice by the A.O. The assessees have also moved an application for rectification under section 154 of the I.T. Act pointingout the same error but the same have not been taken care till date. The assessees clearly explained that assessees are conduit of JIL being their employees and whatever was the direction of the JIL have been carried-out in the matter. The assessees are not beneficial of any of the amount lying in the account of M/s. Alfa India. The assessments have been framed in violation of the Board Circular that proper assessment shall have to be framed as per Law. The A.O. as well as the Approving Authority have thus, not applied their minds to the material on record and being the quasi judicial authority shall have to give reasons in the Orders approving the draft assessment order which is also lacking in the present case. All assessments have been framed at the fag end of the assessment period and even in some cases the request for approval is made on the particular day and approv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2019. 7. Order of ITAT, Lucknow 'B' Bench, Lucknow in the case of AAA Paper Marketing Ltd., New Delhi vs., ACIT, Central Circle-I, Kanpur in ITA.No.167/Lkw/2016 etc., Dated 28.04.2017 8. Order of ITAT, Ranchi Bench, Ranchi in the case of M/s. Rajat Minerals Pvt. Ltd., vs., DCIT, Central Circle-1, Ranchi in IT (SS) A.Nos.41 to 47/Ran/2019 etc., Dated 20.01.2020 9. Order of ITAT, Cuttack Bench, Cuttack in the case of Geetarani Panda, Bhubaneswar vs., ACIT, Circle 2(2), Bhubaneswar in IT (SS) A.No.1/CTK/2017 etc., Dated 05.07.2018. 9.2. Learned Counsel for the Assessee, therefore, submitted that approval under section 153D in all the cases have been granted in a most mechanical manner without any application of mind and without any independent examination of seized material and other material on record. There is no discussion/reasons given by JCIT while approving the draft assessment order. In the approval under section 153D there is no mention about incriminating material forwarded to the JCIT and without looking into if there were any incriminating material pertain to abated or non-abated assessments. There is no mention of the statements recorded at the time of search if hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... explained that they are the conduits of M/s. JIL and ultimately received the amounts in question which remained unexplained, therefore, all the assessees being beneficiaries are liable to explain the source of the amounts deposited in their Bank Accounts and hence, valid approval have been granted under section 153D of the I.T. Act, 1961. Therefore, the additional grounds raised by the assessees deserves dismissal. 11. We have considered the rival submissions and perused the written submissions filed by the parties and considered the material on record. It is an admitted fact that search and seizure action were carried-out in the cases of the assessees on 29.12.2015. Section 153A have been inserted into the Income Tax Act w.e.f. 01.06.2003. Prior to that there were provisions contained under section 158BC being the special procedure for assessment of search cases. Thus, the provisions of Section 153A to 153D are applicable in the case of assessees. According to Section 153A of the I.T. Act, there should be a search initiated under section 132 of the I.T. Act and panchanama drawn, the A.O. shall have to issue notice to the assessee requiring him to furnish the return of income wit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3A that prior approval shall be necessary for assessments in the cases of the search or requisitioned, under section 153D of the I.T. Act. Section 153D of the I.T. Act is reproduced as under : "153D - No Order of assessment or re-assessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in Clause (b) of Sub-Section (1) of Section 153A or the assessment year referred to in Clause (b) of sub-section (ii) of Section 153B except with the prior approval of the Joint Commissioner. "Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under sub-section (12) of section 144BA.". 11.1. It is an admitted fact that in all the above appeals assessments under section 153A have been framed by ACIT, Central Circle, New Delhi, therefore, prior approval of the JCIT in respect of each assessment year referred to under section 153A or 153B shall have to be obtained. Thus, no order of assessment or re-assessment shall be passed by the A.O. in the present cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a [2019] 366 ELT 253 (Gau.) Manu/GH/07070/2018 in para-28 has held as under : "When an Authority is required to give his approval, it is also to be understood that such Authority makes an application of mind as to whether the matter that is required to be approved satisfies all the requirements of Law or procedure to which it may be subjected. In otherwords, grant of approval and application of mind as to whether such approval is to be granted must co-exist and, therefore, where an Authority grants an approval it is also to be construed that there was due application of mind that the subject matter approved and satisfies all the legal and procedural requirements." 11.6. Therefore, in the cases of search, assessment orders whether framed under section 153A or 153C, the Joint Commissioner [Approving Authority] is required to see that whether the additions have been made in the hands of assessee are based properly on incriminating material found during the course of search, observations/comments in the appraisal report, the seized documents and further enquiries made by the A.O. during the course of assessment proceedings. Therefore, necessarily at the time of grant of approval of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd 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. CIT, Central Range, Chandigarh dated 30th January 2014 sending the draft assessment order for....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 sum-up the entire assessment file, containing voluminous submissions and drafted assessment order containing not less than 46 pages and sen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 January, 2014. To Shri Tatung Padi Dy. Commissioner of Income Tax, Central Circle-II, Faridabad. Sub: Approval u/s.153D of the I.T. Act, 1961, in the case of M/s. M3M India Holdings, Formerly M/s.Kris....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l ("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 authority as flowing from Section 153D of the Act, before passing the order of assessment, was not complied with. 4. This was not a case where no approval was granted at all. However, the Tribunal was of the opinion that the approval granted by the Additional Commissioner of Income Tax was without application of mind and, therefore, not a valid approval in the eye of law. The Tribunal reproduced the observations made by the Additional CIT while granting approval and came to the conclusion that the same suffered from lack of application of m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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." 13.2. The ITAT, Jodhpur Branch in the case of Smt. Indira Bansal vs., ACIT (supra), held as under: "Conclusion : Jt. CIT having granted the approval under s. 153D on the very same day on which the forwarding letter seeking approval was received in his office, and circumstances indicate that this exercise was carried out by the Jt. CIT in a mechanical manner without proper application of mind and even without going through the records as the same were in Jodhpur while the Jt. CIT was at Udaipur, therefore, the approval granted by him cannot be sustained. Impugned assessments are annulled." 14. Cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 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 additions stand deleted. In the result, Ground No.1.3 of the appeal of Assessee is allowed." 11.9. Order of ITAT, Cuttack Bench, Cuttack in the case of Dilip Construction P. Ltd., Bhubaneswar vs., ACIT, Circle-1, Bhubaneswar (supra) in which in paras 20 to 41 held as under : 20. We have heard the rival submissions and perused the relevant materials placed on the record of the Tribunal, inter alia, various case laws cited both the sides. The CBDT Circular No. 3 of 2008, dated 12.3.2008, as referred by the ld AO clarifies that the legislature in its highest wisdom made it compulsory that the assessments of search cases should be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring to the assessee before granting approval under section 153D of the Act. It is also not a contention of the assessee/appellant that they were not provided due opportunities of hearing before granting approval. 24. On careful consideration rival submissions, we note that the legal contention of the assessees regarding procedure for granting approval order dated 23.11.2017 u/s.153D of the Act can be summarized mainly on two points viz; (i) the approving authority i.e. ld JCIT has granted approval in a mechanical and hasty manner without even perusing the relevant assessment records and draft assessment orders placed before him and (ii) the approving authority has not applied his mind to the assessment records and draft assessment orders proposed to be passed by the Assessing officer as per mandate of section 153D of the Act, which is clearly discernible from the approval order dated 23.11.2017. As per mandate of section 153D of the Act, no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A of the Act without prior approval....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ft order on 30th January 2014, so that the draft order could be transmitted to the Addl. CIT at Chandigarh on same day. In reply to RTI application, the assessing officer has reported that no record of mode of dispatch of assessment record to the Addl. CIT is available with the Assessing Officer. Similarly, no record is available as to how the draft order and assessment record have been received by Addl. CIT at Chandigarh. The Addl. CIT, Chandigarh did not mention in his approval dated 31st January 2014 (supra), if he has gone through the assessment record or that assessment record was produced before him. Since no details are available on record about the mode, through which, assessment record was transmitted by the assessing officer at Faridabad to Addl. CIT in Chandigarh and vice-versa by Addl. CIT, Chandigarh to Assessing Officer at Faridabad on the very next day would lead to suspicion, in explanation of A.O. if any, valid draft order was transmitted to the Addl. CIT within the time or if the Addl. CIT has communicated the approval under section 153D to the Assessing Officer at Faridabad on 31st January 2014. These facts would clearly show that the action of the Addl. CIT, Cha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... find that the approving authority has required the assessing authority to conduct further enquiry in respect of opening cash in hand. The assessing authority thereafter has never communicated his findings of the further enquiry to the supervisory authority and not taken the approval of justification of his findings. Thus, in our considered opinion, alleged approval letter dated 27.3.2015 of the Addl. CIT, Range-1, Bhubaneswar does not constitute the approval which is envisaged by the provisions of section 153 of the Act. Thus, following the decision of the Hon'ble Bombay High Court in the case of Akil Gulamali Somji (supra), we hold that the impugned order of assessment is void and bad in law. Therefore, the impugned order of assessment is hereby cancelled...." 28. In view of above requirements of provisions of section 153D of the Act, as vehemently relied upon by ld counsel for the assessee, as noted above, when we logically analyse the procedure adopted by JCIT while granting approval u/s.153D of the Act in the case of both the assessees, then, first of all, we find it necessary and appropriate to reproduce verbatim the approval granted by JCIT for both the assessees. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3,750/- u/s.153A/143(3) 2. 2011-12 5,71,290/- u/s.153A/143(3) 3. 2012-13 83,61,660/- u/s.153A/143(3) 4. 2013-14 5,37,450/- u/s.153A/143(3) 5. 2014-15 NIL u/s.153A/143(3) 6. 2015-16 4,59,65,350/- u/s.153A/143(3) 7. 2016-17 7,64,70,720/- u/s.143(3) Sd/- Joint Commissioner of Income Tax (Central), Bhubaneswar End: Record for the AY 2010-11 to 2016-17 (In Seven Folders) 29. From the above, first of all, we note that the Assessing Officer has requested the ld JCIT to grant approval u/s.153D vide letter dated 17.11.2017 in both the cases. The JCIT has granted approval in both the cases by only stating that " Approval is hereby accorded as per the provisions of section 153D of the I.T.Act for passing the assessments in respect of the following cases". 30. In this approval, we are unable to see any mention by the approving authority that he has perused the relevant assessment records and draft assessment orders proposed to be passed by the Assessing Officer. The Assessing Officer issued letter seeking approval on 17.11.2017 and approval has been granted on 23.11.2017 that after a passage of five days time from the approval order as reproduced her....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... before passing the relevant assessment orders u/s.153A r.w.s 143(3) of the Act. 34. Considering the facts and circumstances of the case in the light of above discussion, it is amply clear that the AO vide latter dated 17.11.2017 requested the Approving Authority i.e. JCIT to grant approval u/s 153D of the Act and furnished relevant assessment records and draft assessment order before him for consideration prior to grant of approval. As we have already noted above that there is no requirement of mandate of section 153D of the Act that an opportunity of hearing should be allowed to the assessee before grant of approval u/s.153D of the Act but at the same time, it is also a requirement of mandate of section 153D of the Act that the approving authority must apply his mind to the relevant assessment records and draft assessment order before granting approval u/s.153D of the Act. As the requirement of grant of approval by the Superior authority is not merely a formality but it is a mandate and requirement of provisions of the Act. 35. In our considered and humble opinion, no procedure for grant of approval has been provided u/s.153D of the Act and the Income tax Rules, 1962. Howev....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... non-application of mind cannot be cured or rectified by any other exercise or working undertaken by the approving authority after grant of approval and after passing the assessment orders u/s.153A of the Act by the Assessing officer. 37. The provisions of section 153D of the Act was inserted by the Finance Act, 2007 w.e.f. 1.6.2007. In our humble understanding of said provision, the legislative intent for insertion of said provision is clear inasmuch as prior to insertion of provision u/s.153D, there was no provision for taking approval in cases of assessment or reassessment where search and seizure operation was conducted u/s.133A of the Act. Therefore, in our considered view, the legislature wanted the assessment/reassessment of search and seizure cases should be made and orders should be passed with the prior approval of superior authority, which also means that the superior authority should apply his mind on the materials on the basis of which the AO is making or passing assessment orders and after due application of mind to material in the hands of department while initiating search proceedings, material found & seized during the course of search and also material or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reach to a logical conclusion that it is the duty of the approving authority to act in accordance with the mandate and provisions of law while granting approval and discharging statutory function lay on his shoulders by following proper procedure and also by applying his judicious and cautious mind to the relevant assessment folders/files and draft assessment orders while granting approval u/s.153D of the Act. This is not a formality but a statutory duty of the approving authority with a corresponding obligation on him to examine relevant record and assessment orders and thereafter grant the approval. We are cautious about that the reasons for granting approval may not be a subject matter of challenge or are not required to be mentioned in the order of approval but the manner and the material on the basis of which approval has been granted can be challenged by the assessee and following proper procedure and application of mind by the approving authority should be discernible from the order of approval. No other evidence or documents is required to be considered or appreciated as the approval should be self-speaking that it has been granted by the ld JCIT by following due procedure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a), we hold that no valid approval has been sanctioned or accorded by the ld JCIT before allowing the AO to pass the relevant assessment orders. From the relevant approval orders dated 23.11.2017, it is vivid that ld JCIT has not mentioned in the approval orders that he has gone through the relevant assessment records/files/folders and draft assessment orders for granting approval. These facts clearly show that the approval had been granted in a mechanical manner without application of mind and, thus, no valid approval has been granted by the ld JCIT before authorising the AO to pass assessment orders u/s.153A of the Act. Accordingly, all assessment orders are vitiated and thus same are void being bad in law. The requirement of mandate of section 153D of the Act has not been satisfied in both the cases and accordingly we hold that the all assessment orders are vitiated and thus same are void being bad in law. We, accordingly set aside the impugned orders of lower authorities and quash the assessment orders by allowing additional ground of the assessees in all appeals filed by both the assessees having identical and similar facts and circumstances." 11.10. Order of ITAT Agra Bench....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments will take effect from the 1st day of June, 2007." 13. It is evident from the CBDT Circular that the legislature in its highest wisdom made it compulsory that the assessments of search cases should be made with the prior approval of superior authority, so that the superior authority apply their mind on the materials and other attending circumstances on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authority have to approve the Assessment order. Object of entrusting the duty of Approval of assessment in search cases is that the Additional CIT, with his experience and maturity of understanding should scrutinize the seized documents and any other material forming the foundation of Assessment. It is an elementary law that whenever any statutory obligation is casted upon any statutory authority such authority is required to discharge its obligation not mechanically, not even formally but after due application of mind. Thus, the obligation of granting Approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the AO. The approval granted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt relating to examination/investigation as also the issues identified in the course of examination of seized material have been carefully considered by the AO, the Additional CIT, granted Approval. Admittedly, the Additional CIT, without any consideration on merit in respect of issues on which addition was made granted the Approval on the undertaking of the AO and in view of stated paucity of time with him for granting Approval. This approach of the Additional CIT, Central has rendered the Approval to be an eyewash and idle formality and such a mechanically granted Approval is no approval in the eyes of law. 16. The Lucknow Bench of the ITAT in the case of "AAP Paper Marketing Limited Vs ACIT", (2017) (4) TMI 1371-ITAT Lucknow, (APB-122-129) coincidentally where the ITAT had the occasion to consider the validity of approval granted by the same Additional CIT, Central Circle, Kanpur while quashing the assessments vide Para-14 held as under : "In the present case ACIT has granted impugned approval halfheartedly without application of mind and without considering and perusing the material on record. Thus, we are inclined to hold that there has been no application of mind by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....approval granted by the Addl. Commissioner is devoid of any application of mind, is mechanical and without considering the materials on record. In our considered opinion, the power vested in the Joint Commissioner/Addl Commissioner to grant or not to grant approval is coupled with a duty. The Addl Commissioner/Joint Commissioner is required to apply his mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said power cannot be exercised casually and in a routine manner. We are constrained to observe that in the present case, there has been no application of mind by the Addl. Commissioner before granting the approval. Therefore, we have no hesitation to hold that the assessment order made u/s. 143(3) of the Act r.w. sec. 153A of the Act is bad in law and deserves to be annulled. The additional ground of appeal is allowed. " 19. The above order so passed by the ITAT, Mumbai Bench was subjected to judicial scrutiny in appeal before the Hon'ble Bombay High Court and the Hon'ble High Court approved the order passed by the Mumbai Bench of the ITAT which is found reported as "PCIT Vs Smt. Shreelekha Damani", (2019) 307 CTR (Bom.) 218 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llate proceedings, audit inspection etc. are duly taken into account, and the enquiries and investigations that are required to be made are actually made before finalization of the assessment orders. It would have been much better and in the interest of Revenue if you had submitted the draft orders at least one month earlier so as to allow the undersigned sometime to go through and analyse the same vis-a-vis the appraisal report and seized records. It also goes without saying that you never cared even to discuss these cases with the undersigned for guidance and line of investigation to be taken. However, despite all this, I have gone through the material available on records and some of the observations, in respect of the following cases are given in subsequent paras." 24. In our considered view, the provisions contained in s. 153D as enacted by the Parliament cannot be treated as an empty formality. The provision has certain purpose. It is apparent that the purpose behind the enactment of the above provision in the statute by the Parliament is two-folds. Firstly, the approval of the senior authority will ensure that the assessee is not prejudiced by the undue or irrelevan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... looking into the record. 22. We may record that the decisions relied upon by the ld. DR are factually distinguishable as none of the order has examined this aspect of the matter which is subject matter of present litigation i.e non-application of mind by the superior authorities at the time of granting the Approval. The sum and substance of the decisions relied upon by the Ld. DR's was that the assessee was not entitled to any hearing or representation at the time of grant of approval. As mentioned hereinabove the scope and ambit in the present litigation is not that of grant of hearing or representation at the time of Approval but whether the Approval can be granted by the superior authority without application of mind without looking into seized material, investigation report, the draft assessment order etc can be held sustainable in the eyes of law. We had already answered that such an approval is bad in law and cannot be sustained. 23. The last submission made by the Ld. DR's was that the matter may be sent back to the AO to pass a fresh assessment order after seeking the approval from the competent authority. In this regard we are of the opinion that the Revenue is not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Agarwal vs., DCIT, Central Circle Agra (supra) in which in paras 4 to 5 it was held as under : "4. We have heard the rival contentions of the parties and perused the record. Karnataka High court in the matter of Gopas S. Pandit v. CIT, 95 taxman. Com 246 in paragraph 8 had held as under : "8. Having heard the learned Counsel for the parties, we are satisfied that the internal guidelines issued by the Central Board of Direct Taxes, as urged by the learned Counsel for the Assessee, bereft of the statutory provisions in Section 153D of the Act cannot bind the approving Authority, namely, the Joint Commissioner to comply with the principles of natural justice by the said Authority. The Assessing Authority undoubtedly has of course given adequate and reasonable opportunity of hearing to the Assessee and all objections on merits were considered by him. Merely because, Section 153D of the Act requires a prior approval of the Draft Assessment Order by the higher Authority, namely, the Joint Commissioner in the present case, because the Assessment Order was passed by the Authority below the rank of the Joint Commissioner, the provisions of the Act do not mandate that a fresh round of o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ge implying mandatory character, the same is not without exceptions. However, the present case deals with the interpretation of a taxing statute. It is well settled that a taxing statute has to strictly construed, therefore, from the language employed in section 153D of the Act, the requirement of obtaining the prior approval of the Joint Commissioner has to be regarded as mandatory in nature. 11. In the facts of the present case, as the assessment order has been passed by an Income Tax Officer, the requirement of obtaining the prior approval of the Joint Commissioner under section 153D of the Act was absolute. The Tribunal, however, has recorded a finding of fact that there is nothing on record to indicate that the prior approval of the Joint Commissioner was obtained. As a natural corollary therefore, in the absence of the requirement of prior approval of the Joint Commissioner being satisfied, the whole proceeding would stand invalidated. The Tribunal was, therefore, wholly justified in holding that the impugned order of assessment would stand vitiated in view of non-compliance of the provisions of section 153D of the Act. On this count also, therefore, the appeal, does not m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....subsection (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner]." The above provisions u/s. 153D have been laid down under the heading "prior approval necessary for assessment in cases of search or requisition". This heading itself suggests that obtaining prior approval the assessment in cases of search or requisition is necessary. We further note that the provisions u/s. 153D start with a negative wording "no order of assessment or reassessment" supported by the further wording "shall" makes the intention of the Legislature clear that compliance of Sec. 153D requirement is mandatory. No universal rule can be laid down as to whether mandatory enactment shall be considered directory or obligatory with an implied nullification for disobedience. As per the decision of Hon'ble Supreme Court in the cases of Banwari Lal Agarwalla v. State of Bihar AIR 1961 SC 849 ; Raza Buland Sugar Co. Ltd., v. Municipal Board AIR 1965 SC 895 if object of the enactment will be benefited by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Central Board of Direct Taxes, Department of Revenue, Government of India, reads as under : "9. Approval for assessment : An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT. (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.) The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the ordersheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet. The assessment order can be passed only after the receipt of such approval. The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself. " Chapter XIVB also deals with assessment of search cases. Sections 15....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment, the assessee did file objections and the Incometax Officer completed the assessment himself on the basis of the draft order without forwarding the draft order and the objections to the Inspecting Assistant Commissioner and obtaining directions from him. Such an order, on the face of it, is beyond the powers of the Income-tax Officer under section 143 read with section 144B of the Act and, hence, without jurisdiction. The Tribunal, in our opinion, was, therefore, justified in its conclusion that the assessment was liable to be annulled. It was right in holding that the assessment order passed by the Income-tax Officer the instant case without reference to the Inspecting Assistant Commissioner had rightly been annulled by the Commissioner of Income-tax (Appeals). In view of the above, we answer the question referred to us accordingly in favour of the assessee and against the Revenue. This reference is disposed of accordingly with no order as to costs." 14. In the case of SPL's Siddharth Ltd. (Supra), before the Hon'ble Delhi High Court, the facts were that notice issued by the A.O u/s. 147 r.w.s 148 of the Act for re-opening the assessment for the A.Y. 2002-03 was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uate or curtail the powers of CIT, vested in him u/s. 263 of the said Act. The Hon'ble Madras High Court was pleased to hold that it is not hit by provisions of Sec. 275 of the Act. In Prabhudayal Amichand (Supra), the Hon'ble High Court of Madhya Pradesh with reference to Sec. 271(1)(c) of the Act was pleased to hold that a procedural irregularity not involving the question of jurisdiction can be cured. It is not helpful to the revenue in the present case because in the present case, the A.O was having no jurisdiction to frame assessment order without prior approval of JCIT as necessary requirement to comply with u/s. 153D of the Act. In the case of Damoderdas Murarilal (Supra), the Hon'ble High Court did not approve the view of the Tribunal in holding that in view of Clause (b) of Sec. 251(1) of the Act, the first appellate authority had no power of remand and therefore, the procedural illegality would not be corrected by recourse to remanding the case to the ITO. Here in the present case, as we have already discussed, and also cited the recent decision of Hon'ble jurisdictional Bombay High Court in the case of Mrs. Ratanbai N.K. Dubhah ( Supra) and of Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rama Medical and Surgical Agencies (supra), it was observed that : "... 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 XIB-B of the Act. Apart from the language of the provision, the nature of the functions confided to the Commissioner is inconsistent with the application of the principles of natural justice." 4.5. Similar decision was rendered by the Hon'ble Karnataka High Court in the matter of Rishabhchand Bhansail, 136 Taxman 579, where the Karnataka High Court had held that the approval granted by the Commissioner u/s. 158BG is an administrative approval and there is no necessity of giving hearing to the assessee. For the purpose of that, we reproduce paragraph No. 4 to 4.4 which is to the following effect : 4. Section 158BG provides that no order of assessment for the Block period shall be passed by the Assessing Officer without the previous approval of the Joint Commissioner in respect of a search initiated under section 132. The assessee contends that before granting previous approval under section 158BG for an order of assessment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rnal matter and it does not decide upon any rights of the assessee. The Joint Commissioner, while examining the matter under the proviso to section 158BG does not examine or adjudicate upon the rights or obligations of the assessee, but only considers whether the Assessing Officer has fulfilled the requirements of Chapter XIV-B. 4.3. In V.C. Shukla v. State AIR 1980 SC 962, the Supreme Court gave the following example : "In cases where law requires sanction to be given by the appointing authority before a prosecution can be launched against a Government servant, it has never been suggested that the accused must be heard before sanction is accorded. ." 4.4. Where a statute requires the Executive to take an administrative action after being satisfied or after forming an opinion as to the existence of a state of circumstances, the action is based on the subjective satisfaction. It is well-settled that any administrative actions based either on policy or on subjective assessment, if does not prejudicially affect any vested right or interest, need not be preceded by a hearing, unless the statute specifically provides for the same. Therefore, in the absence of any provision for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... documents or any assets requisitioned under section 132A, after the 30th day of June, 1995 but before the 1st day of January, 1997; (b) the 9 [Joint] Commissioner or the 9 [Joint] Director, as the case may be, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of January, 1997.] 4.7. In view of the above and also on account of the fact that the issue had already been examined by the jurisdictional High Court in respect of section 158 BG holding that the approval granted by the higher authorities were administrative in nature we do not find any reasons to take a contrary view and accordingly we are also of the opinion that the approval granted by the Joint Commissioner in the present case was in the nature of administrative approval. Whether an administrative order which entail civil consequences/penal consequences/civil liabilities can be challenged before the tribunal if assessment order is premised on such administrative prior approval 4.8. In the above noted paragraph it is categorically mentioned that if the approval is lacking under section 153D granted by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted was after the passing of the assessment order in all these cases and any other cases the direction of the tribunal and also the other courts are not barred and the tribunal and the other courts can very well examine the approval granted by the superior authority in the context of our aforesaid observation and also the other preparation of law laid down by the high courts and the tribunal. 4.11. The jurisdictional High Court in the case of Verma Roadways vs. ACIT, 75 ITD 183 to the following effect : "Coming to the aspect of the application of mind, while granting approval, we are of the view that requirement of approval pre-supposes a proper and thorough scrutiny and application of mind. In the case of Kirtilal Kalidas & Co. (supra), the I.T.A.T Madras Bench 'A' has observed that the function to be performed by the Commissioner in granting previous approval requires an enquiry and judicial approach on the entire facts, materials and evidence. It has been further observed that in law where any act or function requires application of mind and judicial discretion or approach by any authority, it partakes and assumes the character and status of a judicial or at least quasi-ju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to shift his responsibility of scrutinizing the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the section is not turned into an empty ritual. Needless to emphasise that before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him the material on the basis whereof an opinion in this behalf has been formed by the Assessing Officer. The approval must reflect the application of mind to the facts of the case. 21. In the light of the aforenoted legal position, we are in respectful agreement with the decision of this Court in Rajesh Kumar's case (supra) that an order under section 142(2A) does entail civil consequences. At this juncture, it would be relevant to take note of the insertion of proviso to section 142(2D) with effect from 1-6-2007. The proviso ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugh having regard to the language of the provision, we have some reservations on the said view expressed in Rajesh Kumar's case (supra), but having held that when civil consequences ensue, no distinction between quasi judicial and administrative order survives, we deem it unnecessary to dilate on the scope of section 136 of the Act. It is the civil consequence which obliterates the distinction between quasijudicial and administrative function. Moreover, with the growth of the administrative law, the old distinction between a judicial act and an administrative act has withered away. Therefore, it hardly needs reiteration that even a purely administrative order which entails civil consequences, must be consistent with the rules of natural justice. (Also see: Mrs. Maneka Gandhi v. Union of India [1978] (1) SCC 248 and S.L. Kapoor v. Jagmohan AIR 1981 SC 136. As already noted above, the expression "civil consequences" encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. Anything which affects a citizen in his civil life comes under its "wide umbrella. Accordingly, we reject the argument and hold th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ious approval requires an enquiry and judicial approach on the entire facts, materials and evidence. It has been further observed that in law where any act or function requires application of mind and judicial discretion or approach by any authority, it partakes and assumes the character and status of a judicial or at least quasi-judicial act, particularly because their Act, function, is likely to affect the rights of affected persons." 11.10. Similarly, u/s. 151 of the Act it is provided that no notice shall be issued u/s. 148 unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied that it is a fit case for the issue of such notice. The sanction under this section was considered by the Tribunal, Mumbai Bench in the case of Shri Amarlal Bajaj v. Asstt. CIT[2013] 37 taxmann.com 7/60 SOT 83 (URO) wherein at para-8, the Tribunal has considered the decision of the Honble Hígh Court of Delhi Bench in the case of United Electrical Co. (P.) Ltd. v. CIT[2002] 125 Taxman 775/258 ITR 317 (Delhi) which read as under: 'Hon'ble Delhi High Court in the case of United Electrical Co. Pvt. Ltd. v. CIT258 ITR 317 has he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said power cannot be exercised casually and in a routine manner. We are constrained to observe that in the present case, there has been no application of mind by the Addl. Commissioner before granting the approval. Therefore, we have no hesitation to hold that the assessment order made u/s. 143(3) of the Act r.w. sec. 153A of the Act is bad in law and deserves to be annulled. The additional ground of appeal is allowed. 13. The Ld. Departmental Representative has strongly relied upon the decision of the Tribunal Mumbai Bench in the case of Rafique Abdul Hamid Kokani v. Dy. CIT [2000] 113 Taxman 37 (Mag.), Hon ble High Court of Karnataka in the case of Rishabchand Bhansali v. Dy. CIT[2004] 136 Taxman 579/267 ITR 577 and Hon'ble High Court of Madras in the case of Sakthivel Bankers v. Asstt. CIT [2002] 124 Taxman 227/255 ITR 144. 13.1. We have carefully perused the decisions placed on record by the ld. DR. We find that all the decisions relied upon by the ld. DR are misplaced inasmuch as all these decisions relate to the issue whether the Joint CIT/CIT has to give an o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e approval was granted in a mechanical manner or after applying mind looking into the record. No evidences required to be appreciated as the approval is self-evident, i.e., that it was granted by the additional Commissioner of income tax without application of mind and without looking into the record. In view of the above the assessment order passed by the assessing officer is void and accordingly all the appeals of the assessee are allowed. 4.16. We may record that the decisions relied upon by the ld. DR are factually distinguishable as none of the decisions have examined this aspect of application of mind by the superior authorities at the time of granting the approval. The sum and substance of the decisions relied upon by the learned departmental representative was that the assessee was not entitled to any hearing or representation at the time of grant of approval. As mentioned hereinabove the scope and ambit in the present litigation is not that of grant of hearing or representation at the time of approval but whether the approval can be granted by the superior authority without application of mind without looking into seized material, investigation report, the draft assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cept with the prior approval of the Joint Commissioner. Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under sub-section (12) of section 144BA." 13.1. A perusal of the order sheet entries copy of which is placed at page 37 of the paper book, Volume-I shows that on 30th March, 2015, the AO has mentioned as under:- "Draft order submitted for approval u/s 153D. Approval received vide letter No.1158. Order passed u/s 153A. Issue notice of demand." 14. Similarly, the letter addressed by the DCIT, Central Circle, Dehradun to the Addl.CIT, Central Range, shows that such draft assessment orders were submitted for approval on 30th March, 2015. The relevant scanned copy of the same reads as under:- " F.No.: DCIT/CC/DDN/DFA/2014-15/ Office of the Dy. Commissioner of Income Tax, Central Circle, Dehradun Dated : 30.03.2015 To The Addl. Commissioner of Income Tax, Central Range, Meerut Sir, Subject: Submission of Draft Assessment Orders in DBIT Group of cases, Dehradun - Approval thereof - rega....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-14 11 Water wealth infra tech india pvt ltd. AABCW0319C 2011-12 to 2013-14 12 Sumer chand and sons AACFS6622C 2007-08 To 2013-2014, 13 Sh. Sanjay Bansal ACZPB9725A 2007-08 To 2013-2014 14 Uttarakhand Uthan samiti AAAAU1376N 2007-08 To 2013-2014 15 Wali Gram Udhyog sansthan AAAAW1501B 2007-08 To 2013-2014 16 Shri Krishna Educational Trust AAATS 3624 C 2007-08 To 2013-2014 u/s 153C Sl.No. Name of the assessee PAN Asstt. Years 01 Rama Gautam ADQPA8706L 2007-08 To 2013-2014 02 Mamta Dandriyal AYDPD5055F 2007-08 To 2013-2014 03 Gulzar Ahmed AFGPA7405Q 2007-08 To 2013-2014 04 Sohan lal kala AKMPK8071H 2007-08 To 2013-2014 05 Rishi Raj ANOPS3775M 2007-08 To 2013-2014 3. You are directed to pass necessary orders, as discussed/as amended in the drafts, in the above cases for all the relevant years. This office letter approving the draft orders shall invariably be quoted in the final order. A copy of final order passed in these cases shall be sent to this office for record. Further, proceedings are to be filed in the case of assessee when it was incorporated/was not in existence. 4. Record submitted in the cases of the above ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s mentioned earlier, there is nothing on record to suggest that the files have in fact moved from Dehradun to Meerut for obtaining approval. Therefore, in our opinion, the mandatory provisions as required u/s 153D has not been complied with. 17.1 We find identical issue had come up before the Delhi Bench of the Tribunal in the case of Rishabh Buildwell Pvt Ltd. (supra). The Tribunal, after considering the various decisions, quashed the assessment orders by observing as under :- " 11. We have heard the arguments of both the parties and gone through the record and documents filed before us. For ready reference the entire part of the letter of approval dated 30.12.2016 is reproduced as under: "Subject: Prior approval u/s 153 D in the cases of Cloud- 9 & Sethi Group- regarding. Please refer to your office letter F. No. DCIT/ CC/ GZB/ S&S/153D 2016- 17/2904, 2908 & 2911 dated 28-12- 2016 & 30-12-2016 on the above mentioned subject. 2. In the following cases of Cloud-9 & Sethi Group, prior approval u/s 153D of the IT Act, 1961 accorded for passing assessment orders in respect of the assesses for the assessment years as mentioned below: S. Name of the assessee PAN A.Yrs. N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taking into consideration, the above points, a copy of the final orders passed be sent to the JCIT. 13. The Income Tax Act envisages prior approval of the JCIT before passing the assessment order. The provisions read as under: "no order of assessment or reassessment shall be passed by the assessing officer below the rant of Joint Commissioner in respect of each assessment year 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." 14. When the approval given by the JCIT, Meerut is juxtaposed against the directions and provisions of the Income Tax Act pertaining to completion to assessment u/s 153B(1) of the Act, it can be said that the approval given by the JCIT is invalid. The Act envisages that the JCIT's approval before passing of the final order. There is no provision to alter, change, modify, adjust, amend or rework the order once the approval has been accorded. The approval to be given is statutory in nature and legally binding. In the instant case, the approving authority has clearly mentioned that the approval given is a technical....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of application of mind. The Tribunal referred to various judgments of the Supreme Court and the High Courts in support of its conclusion that the approval whenever required under the law, must be preceded by application of mind and consideration of relevant factors before the same can be granted. The approval should not be an empty ritual and must be based on consideration of relevant material on record. 5. The learned Counsel for the Revenue submitted that the question of legality of the approval was raised by the assessee for the first time before the Tribunal. He further submitted that the Additional CIT had granted the approval. The Tribunal committed an error in holding that the same is invalid. 6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks :- "To, The DCIT(OSD)-1 Mumbai Subject : Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007- 08 reg. Ref : No. DCIT (OSD)-1/CR-7/A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has observed as under :- "6.4. Coming to the facts of the case, it is apparent from the documents on record that the approval was given by the Joint Commissioner in hasty manner without even going through the records as the records were in Jodhpur while the Joint Commissioner was camping at Udaipur. The entire exercise of seeking and granting of approval in all the 22 cases was completed in one single day itself i.e., 31-3-2013. Thus, it is apparent that the Joint Commissioner did not have adequate time to apply his mind to the material on the basis of which the assessing officer had made the draft assessment orders. Tribunal, Mumbai Bench and Tribunal, Allahabad Bench in their orders, as discussed in the preceding paragraphs, have laid down that the power to grant approval is not to be exercised casually and in routine manner and further the concerned authority, while granting approval, is expected to examine the entire material before approving the assessment order. It has also been laid down that whenever any statutory obligation is cast upon any authority, such authority is legally required to discharge the obligation by application of mind. In all the cases before us, the De....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessment orders for other years are also held to be null and void being not in accordance with law. Accordingly, these appeals filed by the assessee are also allowed." 11.13. The Order of ITAT, Delhi G-Bench, Delhi in the case of Rishabh Buildwell P. Ltd., New Delhi vs., DCIT, Central Circle, Ghaziabad (supra) in paras 8 to 16 has held as under : "8. We have heard the arguments and find that the issue is a purely legal issue pertaining to approval of assessment u/s 153D of the Act and hence being admitted. We rely on the judgment of the Hon'ble Supreme Court in the case of NTPC v. CIT (1998) 229 ITR 383 SC wherein it has explained that the power of the Tribunal in dealing with the appeals under Section 254 of the Act is " expressed in the widest possible terms". It was further observed as under: "5. .....The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orded for passing assessment orders in respect of the assesses for the assessment years as mentioned below: S.No. Name of the assessee PAN A.Yrs. 1 M/s Risabh Buildcon Pvt. Ltd. AACCR7502F 2009-10 to 2015-16 2 M/s R.G.V. Fininvest Pvt. Ltd. AAACR4383G 2009-10 to 2015-16 3 M/s Aggarwal Capfin Financial Services P.Ltd. AABCA0925E 2009-10 to 2015-16 4 M/s Arihant Info Solutions P. Ltd. AADCA5015H 2009-10 to 2015-16 5 M/s Sethi Estate P. Ltd. AABCS7643B 2009-10 to 2015-16 6 Sh. Chander Mohan Sethi AASPS1246A 2009-10 to 2015-16 7 Sh. Gulshan Sethi AASPS1248Q 2009-10 to 2015-16 8 M/s East View Developers P. Ltd. AABCE5324R 2009-10 to 2015-16 9 Sh. Desh Bhushan Jain AAFPJ6467R 2009 10 to 2015-16 10 M/s Max City Developers Pvt. Ltd. AAECM5401A 2009-10 to 2015-16 11 Sh. Sanjeev Jain ACFPJ3817P 2009-10 to 2015-16 12 M/s Sethi Buildwell Pvt. Ltd. AAICS9/42C 2009-10 to 2015-16 13 Sh. Satpal Nagar AAFPN6467M 2009 10 to 2015-16 14 M/s Risabh Buildwell Pvt. Ltd. AACCR9776R 2009-10 to 2015-16 15 Srnt. Magan Jain AAIMPJ8085G 2009-10 to 2015-16 16 M/s Angel Buildcon Pvt. Ltd. AAFCAI968H 2009-10 to 2015-16 2. A technical appr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proval to be given is statutory in nature and legally binding. In the instant case, the approving authority has clearly mentioned that the approval given is a technical approval. Moreover, he has directed the DCIT to ensure the seized materials and the findings of the appraisal report to be incorporated in the final assessment order. This clearly goes to proves that the approval given by the JCIT is not a final approval as required u/s 153D of the Act but a conditional approval subjected to modifications by the DCIT after receiving of the approval which makes it an invalid, qualified, uncertain approval. This is not the mandate of the Act. It has also been laid down that whenever any statutory obligation is cast upon any authority, such authority is legally required to discharge the obligation by application of mind. The approval has to be statutory nature after due application of mind, it should be neither technical nor proforma approval which is envisaged u/s 153D of the Act. Reliance is placed the judgment of Coordinate Bench in the case of M3M India Holdings (ITA 2691/2018). And the judgment of Hon'ble High Court of Bombay in the case of Pr CIT vs. Smt. Shreelekha Damani [ ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-08 reg. Ref : No. DCIT (OSD)-1/CR- 7/Appr/2010-11 dt. 31.12.2010 As per this office letter dated 20.12.2010, the Assessing Officers were asked to submit the draft orders for approval u/s 153D on or before 24.12.2010. However, this draft order has been submitted on 31.12.2010. Hence there is no much time left to analyze the issue of draft order on merit. Therefore, the draft order is being approved as it is submitted. Approval to the above said draft order is granted u/s 153D of the I.T. Act, 1961." 7. In plain terms, the Additional CIT recorded that the draft order for approval under Section 153D of the Act was submitted only on 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, perfe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to verify and consider each assessment year and shall have to apply independent mind to the material on record to see whether in each assessment year there are un-abated or abated assessments and their effect, if any. But, in the present case, the Approving Authority i.e., JCIT has granted common approval for all the assessment years in respect of the single assessee. Thus, there is no application of mind on the part of JCIT while granting approval for all the common years instead of granting approval under section 153D for each assessment years separately. 13. In the present cases various approvals were granted by the JCIT, Central Range-1, New Delhi, and forwarding letter of the A.O. are placed on record in all the cases. In all the cases as per the forwarding letter of the A.O. only assessment records were forwarded to the JCIT, Range-1, New Delhi at the time of granting approval. Therefore, it is evident that the JCIT being the Approving Authority was neither having seized material nor the appraisal report or other material at the time of granting approval. In the approval under section 153D there is a reference to the A.O. letter only. There is no reference to the seized mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en cannot be added in the hands of M/s JIL as income which is also not done in the case of M/s. JIL, rightly so, how the same sale proceeds could be added as income in the hands of assessees under section 68 of the I.T. Act is not understandable. Thus, the Approving Authority without application of mind and in a most mechanical and technical manner granted approval under section 153D even without reference to any reason in the Order under section 153D of the I.T. Act. We, even, otherwise failed to understand that in search cases how an approval can be granted to an assessment year which is required to be based only on incriminating material without verification of those material and its reference in the appraisal report. The JCIT even in approval did not mention if assessment record is seen by him. 14. Another interesting aspect that has come to the notice on the basis of various documents submitted for approval as well as request for approval by the A.O. to the JCIT. We make a specific reference to letter dated 29.12.2017 written by ACIT, Central Circle-4, New Delhi, which is placed at page-144 of the PB. This letter Dated 29.12.2017 is a request for obtaining approval under sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT in all the cases are merely technical approval just to complete the formality and without application of mind as neither there was an examination of the seized documents and the relevance of various observations made by the Investigation Wing in appraisal report. Thus, we hold the approval under section 153D have been granted without application of mind and is invalid, bad in Law and is liable to be quashed. Since we have held that approval under section 153D is invalid and bad in law, therefore, A.O. cannot pass the assessment orders under section 153A of the I.T Act against all the assessees. Therefore, all assessment orders are vitiated for want of valid approval under section 153D of the I.T. Act and as such no addition could be made against all the assessees. In view of the above, we set aside the Orders of the authorities below and quash the assessment orders passed under section 153A of the I.T. Act as well as the impugned appellate Order. Resultantly, all additions are deleted. The additional grounds are allowed. In view of the above findings, the other issues on merits are left with academic discussion only. Accordingly, all the appeals of the Assessees are allowed. 1....