TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 950
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.... Year 2013-14] 4. Brief facts of the case are that a search and seizure operation u/s 132 of the Act was conducted on 06.06.2018 on SRS group of companies, and at the residential and office premises of its business associates including the assessee, Shri Vinod Jindal. A notice dated 18.12.2018 u/s 153A of the Act was issued and served upon the assessee requiring him to file his return of income for the year under consideration. In response to the said notice, the assessee filed the return of income on 08.03.2019 declaring total income of INR 9,25,050/-. Thereafter, notice u/s 143(2) was issued and served on 30.09.2019 and various other notices u/s 142(1) of the Act alongwith questionnaire were issued and served upon the assessee from time to time requiring him to submit his reply/explanation. After examining the requisite details/information filed by the assessee, assessment was completed at a total income of INR 1,13,30,050/-. Against such order, assessee preferred appeal before Ld. CIT(A) who after considering the submissions, dismissed the appeal of the assessee. 5. Aggrieved by the order of Ld. CIT(A), the assessee preferred appeal before the Tribunal wherein the followin....
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....se. 7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making addition of Rs. 7,91,944/- as alleged unexplained credit u/s 68 of the Act and that too by recording incorrect facts and findings and without any basis, material or evidence and without observing the principles of natural justice and by disregarding the submissions, evidences and material placed on record by the assessee and without providing the adverse material on record and without any incriminating material found as a result of search warranting such addition and merely on the basis of surmises and conjectures. 8. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the addition of Rs. 7,91,944/- u/s 68 of the Act is bad in law and against the facts and circumstances of the case. 9. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in treating the salary income of Rs. 14,09,364/-, which was duly mentioned in the return of income, as alleged income of the appellant from ....
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....acts in confirming the action of Ld. AO in passing the impugned order without giving adequate opportunity of being heard and in gross violation of principles of natural justice. 16. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 6. Before us the ld.AR of the assessee stated that Ground No. 13 be taken first wherein the validity of assessment order with regard to the approval granted u/s 153D in mechanical manner is challenged. 7. Before us, Ld.AR for the assessee submitted that in the present case, approval was granted by Ld. Addl. CIT, Central Range, Gurugram vide letter dated 20.04.2021 which is mechanical approval. Ld. AR further submits that Ld. Addl. CIT granted approval for AYrs. 2013-14 to 2019-20 in terms of letter bearing No. Addl. CIT(CR)/GGN/2021-22/112 dated 20.04.2021. He submits that from the perusal of the same it could be seen that the approval granted by the ld. Adl. CIT was mechanical approval as no separate approval for each Assessment Year was given rather approval was given by a single order for various assessmen....
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.... with the AO from time to time with reference to the issues relating to different assessment years and the nature of contents of the seized material. He thus submits that by any stretch of imagination, it cannot be inferred that Range Head was not in a position to apply his mind independently in a judicious manner while granting approval under section 153D of the Act. The CBDT guidelines explicitly emphasize the close coordination required in search and seizure assessments. Therefore, it is reasonable to conclude that, in accordance with prevailing administrative practices and guidelines, the approving authority has a comprehensive understanding of the issues involved in a particular case well in advance, prior to the case being submitted to him for approval under section 153D of the Act. It is thus prayed by ld. CIT DR that the contentions of the assessee on the issue of approval u/s 153D of the Act may please be rejected and the order of the AO may please be upheld. He also placed reliance on the judgement of Co-ordinate Mumbai Bench of Tribunal in the case of Usha Satish Salvi Vs. ACIT in ITA No. 4237 to 4239/Mum/2023 order dated 23.01.2025 wherein the issue of validity of asses....
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....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, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A." [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord appr....
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..... A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. 16. In the present case, the ITAT, while specifically noting that the approval was granted on the same day when the draft assessment orders were sent, has observed as under:- "10. We have gone through the approval granted by the ld. Addl. CIT on 30.12.2018 u/s 153D of the Act which is enclosed at page 36 of the paper book of the assessee. The said letter clearly states that a letter dated 30.12.2018 was filed by the ld. AO before the ld. Addl. CIT seeking approval of draft assessment order u/s 153D of the Act. The ld. Addl. CIT has accorded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of S....
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....draft orders and finds that it meets the requirement of law. The approving authority is expected to indicate his thought process while granting approval, held that it is not correct on the part of the Revenue to contend that the approval itself is not justifiable. Where the Court finds that the approval is granted mechanically, it would vitiate the assessment order itself. The Hon'ble High Court inter-alia observed that there is not even a token mention that draft order has been perused by the Ld. Addl. CIT. The approval letter simply grants approval. In other words, even the bare minimum requirement of approving authority having to indicate what thought process involved leading to the aforementioned approval has not been provided. As explained, the mere repeating of words of the Statue or mere rubber stamping of the communication seeking sanction by using similar words like 'approval' will not, by itself, meet the requirement of law. The Hon'ble Court made reference to manual issued by the CBDT in the context of erstwhile section 158BG of the Act and observed that such manual serves as a guideline to the AOs. Since it was issued by CBDT, the powers of issuing such ....
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....us, quashed by allowing Ground of appeal No. 13 of the Assessee. 16. Since we have already allowed the ground of appeal No. 13 taken by the assessee thus, other grounds of appeal are not adjudicated. 17. In the result, the appeal of the assessee is allowed. ITA Nos.1980/Del/2025 to 1984/Del/2025 [Assessment Years 2014-15 to 2018-19] 18. Since in all the other appeals of the assessee in ITA Nos. 1980/Del/2025 to 1984/Del/2025 for Assessment years 2014-15 to 2018-19 respectively, the assessee has taken one of the ground of appeal, challenging the validity of assessment order passed u/s 143(3) r.w.s.153A of the Act in light of provisions of section 153D of the Act which issue has been decided in favour of the assessee in ITA No. 1979/Del/2025 for AY 2013-14, hereinabove. Since the facts are identical and the approval was granted by Addl. CIT for all these assessment years also by a common order in terms of approval letter No. Addl. CIT(CR)/GGN/2021-22/112 dated 20.04.2021 for Asst. Year 2013-14 to 2018-19 respectively, thus by following the aforesaid observations, ground of appeal taken with respect to the validity of approval in all the captioned appeals of the assesse....