TaxTMI 
TaxTMI 
2025 (11) TMI 626
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 143(3) on 29/12/2017 by making various additions in respect of the subject Assessment Years i.e. Assessment Year 2010-11 to 2016-17. Aggrieved by the above assessment orders, Assessee preferred Appeals before the Ld. CIT(A). The Ld. CIT(A) vide orders dated 25/02/2022 dismissed the Appeal of the Assessee. As against the orders of the Ld. CIT(A), the Assessee preferred the captioned Appeals. 3. The Assessee has challenged the legality or otherwise of the assessment orders on account of mechanical approval accorded u/s 153D of the Act in Ground No. 13 in ITA No. 619/Del/2022, Ground No. 11 in ITA Nos. 620/Del/2022 & 621/Del/2022, Ground No. 12 in ITA No. 622/Del/2022, Ground No. 14 in ITA Nos. 623/Del/2022 & 625/Del/2022 and Ground No. 8. in ITA No. 624/Del/2022. 4. The Ld. Counsel for the Assessee addressing on the above mentioned Grounds of Appeal of the Assessee, submitted that the approval dated 29/12/2017 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 tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s strict or high, as they are in the case of quasi-judicial or judicial order. 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 us Mahadeo Real Estate, dated 17 September, 2019, AIR 2019 SC 4517, 2019 (10) SCC 738. "14. In the present case, the learned Judges of the Division Bench have arrived at a finding that such a sanction was, in fact, granted. We will examine the correctness of the said finding of fact at a subsequent stage. However, before doing that, we propose to examine the scope of the powers of the High Court of judicial review of an administrative action. Though, there are a catena of judgments of this Court on the said issue, the law laid down by this Court in the case of Tata Cellular Vs. Union of India reported in (1994) 6 SCC 651 lays down the basic principles which still hold the field. Paragraph 77 of the said judgment reads thus: "77. The duty of the court is to c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bengal Central School Service Commission Vs. Abdul Halim reported in 2019 SCC Online SC 902 had again an occasion to consider the scope of interference under Article 226 in an administrative action. 31. In exercise of its power of judicial review, the Court is to see whether the decision impugned is vitiated by an apparent error of law. The test to determine whether a decision is vitiated by error apparent on the face of the record is whether the error is self-evident on the face of the record or whether the error requires examination or argument to establish it. I f an error has to be established by a process of reasoning, on points where there may reasonably be two opinions, it cannot be said to be an error on the face of the record, as held by this Court in Satyanarayan v. Mallikarjuna reported in AIR 1960 SC 137. I f the provision of a statutory rule is reasonably capable of two or more constructions and one construction has been adopted; the decision would not be open to interference by the writ Court. It is only an obvious misinterpretation of a relevant statutory provision, or ignorance or disregard thereof, or a decision founded on reasons which are clearly wrong i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as empowered to exercise the power of judicial review to prevent arbitrariness or favoritism on the part of the State authorities, as has been observed by it in paragraph 13. We are also unable to appreciate the finding of the High Court in para 17 wherein it has observed that the impugned decision of the authorities are found not to be in the public interest. We ask the question to us, as to whether directing re-tendering by inviting fresh tenders after giving wide publicity at the National level so as to obtain the best price for the public property, would be in the public interest or as to whether awarding contract to a bidder in the tender process where it is found that there was no adequate interest or as to whether publicity and al so a possibility of there being a cartel of bidders, would be In the public interest. We are of the considered view that the decision of the Commissioner which is set aside by the High Court is undoubtedly in larger public Interest, which would ensure that the Municipal Council earns a higher revenue by enlarging the scope of the competition. By no stretch of imagination, the decision of the State Government or the Commissioner could be termed as i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... approval u/s 153D of the Act and the Hon'ble Tribunal had decided the issue in favour of the Department even in the case wherein common approval had been granted for all search cases of the assessee. PRAYER: The assessment order deserves to be upheld, and the assessee's objection on the ground of improper approval u/s 153D ought to be dismissed, in view of the reasons above which establish that the allegation that approval u/s 153D was mechanical is factually and legally unsustainable and must be rejected." 6. We have carefully considered the submissions of the parties and also verified, material available on record and the case laws cited. The legal objection of transgression of requirement of approval under S. 153D of the Act is in question which has the effect on the very substratum of the assessment and consequential appellate proceedings. 7. For the purpose of deciding the issue of legality of approval accorded u/s 153D of the Act and the consequential assessment proceedings, we shall straightway advert to the approval accorded u/s 153D of the Act. The approval under s. 153D of the Act dated 29/12/2017 granted by the Joint Commissioner of Incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icity 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 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 auth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. 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 This is a digitally signed order The authenticit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh Court in the case of ACIT vs Serajuddin & Co. 454 ITR 312 (Orissa) had an occasion to examine substantial question of law on the propriety of approval granted under Section 153D of the Act. The Orissa High Court made wide ranging observations towards the manner and legality of approval under s. 153D of the Act. The Hon'ble High Court inter-alia observed that the approval under s. 153D of the Act being mandatory, while elaborate reasons need not be given, there has to be some indication that approving authority has examined 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 justiciable. Where the Court finds that the approval is granted mechanically, it would vitiate the assessment order itself. 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 ....