TaxTMI 
TaxTMI 
2024 (3) TMI 88
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....sessment 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 and in the circumstances of the case and in law, the learned Commissioner ....
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....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 section 68 of the Act and disallowance of expenses. 5. Upon the assessee's appeal, the learned Commissioner of Income-tax (Appe....
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....ida/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 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. Mettalloy P. Ltd. AAGCM5789D 2011-12 to 2015-16 11. M/s. Promart Retail India P. Ltd. AAFCP8743B 2009-10 to 2015-....
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....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 basis of the drafts assessment orders submitted for the assessment years in reference years. You are directed to ensure taking into account the seized documents/papers and comments in the appraisal report pertaining to the assessment years. 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 Income-tax Act under section 271(1)(c)/271AAB per facts of the case must be ensured. 4. This office reference no of approving the draft orders shall invariably be quoted in the assess....
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.... 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 the Income-tax Appellate Tribunal as under : "8. We have carefully considered the rival submissions and material placed on record and case laws cited. The legal objection of transgression of requirements of approval under section 153D is in question which has the effect on the very substratum of the assessment and appellate proceedings. We, thus require to address ourselves into such mainstay issue at the outset. 9. We shall straightaway advert to the communication between the Assessing Officer and the Joint Commissioner of Income-tax being the competent authority for the purposes of approval contemplated under section 153D of the Act. 9.1 For the sake of convenien....
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....g 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 delivered to the office of Joint Commissioner of Income-tax on December 31, 2016, i. e., the very last date of limitation for completion of the assessment. Subject to these broad observations, the approval was granted vide approval memo F. No. JCIT/Central Range/Meerut/S&S/153D/2016-17/1477, dated December 31, 2016. By implication, the Joint Commissioner of Income-tax, while granting the approval, was not privy to seized material, appraisal report, etc., and left the onus of varied compliances to the wisdom of the Assessing Officer. 9.3 From the perusal of the communication made by the Assessing Officer seeking approval under section 153D and the approval given under section 153D thereon by the Joint Commissioner of Income-tax, it is seen that the Asses....
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....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 requirement of law and, hence, the assessment orders passed in consequence of such non est approval is a nullity in law. The assessment order thus passed is vitiated in law which illegality cannot be cured. 10. In nutshell, the approval under section 153D is repugnant for more than one reasons : (i) the approval accorded under section 153D is admittedly without any occasion to refer to the assessment records and seized materials, if any, incriminating the assessee and, hence, such approval is in the realm of an abstract approval of draft assessment orders and consequently suffered from total non-application of mind. (ii) approval granted hurriedly in a spur involving voluminous assessments spanning over five assessment years admittedly a symbolic exercise to meet the requi....
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....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 mind and on the basis of seized materials, the superior authority is required to accord approval the respective assessment order. The solemn object of entrusting the duty of approval of the assessment in search cases is that the Additional/Joint Commissioner of Income-tax concerned, with his experience and maturity of understanding, should at least minimally scrutinise the seized documents and any other material forming the foundation of the assessment. It is elementary that whenever any statutory obligation is cast upon any statutory authority, such authority is required to discharge its obligation not mechanically, not even formally but after due application of mind. Thus, the obligation of granting approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the Assessing....