TaxTMI 
TaxTMI 
2025 (6) TMI 1614
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Delhi (hereinafter referred to as "the AO") under Section 153A, 144 and 143(3) of the Act for assessment year 2013-14. ITA No.3719/Del/2017 3. The appeal is filed against order dated 28.04.2017 of Ld. CIT(A) arising out of penalty order dated 25.11.2016 under Section 271(1)(c) of the Act of the ACIT, Central Circle-26, New Delhi for the assessment year 2013-14. ITA No.4910/Del/2017 4. The appeal is against order dated 05.05.2017 of Ld. CIT(A) arising out of penalty order dated 25.11.2016 under Section 271 AAB of the Act for the assessment year 2013-14. 5. Brief facts of ITA Nos.371/Del/2017 are that a search and seizure operation under Section 132 of the Act was carried out on 11.09.2013 and 17.09.2013 in case of AKN Group of Cases. The case of assessee was also covered in the search. During search carried out at the different premises located in India, documents and data storage devices etc. belonging to the assessee company were found and seized. The case, was centralized with Central Circle- 26, New Delhi by the Learned PCIT-16, New Delhi vide order date 18.09.2015 under Section 127 of the Act. The assessee filed return of income under Section 139(4) of the Act f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 271(1)(c) of the Act, penalty of Rs. 74,35,694 was imposed. 8. In ITA No.4910/Del/2017, vide penalty order dated 25.11.2016 under Section 271 AAB, penalty of Rs. 3,18,00,375/- was imposed. 9. Against assessment order dated 13.5.2016 and penalty orders dated 25.11.2016, appellant/assessee preferred separate appeal before the Ld. CIT(A) which were dismissed vide separate orders dated 30.12.2016, 05.05.2017 and 28.04.2017. 10. Being aggrieved, appellant/assessee has preferred above captioned three appeals. 11. Learned Authorised Representative for the appellant/assessee in ITA No.731/Del/2017, submitted that additional legal ground raised under Rule 11 of the Income Tax Appellate Rules is as under: "That impugned assessment order passed u/s. 153A/144 of 1961 Act by Ld AO (ACIT CC 26 Delhi) dated 13.05.2016 as sustained by Ld CIT-A are void ab initio and is jurisdictionally flawed as said assessment order is based on invalid /illegal "purported" approval u/s 153D by Add CIT Central Range 7 Delhi (dated 13.05.2016) and therefore impugned asst order and first appeal order may please quashed for want of valid approval u/s 153D of 1961 Act" 12. Learned Authorised Representa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for "each assessment year" referred to in clause (b) of sub- section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of PCIT v. Sapna Gupta [2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- "each assessment year" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under:- "13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply independent mind to the material on record for "each assessment year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the Assessing Officer should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together." 17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der by the Addl. CIT/JCIT under section 153D is an Administrative Order, by the higher authority i.e. JCIT/AddI. CIT to the lower authority, i.e. AO. Such an order is not a quasi-judicial or judicial order. Therefore, the legal requirements and benchmarks regarding the principles of "the application of mind" and "the speaking order" are not as strict or high, as they are in the case of quasi-judicial or judicial order. 15.3 In respect of the legal requirements and the benchmarks regarding the administrative orders, the Hon. Supreme Court has given many comprehensive judgements, which are enclosed and the relevant portions/parts are quoted as under:- (i) Decision of Hon'ble Supreme Court in the case of Municipal Council Neemuch vs Mahadeo Real Estate, dated 17 September, 2019, AIR 2019 SC 4517, 2019 (10) SCC 738; & (ii) In the case of West Bengal Central School Service Vs. Abdul Halim dated 24 July 2019, AIR, 2019, AIR 2019 SC 4504, AIRONLINE 2019 SC 2188 AIR 2020 SC (CIV) 82. 16. From the examination of record in light of aforesaid submissions, it is crystal clear that in ITA No.731/Del./2017, appellant/assessee through additional legal ground has challe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uld not have approved the assessed income at Rs. 1,65,07,560/- had he applied his mind. The addition of Rs. 15,04,35,000/- made by the AO in the instant case is completely out of the scene in the final assessed income shows volumes. 17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessment order without any assessment records what to say about the search material. As mentioned earlier, there are infirmities in the figures of original return of income as well as total assessed income and the Addl. CIT while giving his approval has not applied his mind to the figures mentioned by the AO. Therefore, approval given in the instant case by the Addl. CIT, in our opinion, is not valid in the eyes of law. We, therefore, hold that approval given u/s 153D has been granted in a mechanical manner and without application of mind and thus it is invalid and bad in law and consequently vitiated the assessment order for want of valid app....