TaxTMI 
TaxTMI 
2025 (12) TMI 1040
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....ri Alok Agarwal has facilitated acquisition of shares of several shell entities for the benefit of his own group as well as his known associates and clients on commission basis. He has received and provided accommodation entries and also facilitated bogus short term capital loss to set off long term capital gains to various persons through several entities managed and controlled by him and his associates. Based on the incriminating material so found and seized from the possession of third person which pertained to the assessee, satisfaction was recoded and proceedings u/s. 153C of the Act were initiated in the case of assessee. In response, the assessee filed his return of income on 16.09.2022, declaring same income as was declared in the return filed u/s. 139(1) of the Act at INR 2,11,090/-. Since proceedings u/s. 153C of the Act were initiated thus earlier proceedings of re-assessment u/s. 148 were abated. The AO thereafter raised various quires and thereafter the assessment order was passed on 04.03.2024 u/s. 153C of the Act at a total income of Rs. 3,31,71,090/- by making various additions. 3. Against the said order, an appeal is filed by the assessee before Ld.CIT(A) which ....
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.... and void ab initio, having been issued without adherence to the mandatory preconditions stipulated under the Act, and thus impugned proceeding are liable to be quashed. 6. That the PCIT has failed to appreciate that the issues raised in the show cause notice, at best, pertain to the adequacy of enquiry and not lack of enquiry, which is not a valid ground for invoking jurisdiction under Section 263 of the Act. 7. That the initiation of proceedings under Section 263 is legally untenable in the absence of any new material or tangible evidence and amounts to a mere change of opinion, which is not permissible under the law. 8. That the PCIT has erred in holding the assessment order passed under Section 153C of the Act to be erroneous and prejudicial to the interest of the Revenue without demonstrating any cogent or objective basis to support such a conclusion. 9. That the assumption of jurisdiction under Section 263 is invalid as the assessee appeal against the impugned assessment order was already pending adjudication before the Commissioner of Income Tax (Appeals), and therefore, the same could not have been taken up under revision. 10. Th....
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....e of assessee after recording necessary satisfaction on the basis of documents found and seized during the course of search of third person. He further submits that in the order passed u/s. 153C of the Act, no inquiry was made nor any addition was made on the issues for which the satisfaction of escapement of income was reached in the reasons recorded before issue of notice u/s. 148 of the Act. Regarding the approval by Adl. CIT u/s. 153D of the Act, the ld. CIT DR submits that the ld. PCIT is the higher authority and who has the power to examine the approval so granted. He thus submits that action of Ld. PCIT in holding the order passed u/s. 153C as erroneous and pre-judicial to the interest of the Revenue is valid and deserves to be uphold on this count. 8. Heard the contentions of both the parties and perused the material available on record. At the outset, it is seen that the assessment order which is subject matter of revision u/s. 263 was passed u/s. 153C of the Act after getting statutory approval u/s. 153D of the Act from the higher authorities i.e. Adl. CIT/JCIT. In the instant case, the Adl.CIT in terms of his letter vide DIN & letter No. ITBA/COM/F/17/2023-24/10616447....
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....s. 1890 to 1893/Del/2024 for AYs. 2015-16 to 2018-19 dated 30.08.2024 in support of his contentions. We have gone through the said decision and we find that the ratio decidendi of the said decision squarely applies to the facts of the instant case before us. The relevant operative portion of the said decision is reproduced herein:- "9. We find that in the impugned order the ld. PCIT has not taken account of the fact that the assessments were completed after prior approval of the competent authority. Thus, we are of the considered view that at the time of (examining the issue as to if the assessment order is erroneous so far as prejudicial to the interest of the Revenue, the Id. revisional authority is not only supposed to see the assessment record of AO, but also the record of the approval which as far as the revisional authority is concerned becomes "record" of the quasi judicial authority whose order is being examined by invoking the revisional jurisdiction. Therefore, without giving a finding that the prior approval u/s. 153D was vitiated and was also erroneous so far as prejudicial to the interest of the Revenue, the assessment order independently cannot be held ....