TaxTMI 
TaxTMI 
2024 (5) TMI 1502
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....1-12. Since they raise a common issue, hence, the same are being decided by this common order. For the sake of clarity, the facts are being extracted from ITA 243/2023. 2. As per record, the assessee appears to be a Proprietor of a company namely, Tirupati Construction Company and earns business income from the said proprietorship firm. He is additionally stated to earn salary income from an entity namely, Tirupati Constwell Pvt. Ltd. The dispute involved in the present lis got triggered with the initiation of a search and seizure operation dated 14.09.2010 on Dabas Group under Section 132 of the Income Tax Act, 1961 ["Act"]. The premises of the assessee were also searched as per Section 132(1) of the Act. 3. On 18.10.2012, the case of the assessee got centralized under Section 127 of the Act and a notice dated 22.10.2012 under Section 153A of the Act was duly issued and served upon the assessee. The assessee filed his Income Tax Return ["ITR"] for the relevant AY, declaring a total income of Rs. 2,69,85,790/-. 4. Thereafter, the assessing officer ["AO"] passed an assessment order under Section 143(3)/153A of the Act, assessing the total income at Rs.19,19,39,713/-, inter ....
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....ate manner, dehors the settled position of law? 11. Recently, in the case of Pr. Commissioner of Income Tax -15 v. Shiv Kumar Nayyar [ITA 285/2024], we had an occasion to deal with an almost identical issue i.e., grant of approval under Section 153D of the Act in a mechanical manner and without application of mind. The relevant discussion of the said decision in Paragraph nos. 10 to 15, is reproduced hereunder as: - "10. Before embarking upon the analysis of the factual scenario of the instant appeal, we deem it apposite to examine the underlyingintent of the relevant provision of the Act i.e., Section 153D, which is culled out as under:- "153-D. Prior approval necessary for assessment in cases 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 153-A] or the assessment year referred to in clause (b) of sub-section (1) of Section 153-B, except with the prior approval of the Joint Commissioner : Provided that nothing contained in this section shall apply where the assessment or reasse....
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....phasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately. 13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC OnLine Ori 992] to understand the exposition of law on the i ssue at hand. Paragraph no.22 of the said decision reads as under:- "22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having been perused by the Additional Commissioner of Income-tax. The letter simply grants an approval. In other words, even the bare minimum requirement of....
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....er of approval passed by the concerned statutory authority. 13. In the instant case, with respect to the inappropriate approval accorded by the relevant authority, the ITAT has made a categorical finding, which reads as under: - "36. A perusal of the approval sought by the Assessing Officer shows that he has requested to grant necessary approval u/s 153D for the cases completed u/s 153A/143(3) of the Act. A combined perusal of the approval sought by the Assessing Officer, the approval given by the Addl. CIT and the copy of remand report of the Assessing Officer show that there is only some namesake approval given by the Addl. CIT on the very same day on which the Assessing Officer sought approval. The Addl. CIT without verifying the records has given approval in a mechanical manner. This is more so evident from the fact that the opening balance of unsecured loans of Rs.8 Crores was added by the Assessing Officer, which is not a small amount and the number of unsecured loan creditors are only four and not very large. We find merit in the argument of the ld. Counsel for the assessee that the Ld. Addl. CIT received draft assessment order in 35 cases and approved all cases ....