TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 432
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....view of the fact that the proper procedure of law has not been followed by the Id authorities below while granting the approval u/s. 153D of the Act. Assessment order passed u/s 153A of the Act is liable to be quashed since the statutory and mandatory approval as required u/s 153D of the Act sought and granted was totally mechanical and ritualistic only." 3. The ld. counsel for the appellant assessee requested for admission of the additional legal ground under pretext that the legal ground does not require new facts to be investigated, and since it goes to the root of the matter, to decide the appeal, and therefore, the additional ground may be admitted in the light of the judgement of Honorable Supreme Court in the case of NTPC limited Vs. CIT 229, ITR 383. that the additional grounds of appeal raised is legal in nature and which goes to the root of the matter to decide the appeals which was inadvertently not included in the grounds of appeal and it is being purely legal ground based on the facts on the record. The Ld. DR failed to rebut the contention of the appellant. 4. Since, the additional is purely legal in nature and it goes to the root of the matter; and hence, it can b....
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....ld be completed and orders should be uploaded in the ITBA portal well in time. We are enclosing herewith list of books, documents etc found and seized during search at page no. 11-13. Perusal of these pages will reveal that 2357 pages have been seized from 810, GTB Nagar, Jalandhar and 374 pages have been seized from H. No. 14-15, Guru Nanak Nagar, Model Town, Jalandhar. Total papers seized comes to 2731 papers. Assessee filed replies for all the assessment years and papers filed in replies comes to approximately 1000 papers. 4. That from the letter of the Assessing Officer and letter of Joint Commissioner of Income Tax, Central Range, Jalandhar your honor will observe that whole exercise of approval by Joint Commissioner of Income Tax, Central Range, Jalandhar and release of final assessment orders for all the years was completed within few hours which is practically not possible. Letter for approval of assessment orders was received in the office of Joint Commissioner of Income Tax on 31.12.2018, approval was granted on 31.12.2018 and assessment orders were also released on 31.12.2018. 5. That it is worthwhile to mention here that Joint CIT, Central Range, Jalandhar at that....
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....ssment is framed by the Assessing Officer after proper enquiries/investigations. There is a statutory duty u/s 153D of the Act on the Joint/Addl. Commissioner of Income Tax to examine the assessment record and accord approval after through examination of seized material and proceedings conducted by the Assessing Officer which needs lot of time. The meaning of "approval" u/s 153D of the Act is that the Joint CIT is required to verify issues raised by the Assessing Officer in the draft assessment orders and apply his mind and to ascertain as to whether the entire facts have been properly appreciated by the Assessing Officer. He is also required to verify whether the required procedure has been followed by the Assessing Officer or not. Approval cannot be a mere discretion or formality but quasi-judicial function based on reasoning. 8. That assessment orders for all the years sent for approval, approval granted and final orders released on the same day clearly establish that approval granted u/s 153D of the Act is no approval in the eyes of law since approval has been granted without application of mind. Approval u/s 153D of the Act has been granted mechanically which makes the asse....
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....ears were sent by the AO vide letter No. CC-I/JAL/153B/CUCB/2018-19/1952 dated 30.12.2018 which was received in the office of the Joint CIT, Central, Range, Jalandhar the Competent Authority on 31.12.2018, which included the assessment of the Five cases of appellant assessee in respect of Five Different Assessment Years. All these Assessments were approved on same date i.e. 31.12.2018. In our view, it is humanly impossible to apply independent mind to satisfy the competent authority perse se to grant the approval u/s 153D of the Act on same date i.e. 31.12.2018 to complete the entire exercise of sending and receipt, of draft proposal, dispatch and deliver in the office of Competent authority and vice versa who had to go through the records and assessment orders of 7 Assessment Years in one day. Meaning thereby, the approval granted was a mechanical exercise of power, in the instant Assessments. 11. The Hon'ble High Court in the case of Pr. CIT and Anr. v. Subodh Agarwal dated 12.12.2022 [2022] 115 CCH 0528 All HC, while adjudicating on the issue of Approval u/s 153D has observed as under: "It was submitted by the assessee that in search cases, the Assessing Officer before passin....
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....s for assessment in case of search under Section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in Clause (b) of sub-section (1) of Section 153A. The proviso to Section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A. In the instant case, the draft assessment order in 38 cases, i.e. for 38 assessment years placed before the Approving Authority on 31.12.2017 was approved on same day i.e. 31.12.2017, which not only included the cases of respondent- assessee but the cases of other groups as well. It is humanly impossible to go through the recor....
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....as was required to be issued with the approval of ACIT, in view of CBDT instruction was not issued with his approval - Since no time was left to analyze issue of draft order on merit, order was approved solely relying upon undertaking obtained from AO that he has taken due care while framing assessment - Thus, sanctioning authority delegated his statuary duty to grant Approval, after due application of his mind, to the same subordinate AO, whose action ACIT, was supposed to supervise - ACIT without any consideration on merit in respect of issues on which addition was made granted Approval on undertaking of AO - This approach rendered Approval to be an eyewash and idle formality and such a mechanically granted Approval is no approval in eyes of law - Assessment orders u/s 153A quashed - Assessee's appeal allowed." 13. On similar facts, Recently, the Coordinate Bench in the case of "Shri Balwinder Singh Kohli vs. DCIT", in ITA No. 87/Asr/2017 vide it decision dated 21/06/2023 on the matter of Approve u/s 153D of the Act has granted relief to the assessee by observing as under: "5. We have heard the rival contentions, perused the material on record, impugned order, written submiss....
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.... facts are admitted before us, the questions of law framed on the factual issues related to the findings recorded by the Assessing Officer are not open to agitate within the scope of the present appeals being in the nature of second appeal. No substantial question of law arises for consideration before us. 21. The Appeals are dismissed being devoid of merit.'' 8. In another case of "Principal Commissioner of Income-tax v. Subodh Agarwal"', [2023] 149 taxmann.com 373 Hon'ble Allahabad High Court vide para 18 and 20 of the judgment has held as under: 18. The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in the assessment order. It is admitted by Sri Gaurav Mahajan, learned counsel for the appellant-revenue that the approval order is an administrative exercise of power on the part of the Approving Authority but it is sought to be submitted that mere fact that the approval was in existence on the date of the passing of th....
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....anted mechanically, it would vitiate the assessment order itself. In Sahara India (Firm) (supra), the Supreme Court explained as under: "8. There is no gainsaying that recourse to the said provision cannot be had by the Assessing Officer merely 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." 22. As rightly pointed out by learned counsel for the Assessee there is not even a token mention of the dr....
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....assessment orders themselves. 10. In the instant cases, the AO has submitted the draft assessment order on 20/03/2015 before the Approving Authority who had approved on same day i.e. 20/03/2015. In our view, it was humanly impossible to peruse records of all 5 cases in one day to apply independent mind to appraise material records. Further, the approving authority has not mentioned any indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. Even the approving authority has not written or repeated the words of the statute, in granting the approval u/s 153D of the Act. We are therefore of the considered view that mere endorsing a list of cases by signature with "rubber stamping" of the letter without mentioning even the words like 'seen' or 'approved' will not satisfy the requirement of the law for approval or sanction u/s 153D of the Act. Therefore, we hold that in the present case, the prior approval of the Additional CIT before passing the order of assessment in pursuant to a search operation being a mandatory requirement of section 153D of the Act was not as per law because such approval is not m....