TaxTMI 
TaxTMI 
2025 (6) TMI 1997
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....for the A.Y. 2017-18 as a lead appeal and the facts are extracted there from. ITA No. 287/VIZ/2025 (A.Y. 2017-18) 3. Brief facts of the case are that, assessee being an individual carrying on the Civil Contract Works and engaged in real estate activities and share trading, filed his return of income for the A.Y. 2017-18 on 29.10.2017 admitting a total income of Rs. 1,95,71,890/-. The case was selected for scrutiny under CASS and accordingly notices under section 143(2) of Income Tax Act, 1961 (in short 'Act') dated 13.08.2018 was issued to the assessee. Subsequently, a search operation under section 132 of the Act was conducted in the case of M/s. P.L.Raju Constructions Private Limited where the assessee was doing sub-contract works with the said person. A notice under section 153A of the Act was issued on 25.09.2020 calling for the return of income for the A.Y.2017-18, since the assessment for the relevant assessment year is abated. In response, assessee filed the return of income on 23.01.2024 admitting the same income filed under section 139(1) of the Act. Thereafter notice under section 142(1) of the Act was issued on various dates. In response, the assessee's representat....
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....Ld.AR referred to paper book page no. 28 wherein the Ld.AO has sent a draft assessment order for the A.Y. 2013-14 to A.Y. 2019-20 to the JCIT, Central Range, Guntur for approval under section 153D of the Act on 29.09.2021. He further submitted that the JCIT on the same date i.e on 29.09.2021 granted approval in the mechanical manner which is available in the paper book page no. 29. He further submitted that if the bench decides the validity of the assessment order passed under section 143(3) r.w.s. 153A of the Act in accordance with the approval granted under section 153D of the Act holding the assessment order as void ab-initio, the other grounds become academic. He further submitted that on perusal of the letter dated 29.09.2021 the JCIT has granted approval under section 153D of the Act for all the assessment years and also gave a direction to the Ld. AO which is not in accordance with law. Further, he also submitted that the JCIT has also granted various approval under section 153D of the Act for other cases, he alleged. On this issue, Ld.AR placed reliance on the following cases: - i. Pr. CIT v. Anuj Bansal - (2024) 165 taxmann.com 3 (SC). ii. Commissioner of....
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.... of the Hon'ble Orissa High Court in the case of ACIT v. Serajuddin & Co. (supra), wherein it was held that when the approval is granted mechanically it vitiates the assessment order. Further Ld.AR in his written submissions has also relied on the following decisions: - a. Utility Supply (P) Limited v. DCIT [2025] 174 Taxmann.com 250. b. Maheswari Coal Beneficiation and Infrastructures Private Limited v. DCIT [2025] 171 taxmann.com 842. c. Decision of the Hon'ble Delhi High Court in the case of PCIT v. Subash Dabas in ITA No. 243/2023 8. He therefore pleaded that since the procedure laid down under section 153D was not adhered to by JCIT who has granted mechanical approval on the same day i.e., 29.09.2021, the assessment order is void ab-initio. He therefore pleaded to quash the assessment order. 9. Per contra, Ld. Departmental Representative [hereinafter in short "Ld.DR"] submitted that JCIT has granted approval after application of mind and not in a mechanical manner as alleged by the Ld.AR. He also further submitted that the ratio laid down in the case of ACIT v. Serajuddin & Co. (supra) as relied on by the Ld.AR is distinguishable on the fact th....
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....iod prescribed for completion of the assessment proceedings. The Hon'ble High Court has held that there are three or four requirements which are mandated for seeking approval under section 153D of the Act, which are as follows: - First the AO should submit the draft order "well in time"; Secondly the final approval must be in writing; Thirdly the fact that the approval has been obtained should be mentioned in the body of the assessment order. 13. The relevant paragraph in the case of ACIT v. Serajuddin & Co. (supra) is extracted below: - "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 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 repeati....
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....h December 2019. However, the approving authority accorded the approval on the very same day (27-12-2019) of submitting the draft order and in less than 12 hours, which goes to show that the Approving Authority has not applied his mind due to paucity time and therefore granted the approval in mechanical and haste manner. It is also a fact that the AO on the very same day of getting the approval, completed the assessment proceedings and passed the assessment order dated 27.12.2019, which also creates suspicion. As we have observed above that granting of approval is not a technical or mechanical exercise or ritual formality but must demonstrate the examination of the relevant material and finding/reasoning, as to why the approval has been granted. And therefore the contention of Ld. DR to the effects "that the procedure normally followed in such cases is that after centralization of the case, periodic discussions are held between the Range Head and the AO, where the appraisal report and the relevant seized material are duly discussed and submitting of the draft assessment order, is the culmination of the discussion process, not the initiation of the involvement of the Range ....
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....er as to whether the assessment records/ assessment folders/ files/ seized materials or any incriminating documents or other connected documents and papers/ various statements recorded under section 132(4) and section 131(1A) of the assessee or any other person/ appraisal report of the Investigation Wing of the Department/ materials on hand with the Department at the time of initiation of search or material evidences gathered were placed for its verification and the same were duly verified and/or examined by him as mandated under section 153D. In the absence of compliance of the above mandate, the approval order dated 31/03/2022, passed under section 153D becomes an empty formality without due process of law and, thus, not sustainable. This is nothing but an approval by way of mere mechanical exercise accepting the draft assessment order without any independent application of mind by the Addl. CIT." 17. Additionally, the Hon'ble Bombay High Court in the case of PCIT v. Shrilekha Damini in ITA No. 668 of 2016 dated 27.11.2018 also dealt with similar issue wherein the draft assessment order for approval under section 153D of the Act was submitted on 31.12.2010 leaving no time to a....
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.... 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 132A, 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 passed under clause (b) of section 153A in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A. The provision has also been made applicable to orders of assessment passed under clause (b) of section 153B in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisitioned is made under section 132A." 21. After analysing the aforesaid section and the CBDT Circular and the various judicial pronouncement, it i....
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....ordingly the decision in ITA No. 287/VIZ/2025 shall mutatis mutandis applies to ITA Nos.288 & 289/VIZ/2025. 26. In the result, appeals filed by the assessee are allowed. 27. To sum-up, all the appeals filed by the assessee are allowed. Order pronounced in the open court on 18th June,2025. ============= Document 1 Office of the Joint Commissioner of Income Tax, Central Range, 3'ª Floor, Rajkamal complex, Lakshmi Puram, Guntur Fax: 0863-2219834 Dated: 29.09.2021. कारà¥à¤¯à¤¾à¤²à¤¯ - जॉइंट आयकरआयà¥à¤•à¥à¤¤ सेंटà¥à¤°à¤²à¤°à¥‡à¤‚ज, गà¥à¤‚टूर उवीमंज़िल, राजकमलà¤à¤µà¤¨-समूह, लकà¥à¤·à¥à¤®à¥€à¤ªà¥à¤°à¤®, गà¥à¤‚टूर F.No.81/ JCIT/CR-GNT/2021-22 To The Deputy Commissioner of Income tax, Central Circle 1, GUNTUR. Sir Sub: Approval u/s.153D of the I.T.Act - in the case of Sri Bathina Kumara Swamy Reddy ....