TaxTMI 
TaxTMI 
2024 (12) TMI 1553
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....nd argued before us reads as under:- "The CIT(A) erred in not quashing the assessment order as the purported approval u/s 153D validating the lack of compliance to the mandatory prescribed procedures ignored by the AO while passing the impugned order u/s 143(3) r.w.s. 153A of the Act as below: (i) as it is physically impossible to deal with approval in more than 80 cases in a day, to make corrections in the draft orders and then for the AO to pass the correct orders, all in a single day, (ii) when no record of the suggested corrections and the pre and post correction assessments was provided, (iii) when no record by way of the dispatch-receipt registers has been provided despite of the applications under RTI Act, (iv) when the impugned approval was without any reference to the incriminating documents / appraisal report/statements ..." 5. Representatives of both the sides were heard at length on the ground mentioned hereinabove. 6. The underlying facts in the impugned issue are that a search/survey action u/s 132/133A of the Act was carried out on 06/10/2017 in case of Sunshine Group, M/s. Sabari Developers LLP and M/s. Evergreen Enterprises and other entities at their o....
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.... of section 153A 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 reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under sub- section (12) of section 144BA." 12. The Legislative intent can be gathered from the CBDT Circular No. 3 of 2008 dated 12/03/2008 which reads as under: "50. Assessment of search cases Orders of assessment and reassessment to be approved by the Joint Commissioner. 50.1 The existing provisions of making assessment and reassessment in cases where search has been conducted under section 132 or requisition is made under section 132 A does not provide for any approval for such assessment. 50.2 A new section 153D has been inserted to provide that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the previous approval of the Joint Commissioner. Such provision has been made applicable to orders of assessment or reassessment....
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....e ld. D/R has elaborately explained the procedure to justify that the approval granted was not mechanical but after giving a thoughtful consideration to the facts of the case. The AO in his report dated 04/12/2023, has also explained the procedure. The relevant comments of the AO read as under:- "The assessee challenged that the approval of the Addi. CIT for passing an assessment order is mechanical in nature and does not indicate any application of mind. Though approval is given on one particular date, however, consultation and guidance have been regularly provided by the Range head to the assessing officer (AO) concerned on regular basis right from the issuance of notice u/s 142(1) and replies furnished by the assessee till finalization of assessment order. During the course of assessment proceedings, the assessing officer regularly consults the Range Head. Every meeting is not codified in the form of written communication but it doesn't mean that there was no discussion or consultation between the Range head and the assessing officer. The entire set up in the Income Tax Department itself revolves around the Range Head and the assessing officers cannot conduct enquiry, is....
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....essing officer and Addl. CIT of the range concerned for assessment in the central charges. Thus, the Addl. CIT of the range concerned has also been familiar with the findings of the case and give directions to the assessing officer as per the provisions laid down in the Income Tax Act, 1961. The AO, on the basis of available records and after going through the merits of the case and submissions made by the assessee during assessment proceedings, prepared draft assessment order and put up the same to the Addl. CIT of the concerned range for approval. The Addl. CIT, after duly and independently applying mind well within the ambit of law and after through verification of the facts and merits of the case, gives approval u/s 153D for passing the assessment order. In view of the above, the contention of the assessee that the approval was mechanical in nature is baseless and devoid of any merit." 17. The Hon'ble High Court of Orissa had the occasion to consider a similar argument in the case of ACIT vs. M/s. Serajuddin & Co. Kolkata, in ITA Nos. 39 to 45 of 2022, wherein the Hon'ble Court considered the following submissions made by the ld. Senior Standing Counsel for the revenue:- ....
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....) 8 SCC 519; Managing Director, ECIL v. B. Karunakar (1993) 4 SCC 727; Haryana Financial Corporation v. Kailash Chandra Ahuja (2008) 9 SCC 31; State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364; P.D. Agrawal v. State of Bank of India (2006) 8 SCC 776 and State of U.P. v. Sudhir Kumar Singh. It was then submitted that where initiation was valid but completion was not correct, the order may not be invalid but only irregular because the intervening irregularity is a curable one. Reliance was placed on the decision of the Kerala High Court in Panicker (CGG) v. CIT, (1999) 237 ITR 443 and CIT v. M. Krishnan (N) (1999) 235 ITR 386. It was submitted that mere technicality should not defeat justice." 18. The Hon'ble Court interalia held 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 CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be som....
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....been achieved upon production of some materials for understanding the books of accounts and/ or the entries made therein. While exercising its power, the assessing officer has to form an opinion. It is final so far he is concerned albeit subject to approval of the Chief Commissioner or the Commissioner, as the case may be. It is only at that stage he is required to consider the matter and not at a subsequent stage, viz., after the approval is given." 21. Thus, where the approval is granted mechanically, it would vitiate the assessment order itself. 22. Similar quarrel arose in a bunch of cases considered by the Hon'ble High Court of Delhi belonging to M/s. MDLR Hotels Pvt. Ltd. group in ITA No. 593/2023 & Ors., wherein the Hon'ble High Court interalia was seized with the following substantial question of law:- "I. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is correct in allowing the appeal of the assessee and quashing the assessment order by holding that the approval has been given mechanically without application of mind despite the fact that Range Head was fully involved in each and every aspect of this case and had duly applied his mi....
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....missioner must be "satisfied", on the reasons recorded by the AO, that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval as per the said Section. xxxxx xxxxx xxxxx 17. Thus, the incidental question which emanates at this juncture is whether simply penning down "Yes" would suffice requisite satisfaction as per Section 151 of the Act. Reference can be drawn from the decision of this Court in N. C. Cables Ltd., wherein, the usage of the expression "approved" was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under:-- "11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression "approved" says nothing. It is not as if the Commissioner of Income-tax (Appeals) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possib....
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....f the respondents that the 'rubber stamp' reason given mechanically for the supersession of each officer does not amount to 'reasons for the proposed supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28.. .. If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable." (emphasis supplied)" 19. In the case of Chhugamal Rajpal, the Hon'ble Supreme Court refused to consider the affixing of signature alongwith the noting "Yes" as valid approval and had held as under:-- The authenticity of the order can be re-verified from Delhi High Court Ord....