AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1490
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....014-15 10.07.2023 -do- 3. 2595/Del/2023 128/Del/2023 2015-16 16.12.2024 -do- 4. 2596/Del/2023 129/Del/2023 2016-17 17.12.2024 -do- 5. 2597/Del/2023 130/Del/2023 2018-19 16.12.2024 -do- 2. At the time of hearing, it was stated that the issues involved in all the appeals filed by the revenue and cross objections raised by the assessee for captioned assessment years are common, interlinked and arising from the search action on the assessee and other persons. Hence, all these cases have been heard together and accordingly, adjudicated by this common order. 3. First we take appeal of the revenue assessee in ITA No. 2594/Del/2023 and cross objections filed by the assessee in C.O No. 127/Del/2023 both for Assessment year 2014-15. 4. Brief facts of the case are that assessee filed its return of income on 30.11.2014, declaring total income at 1,14,71,990/-. A search and seizure operation was carried out by the Investigation Wing, Meerut in the case of Kohli Tent group of cases on 03.05.2018. Thereafter proceedings u/s 153A of the Act were initiated in the case of assessee by issued of notice u/s 153A on 21.1.2020. In respo....
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....bsence of incriminating material found under section 153A of Act and in absence of pending assessment on the date of search operation on 03/05/2018. 2) That Ld. CIT(A), in the impugned order, proceeded contrary to judgment passed by Hon'ble Supreme Court in PCIT vs Abhisar Buildwell Put. Ltd. [2023 SCC Online SC 481] when admittedly on the date of search on 03/05/2018 neither any incriminating material was found from the premises searched of respondent in terms of search warrant nor assessment for assessment year 2014-15 was pending under provisions of Income Tax Act, 1961. 3) That Ld. CIT(A) passed impugned order contrary to schematic and purposive interpretation of scheme of assessment in case of search operation under section 132 of Act or requisition under section 132A of Act. 4) That Ld. CIT(A) in the impugned order failed to appreciate difference between proceedings under section 153A and 153C of Act. 5) That Ld. CIT(A) grossly erred in upholding taking countenance of material found from third party in absence of satisfaction as mandated under section 153C of Act which is sine qua non. 6) That in the facts and circumstances of ....
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....ven rather approval was given by a single order for various assessment years and for various assessee. 9. Ld.AR further submits that from the perusal of the approval, it could be seen that Adl. CIT while granting approval has observed that he has perused the draft assessment order and case records, without referring to any material which was considered by him such as seized material, including replies filed by the assessee with reference to the additions/ disallowance proposed in the drafts assessment order, etc. It was pointed out that the mandate of law u/s 153D is that the approval should be granted with an independent mind after considering the material on record for each assessment year in respect of each assessee separately. The reliance in this regard was placed on the order of the Hon'ble Delhi High Court in the case PCIT vs. Sapna Gupta (2023) 147 taxmann.com 288 (All) and PCIT vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Delhi). Further, the ld. counsel has relied the judgement of the Hon'ble Delhi High Court in the case PCIT vs. Anuj Bansal (2024) 165 taxmann.com 2 (Delhi) and decision of the coordinate Bench of ITAT Delhi in the case MDLR Airlines Put. Ltd....
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....sessment records which included seized material was placed before the approving authority for the purpose of taking decision with regard to approval under section 153D of the Act. 2. In view of the same, it cannot be inferred in any manner from the letter seeking approval by the AO and the letter granting approval by the Addl. CIT that approval under section 153D of the Act was granted in mechanical manner without independent application of mind by the Addl. CIT. 3. Further, in search cases, an Addl. 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 case....
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....ch less perusal of the same with an independent application of mind. Also, in this case of Shiv Kumar Nayyar, there was no fact brought on the record by the Revenue to prove that identical issues (involving similar facts) were involved in different cases submitted for approval by the AO. It was in absence of such factual information that granting of approval for 43 cases in a single day was viewed by the Hon'ble High Court. Further, in the instant case, approval is given for the case of assessee 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/ 2017 Dated 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....
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....ation of mind to the objections raised by the notice. In case the objections are such that it would require a detailed examination of facts and application of legal provizions, taking into account the assessment order sought to be reopened, the string of violations, suppression of material particulars and transactions which would require considerable time and would be in the nature of a detailed adjudicatory process, the Assessing Officer can dispose of the objections, by giving his tentative 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,....
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....s a normal I rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technalities." 7. It is further submitted that there cannot be any presumption drawn against the approving authority with regard to application of mind merely on the ground that number of cases approved in a day were high. There cannot be any threshold limit set for the same. How many cases will be considered unreasonably 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 inter- relationship 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....
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....val 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 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 Autho....
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....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 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] ....
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....n 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." 14. Similarly, the Hon'ble Orissa High Court in the case of ACIT us 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 ....
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....d. 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. A reference is also made the CBDT manual issued in respect to the procedure to be followed in this regard. 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 provisions of Section 153D of the Act being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the Sec....
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.... 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 through single order on the request of the AO made on the very same day vide letter dt. 21.06.2021 which is available in paper book page 191 filed by the assessee. 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 cross objection No. 7 taken by the Assessee. 18. Since we have already quashed the assessment order by allowing the cross objection No. 7 taken by the assessee thus other cross objection taken by assessee and the grounds of appeal taken by the revenue in its appeal become academic and thus not adjudicated. 19. In the result, the cross objection filed by the assessee is allowed and appeal of the revenue is dismissed. ITA Nos.2956 for AY 2013-14, ITA No. 2595 to 2597/Del/2023 ....