TaxTMI 
TaxTMI 
2021 (3) TMI 1414
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.... 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 possible for him to go into deep. Therefore, the JCIT without going to the material available on record including the draft assessment order approved only for technical requirement u/s 153D of the Act. Referring to section 153D of the Act , the ld. representative for the assessee vehemently argued that unless the JCIT applies his mind to the material available on record and the draft assessment order as proposed by AO, it cannot be construed as approval as required u/s 153D of the Act. Placing reliance on the order of the Delhi Benches of this Tribunal in Sanjay Dungal & Others vs. M/s. ACIT in ITA No. 1813/Del/2019 & Ors. (copies of which available in the P.B). Submitted that approval of JCIT is not a mere formality or ritual. It is mandatory requirement of the statutory provision. 3. The ld. representative for the assessee further submitted that since the JCIT has not applied his mind to the facts of the matter and granted only a technical approval, the A.O. has no jurisd....
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....hority 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 ITR 495). The ld. DR submitted that the power to determine the income vest in the authority exercising the quasi-judicial function. It is in violation of principle of quasi-judicial function that can render the assessment invalid. The Act of Administrative Approval by Additional C.I.T. does not take away the quasi-judicial powers which still vests in A.O. Therefore, even if there is some defect in the technical approval granted by the JCIT, the same may not invalidate the order of assessment. 6. We have carefully gone through the orders of both the authorities below in the light of the arguments advanced on both the sides and the material available on record. The issue of approval u/s 153D goes to the very root of the matter. For the purpose of convenience, the provision of section 153D is reproduced herewith. [SECTION 153D. Prior approval necessary for assessment in cases of search or requisition No order of assessment or reassessment shall be passed by an As....
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.... 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 JCIT on the one hand and A.O. on other and also a letter written by JCIT to the Commissioner. OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX RANGE-1, CR BUILDING, NAPIER TOWN, JABALPUR 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 15th 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 15.12.2011 1. Aditya Welfare Trust 2004-05 to 2010-11 2. Vedansh Welfare Trust 2004-05 to 2010-11 3. Vineet Welfare Trust 2004-05 to 2010-11 4. Ankur....
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.... RANGE-1, CR BUILDING, NAPIER TOWN, JABALPUR 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 20th 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 20.12.2011 1. Pawan Kumar Mittal(Indl) 2004-05 to 2010-11 2.Suresh Kumar Mittal (Indl) 2004-05 to 2010-11 3. Vijay Marbles Pvt. Ltd. 2004-05 to 2010-11 4. PLM Builders Pvt. Ltd. 2004-05 to 2010-11 5.Trackway Securities & Finance Pvt. Ltd. 2004-05 to 2010-11 6. Mittal Tractors Pvt. Ltd. 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 f....
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....e of the assessee Assessment year 26.12.2011 1. Vijay Kumar Mittal Katni (Indl) 2004-05 to 2010-11 2. M/s Mittal Roadways 2004-05 to 2010-11 3. M.P Minerals Pvt. Ltd. 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 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,....
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....II Jabalpur-Clarification- regarding- 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 transferred back to the mittal family in later years. During the course of search, such share certificates, transfer forms, power of at....
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....nvestment 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 short, the point is clarified as- Mr. Kale is an Adivasi and as per the Govt. guidelines, the land of adivasis cannot be purchased by an....
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....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 one hand and the JCIT on the other hand and the letter addressed by the JCIT to the Commissioner clearly shows that it was at the stage ....
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....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 returned herewith.' (emphasis, supplied) The facts and circumstances leading to the said 'approval' have been discussed in detail, ....
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....ties 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 actual assessment is made and he saddled with a pecuniary liability resulting from it. The object appears to be to avoid multiplicity of procee....
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....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 is equally impermissible to question the bona fides of the approval as given or the truthfulness of what is stated in the 'approval' letter or ind....
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.... 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 approval', lack of which may therefore not be fatal to the assessment. It may be necessary to clarify this aspect as want of administrative action,....
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....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 being directory.' 5.2 The issue, nevertheless, is not res integra; the decision in CIT vs. Maharaja Pratap Singh Bahadur of Gidhaur [1961] 41 IT....
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....s 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 amending Act provides that the amending section shall be deemed to have come into force on March 30, 1948, and thus by this retrospectivity, indicates a different intenti....
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.... 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. Reference in this regard may also be made to CIT v. Ratanbai N.K. Dubhash [1998] 230 ITR 495 (Bom). There is however no gainsaying that the time constraint, as stated in th....