TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 416
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.... quashed since the statutory and mandatory approval as required u/s. 153D has not been obtained and the approval sought and granted was totally mechanical and ritualistic only." 3. The Ld. Counsel for the assessee stated that this ground is purely legal in nature and no new facts are required for the adjudication of this ground and hence, the same deserves to be admitted keeping in mind the law laid down by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. (NTPC) Vs. CIT (1998) 229 ITR 383(SC). The Ld. Counsel for the assessee took us through the Paper Book filed on 18.05.2021 whereby he has enclosed copy of approval granted u/s. 153D of the Act vide dated 29.06.2017. The Ld. Counsel for the assessee took us through the letter written by the AO to the Addl. CIT vide No. ACIT/C-II/Ldh/2017-18/446, dated 29.06.2017 and pointed out that the AO applied for approval u/s. 153D of the Act to the Addl. CIT only on 29.06.2017. He further took us through page No. 2 of assessee's Paper Book wherein relevant approval was granted u/s. 153D of the Act by the Addl. CIT, Central Circle Range, Ludhiana vide F. No. Addl. CIT(C), R/Ldh./16-17/560, dated 29.06.2017. He ....
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....ies that the assessee's application for additional ground is dated 19.03.2021 whereas the assessee has deposited the challan for taking copies from the AO only on 20.03.2021. According to her, this application is totally mechanical and ritualistic and documents obtained from the Department were not available with the assessee at the time of raising this additional ground. Hence, she argued that at this very count the assessee's additional ground should be rejected. 5. When this fact was pointed out to the Ld. Counsel for the assessee, he stated that the assessee obtained the letter written by the AO to the Addl. CIT for approval of assessment order u/s. 153D of the Act and approval accorded by the Addl. CIT u/s. 153D of the Act were actually handed over by the AO only on 19.03.2021, whereas the assessee was asked to deposit a sum of Rs. 100/- which was eventually deposited only on 20.03.2021. When a question was pointed out to the Ld. CIT DR about the authenticity of these documents, she stated that these documents are taken from the Department but her only point is that the assessee first raised this additional ground and after that obtained the copies of approval accorde....
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....2006-IT (Inv. II) dated 22.12.2006 wherein entire process of search and seizure assessment is mentioned and according to her this is strictly followed and there is no deviation from the same. She also stated that the Addl. CIT is supervising authority of the AO in case of search assessment and there is no allegation by the assessee that there is any deviation in the process. She read out the relevant clauses of the above circular issued by the Board. 10. We have gone through all the facts of the case first and also gone through the Paper Book filed by the assessee on 18.05.2021 wherein relevant two documents i.e. letter by the AO to the Addl. CIT which is enclosed in assessee's Paper Book at page No. 1 and which reads as under: Government of India Office of the Asst. Commissioner of Income Tax, Central Circle-II, Opp. B.V.M. School Kitchlu Nagar, Ludhiana. No. ACIT/C-II/Ldh/2017-18/446 Dated: 29.06.2017 To The Additional Commissioner of Income Tax, Central Range, Ludhiana. Madam, Sub: Approval under section 153D of the Income Tax Act, 1961-in the case of M/s. Inder International (PAN AABFI7996J) and Sh. Abhay Jain (PAN AHEPJ7203M)-matter regarding- ****....
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....; to 2016-17 (six Years U/s 153A) 2. Sh.Abhay Jain Prop. M/s Shree Lakshmi Steels, 467, Industrial Area-B, Millerganj, Ludjhiana AHEPJ7203M 2012-13 to 2016-17 (Five Years U/s 153C) Necessary statutory approval u/s. 153D is given to pass the above assessment order, as sub. Assessment record in this case is returned herewith. Encls: As above. Sd/- (Dr. Rajinder Kaur) Addl. Commissioner of Income Tax Central Range, Ludhiana 11. From these two documents it is clear that the AO has prepared a draft assessment order only either on 28.06.2017 or on 29.06.2017. This draft assessment order was sent to the Addl. CIT only on 29.06.2017 alongwith draft assessment order of other group cases and the Addl. CIT, Central Range, Ludhiana has accorded approval u/s. 153D of the A....
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.... 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." 13. We have also gone through the recent case law of Mumbai Tribunal in the case of Arch Pharmalabs Ltd. (supra) wherein the Tribunal held as under: "11.1. It may be pertinent to observe at this stage that the impugned assessment orders were passed u/s. 143(3) rws 153A of the Act for the AY 2003-04 to AY 2008-09 and for the AY 2009-10 u/s. 143(3) of the Act pursuant to search carried out under s. 132 of the Act. For passing such assessment orders, the Assessing Officer is governed by s. 153D of the Act whereby the Assessing Officer should complete the assessment proceedings and prepare a draft assessment order which need to be placed before the approving authority i.e. Joint/Addl. Commissioner (designated authority giving approval to search assessments u/s. 153D of the Act).....
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....t in letter and spirit. It is evident from the communication of AO and consequent approval thereon under S. 153D that no assessment record for any assessment year in question or any seized material had traveled to the authority concerned for his objective consideration of the same qua the draft assessment orders. No reference in this regard is made in the approval note either which may discard such allegation as untrue. No other material or order sheet in assessment proceedings etc. were placed before us either to establish otherwise. Except these two documents namely, a solitary communication from AO to the Addl. CIT dated 29/12/2010 and an in turn approval by Addl. CIT dated 31/12/2010, there is nothing else before us to gauge the facts differently. A bare glance at the approval so accorded makes it evident that such approval is generic and listless and accorded in a blanket manner without any reference to any issue in respect of any of the 7 assessment years. Apparently, the approval has been granted on a dotted line without any availability of reasonable time which firms up the belief towards non application of mind. Besides, the approval has been granted in a consolidated mann....
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....iny, it should stand for itself and should be self-defending. There are long line of judicial precedents which provides guidance in applying the law in this regard. 11.5. At the cost of repetition, it may be reiterated that in the instant case, approving authority did not mention anything in the approval memo towards his/her process of deriving satisfaction so as to exhibit his/her due application of mind. We may observe that Para 2 of the above approval letter merely says that "Approval is hereby accorded u/s. 153D of the Income-tax Act, 1961 to complete assessments u/s. 143(3) r.w.s. 153A of the I.T. Act in the following case on the basis of draft assessment orders..."which clearly proves that the Addl. CIT had routinely given approval to the AO to pass the order only on the basis of contents mentioned in the draft assessment order without any application of mind and seized materials were not looked at and/or other enquiry and examination was never carried out. From the said approval, it can be easily inferred that the said order was approved, solely relying upon the implied undertaking obtained from the Assessing Officer in the form of draft assessment order that AO has taken ....
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....ed." 14. In view of the above decision and the fact that in the present case before us also the Addl. CIT has accorded the approval u/s. 153D of the Act only on 29.06.2017 when the AO placed the assessment order on that very date i.e. 29.06.2017. The relevant approval by the Addl. CIT reads as under: "Necessary statutory approval u/s. 153D is given to pass the above assessment order as such. Assessment record in this case is returned herewith." 15. From the above, it is clear that this is totally non application of mind by the Addl. CIT, who is the supervising authority of the AO, while granting statutory approval u/s. 153D of the Act, the issue stands covered in favour of the assessee by various decisions cited above. In the present case before us, we noted that the Addl. CIT did not mention anything in the approval memo towards his process of deriving satisfaction so as to exhibit his due application of mind. We noted that the Addl. CIT merely approved the letter and the relevant is noted in above paras. We noted that the relevant Para of the above approval letter merely says that "Necessary statutory approval u/s. 153D is given to pass the above assessment order as such. Ass....