TaxTMI 
TaxTMI 
2025 (1) TMI 1570
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....ed by the Assessee first i.e. with regard to the approval granted by Addl.CIT u/s 153D of the Act which is mechanical in nature and hence assessments deserves to be quashed. For this issue, the ld. Counsel for the Assessee drew our attention to Grounds raised by the Assessee in all the six appeals i.e. Ground No.6. This issue is raised in all these appeals are identical. Hence, we will take the Grounds and facts from assessment year 2013-14 in ITA No. 140/Chd/2024 and will decide this common issue in all six years. 3. The relevant Ground No. 6 reads as under:- "6. That the Learned CTT(A) gravely erred in upholding the validity of the assessment order particularly when the approval granted by the beamed Additional Commissioner of Income Tax u/s 153D of the Income Tax Act, 1961 before passing the impugned order was mechanical in nature and deserved to be quashed." 4. Brief facts are that a search u/s 132 of the Act was conducted at the business and residential premises of S.P. Singla Constructions Pvt. Ltd along with other S.P. Singla Group of cases on 09.08.2018. Search warrant u/s 132 of the Act were executed in the name of Assessee in various premises, which are men....
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.... [email protected] Phone 0172-2544217 No. DCIT/CC-I/CHD/2023-24/581 Dated 7.11.2023 The Commissioner of Income tax (Appeals-3). Gurgaon. (Through Proper Channel) To Sir. Sub : Submission of remand report in matter of appellate proceedings in the case of M/s. S.P, Singla Construction Pvt. Ltd. - PAN: AAGCS5773B for the AY 2013-14 to 2018-19 -regarding - Kindly refer to your office letter No. CIT(A)-3/GGN/202324/135 dated 22.08.2023 wherein the undersigned has been directed to submit remand report in respect of supplementary submissions filed for the AY 2013-14 to AY 2018-19 by the appellant (M/s. S.P. Singla Construction Pvt. Ltd.) before your good office. 2. The undersigned has considered the issue raised by the appellant in supplementary submissions filed before your good office. The relevant issue is that the Addl. CIT's approval u/s 153D is issued without generating DIN in this case. 3. ................................................................ The report is submitted for your kind consideration. Yours faithfully, Sd/- ....
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....ctioning or convention to an act or thing done by another authority in exercise of a statutory mandate and is not an internal administrative process of the Department but the exercise of a quasi-judicial function. ............................................................................. It is, thus, prayed that keeping in view the import of submissions made above, the appeal may kindly be adjudicated accordingly. Thanking you, Yours faithfully Sd/- ( Ashwani Kumar) C.A. Counsel for the appellant End.: As above Dated : 22.11.2023" 38.5. On consideration of facts of the case and material available on record, on this issue is found that the AO has forwarded the draft assessment orders to the Addl. CIT on 15.06.2021 alongwith assessment record to seek the approval u/s 153D of the Act which was accorded on 19.06.2021. The copies of the letters sent by the AO to the Addl. CIT and Addl. CIT to AO wherein approval was accorded are reproduced as under for reference for one of the assessment years for example 2016-17: "GOVERNMENT OF INDIA INCOME TAX DEPARTMENT Office of Deputy Commissioner of Income tax, C.R. Building, Ground Fl....
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....s observed that the AO has forwarded the assessment record with the same. The Addl. CIT has considered the issues involved in the draft assessment order and made the perusal of assessment record. The allegation of the appellant that the action of the Addl. CIT, Chandigarh in granting approval was a mere mechanical exercise without any independent application of mind is without any basis. It is stated that in the Central Charges group cases where search u/s 132 of the Act conducted, are centralized. The Addl. CIT as Range Head is actively involved in assessment of all such cases from beginning and at all stages of search and seizure assessment. The Assessing Officer discusses various issues with him periodically and seeks his guidance. In this case, it is relevant to mention here that both the AOs and Addl. CIT are situated in the same building (in adjacent rooms to each other). Thus from facts of the case, it is evident that draft assessment order is not put before the Addl. CIT by the AO at the last stage of the assessment proceedings; rather the AO prepares the draft order in consultation, discussion and under direct guidance taken periodically from the Addl. CIT. It is also rele....
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....atisfaction as per the provisions of the Act. Further, approval u/s 153D being an official act provided under the statute, it is to be presumed that before according approval, the Range Head has looked into the records, applied his mind and he did not find any reason to disapprove the order passed by the Assessing Authority and thereafter he has accorded approval. 38.10 In the given facts of the case, it can be said that the Addl. CIT has applied his mind on the issue involved and has accorded his approval in accordance with the provisions of the Act. Such approval cannot be said as mechanical and without application of mind. Accordingly, such ground of appeal is hereby dismissed for AYs 2013-14 to 2018-19." Aggrieved, the Assessee is in appeal before Tribunal. 7. Before us, ld. Counsel for the Assessee filed copies of approval granted in each of the years i.e. the approval granted by Addl. CIT for these six assessment years. The ld. Counsel for the Assessee drew our attention to the approval and stated that the draft assessment order was sent to JCIT on 15.6.2021 along with assessment record to seek the approval of the JCIT u/s 153D of the Act which was granted by J....
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....r the Assessee referred the entire instructions. He also referred to another Instruction No. F.286/57/2002-IT (Inv. II) dated 03.07.2002 issued by CBDT. 11. The ld. Counsel stated that these instructions carry procedure which is to be adopted for completing block assessments and it does not talk about approval to be granted by the Addl. CIT /Joint CIT. He stated that the CIT(A) while adjudicating this issue has only discussed the same procedure that the JCIT being Range Head was involved in the entire process of assessment. He argued that the Legislature in its wisdom has introduced this provision by the Finance Act, 2007 w.e.f. 01.06.2007 for prior approval of search assessment order by higher authority like JCIT. Learned Counsel argued that the act of granting approval under Section 153D of the Act is not a mere internal process relating to the administrative functioning of the Department but is a quasi-judicial function mandated by the provisions of the Act with an underlying requirement of it being based on due application of mind and cogent reasoning. Hence, he argued that from the very approval, it is very clear that the approval granted by the JCIT was mechanical in natur....
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....3-14 15/06/2021 19/06/2021 02/07/2021 103 2014-15 15/06/2021 19/06/2021 05/07/2021 135 2015-16 15/06/2021 19/06/2021 06/07/2021 237 2016-17 15/06/2021 19/06/2021 06/07/2021 298 2017-18 15/06/2021 19/06/2021 09/07/2021 244 2018-19 15/06/2021 19/06/2021 12/07/2021 419 2019-20 15/06/2021 19/06/2021 12/07/2021 343 15. These are simplicitor admitted facts. From the above chart, the ld. counsel has pointed out that JCIT had received the search material which is running into 10000 or more pages seized during the course of search and thereafter the explanations filed by the Assessee during the assessment proceedings. Even the assessment orders for these assessment years running from 103 minimum to419 of maximum pages. We noted that the JCIT being Range Head may be supervisory head for search assessments but he cannot direct the AO as to how assessment in a particular manner is to be made and which document is to read and how. He cannot be a party to framing of assessment because assessment is always framed by the Assessing Officer under the scheme of Income Tax Act. The assessment proce....
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.... the Investigation Wing in the appraisal report or by the Ld. AO in the draft assessment order. The copy of the appraisal report submitted by the Investigation Wing to the Ld. AO and ld. JCIT are merely guidance to the Ld. AO and are purely internal correspondences on which the assessee does not have any access. Moreover, the Act mandates the Ld. AO to frame the assessment after getting prior approval from ld. JCIT u/s 153D of the Act. The ld. JCIT getting involved in the search assessment proceedings right from inception does not have any support from the provisions of the Act as no where the Act mandates so. The scheme of the Act mandates due application of mind by the Ld. AO to examine the seized documents independently dehors the appraisal report of the Investigation Wing and seek explanation/clarifications from the assessee on the contents of the seized documents. When the scheme of the Act provides for a leeway to both the Ld. AO as well as the ld. JCIT to even ignore the conclusions drawn in the appraisal report by the Investigation Wing and take a different stand in the assessment proceedings, the fact of ld. JCIT getting involved in the search assessment proceedings right ....
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....as accorded approval for the said draft assessment order on the very same day i.e. on 27.03.2015 for various assessment years for 232 files on a single day. In any event, whether is it humanly possible for an approving authority like the ld. JCIT to grant judicious approval u/s 153D of the Act for all the assessment years on a single day is the subject matter of dispute before us. Further, we find that similar issue has been addressed by the Hon'ble Jurisdictional High Court in the case of PCIT vs. Anju Bansal in ITA 368/2023 order dated 13.07.2023 wherein, under similar circumstances, the Hon'ble Delhi High Court categorically held that statutory approval given by a quasi judicial authority without due application of mind as contemplated in section 153D of the Act would be fatal to the entire search assessment proceedings. The relevant operative part of the said order is reproduced below:- "12. This aspect was brought to the fore by the Tribunal in the impugned order. The Tribunal, thus, concluded there was a complete lack of application of mind, inasmuch as the ACIT, who granted approval, failed to notice the said error. 12.1 More particularly, the Tribu....
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....indings of fact, in our view, no substantial question of law arises for our consideration. The Tribunal was right that there was absence of application of mind by the ACIT in granting approval under Section 153D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B of the Act. 16. We are not inclined to interdict the order of the Tribunal." 10. The ld. AR also placed on record the recent decision of Hon‟ble Jurisdictional High Court in the case of PCIT vs Shiv Kumar Nayyar reported in 163 taxmann.com 9 (Del) wherein it was held that where order of approval u/s 153D of the Act for relevant assessment year was granted by Additional Commissioner who had granted approval for 43 cases on a single day without perusing the draft assessment orders at all and without an independent application of mind, impugned assessment order was rightly declared to be illegal by Tribunal." 16. In view of the above, we are of the view that the power of approval under Section 153D of the Act is statutory in nature granted pursuant to the specific provisions of Section 153D and is not a mere administrative exercise. The....
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....(which are in Hindi), means that implicatory approval of draft assessment order by the JCIT under Section 153D of the Act is clearly without application of mind as no verification of assessment records, seized material or the replies of the assessee were considered by the JCIT while granting approval. Hence, the approval is mechanical in nature and does not stand to the scrutiny of law. Hence, we quash the assessment order framed in consequence to approval granted under Section 153D of the Act. 18. Accordingly, this issue of assessee's six appeals is allowed. Stay Application Nos.16 to 20/Chd/2024 (in ITA Nos.141 to 145/Chd/2024):- 19. As we have already allowed the assessee's appeals on jurisdictional issue, the present stay applications have become infructuous and are, accordingly, dismissed. 20. In the result, all the appeals of the assessee are allowed whereas the stay applications are dismissed. Order pronounced on 17 .01.2025. ============= Document 1 कारà¥à¤¯à¤¾à¤²à¤¯ सेà¤à¤•à¤¸à¤¾à¤² 19 JUN 2021 कारà¥à¤¯à¤¾à¤²à¤¯ Office of the अपर आà¤....
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....हत उपरोकà¥à¤¤ करदाता के मामले में निरà¥à¤§à¤¾à¤°à¤£ वरà¥à¤· 2016-17 के पà¥à¤°à¤¾à¤°à¥‚प निरà¥à¤§à¤¾à¤°à¤£ आदेश (Draft Assessment Order) को अनà¥à¤®à¥‹à¤¦à¤¿à¤¤ किया जाता है। 3 निरà¥à¤§à¤¾à¤°à¤£ रिकॉई । volume (बिना कà¥à¤°à¤® संखà¥à¤¯à¤¾) में वापिस किया जाता है। (सौरठनारायण मोदी) अपर आयकर आयà¥à¤•à¥à¤¤, सेनà¥à¤Ÿà¥à¤°à¤² रेंज, चणà¥à¤¡à¥€à¤—ढ़ Encli as above Document 2....