TaxTMI 
TaxTMI 
2021 (4) TMI 986
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.... to 134 &136 to 138, 115 &116, 130 & 131, 121, 122 & 123, 151, 152, 141, 124/JAB/2014, CO No.39, 79, 80, 81, 12, 30, 31, 26, 92, 93, 103, 113, 114, 16, 17, 50, 66, 69, 70, 71, 51, 52, 73, 74/JAB/2014 Shri Nrs Ganesan, Judicial Member And Sanjay Arora, Accountant Member For the Appellant : Shri Dhiraj Ghai, CA For the Respondent : Smt. Neerja Pradhan, C.I.T.-DR ORDER PER BENCH: All the appeals of the independent assessee are directed against the respective orders of ld. C.I.T.(A). Since common issues arising for consideration in all these appeals, we heard the same together and disposing of the same by this common order. 2. Shri Dhiraj Ghai, the ld. representative for assessee submitted that the first ground taken by him is with regard to approval by the JCIT as required under section 153D of the Income Tax Act, 1961 ( 'the Act' hereinafter). According to ld. representative for the assessee, no assessment order shall be passed unless it is approved by the JCIT. Referring to Paper Book, the ld. representative for the assessee submitted that the JCIT in categorically terms says that due to shortage of time as he was holding charges of six ranges, it was not pos....
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....e A.O. Referring to the copy of the letter addressed to the A.O. by the JCIT, the ld. DR submitted that there were discussions between the A.O. and the JCIT, therefore, it cannot be said that there was no application of mind. The A.O. also has responded to the letter of the JCIT dated 21.12.2011 by this letter dated 22.12.2011. The assessee was also invited for the discussion along with the A.O. in the chambers of the JCIT. The JCIT has also written a letter to the Commissioner on 20.12.2011 in order to take the Commissioner into confidence. The A.O also by his letter dated 26.12.2011 reminded the JCIT to give approval at the earliest opportunities, since, the assessment is getting time barred. 5. The ld. DR placed her reliance on the judgment of the Supreme Court in C.I.T. vs. Jai Prakash Singh (219 ITR 737) and submitted that charging sections fix the liability to tax and any violation of machinery provision will not render the assessment order void. Once the superior authority agreed to the finding of the lower authorities then it is not necessary to record reasons for so agreeing. Referring to the judgment of the Bombay High Court in C.I.T. vs. Ratanbai N.K. Dubash (230 I....
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..... It is not a copy of approval as required by statutory provision. Therefore, the Judgment of the Apex Court is not applicable to the facts of this case. 9. We have also gone through the judgment of the Bombay High Court in Mrs. Ratanbai N.K. Dubash (supra). In this case, the AO passed the order without obtaining direction from Inspecting assisting Commissioner. Hence, the assessment was annulled. This judgment of the Bombay High Court in fact supported the case of the assessee. Moreover, the Bench of the Tribunal in Tarachand Khatri (supra) has found that on identical circumstances, there was no approval u/s. 153D of the Act. One of the Accountant Member is party to the order. 10. Now, let us examine whether the JCIT granted approval for passing the assessment order. Under the scheme of the Act, u/s. 153D, the Commissioner has no role to play. It is not known, why the JCIT intended to take the Commissioner into confidence by addressing a letter to him. The Commissioner has all the powers u/s. 263 of the Act, in case, he/she is satisfied that the assessment order is erroneous and prejudicial to the interest of revenue. We are reproducing the correspondence between the J....
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....bsp; Dated: 26.12.2011 To The Asstt. Commissioner of Income Tax, Circle, Katni Sub: Statutory approval of Draft Assessment order u/s 153D in the cases of different assesses of Mittal Group, Katni- Reg. Please refer to your letter No.ACIT/KTE/MITTAL/153D/11-12 dated 26th December, 2011 forwarding therewith draft assessment orders in Mittal Group of cases for AY 2004-05 to 2010-11: Covering letter date Name of the assessee Assessment year 26.12.2011 1. Vijay Kumar Mittal Katni (Indl) 2. M/s Mittal Roadways 3. M.P Minerals Pvt. Ltd. 2004-05 to 2010-11 2004-05 to 2010-11 2004-05 to 2010-11 2. Due to shortage of time, as I am holding charge of six Ranges, it is not possible for me to go into the deep, therefore, the draft assessment orders in the following cases submitted by you are hereby approved u/s 153D as per technical requirement. Case records as received are returned herewith. 3. Please ensure p....
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....R HOLDING ADDITIONAL CHARGE OF RANGE-II, JABALPUR RANGE-SATNA, KATNI, CHHINDWARA AND SAGAR F.No.JCIT/Range/Katni/Mittail/2011-12 Dated: 26.12.2011 To The Asstt. Commissioner of Income Tax, Circle, Katni Sub: Statutory approval of Draft Assessment order u/s 153D in the cases of different assesses of Mittal Group, Katni- Reg. Please refer to your letter No.ACIT/KTE/MITTAL/153D/11-12 dated 16th December, 2011 forwarding therewith draft assessment orders in Mittal Group of cases for AY 2004-05 to 2010-11: Covering letter date Name of the assessee Assessment year 16.12.2011 1. Smt. Satya Devi (Individual) 2004-05 to 2010-11 2. Smt. Sarla Mittal (Individual) 2004-05 to 2010-11 3.Smt. Kavita Mittal (I....
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....ubmitted by you are hereby approved u/s 153D as per technical requirement. Case records as received are returned herewith. 3. Please ensure passing of order, issue of demand notice and challan as also service before the limitation date. (Abhishek Shukla) Jt. Commissioner of Income Tax Range-Katni OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX KATNI (MP) F.No.ACIT/Assessment/Approval/Mittal/2011-12 Dated: 22.12.2011 To The Joint Commissioner of Income Tax, Range-Katni, Katni(MP) Sub: Reply to your letter regarding approval of Draft Assessment order u/s 153A/143(3) in case of different assessee of Mittal Group, Katni- Reg. Ref: Your letter F.No.JCIT/R-KATNI/Mittal Group/11-12, dated 21/12/2011 Sir, Please refer to above, in this connection m....
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....ted 20.12.2011- addressed to CIT-II Jabalpur and copy endorsed to me & dated 21/12/2011 addressed to me and copy to CIT-II Jabalpur-Clarificationregarding- Please refer to the above. It may be clarified that till 20/12/2011 in 21 cases draft orders were submitted to your office. However, from the letter address to me, I am unable to understand it is whether approval under section 153D or directions to reframe the assessments. Please clarify assessee wise and assessment year wise. 2. As regard the addition in the case of Smt. Sarla Mittal, one of the member of mittal family, it was clearly stated before your honour and also before Shri Lalit Mittal and RN Mittal, CA that the amounts of Rs. 13,00,000/- was the shares claimed to have been sold by the relevant companies to various fictitious persons of Delhi and Kolkatta, the identity of these persons (companies) could not be traced by the Investigation wing during the post search enquiry and also the fact that the letters issued by me during the assessment proceedings were received back unserved with the postal remark "No such addressee". It is also relevant to mention that those shares were transfe....
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....sing of assessment order is stayed. However, it was made clear that assessment order may be prepared and not to be released. 5 Investment in Jewellery and capital gain on sale of these jewellery items linked to land purchased by the assessee in the name of Shri Kale- First of all, I may made it clear that the capital gain on sale of jewellery was made on account of purity of gold i.e. the gold jewellery purchased/possessed having purity of 79.96 and when it was sold, the purity was around 90. Some of the jewellery was claimed to have been acquired by gift from various family members. In spite of repeated opportunities given, the assessee had not given any details regarding the name of the person or the date of acquisition by those persons gifted the jewellery. In that situation, in my view except to apply the provisions of section 49(1), I have no other alternative. In view of this, it is requested that specific directions be given to exclude the capital gain on sale of jewellery particularly in view of purity and date of acquisition. As regards the purchase of land in the name of Mr Kale, in spite of repeated opportunity, the assessee had not given any detail. In....
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....the short time span, I could complete the search & seizure assessments. 10. It may be made clear that recently my Sister-in law(Bhabhi) expired on 21" Dec.2011 and due to these time barring cases, I could not even see her during her alling time or otherwise to attend the funeral which was held on 22/12/2011. At the same time, my mother was already a paralytic patient and recently suffered a second paralytic attack. 10. It may further be stated here that the valuation reports in the cases of Shri Vijay Kumar Mitital, MP Minerals and Mittal Roadways were received recently, and the assesee was given an opportunity to furnish their objections to the proposed valuation. Only on receipt of the objections, these cases could be finalized. At the end, it may be mentioned that all the assessments in Mittal group are getting barred by limitation on 31/12/2011, keeping in view the peculiar situation, may I request you to kindly issue clear instructions whether to maintain the addition or to delete the additions proposed. Yours faithfully, (Sanjay Kumar) Asstt. Commissioner Of Income tax Circle, Kátni. 11. From the above correspondence between the A.O. on....
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...., are being stated per a separate, assent order, which is to be read in conjunction with the said order. 2. The appeal raises the issue of maintainability of the impugned assessments in view of the approval u/s. 153D of the Act dated 26/12/2011 by the Joint Commissioner of Income Tax, Jabalpur ('Jt. CIT' for short). Section 153D reads as under: 153D. Prior approval necessary for assessment in cases of search or requisition 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 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. (emphasis, supplied) The operative part of the approval letter afore-referred reads as under: 'Due to shortage of time, as holding charge of six ranges, it is not possible for me to go into the deep, therefore, the draft assessment orders in the following cases submitted by you are hereby approved u/s. 153D as per technical requirement. Case records as received are re....
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....hat being itself a subjective matter, which would vary from person to person. Rather, as the communications exchanged between the two authorities would reveal, there was consideration of and application of mind to the various aspects of the assessment/s. It may, toward this, be relevant to traverse the provision, considering it in light of the legislative intent leading to its enactment. The provision of section 153D was brought on the statute-book by Finance Act, 2007, w.e.f. 01.6.2007. The scope and effect of its insertion has been elaborated in Board Circular 3/2008, dated 12.3.2008. It states of the law providing thus for an approval of an assessment in cases where search has been conducted or requisition made. Not much guidance also flows from the Notes on Clauses explaining the statutory change; the sections 153A to 153C having been inserted on the statute-book by Finance Act, 2003, w.e.f. 01/4/2003. A review of the provisions of section 144A and, since omitted, section 144B, reveal them, and even as explained by the Hon'ble Courts, to be designed to provide a pre-assessment review and a forum to an assessee to know the merits of the proposed assessment order before the....
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....verwhelmed by the volume of work involved in the short span of time available, recused himself - so to speak, by issuing 'technical' approvals. Either way, the object and intent of the law gets defeated. Nothing, therefore, turns in law on the fact of deliberations between the assessing and the reviewing authority - which Ms. Pradhan, the ld. CIT-DR, was at pains to emphasize before us, as the assessment order/s that came to be finally passed cannot be regarded as an approved order/s, being 'approved', as apparent, to meet, in the given facts and circumstances of the case, the technical requirement of 'approval'! It is also not open for this Tribunal to travel beyond the express statement by the competent authority in the 'approval letter', and to, upon a review of the correspondence exchanged (including the material referred to therein) between the Revenue authorities, form an opinion as to whether the approving authority ought to have been, or been not, satisfied. It is his, and his satisfaction alone that is relevant, and doing so would be to intrude upon and usurp his supervisory power and duty with regard to assessment, framing of which is the prerogative of the Revenue. It....
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....und by the Appellate Courts, as in Tarachand Khatri v. Asst. CIT (in ITA No. 21/Jab/2019, dated 17/01/2020), of there being in fact no satisfaction inasmuch as the same could not arise under the given facts and circumstances, as, for example, apparent inconsistencies and anomalies in the 'approved' assessment order. Needless to add, this again can be examined by the Courts only from the stand-point of a prima facie satisfaction of the competent authority. 5. The question that arises next for consideration is the legal consequence of such an approval, i.e., which cannot be regarded as one in the eyes of law. Without doubt, there has been thus, in fact, noncompliance of section 153D of the Act. The provision, cast in negative terms, coupled with the use of word 'shall', clarifies a mandatory intent, law on which is well-settled (see: Montreal Street Railway Co. v. Normadin [1917] A.C. 170, relied upon and applied in, to cite some, Hazari Mal Kathulia v. ITO [1961] 41 ITR 12 (SC) and Bhakta Vedanta Swami Charitable Trust vs. CIT (in WP(C) 12347/2005, dated 09/5/2006 (Orissa)). 5.1 An issue that came up in this regard during hearing was of the 'approval' being an 'administrative ....
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....ncil case was also applied by the Federal Court in Biswanath Khemka vs. King Emperor [1945] F.C.R. 99 and there, as pointed out by this Court, the words of the provision were even more emphatic and of a prohibitory character. The essence of the rule is that where consultation has to be made during the performance of a public duty and an omission to do so occurs, the action cannot be regarded as altogether void, and the direction for consultation may be treated as directory and its neglect, as of no consequence to the result. In view of what has been said in these cases, the failure to consult the Central Board of Revenue does not destroy the effectiveness of the order passed by the CIT, however wrong it might be from the administrative point of view. The power which the CIT had, was entrusted to him, and there was only a duty to consult the Central Board of Revenue. The failure to conform to the duty did not rob the CIT of the power which he exercised, and the exercise of the power cannot, therefore, be questioned by the assessee on the ground of failure to consult the Central Board of Revenue, provision regarding which must be regarded as laying down administrative control and as ....
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....and thus expose the defendant to a double jeopardy for the same act, unless the statute expressly and by definite words gave him that right. The Privy Council case is thus entirely different. No doubt, under section 6 of the General Clauses Act it is provided that where any Act repeals any enactment, then unless a different intention appears, the repeal shall not affect the previous operation of any enactment so repealed or anything duly done thereunder or affect any right, obligation or liability acquired, accrued or incurred under any enactment so repealed. It further provides that any legal proceedings may be continued or enforced as if the repealing Act had not been passed. Now, if the amending Act had repealed the original section 34, and merely enacted a new section in its place, the repeal might not have affected the operation of the original section by virtue of section 6. But the amending Act goes further than this. It repeals the original section 34, not from the day on which the Act received the assent of the Governor-General but from a stated day, viz., March 30, 1948, and substitutes in its place another section containing the proviso abovementioned. The amend....
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....u/s. 153D, is an invalid order/s, to which no cognizance in law can be given. The plea of the 'approval' thereunder being an 'administrative approval/action' is thus to no moment. As explained in Panchamahal Steel Ltd. v. ITO [1997] 225 ITR 458 (SC), in the context of sec. 144B, the AO becomes practically functus officio after forwarding the draft assessment order along with the assessee's objections to the approving authority, and is to thereafter only follow the directions by the latter, which he cannot vary or depart from. His acceptance of the revised return by the assessee thereafter, even though furnished within the time period stipulated by law therefor, was accordingly disapproved by the Hon'ble Court, explaining that the provision of sec. 139(5) for furnishing a revised return is to be understood and construed in a reasonable manner. Sure, time permitting, it is open for the AO to, as in Maharaja Pratap Singh Bahadur (supra), seek fresh approval (u/s. 153D), and issue an assessment order - marking the culmination of the process of framing the assessment. This is, again, for the same reason; an order passed without a valid approval being of no consequence in law. Refe....