TaxTMI 
TaxTMI 
2025 (11) TMI 716
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....sessment orders passed by the Assessing Officer [AO] as tabulated hereunder: Sr. Nos. ITA Nos. CIT(A) Order dated Assessment Order dated Assessment Order under section 1 ITA No.2076/Del/2023 28.04.2023 28.07.2021 143(3) of the Income Tax Act, 1961. 2-3 ITA No.1941/Del/2023 & C.O .- 81/Del/2023 -do- -do- 143(3)/153A of the Income Tax Act, 1961. 4-5 ITA No.2077 to 2078/Del/2023 -do- -do- -do- 6 ITA No.2079/Del/2023 01.05.2023 -do- -do- 7-8 ITA No.2266/Del/2023 & Co.No.97/Del/2023 -do- -do- -do- 9-10 ITA No.2267/Del/2023 & Co.No.98/Del/2023 -do- -do- -do- 11 ITA No.2080/Del/2023 -do- -do- -do- 12-13 ITA No.2567/Del/2023 & C.O.120/Del/2023 -do- -do- -do- 14 ITA No.2081/Del/2023 -do -do- -do- 15-16 ITA No.2268/Del/2023 & C.O .- 99/Del/2023 -do- -do- -do- 17 ITA No.2086/Del/2023 -do- -do- -do- 18-19 ITA No.2568/Del/2023 & C.O .- 119/Del/2023 -do- -do- -do- 20 ITA No.2082/Del/2023 -do- do- -do- 2. The issues being common, interlinked and related to the same assessee for various A....
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....oviding the entire adverse material available on record and without observing the principles of natural justice. 4. 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 Ld. AO in rejecting the books of account of the assessee and that too without any basis/material and evidence available on record. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have deleted the various following additions/disallowance inter alia on the ground that no incriminating material was found during the course of search warranting such additions/disallowances. * Rs. 85,60,040/- by treating it as alleged unexplained investment u/s 69. * Rs. 27,55,000/- by treating it as alleged unexplained credit u/s 68. * Rs. 59,01,048/- by treating it as alleged unexplained credit u/s 68. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have quashed the impugned assessment order dated 28-07-2021 as the same is barred by limitation. 7. That in any case and without prejudice to the above grounds, additions/disal....
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....ficer was stationed at Ghaziabad and it is not possible that Addl. CIT had occasion to go through the assessment records and seized material pertaining to the issues on which additions were proposed in draft assessment order. 9. Ld. AR finally submits that common approval is given for various Assessment Years and for five different assessee which is contrary to the provisions of section 153D of the Act and therefore, he prayed that no proper application of mind before granting the approval and thus assessment order so passed deserved to be held as null and void. He placed reliance on the following judgements:- [i] M/s Tavleen Resorts & Spa Pvt. Ltd. Vs. DCIT in ITA No. 3361-3366/Del/2024 [ii] Smt. Peu Veer Vs. DCIT in ITA No. 3367-3370/Del/2024 & 3380 t0 3381/Del/2024 [iii] Mainee Steel Works Pvt. Ltd. Vs. DCIT in ITA No. 3371 to 3377/Del/2024; [iv] Divjot Singh Mainee Vs. DCIT in ITA No. 3378- 3379/Del/2024 [v] Sohan Lal Single (AOP) Vs. DCIT in ITA No. 711- 712/Del/2023 and 713-714/Del/2024 10. On the other hand, Ld. Sr. DR for the Revenue supported the orders of lower authorities. The Ld. Sr. DR filed a written submission regard....
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.... CIT is well aware about progress of the assessment proceedings, relevant issues of different assessee, nature and content of the seized material in light of the fact that the as per the CBDT guideline F. No. 286/161/2006-IT (Inv. II) dt. 22.12.2006, copy of appraisal report is shared by Investigation Wing with both that the assessing officer and Joint CIT. In fact, CBDT guideline dt. 22.12.2006 (Copy enclosed) on the subject of the search and Seizure Assessments clearly outlines such close coordination. Thus, as per the prevailing Practice and Guidelines, the approving authority has good idea of issues involved in particular case before hand i.e. much before the cases are sent to him for approval Under Section 153D of the Act. This guideline of CBDT is relevant piece of information, which throws light on the way search assessments are taken up by the filed officers. Therefore, in light of such peculiar fact of instant case, it cannot be inferred that the Addl. CIT was not in a position to independently apply his mind in judicial manner to the case of assessee on the same day. 4. In this regard, it is further submitted that on perusal of case laws on the issue of ....
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.... only. Therefore, facts of the instant case are distinguishable. ITAT NEW DELHI in the case of Seh Realtors Pvt. Ltd. v. ACIT Central Circle-8 ITA no. 2503/Del/Dated 2017 23.07.2024 The approving authority had granted approval in 232 cases in a single day. Therefore, issue of judicious approval for such large number of cases from the angle of human limitations was an issue before Hon'ble Bench. In the instant case, approval is given for the case of assessee only and that too in six cases. Therefore, facts of the instant case are distinguishable. 5. Reliance is placed in the case of Home Finders Housing Ltd. v Income-tax Officer Ward 2(3), Chennai [2018] 93 taxmann.com 371 (Madras) wherein it was held that in case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated. 9. There is no statutory requirement to deal with the objections given by the assessee after receiving reasons for initiating proceedings under section 147 of the I.T. Act. However, there is a judgement of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd.'s cas (supra) mandating such disposal of objections before passi....
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....e reasons for overruling the objections. 18. The disposal of objections is in the value of a procedural requirement to appraise the assessee of the actual grounds which made the Assessing Officer to arrive at a prima facie satisfaction that there was escape of assessment warranting reopening the assessment proceedings. The disposal of such objection must be before the date of hearing and passing a fresh order of assessment. In case, on a consideration of the objection submitted by the assessee, the Assessing Officer is of the view that there is no ground made out to proceed, he can pass an order to wind up the proceedings. It is only when a decision was taken to overrule the objections, and to proceed further with the reassessment process, the Assessing Officer is obliged to give disposal to the statement of objections submitted by the assessee. 20. The learned counsel for the appellant by placing reliance on an order passed by the learned Single Judge in Mrs. Jayanthi Natrajan (cited supra) submitted that the order being one made without complying with mandatory procedure, is nonest in law and it cannot be given life by complying with the procedure later. In shor....
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.... high and how many cases will be considered reasonable? It is submitted that every approval needs to be examined in light of its peculiar facts such as number of issue involved, nature of issue involved, modus-operandi involved, number of cases involved and interrelationship among facts of such cases. If identical issues are involved involving same modus-operandi and cases are of same search group only, it would not be unreasonable to consider that an approving authority will be able to apply its independent mind judiciously to relatively larger number of cases in a single day. Ultimately, it boils down to factual matrix of the cases sent for approval. In the instant case, in light of the factual matrix that additions were made in different cases of the group on the same ground based on same factual position with regard to same accommodation entry provider and involving same modus-operandi, it would be justified to consider that the approving authority would have been in a position to apply his mind to all such cases sent for approval by the AO on the same day, particularly when number of such cases is not too high and facts/issues involved are in the knowledge of approving authori....
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....re 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, 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, ....
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....aft 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 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, ....
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....or 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above." 13. Similarly, the Hon'ble Orissa High 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 s. 153D of the Act. The Hon'ble 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 interalia 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 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 ....
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....s namely Shri Harish Bajaj and Devendra Kumar Bajaj, in whose cases approval was granted by the ld. Addl. CIT through same approval letter, were decided by the Co-ordinate "B" Bench of Delhi Tribunal wherein under identical circumstances and by making similar observations in ITA Nos. 2218/Del/2023 [Assessment Year 2013-14] & Others vide order dt.25.02.2025. The Co-ordinate bench has quashed the orders by holding the approval as mechanical. Thus, applying the ratio of judgements delivered as noted above, the assessment order based on ritualistic approval stands vitiated and thus, quashed by allowing Ground of appeal No. 8 of the Assessee. 16. Since we have already allowed the Ground of appeal No. 8 taken by the assessee thus, other grounds of appeal are not adjudicated. 17. In the result, appeal of the assessee is allowed. ITA Nos. 2077 to 2079, 2080, 2081, 2086, 2082/Del/2023 [Assessee's appeals], ITA Nos. 1941, 2266, 2267, 2567, 2268, 2568/Del/2023 [Revenue's appeals] & C.O.Nos.-81, 97, 98, 120, 99, 119/Del/2023 [C.Os by Assessee] [Assessment Years 2011-12 to 2019-20] 18. Since in all the other appeals of the assessee in ITA Nos. 2077 to 2079, 2080, 2081, 2086....