AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2024 (3) TMI 88
X X X X Extracts X X X X
X X X X Extracts X X X X
....re similar we are referring grounds of the assessment year 2009-10 as under : "I. T. A. No. 4461/Delhi/2019 (the Revenue's appeal) 1. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in law while holding that there was no incriminating material for the issuance of notice under section 153C, without appreciating that material seized during the search operations constituted 'incriminating material' for the purpose of the issue of notice under section 153C in the context of the assessee. 2. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in law while holding that there was no incriminating material for the issuance of notice under section 153C, without appreciating that while recording the satisfaction for issue of section 153C the test for 'incriminating material' has to be only in nature of prima facie belief based on some material having live nexus and not in the nature of absolute evidence established after detailed investigation of the facts or law. 3. Whether on the facts a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns of Rs. 16,95,19,950 on the account of alleged unexplained cash credits under section 68 of the Income-tax Act, 1961. 5. On the facts and in the circumstances of the case and in law, the assessment order passed by the Assessing Officer is contrary to the provisions of section 153D of the Income-tax Act, 1961." 4. The brief facts of the case are that a search and seizure operation was carried out under section 132(1) of the Act in M/s. Apple Group of Companies (AGC) on November 11, 2014 wherein certain incriminating documents were found and seized belonging to the assessee. Thereafter, notices under section 153C of the Income-tax Act, 1961 (for short "the Act") were issued for the assessment years 2009-10 to 2013-14. Further, the assessee filed its return showing income of Rs. (-) 2,04,664, Rs. nil, Rs. (-) 61,071, Rs. (-) 37,162 and Rs. (-) 49,505 respectively. Subsequently, notices under sections 143(2) and 142(1) were issued and the Assessing Officer completed assessment by making addition of Rs. 16,65,19,950, Rs. 3,18,73,447, Rs. 38,13,12,000, Rs. 3,59,00,000 and Rs. 65,00,000 for the assessment years 2009-10 to 2013-14 on account of unexplained cash credit under s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....approval. 1.2. The letter addressed by the Assessing Officer to Joint Commis sioner of Income-tax seeking his approval is reproduced as under : F. No. DCIT/cc/Noida/S&S/153D/2016-17/2623 Dated : 30-12-2016 To, The Joint Commissioner of Income-tax, Central Range, Aayakar Bhawan, Bhainsali Ground, Meerut. Sir, Sub : Draft assessment orders under section 153A/153C/143(3) of the Income-tax Act, 1961 in Apple Group (D. O. S. November 11, 2014)-Approval under section 153D of the Income-tax Act, 1961-regarding Please find herewith revised list of cases for your kind approval under section 153D of the Income-tax Act : SI. No. Name of the assessee PAN Assessment years 1. Shri Narender Kumar Garg, AEKPG6296A 2009-10 to 2015-16 2. Smt. Shaloo Narender Kumar Garg AADPG1563F 2009-10 to 2015-16 3. Shri Yogender Kumar Garg ABIPG9791P 2009-10 to 2015-16 4. Smt. Madhu Garg ABIPG9792Q 2009-10 to 2015-16 5. Shri Pulkit Garg AJEPG5760A 2009-10 to 2015-16 6. Smt. Ruchi Garg AAIPG1671M 2009-10 to 2015-16 7. Shri Pawan Kumar Garg AAHPG8132G ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to 2015-16 4. Smt. Madhu Garg ABIPG9792Q 2009-10 to 2015-16 5. Shri Pulkit Garg AJEPG5760A 2009-10 to 2015-16 6. Smt. Ruchi Garg AAIPG1671M 2009-10 to 2015-16 7. Shri Pawan Kumar Garg AAHPG8132G 2009-10 to 2015-16 8. M/s. Apple Industries Ltd. AAGCA9960N 2009-10 to 2015-16 9. M/s. Nirman Stelco P. Ltd. AACCN4842Q 2009-10 to 2015-16 10. M/s. M. G. Metalloy P. Ltd. AAGCM5789D 2011-12 to 2015-16 11. M/s. Promart Retail India P. Ltd. AAFCP8743B 2009-10 to 2015-16 12. M/s. Apple Sponge & Power Ltd. AAFCA1965L 2009-10 to 2015-16 13. M/s. Apple Metal Industries Ltd. AAACD7670E 2009-10 to 2015-16 14. M/s. Apple Buildtech Ltd. AAFCA8106K 2009-10 to 2013-14 15. M/s. Apple Insurance Brokers P. Ltd. AAECA5320N 2009-10 to 2015-16 16. M/s. Zync Global P. Ltd. AAACZ5235H 2012-13 to 2015-16 17. M/s. Apple Iron Enterprises P. Ltd. AAHCA8642G 2010-11 to 2013-14 18. M/s. Mastermind Trade-in-P. Ltd. AAECM9435E 2009-10 to 2015-16 3. A technical approval is accorded to pass assessment orders in the above cases on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d and uncertain approval. This is not the man date of the Act. The action of the Joint Commissioner of Income-tax of granting the approval was a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. Therefore, the approval is invalid in the eyes of law. 2. It may also be submitted that appeal of another group company M.G. Metalloy P. Ltd., involving the same approval under section 153D has been considered and allowed in favour of the assessee by the hon'ble Income-tax Appellate Tribunal in I. T. A. No. 3693/Delhi/2018 vide order dated May 8, 2023 M. G. Metalloy P. Ltd. v. Dy. CIT. Therefore, the issue involved in the present appeal stands covered in favour of the assessee-company. 8. Per contra, the learned Departmental representative for the Revenue relied upon the order of the Assessing Officer. 9. Upon careful consideration, we find that the Income-tax Appellate Tribunal on the basis of similar batch of approvals has considered the identical issue for the assessment year 2014-15 and decided the plea raised by the assessee in the assessee's favour. We may gainfully refer to the adjudication of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the assessment years under reference. The Joint Commissioner of Income-tax thereafter also observed that the fact of initiation of penalty proceedings, wherever applicable, must also be incorporated in the last para of the order. The initiation of correct penalty provisions of the Act under section 271(1)(c)/271AAB as per facts of the case were also directed to be ensured at the end of the Assessing Officer. (c) After taking into consideration the above points, a copy of the final orders passed be sent to the Joint Commissioner of Income-tax. (d) As many as 18 draft assessment orders including the assessment order of the assessee herein were combinedly placed before the Joint Commissioner of Income-tax in one go seeking statutory approval under section 153D of the Act in relation to multiple assessment years of the each assessee. (e) No reference to the assessment records being sent along with the draft assessment order to the Joint Commissioner of Income-tax stationed long away is found in the communication addressed to Joint Commissioner of Income-tax by the Assessing Officer. (f) The communication letter dated December 30, 2016 have been del....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue application of mind on various issues contained in such order so as to derive his/her conclusive satisfaction that the proposed action of the Assessing Officer is in conformity with subsisting law and with underlying factual matrix. The Assessing Officer is obligated is pass the assessment order exactly, as per approval/directions of the designated authority. It is not open to the Assessing Officer to modify the assessment order without the knowledge and concurrence of the designated authority. Inevitably, this evaluation is to be made on basis of material gathered at time of search as well as obtained in the course of the assessment proceeding. The requirement of law is to grant approval not merely as a formality or a symbolic act but a mandatory requirement. 9.5 In the instant case, it is a matter of record by the own admission of Joint Commissioner of Income-tax that the approval granted is merely technical and without appraisal of evidence or enquiries. Thus, fact thus need not be traversed any further. In the backdrop of the unequivocal observations made by the Joint Commissioner of Income-tax, approval granted under section 153D apparently does not meet the requir....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be pertinent to observe, section 153D bestows a supervisory onus on the designated authority in respect of search related assessment and thus enjoins a salutary duty of statutory nature. The designated superior authority is thus expected to confirm to the statutory requirements in letter and spirit. As noted in the preceeding paragraphs, it is a classic case of collective abdication of statutory responsibility assigned under the Act and yet putting civil consequences of onerous nature on a tax payer. It is axiomatic from the plain reading of approval memo that the Joint Commissioner of Income-tax is in complete dark on the facts while being called upon to grant his clearance to the draft assessment orders. It is evident from the Central Board of Direct Taxes Circular No. 3 of 2008, dated March 12, 2008 ([2008] 299 ITR (St.) 8 ) that the Legislature in its highest wisdom made it obligatory 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 Assessing Officer is making the assessment and after due application of m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tutory compulsion and proceeded to grant a simplicitor approval with caveats and disclaimers. This approach of the Joint Commissioner of Income-tax has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and cannot thus be countenanced in law. 12. The identical issue has been favourably adjudicated in asses see's own case in I. T. A. No. 3306/Delhi/2018, order dated August 23, 2021 M. G. Metalloy P. Ltd. v. Dy. CIT concerning other assessment year 2015-16 where co-ordinate Bench found total lack of propriety in such statutory approval. There are plethora of decisions of various co-ordinate Benches including Sanjay Duggal v. Asst. CIT I. T. A. No. 1813/Delhi/2019, dated January 19, 2021 ; order dated which have also echoed the same view on similar fact situation. 13. The Commissioner of Income-tax (Appeals) in para 7 of first appellate order has brushed aside the legal objection summarily merely on an inept and indifferent premise that the assessment order makes mention of the approval from Joint Commissioner of Income-tax under section 153D of the Act. The cryptic conclusion drawn by the Commiss....