TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 143
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....facts of the case are that assessee filed its return of income on 29.09.2012, declaring total income at NIL. A search and seizure operation was carried out by the Investigation Wing, Meerut in the case of Sanjeev Mittal Group of cases on 29.12.2017 and 06.02.2018. During the search and seizure action, incriminating materials were found and seized which inter-alia include one Annexure No. LP-19 which contained various papers related to purchase/sale of immovable property in cash. From the perusal of seized documents LP-19, it is found that assessee has made cash transaction in the dealing of immovable property in FY 2011-12 & 2012-13. Therefore, proceedings u/s 153C of the Act was initiated in the case of assessee by issued of notice u/s 153C which was served upon the assessee. In response thereto, assessee filed return of income on 18.01.2021, declaring total loss of INR 5,09,564/-. Thereafter, notices u/s 143(2) and 142(1) with questionnaire were issued and served upon the assessee which were duly complied with by the assessee and detailed submissions were field from time to time. The AO after considering the papers/documents seized and replies submitted assessed the income at INR....
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....ted to the Appellant Assessee; (ii) it was not made clear, as to whether the author of the said document was examined or not; and (iii) copy of the recorded statement of the author of the said document (if any) was not brought on record and confronted to the Appellant Assessee. 7. On the facts of the case and in law, the assessment order passed u/s 153C r.w.s. 153A/143(3) ought to have been annulled because the same was barred by limitation. 8. On the facts of the case and in law, the addition of Rs. 66205543/- made by the learned AO u/s 69B based upon Page 78 of LP-19 (which document was stated to had been seized during the search & seizure operation carried out in the case of Sanjeev Mittal Group) is not sustainable because the said seized document was not referred in the Satisfaction Note. 9. On the facts of the case and in law, the addition of Rs. 66205543/- made by the learned AO u/s 69B based upon Page 78 of LP-19 (which document was stated to had been seized during the search & seizure operation carried out in the case of Sanjeev Mittal Group) is not sustainable, particularly when he could not establish with certainty that the Appellant Assessee ha....
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.... the learned ACIT Central Circle Meerut on 21.09.2021, was not in accordance with law." 6. During the course of hearing, assessee vide letter dt. 01.05.2025 has taken additional ground of appeal which reads as under: "On the peculiar facts of the case and in lw, the assessment order is liable to be quashed / annulled as the approval u/s 153D granted by the Addl. CIT Central Range Meerut is mechanical and without due application of mind." 7. The ld. AR submits that the additional ground now raised is purely a legal ground and goes to the root of the matter thus, the same be admitted and adjudicated first. He placed reliance on the decision of Hon'ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 (SC). 8. On the other hand, ld. CIT DR for the Revenue vehemently objected of the admission of additional ground and submits that the same was not taken before the ld. CIT(A) and further submits that this ground is taken after almost one year from the filing of appeal thus same should not be admitted. 9. After considering the submission of both the parties and looking to the nature of additional ground raised by the assessee, we find that in this ground ....
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....t. 3. The assessee, ZTA Infratech Pvt. Ltd. was apparently known as PROVIEW RISHABH INFRA PVT. LTD. at the time of assessment proceedings. The AO has submitted the following. copy of which is attached with this submission: (i) letter of the AO seeking approval u/s 153D of the Act for AY 2013-14 to 2018-19 for PROVIEW RISHABH INFRA PVT. LTD. dated 15.06.2021 (ii) approval accorded u/s 153D of the Act by the Jt./Addl. CIT for 2013-14 to 2018-19 for PROVIEW RISHABH INFRA PVT. LTD. dated 21.09.2021 4. On perusal of the above it can be seen that: (i) AO had submitted 7 case records along with draft assessment orders u/s 153C of the Act for AYs 2013-14 to 2018-19 in the case of PROVIEW RISHABH INFRA PVT. LTD. ON 15.06.2021. (ii) The approval u/s 153D of the Act by the Jt. / Addl. CIT was accorded to PROVIEW RISHABH INFRA PVT. LTD. on 21.09.2021 i.e. 3 months after approval request submitted by the AO. iii) The other cases of other assessee's mentioned in the AO's approval request date 15.06.2021, have NOT been repeated in the approval order u/s 153D of the Act by the Jt./Addl. CIT. 5. The search and seizure manua....
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.... they work as team during the course of search assessments. The approval accorded by the Jt/Addl. CIT under section 153D of the Act is nothing but the culmination of day-to-day involvement of the AO and the Jt. / Addl. CIT in search assessments. The fact is that the AO and the Jt. / Addl. CIT work as team members and the AO works under the supervision of the Jt./Addl. CIT. The teamwork gets culmination by the approval under section 153D of the Act. Such involvement of the Jt./Addl. CIT in the search assessment is in routine in the Central Charges of the Income Tax Department where the search assessments are completed. It is not a case where the assessment records, other files, investigation folders, etc. of a search case are discussed for the first time between the AO and the Jt./Addl. CIT at the time of approval of the search assessment. 7. As per the SOP prescribed in the Search & Seizure Manual and other instructions/guidelines issued by the CBDT, there is close monitoring of search assessments by the Jt./Addl. CIT by way of internal correspondence folder(s), order sheet noting. meeting(s), discussions, electronic communications, etc. from time to time throughout the ye....
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.... / Addl. CIT is required to the extent that the AO has looked into all seized material and has given proper opportunity of being heard to the assessee by confronting the evidences and the proposed additions. The Jt./Addl. CIT, while granting approval under section 153D of the Act, does not enter into the realm of deciding whether the additions proposed by the AO is legally sustainable. 10. The CBDT Circular No. 3 of 2008, dated 12.03.2008 mentions the legislative intent of section 153D of the Act. Further, the section 153D of the Act does not lay the procedure and manner of granting approval under section 153D of the Act. The approval under section 153D of the Act by the Jt./Addl. CIT is merely administrative in nature to safeguard internal checks & balances without affecting the quasi-judicial powers of the AO or creating any prejudice to assessee, In fact, while granting approval under section 153D of the Act, the Jt./Addl. CIT does not act as a Reviewing Appellate Authority to allow or disallow the additions proposed by the AO. 11. The manner of arriving satisfaction for granting administrative approval itself could not have been matter of adjudication in the d....
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....facts of this case are distinguishable from the case of Anuj Bansal (supra). Therefore, the decision of the Hon'ble High in the case of Anuj Bansal (supra) is not applicable in the present case. Rather, this case supports the view that in view of the decision of the Hon'ble Delhi High Court (Full Bench) in the case of Kelvinator of India Ltd. (supra) and the fact that the Ld. AR failed to pin point any inaccuracy/mistake/error/lapses, etc. in the approval under section 153D of the Act and the details mentioned in the assessment order. Similarly, the decision of the Hon'ble Orrisa High Court in the case of (ACIT vs. Serajuddin & Co. [2023] 454 ITR 312 (Orissa)[15- 03-2023])is also DISTINGUISHABLE on the facts as the Ld. AR failed to demonstrate that the search assessment orders did not mention the approval of the Jt. / Addl. CIT. In the present case, the Ld. AR failed to establish that the guidelines enunciated by the Search & Seizure Manual. Circular-3 of 2008 and SOP for search assessments have been flouted by the AO and the Jt./Addl. CIT and there was no application of mind by them. 15. It is equally a well-settled position on the law of precedent that a ruli....
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.... following observations at para 9.27: "9.27 It is a well settled principle of law emerging from a catena of decisions of this Court, including Supreme Court Employees Welfare Association v. Union of India & Anr. and State of Punjab v. Davinder Pal Singh Bhullar, that the dismissal of a S.L.P. in limine simply implies that the case before this Court was not considered worthy of examination for a reason, which may be other than the merits of the case. Such in limine dismissal at the threshold without giving any detailed reasons, does not constitute any declaration of law or a binding precedent under Article 141 of the Constitution." Thus, it is humbly submitted that in the present appeals, only facts of the case should be discussed and examined and they only should determine the fate of these appeal. 18. On perusal of all the documents submitted before Your Honours it is evident that: (1) AO had submitted 7 case records along with draft assessment orders u/s 153C of the Act for AYs 2013-14 to 2018-19 in the case of PROVIEW RISHABH INFRA PVT. LTD. ON 15.06.2021. (ii) The approval u/s 153D of the Act by the Jt./Addl. CIT was accorded to PROV....
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....ny such material before granting approval. Further as could be seen from the approval as reproduced above, common approval was given for seven assessment years in the case of three different assessee thus, in total 21 approvals were granted vide single order. 15. The Hon'ble Jurisdictional High Court in the case of Shiv Kumar Nayyar in ITA No.285/2024 [TS-343-HC-2024-Delhi] has held that the approval u/s 153D of the Act has to be granted for each Assessment year independently. The relevant observations of the judgement of Hon'ble High Court are as under:- "11. A plain reading of the aforesaid provision 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....
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.... on the issue at hand. Paragraph no.22 of the said decision reads as under:- "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 Commissioner of Income-tax. 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 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 t....
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....dent from page 36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt. Neetu Nayyar. The remaining cases may belong to some other assessee's, 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 appr....
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....juddin & Co., Orrisa and in PCIT vs Anuj Bansal in ITA No.368/2023 (Delhi High Court) has held in chorus that the approval granted under s. 153D of the Act, if granted mechanically, will vitiate the assessment order itself. 18. Recently the Hon'ble Third Member in the case of Dheeraj Chaudhary Vs. ACIT in ITA Nos. 6158 to 6160/Del/2018 after considering all the judgements relied upon by the ld. CIT DR and further after detailed analyzing the provisions of section 153D, power and independence of assessing authority and the CBDT manual referred by the revenue has held that the common approval granted for various year and for various assessee without making any reference to the material seen is mechanical approval and cannot sustained in the eyes of law. The relevant observations of the hon'ble Third Member are as under: 22. I noted that the common thread discussed by Hon'ble Orissa High Court in the case of Serajuddin& Co. (supra), by Hon'ble Delhi High Court in the case of Anuj Bansal (supra) and by Hon'ble Allahabad High Court in the case of Sapna Gupta (supra) is that the requirement of previous approval of assessment by the Additional CIT/Joint CIT in terms of pro....
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....roposal sent by the Assessing Officer as reproduced in Paragraph 10. It means that the approval granted is mechanical in manner and without application of mind by the approving authority i.e., by the Additional CIT. 19. Such mechanical approval cannot be sustainable in law in the light of judicial dicta available. The approval memo is totally silent on the issues involved and has granted omnibus approval without any thoughtful process being discernible. A single approval u/s 153D has been accorded in respect of seven Assessment Years and for three different assessee thus in total 21(twenty one) approvals were granted through single order. There is no other material to show involvement of the superior authority in the course of assessment proceedings. Thus applying the ratio of judgements delivered as noted above, the assessment order based on ritualistic approval stands vitiated and thus quashed by allowing additional Ground of appeal of the Assessee. 20. Since we have already allowed the additional ground of appeal taken by the assessee, thus other grounds of appeal are not adjudicated 21. In the result, appeal of the assessee is allowed. ITA No. 4497/Del/2024 [AY 2013....