TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 1570
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....d 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 mentioned in the assessment order as well as the order of the CIT(A) at pages ....
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....sioner 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/- (Dr. Ankit Kumar Aggarwal) Dy. Commissioner of income tax. Central Circle-I, Chandigarh" 38.4. The above report of the AO was made available to the appellant on 16.11.2023. In response to the same the su....
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....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 Floor, Sector 17-E, Chandigarh Phone 0172-2544217 Fax 2544217 E- [email protected] No. DCIT/CC-I/CHD/2021-22/285 Dated 15.06.2021 To Addl. Commissioner of Income Tax, Range Central, Chandigarh Sir, Sub: Draft assessment order in the case of M/s S.p.Singla Construction Pvt Ltd, 1006-1007, 10th Floor, Pearls Best Height-1, NetajiSubhas Pl....
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....ized. 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 relevant to mention here that issues involved in the draft assessment orders for all the above assessment years from 2013-14 to 2018-19 were common in nature; all the draft assessment orders were common in nature. Therefore, the Addl. CIT was to go through the common issues involved for various years and accordingly, it cannot be said that just because the Addl. CIT accorded the approval in just one day; therefore, the said approval was mechanical in nature and without application of mind. In the ....
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....e 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 JCIT on 19.6.2021. The ld. Counsel for the Assessee stated and read out the approval, which is in Hindi language and the same is being reproduced from A.Y. 2013-14 as under: - 8. The relevant letter dated 15.6.2021 by virtue of which draft assessment was transmitted to the Addl. CIT by the Assessing Officer is also enclosed and the relevant portion reads as under: - "Sub :-Draft Assessment Order in the case of M/s SP Singla Construction Pvt.Ltd., 1006-1007, 10th Floor Pearls Best Height-1, Netaji Subhas Place Pitampura, Delhi (PA....
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....as 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 nature and deserves to be quashed. 12. On the other hand, the ld. CIT DR Smt Kusum Bansal supported the order of CIT(A) and argued that the CIT(A) is correct in adjudicating the issue that the approval granted by JCIT u/s 153D of the Act is after application of mind for the reason that the JCIT being Range Head and all search and seizure assessments are regularly supervised and monitored by the Range Heads as well as concerned PCIT. She argued that the Assessing Officer as well as the Range Head, both, has to follow the instructions for completing assessment in search cases as....
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....led 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 process is mentioned in the provisions of section 153A of the Act, which means that the assessment is to be framed by the Assessing Officer only being a quasi-judicial authority. From the very provision of section 153A of the Act, it is clear that the assessment is a domain of only the Assessing Officer and not any other authority under the Income Tax Act. Now, on facts, whether in the present case the JCIT can interfere in the regular assessment. We noted that this issue is dealt by Delhi Tribunal in ITA No.2503 & 2693/Del/2017 and C.O. No.9/Del/2022 in the case of SEH Realtors Pvt.Ltd., Order dated 23rd July, 2024, wherein the entire scheme is discussed in parag....
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....y 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 from the receipt of copy of appraisal report, as argued by the Ld. CIT DR, has no substance. In other words, irrespective of the conclusions drawn in the appraisal report by the Investigation Wing, both the Ld. AO and the ld. JCIT are supposed to independently apply their mind in a judicious way before drawing any conclusions on the contents of the seized documents while framing the search assessments. As far as the argument of the Ld. CIT DR that the details were normally filed by the assessee at the last moment is concerned, the ld. AO has got every right to reject the said replies if not filed within the stipulated time. It is not the case of the revenue that the....
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.... 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 Tribunal notes that all that was looked at by the ACIT, was the draft assessment order. 13. In another words, it was emphasised that the approval was granted without examining the assessment record or the search material. The relevant observations made in this behalf by the Tribunal in the impugned order are extracted hereafter: "17.1 However, in the present case, we have no hesitation in stating that there is complete non-application of mind by the Learned Addl. CIT before granting the approval. Had there been application of mind, he would not have approved the draft assessment order, where the returned income of Rs.87,20,580/-, Similarly, when the total assessed income as per the AO co....
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....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 power of approval vested with JCIT under Section 153D of the Act entails an application of mind while perusing the assessment records, seized records, replies of assessee and issues raised by the AO and the procedure followed for framing of assessment order. The act of granting approval under Section 153D of the Act is not a mere internal process relating to administrative functioning but is a quasi-judicial function mandated by specific provisions of the Act with an underlying requirement of it being based on due application of mind. This being the situation, the approval to be granted under Section 153D of the Act for passing of the assessment order by the JCIT is reflective of the Act of confirming, rectifying, sanctioning or convention to a....