TaxTMI 
TaxTMI 
2025 (7) TMI 96
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....ssessee and an order of assessment came to be passed on 28/12/2021 u/s 153C r.w. Section 143(3) of the Act by making an addition of Rs. 79,65,000/- on account of cash payments made by the Assessee holding the same as deemed income u/s 69C of the Act. Aggrieved by the said addition, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 18/04/2023 dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A), the Assessee filed the present Appeal. 3. The Ld. Counsel for the Assessee addressing on the Ground No. 3 of the Assessee submitted that the approval accorded u/s 153D of the Act is a mechanical and arbitrary approval without their being any application of mind and also without satisfying the statutory preconditions of the Act as such the assessment so framed is null and void. The Ld. Counsel further submitted that approval issued u/s 153D of the Act does not mention any seized document having been perused and a single approval has been granted for two Assessment Years pertaining to the Assessee. The Ld. Counsel relying on the Judgment of the Jurisdictional High court in the case of Pr. Commissioner of Income Tax Vs. Shiv Kumar....
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....a [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 considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, This is a digitally signed order. The authenticity of the order can be re-verif....
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....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 under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." [Emphasis supplied] 14. During the course of arguments, learned counsel for the ....
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....le 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." 9. Significantly, the Hon'ble Orissa High Court in the case of ACIT vs Serajuddin& Co. 45....
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.... mentioning of seized material in the other material to show involvement of the superior authority in the approval granted by the ACIT. Applying the ratio of judgments delivered as noted above, the assessment order based on ritualistic approval stands vitiated and thus quashed by allowing Ground No. 3 of appeal of the Assessee. 12. In the result, the appeal of the Assessee in ITA No. 1602/Del/2023 is allowed. 13. Since, we have quashed the Assessment Order on the ground of erroneous approval accorded u/s 153D of the Act, we do not consider it necessary to address on other legal and factual contentions raised in the other grounds of Appeal of the Assessee. Order pronounced in the open court on 30th April, 2025 ============= Document 1 IN ----- OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX. CENTRAL RANGE-4, NEW DELHI Room No. 249, 2" Floor, ARA Centre, E-2, Jhundewalan Extension, New Delhi - 110055 Phone No. 011-23593272: E-Mail I.D .: [email protected] F.No. Addl, CIT/C :. R-4/Approval u/s 153D/2021-22/ |/ 3 / Date: 28. 12.2021 To. Assistant Commissioner of Income-tax. Central Cirele-14, New Delhi Subss Approval u/s 153D of the I.T.....