TaxTMI 
TaxTMI 
2025 (11) TMI 1911
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.... Income Tax Appeal (L) No. 34394 Of 2024 With Income Tax Appeal (L) No. 34430 Of 2024 With Interim Application No. 1074 Of 2025 In Income Tax Appeal (L) No. 34430 Of 2024 With Income Tax Appeal (L) No. 35473 Of 2024 With Interim Application No. 1083 Of 2025 In Income Tax Appeal (L) No. 35473 Of 2024 With Income Tax Appeal (L) No. 35504 Of 2024 With Interim Application No. 1010 Of 2025 In Income Tax Appeal (L) No. 35504 Of 2024 With Income Tax Appeal No. 769 Of 2025 With Income Tax Appeal No. 771 Of 2025 With Income Tax Appeal No. 775 Of 2025 And Income Tax Appeal (L) No. 34768 Of 2024 With Interim Application No. 1885 Of 2025 In Income Tax Appeal (L) No. 34768 Of 2024 With Income Tax Appeal (L) No. 34792 Of 2024 With Interim Application No. 1956 Of 2025 In Income Tax Appeal (L) No. 34792 Of 2024 With Income Tax Appeal (L) No. 34854 Of 2024 With Interim Application No. 1962 Of 2025 In Income Tax Appeal (L) No. 34854 Of 2024 With Income Tax Appeal (L) No. 34913 Of 2024 With Interim Application No. 1959 Of 2025 In Income Tax Appeal (L) No. 34913 Of 2024 With Income Tax Appeal (L) No. 34916 Of 2024 With Interim Application No. 1893 Of 2025 In Income Tax Appeal (L) No. 34916 Of 2024 Wit....
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....Application No. 1141 Of 2025 In Income Tax Appeal (L) No. 36519 Of 2024 With Income Tax Appeal (L) No. 36557 Of 2024 With Interim Application (L) No. 8772 Of 2025 In Income Tax Appeal (L) No. 36557 Of 2024 With Income Tax Appeal (L) No. 36558 Of 2024 With Interim Application No. 1144 Of 2025 In Income Tax Appeal (L) No. 36558 Of 2024 With Income Tax Appeal (L) No. 36566 Of 2024 With Interim Application No. 1136 Of 2025 In Income Tax Appeal (L) No. 36566 Of 2024 With Income Tax Appeal (L) No. 36567 Of 2024 With Interim Application No. 1138 Of 2025 In Income Tax Appeal (L) No. 36567 Of 2024 With Income Tax Appeal (L) No. 36586 Of 2024 With Interim Application No. 1139 Of 2025 In Income Tax Appeal (L) No. 36586 Of 2024 With Income Tax Appeal (L) No. 36601 Of 2024 With Interim Application No. 1143 Of 2025 In Income Tax Appeal (L) No. 36601 Of 2024 With Income Tax Appeal (L) No. 36602 Of 2024 With Interim Application No. 1145 Of 2025 In Income Tax Appeal (L) No. 36602 Of 2024 With Income Tax Appeal (L) No. 36609 Of 2024 With Interim Application No. 1401 Of 2025 In Income Tax Appeal (L) No. 36609 Of 2024 With Income Tax Appeal (L) No. 36610 Of 2024 With Interim Application No. 1140 Of 20....
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.... Tax Appeal (L) No. 37151 Of 2024 With Income Tax Appeal (L) No. 37155 Of 2024 With Interim Application No. 1146 Of 2025 In Income Tax Appeal (L) No. 37155 Of 2024 With Income Tax Appeal (L) No. 74 Of 2025 With Interim Application No. 1336 Of 2025 In Income Tax Appeal (L) No. 74 Of 2025. For the Appellant: Mr. Suresh Kumar, in all the matters. For the Respondent: None. ORAL JUDGMENT:- (PER M. S. SONAK, J) 1. Heard Mr Suresh Kumar for the Appellants/Applicants. 2. Mr Suresh Kumar states that notices have been served upon the Respondents in all these matters. He points out that the delay in matters listed at Sr. Nos. 401 to 462 ranges between 1 day to 51 days. Sufficient cause has been shown in the Interim Applications. Accordingly, he submits that the delay involved in instituting these Appeals be condoned. 3. We have perused the Interim Applications, and we are satisfied that sufficient cause has been made out for condoning the delay, which is not even inordinate. 4. Accordingly, all the Interim Applications are allowed, and delay is condoned. 5. With consent, the Appeals are immediately taken up for consideration, since, Mr. Suresh Kumar pointed out that....
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....cials seeking approval and the official granting it during the pendency of proceedings. He submits that even the ITAT has accepted this position. Accordingly, he submits that there was nothing wrong in the expeditious grant of such approvals. He submits that the expeditious grant of such approvals was not indicative of any non-application of mind. 11. Mr Suresh Kumar submitted that, in such matters, elaborate reasons are not expected from the approving authorities; it is sufficient if the draft orders accompanying the proposal for approval are considered. He submits that such orders were duly considered. He submitted that the ITAT has not examined the matter on merits but, on technical pleas, faulted the approvals duly granted by the approving authority. He submitted that these Appeals must be admitted on the above proposed substantial question of law. 12. We have considered Mr Suresh Kumar's submissions and, with his assistance, perused the record and the ITAT's common and impugned judgment and order dated 30 April 2024. For reasons discussed hereafter, we are satisfied that the Approvals granted by the Additional Commissioner in this case were indeed vitiated by total non-a....
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....cy shows that the approval was a foregone conclusion even before the proposal and draft orders were received by the Additional Commissioner, or that the authorities considered the mandatory approval a trivial formality subject to casual compliance. 16. Some serious explanation was called for regarding how the details of the approval orders were reflected in the draft assessment orders accompanying the proposal for approval. Such a glaring discrepancy remains unexplained, but it was sought to be downplayed. The ITAT has noted that the proposals were received by the Additional Commissioner at 5.02 pm and that over 30 approvals were granted within minutes. The ITAT, in such circumstances, which are common to all cases, cannot be faulted for drawing an inference of total non-application of mind in the grant of approvals. The draft assessment orders, as noted by the ITAT, were not common but rather addressed diverse factual scenarios. 17. Apart from the fact that even the draft assessment orders contained glaring discrepancies, it is too much to accept that the Additional Commissioner, in a matter of minutes or, at most, a few hours, could have read, let alone applied his mind to,....
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.... The Court held that such approval is mandatory and must not be given mechanically. The Court explained that, while elaborate reasons need not be given, there must be some indication that the approving authority examined the draft orders and found that they met the requirements of law. The Court held that where approval was granted mechanically, it would vitiate the assessment order itself. The Court also referred to the CBDT guidelines for granting such approvals and noted that these guidelines can be traced to Section 119 of the Income Tax Act, 1961. The Court also noted that there was a series of judgments about the instructions under Section 119 binding the Department. The Special Leave Petition against this decision was dismissed by the Hon'ble Supreme Court (2024) 163 taxmann.com 118 (SC). 21. The requirement to obtain prior approval for the draft assessment order is an inbuilt protection against the arbitrary or unjust exercise of power by the Assessing Officer (AO). Therefore, this protection cannot be reduced to some mechanical exercise uninformed by any serious application of mind. The precedents referred to by the ITAT suggest that the legislature has introduced this ....
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....erely referred to instances of gross discrepancies in some of the cases, only to flag the quality of the approvals and the utmost casualness with which the entire exercise was processed. 25. In paragraph 41 of the ITAT's impugned order, the ITAT refers to a glaring example of non-application of mind, and we transcribe this paragraph below for the convenience of reference. "041. Further glaring example of Non application of mind is that in case of Platinum textiles limited for assessment year 2016-17 to assessment year 2018-19 and in case Helios Mercantile Limited for assessment year 2017-18 and assessment year 2018-19 some information is received from the Deputy Director of Income Tax (investigation) regarding transaction with 'one-word group' through email on 26/2/2021 at 5.02 PM, the email is also referred to in the assessment order which was passed on 26/2/2021. Thus, natural corollary is that such assessment order is passed after 5.02 PM on 26/2/2021 and approval is also granted is without application of mind." 26. Similarly, in paragraph 42 of the ITAT's impugned order, there is yet another instance of non-application of mind, and therefore, we transcribe the co....
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....pproval and the authority granting approval "were discussing the matter on a routine basis," though partially accepted by the ITAT, cannot be regarded as some substitute for serious application of mind. If indeed such discussions were held and we are to assume they should be considered in explaining the haste with which the approvals were granted, then we wonder how so many glaring discrepancies crept into the approval orders. The discrepancies are not, by any means, insignificant. The discrepancy in how the draft assessment orders referred to the date and number of the approval orders, even before those approval orders were granted, is glaring and has never been explained. 30. In this case, all the approvals are identically worded, and there is no reference to the draft orders having been pursued by the Additional Commissioner of Income Tax. The approval order merely states the following: - "The draft assessment order, submitted by you in the following case of M/s Platinum Textiles Ltd. for Assessment Year as mentioned below, is approved u/s 153D of the Income Tax Act, 1961 based on the perusal of records submitted along with the submissions of the assessee" 31. In ....
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.... draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectively justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted or the approval granted must be recorded. Nevertheless, when the Additional CIT while granting the approval recorded that he did not have enough time to analyze the issues arising out of the draft order, clearly this was a case in which the higher Authority had granted the approval without consideration of relevant issues. Question of validity of the approval goes to the root of the matter and could have been raised at any time. In the result, no question of law arises." 34. In Samp Furniture Pvt. Ltd.Vs. Income Tax Officer, Ward 3(3)-Thane & Ors. 2024 SCC OnLine Bom 2774, another Coordinate Bench of this Court was concerned with an approval accorded by the Chief Commissioner of Income Tax on 7 March 2024, the same being made available on the order sheet for issuance of impugned notice, the Coordinate Bench held that the Chief Commissioner of Income Tax has acted without applic....
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....raft assessment orders at all and without any independent application of mind, vitiated the approval orders. The Court upheld the ITAT's order quashing such approval and the action based thereon. 38. In Central India Electric Supply Co. Ltd. Vs. Income-tax Officer, Company Circle-X, New Delhi (2011) 10 taxmann.com 169, the Delhi High Court was concerned with a sanction issued under Section 151 for re-assessment under Sections 147 and 148 of the IT Act. The Delhi High Court noted that even if the CBDT agrees with the reasoning set out by the ITO for reopening the assessment, the least that is expected is that an appropriate endorsement is made in this behalf, setting out brief reasons. A mere rubber-stamping of the underlying material would suggest that there was no application of mind and the decision had been taken mechanically. 39. In Synfonia Tradelinks (P.) Ltd Vs Income Tax Officer, Ward-22(4) (2021) 127 taxmann.com 153 (Delhi), the Delhi High Court held that the satisfaction arrived at by the concerned officer must be discernible from the sanction order passed under Section 151. A mere endorsement that the information received from the investigation wing and the reasons....