TaxTMI 
TaxTMI 
2025 (10) TMI 1340
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....appeals against orders passed by the DCIT, Central Circle, Allahabad under section 153(A) r.w.s. 143(3) / 153(C) r.w.s. 153A & 143(3) / 143(3) r.w.s. 153(B)(1). 2. The facts of the case are that a search and seizure operation under section 132(1) of the Income Tax Act, 1961 was conducted in respect of all these assessees on 3.02.2011. Thereafter, assessment proceedings were taken up under section 153A r.w.s. 143(3) for the period starting from assessment year 2005-06 to assessment year 2011-12. After obtaining approval from the ld. JCIT under section 153D on 26.03.2013, all these assessment orders were passed in the closing days of the financial year 2012-13. The assessees filed appeals against all these assessment orders before the ld. CIT(A)-3, Kanpur, who, after considering the issues on the basis of the grounds raised before her, passed her orders in all these appeals and aggrieved by such orders passed by the ld. CIT(A)-3, Lucknow, these assessees have come in appeals before us against various appeal orders. The Department has also come in appeals in two cases (in the matter of Vijay Stone Products) against which the assessee has filed cross objections. In the case of Sh....
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.... taken/ granted on one day in more than 45 cases (Group) hence the order passed by the assessing officer and his action as confirmed by CIT Appeal is highly unjustified. The legal issue in question is well covered by the decision Hon'ble Jurisdictional High Court as well as other Hon'ble I.T.A.T. benches hence the decisions are binding. 5. That in any view of the matter on the date of search original assessment u/s 143(3) of the act was concluded and no assessment pending whereas only pending assessment shall abate and not concluded assessment and since no material was found hence as per the proviso only one assessment can be made hence sanctity of original assessment passed u/s 143(3) should be maintained as a result the order passed u/s 153A r.w.s. 143(3) is illegal. 6. That any view of the matter addition of Rs. 3,26,400/- as made as per para 2.3 (i) of the order by alleging unexplained investment in immovable property is highly unjustified in the facts and circumstances of the case and such addition made without any material or evidence hence the addition is incorrect and more so the learned CIT(A) was also incorrect in treating the addition as unexpla....
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.... brought on record. The entries are mostly imaginary entries and had no value in the eye of laws hence addition as maintained is unwarranted. 12. That in any view of the matter that the diaries marked as annexure-4 & annexure A-5 are the dumb document, dubious entries without any corroborative material without any evidence brought on record but the two lower authorities made and maintained the addition in vague manner as such the said document liable to be discarded for the purpose of assessment hence addition is unwarranted. The lower authorities considered the issue in very vague and general manner. 13. That in any view of the matter in the course of hearing of appeal an affidavit was filed and in para 5 of the affidavit the appellant confirmed on oath that the diaries are rough diaries and on the basis of said the diaries there was no business transaction and also confirmed that on the basis of said diaries there was no business transaction and also that diary are dumb document but without taking statement of the appellant on the basis of affidavit addition maintained which action is not correct and against the settled law. 14. That in any view of the ....
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....idered the facts and law properly hence the action of the two lower authorities liable to be declared illegal/ incorrect and invalid. 2. That in any view of the matter assessment as framed u/s 153A r.w.s. 143(3) of the act without considering the facts in proper manner and likewise CIT(Appeal) failed to considered the facts and cited decisions of various higher courts as well as failed to considered the contents of the affidavit filed before him and even no statement was recorded on the basis of affidavit nor any proper opportunity was allowed to the assessee hence the entire action of CIT(Appeal) is incorrect illegal. The allegation of the CIT(Appeal) in the order that sufficient opportunity was allowed is absolutely wrong and incorrect. 3. That in any view of the matter approval u/s 153D of the act as taken by the assessing officer from Joint Commissioner of Income Tax Lucknow in various assessee (Group cases) in one day which shows that prescribed authorities granted the approval without application of mind and without considering the search Material facts, and in all the cases (Group Cases) hence the entire Assessment order is illegal invalid as such the order....
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.... is highly unjustified hence addition is incorrect and but the A.O. action as confirmed by CIT(Appeal) is not correct at all. Thus both the lower authorities failed to considered the facts properly. 10. That in any view of the matter various addition made by the assessing officer without considering the documents place in the paper books and the two lower authorities failed to considered the facts properly and made and maintained the addition is not correct. The entire approach of the two lower authorities were in mechanical manner which is not permissible in the act. 11. That in any view of the matter addition of Rs. 1,69,38,500/- as per para 3.1 of the order made by the assessing officer and confirmed by CIT(Appeal) without considering the nature and manner of entries as recorded in the diary found in the course of search marked as Annexure A-4 and no.A-5 are nothing but rough and dumb document but the two lower authorities without considering the nature of entries made and confirmed the addition which is highly unjustified. 12. That in any view of the matter a huge & arbitrary addition of Rs. 1,69,38,500/- made on the basis of annexure no. A-4 made wit....
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....ition called for on any issue. 18. That in any view of the matter the total income as determined/computed at Rs. 1,97,72,623/- is highly unjustified incorrect and the learned CIT(Appeal) simply allowed a token relief of Rs. 1,06,555/- only against such huge addition thus the action and approach of CIT Appeal is uncalled for as the two paper books filed before lower authorities were not considered in proper manner. 19. That in any view of the matter the appellant denied whole of he tax liability as have been determined in pursuance of assessment order dated 30.03.2013 and objecting to the proceeding initiated in pursuance of the said order is not correct. 20. That in any view of the matter penal interest charge u/s 234A is highly unjustified because the delay is not on the part of the appellant rather on department as the search material was not provided in time and even part search material still not provided. 21. That in any view of the matter penal interest charge u/s 234B is not correct as the appellant never anticipated about such huge illegal addition made in illegal manner hence charge of interest not correct. 22. That in any view ....
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..... The legal issue in question is well covered by the decision of Hon'ble Jurisdictional High Court as well as Hon'ble I.T.A.T. benches hence the decisions are binding. 5. That in any view of the matter on the date of search original assessment u/s (1) of the act was concluded and no assessment pending whereas only pending assessment shall abate and not concluded assessment and since no material was found hence as per the proviso only one assessment can be made as such sanctity of original assessment passed u/s 143(1) should be maintained as a result the order passed u/s 153A r.w.s. 143(3) is illegal. 6. That in any view of the matter there was no abatement as the year under consideration in appeal is concerned there are assessment related to proceeding pending at the time of commencement of search accordingly, assessment order dated 30.03.2013 is illegal and his action as confirmed by CIT(Appeal) unwarranted as decided by the various court. 7. That in any view of the matter addition of Rs. 8,10,400/- as made as per para 3.1 of the assessment unexplained cash deposit in bank is highly unjustified and the order by alleging action of assessing office....
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....e in illegal manner hence charge of interest not correct. 16. That in any view of the matter the assessee reserve is right to take any fresh of ground before hearing of appeal." ITA No. 101/ALLD/2023 (A.Y. 2008-09) (Ramji Vaish) 1. That in any view of the matter order passed u/s 153A r.w.s. 143(3) of the Act on 30.03.2013 is bad both on the facts and in law and by such order income was determined at Rs. 67,04,560/- which is highly unjustified, illegal without any basis hence the action of the two lower authorities are not correct as such the declared income liable to be accepted in the facts and circumstances of the cases. 2. That in any view of the matter in the course of search operation since no incriminating material was found hence addition in absence of incriminating material made by the assessing officer and confirmed by CIT(A) is highly unjustified incorrect in the light of settled law by various high court till date. 3. That in any view of the matter the learned CIT(A) decided the appeal in a mechanical manner without providing reasonable opportunity which is nothing violation of natural justice hence the order passed b....
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....ng the evidence, explanation and details as furnished hence additions are unwarranted. 10. That in any view of the matter penal interest charge u/s 234A is highly unjustified in the facts and circumstances of the case. 11. That in any view of the matter penal interest charge u/s 234B and his action as confirmed by CIT Appeal without considering the facts is highly unjustified in the facts and circumstances of the case. 12. That in any view of the matter the assessee reserve is right to take any ground before hearing of appeal." ITA No. 125/ALLD/2023 (A.Y. 2009-10) (Ramji Vaish) 1. That in any view of the matter order passed u/s 153A r.w.s. 143(3) of the Act dated 30.03.2013 is bad both on the facts and in law and by such order income as determined by the A.O. at Rs. 6,75,93,340/- is highly unjustified, illegal as well as determining the income in arbitrary manner hence the declared income in the return liable to be accepted in the facts and circumstances of the case. 2. That in any view of the matter entire action u/s 132 of the Act and in consequences to which notices issued u/s 153A of the I.T. Act is illegal and with....
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.... also confirmed the addition as per discussion in para 3 are totally incorrect and the entire observation of the two lower authorities in confirming the addition is highly unjustified as the issue was not properly considered. 10. That in any view of the matter the department failed to examined the nature of entries in said diaries found during the course of search in the premises having no evidentiary value to prove the fact of transaction when the diaries are dumb document in the eye of law hence addition on the basis of dumb document is unwarranted. 11. That in any view of the matter addition of Rs. 6,34,36,282/- made on the basis of diaries do not constitute books of accounts as no evidence or any corroborative evidence found in support of the entries recorded in diary hence addition not is uncalled for. 12. That in any view of the matter addition of Rs. 33,20,300/- as per 6.1 by alleging unexplained cash deposit is highly unjustified in the facts and circumstances of the case as deposits were made in bank from definite source hence allegation of two lower authorities are not correct hence liable to be deleted. 13. That in any view of the matt....
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....n and also the income as determined is not based on any incriminating material which is preliminary condition in such assessment and more so even no cash, no jewellery nothing was found in search operation but in spite of the fact addition made on the basis of dumb document which is confirmed by CIT(A) is not correct. 3. That in any view of the matter no reasonable opportunity was allowed by the A.O. nor by the CIT(A) and the allegations/observation made in the orders of the two lower authorities also about opportunity are totally incorrect and baseless. 4. That in any view of the matter while determining the income on the basis of dumb document possession of the assets/wealth with the assessee was altogether ignored which clearly shows that such huge additions were made on imaginary basis which has no value in the eyes of law hence the additions made and maintained under different heads is highly unjustified. 5. That in any view of the matter in the present case the approving authority u/s 153D has exercise their power in mechanical manner which vitiated the entire proceeding because it was humanly impossible for the approving authority for applying his ....
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....ourse of search in support of the entries recorded in diary hence addition of Rs. 8,10,19,000/- is uncalled for and also bad in law. 13. That in any view of the matter addition of Rs. 51,000/- made and confirmed by the two lower authorities by saying unexplained investment as per discussion in para 5.1 of the order is highly unjustified in the facts and circumstances of the case. 14. That in any view of the matter addition of Rs. 52,81,000/- made and confirmed by two lower authorities by saying unexplained cash deposit is highly unjustified in the facts and circumstances of the case. 15. That in any view of the matter addition of Rs. 21,93,500/- made and confirmed by two lower authorities by saying unexplained cash deposit is totally incorrect and the entire discussion in para 7.1 of the order is highly unjustified in the facts and circumstances of the case. 16. That in any view of the matter search action did not lead to discovery of unaccounted money, bullion, jewellery or valuable article and no books of account reveals undisclosed transaction of the assessee and entire impugned proceeding liable to be reverse. 17. That in any view of....
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....y shows that such huge additions were made on imaginary basis which has no value in the eyes of law hence the additions made and maintained under different heads is highly unjustified. 5. That in any view of the matter in the present case the approving authority u/s 153D has exercise their power mechanically which vitiated the entire proceeding because it was humanly impossible for the approving authority for applying his mind for granting approval. Thus, the approval granted in vague manner hence entire order is illegal, void in the eyes of law. 6. That in any view of the matter the approval u/s 153D of the Act given by JCIT for passing assessment order without of the application mind, without considering record/file/folder as well as draft assessment order hence impugned order passes by A.O. and confirmed by CIT(Appeal) is uncalled for in the facts and circumstances of the case. 7. That in any view of the matter addition of Rs. 25,00,000/- by alleging unexplained investment immovable property as per discussion in Para 3.1 of the order are totally incorrect and without any basis. The lower authorities failed to consider the facts properly. 8. Th....
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....e and both the two lower authorities failed to consider the facts properly hence addition is unwarranted. 17. That in any view of the matter search action did not lead to discovery of unaccounted money, bullion, jewellery or valuable article and no books of account reveals undisclosed transaction of the assessee hence entire impugned proceeding liable to be reverse. 18. That in any view of the matter affidavit as filed before the lower authority was totally ignored and even no statement as such on basis of affidavit was recorded hence addition is unwarranted in view of the settled law. 19. That in any view of the matter there is nothing on record which suggest that there was any undisclosed income earned by the assessee based on any material found during search hence addition made in general manner is highly unjustified and illegal. 20. That in any view of the matter penal interest charge u/s 234A by the assessing officer and confirmed by CIT(A) is highly unjustified. 21. That in any view of the mater penal interest charge u/s 234B is totally incorrect as the assessee never anticipated about such type of arbitrary addition hence interest....
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....t jurisdiction and also income determined is not based on any incriminating material nor related to the appellant was found in search. Therefore the assessment framed is illegal and income determined at Rs. 86,80,710/- for the year under consideration as against NIL return is highly unjustified and against the provision of the Act hence such order is nullify, void and liable to be declared illegal. 3. That in any view of the matter addition of Rs. 47,78,319/- as maintained by Commissioner of Income Tax (Appeal) as per para 18 of the order as against Rs. 73,37,664/ on account of extra profit addition as made by Assessing Officer by applying net profit rate of 15% is highly unjustified and the net profit rate as disclosed on the basis of closed books of accounts should have been accepted. 4. That in any view of the matter addition of Rs. 47,78,319/ on account of extra profit addition as maintained by the CIT(A) is not correct when the assessee Company is maintaining books of accounts, books are audited, по defect pointed out in books hence application of N.P. rate of 10% by CIT(A) as against 15% as applied by AO without giving any comparable case is not ....
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.... AO without giving any comparable case is correct and the case laws as cited in the assessment order are not applicable to the assesse case hence entire addition on this count is incorrect, improper and liable to be deleted. 5. That in any view of the matter addition of Rs. 20,50,000/- on the basis of seized annexure BS- 2/A-1/12-15 as made by assessing officer which was maintained by CIT(A) as per para 23 of order is highly unjustified. 6. That in any view of the matter addition of Rs. 100000/- as made by assessing officer on basis of seized annexure BS-2/LP-1/82 and his action as confirmed by CIT(A) is highly unjustified. 7. That in any view of the matter findings and observations of the assessing officer in the order regarding the addition of Rs. 20,50,000/- and Rs. 1,00,000/- as made are totally incorrect and contrary to the actual facts of the case. 8. That in any view of the matter the appellant reserves his right to take any fresh ground of the appeal before hearing of the appeal. 9. That in any view of the matter interest charged under section 234A, 234B and 234C of the Income Tax Act is highly unjustified." ITA No.107/A....
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....ew of the matter findings and observations of the assessing officer and confirmed by CIT(A) in the order regarding the net profit additions as made are totally incorrect and contrary to the actual facts of the case. 8. That in any view of the matter the appellant reserves his right to take any fresh ground of the appeal before hearing of the appeal. 9. That in any view of the matter interest charged under section 234A, 234B and 234C of the Income Tax Act is highly unjustified." ITA No.108/ALLD/2019 (A.Y. 2010-11) (M/s Subhash Stone Product (P) Ltd.) 1. That in any view of the matter assessment as framed. vide order dated 30.03.2013 is bad both on the facts and in law and by such order income as determined at Rs. 1,19,62,290/ is highly unjustified and illegal hence the declared income should have been accepted. 2. That in any view of the matter entire action under section 132 of the income tax Act and inconsequence to which notice issued under section 153A of the Act is illegal and without jurisdiction and also income determined is not based on any incriminating to the material nor undisclosed income related appellant was found i....
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....in any view of the matter the approval granted on the basis of draft assessment order by the Joint Commissioner of Income Tax Central Range, Lucknow u/s 153D of the 1.T., Act on 26.03.2013 without examination of record & seized material and granted approval in mechanical manner without application of proper mind therefore the assessment framed u/s 153A r.w.s. 143(3) on 30.03.2013 is illegal and nonest and consequential assessment made on the basis thereof is illegal and deserved to annulled. 2. That in any view of the matter approval has taken from Joint Commissioner of Income Tax Central Range Lucknow dated 26.03.2013 is not an approval in the eye of law and therefore the assessment as framed on 30.03.2013 for all the block year are null and void hence liable to be declared illegal and more so without jurisdiction and specially in the light of decision of jurisdiction High Court, Orissa High Court and decision of Hon'ble Supreme Court in SLP and as well as decision of other Hon'ble I.T.AT. Benches. 3. That in any view of the matter there is no year-wise reasoning in the said approval dated 26.03.2013 granted." 6. In the case of M/s Jai Maa Sharda Servi....
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....ed u/s 153A/143(3) of the Act dated 28/03/2013 and by such order income as determined by the assessing officer in arbitrary manner and the same as partly confirmed by the Commissioner of Income Tax (Appeal) is highly unjustified and incorrect in the facts and circumstances of the case. 2. That in any view of the matter extra addition of Rs. 6,30,320/- as maintained by the Commissioner of Income Tax (Appeal) is highly unjustified in so for as the trading result is supported by day to day register and purchase and sale was fully vouched, no defect was found in books and in the case of sister concern book result has been accepted in similar set off fact hence the extra addition as maintained by the commissioner of Income Tax (Appeal) by applying 1% rate of the sales is uncalled for in the fact and circumstances of the case. 3. That in any view of the matter extra addition of Rs. 6,30,320/- as maintained by the first appellate authority is incorrect illegal especially when in sister concern book result in similar type of facts has been accepted. Moreso when sales and purchases have been accepted then there is no justification to maintain extra addition so made arbitra....
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....ettled law of various courts, hence the disclosed income is liable to be accepted. 2- That in any view of the matter extra addition of Rs. 2,89,689/- maintained by the first appellate authority without appreciating the correct facts is not correct because all the information, facts & figures were already brought on record in the audit report prior to the search, no incriminating material was found in search about any suppression of extra income and even proviso to section 145(3) of the Act was not invoked. Therefore the extra addition is liable to be deleted in the facts and circumstances of the case. 3- That in any view of the matter in similar set of facts extra addition so made during the A.Y. 2008-09 on account of extra profit was deleted, hence there is no justification to maintain such type of addition in the present year during the during year when every entry was recorded in books. 4- That in any view of the matter addition of Rs. 45,00,000/- as partly maintained as per para 16 of the Commissioner of Income Tax (Appeal) order ignoring the correct facts is highly unjustified and illegal in the facts and circumstances of the case, hence the addition....
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....ng donation as maintained is highly unjustified in the facts and circumstances of the case. 5- That in any view of the matter Rs. 20,71,000/- (Rs 4,91,000/- Rs. 15,80,000/-) as partly maintained as per para 29 of the Commissioner of Income Tax (Appeal) order ignoring the correct facts is highly unjustified and illegal in the facts and circumstances of the case, hence the addition is liable to be deleted. 6- That in any view of the matter the addition so made and partly maintained u/s 40A(3) of the IT Act is totally incorrect so for as the payments were made under unavoidable circumstances beyond control of the assessee. Moreso when book entries have been accepted there is no justification to maintain the addition in part, hence the addition is liable to be deleted in the facts and circumstances of the case. 7- That in any view of the matter in the facts and circumstances of the case the additions/disallowances so made by the assessing officer and partly maintained by the Commissioner of Income Tax (Appeal) under two heads are without appreciating the correct facts are unjustified and illegal hence the same are liable to be deleted in interest of justice. ....
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....maintained by the Commissioner of Income Tax (Appeal) two heads are without appreciating the correct facts are unjustified and illegal hence the same are liable to be deleted in interest of justice. 7. That in any view of the matter the interest charged under different sections of the IT Act is highly unjustified and illegal in the facts and circumstances of the case. 8. That in any view of the matter the appellant reserves his right to take any fresh ground before hearing of the appeal." ITA No.33/ALLD/2019 (A.Y. 2011-12) (Vijay Stone Product) 1- That in any view of the matter the assessment order dated 29.03.2013 passed u/s 153 r.w.s. 153A r.w.s. 143(3) of the IT Act is bad both on the facts and in law because it was framed against the settled law of various courts, hence the disclosed income is liable to be accepted. 2- That in any view of the matter extra addition of Rs. 1,46,692/- maintained by the first appellate authority without appreciating the correct facts is not correct because all the information, facts & figures were already brought on record in the audit report prior to the search, no incriminating material was fo....
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....ounts as unreliable. 2. On facts & circumstances of t circumstances of the case and in law, the CIT(A) erred in restricting the GP rate @20% instead of 30% applied by the AO, without giving any finding as to why the GP rate of 30% as applied by AO was excessive when the CIT(A) herself upheld the action of the AO in applying GP rate of 25% in AY 2009-10 in assessee's own case in same line of business. 3. On facts & circumstances of the case and in law, the CIT(A) erred in restricting the GP rate @20% instead of 30% applied by the AO. without appreciating that no bills/vouchers, etc, were produced by assessee either before the AO or even before the CIT(A) and that the CIT(A) herself upheld the action of the AO in rejecting the books of accounts as unreliable. 4. On facts & circumstances of the case and in law, the CIT(A) erred deleting the addition of Rs. 2,93,58,147/- u/s 40A(3) without appreciating that no justification at all was submitted before the AO to prove that such expenses were covered under the exception u/r 6DD(j), even though the CIT(A) herself recorded a finding that the AO has given adequate opportunity to the assessee during the assessm....
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....at the CIT(A) has accepted the explanation of assessee without giving a finding on veracity of such claims made before her for first time and existence of the exception exceptional circumstances as provided u/r 6 DD(j). 10. On facts & circumstances of the case and in law, the CIT(A) while deleting the addition u/s 40A(3), erred in admitting the additional evidence as the CIT(A) failed to record any findings with reference to the sufficiency of circumstances under which the assessee was prevented from producing those evidence/explanations before the AO, when CIT(A) herself records a finding that the AO has given adequate opportunity to the assessee during the assessment proceedings. 11. On facts & circumstances of the case and in law, the CIT(A) erred in admitting the additional evidence without passing any order u/r 46A(2) to show that the conditions for filing addl. Evidence u/r 46A(1) are satisfied, thereby violating the principles of admissions of addl. Evidence as explained in Ranjit Kumar Choudhary 288 ITR 179 (Guj), when CIT(A) herself records a finding that the AO has given adequate opportunity to the assessee during the assessment proceedings. 12.....
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....he appeal as under:- ITA No.65/ALLD/2019 (A.Y. 2011-12) (Departmental Appeal) Vijay Stone Product) 1. On facts & circumstances of the case and in law, the CIT(A) erred in restricting the GP rate 23% instead of 30% applied by the AO, without giving any finding as to why the GP rate of 30% as applied by AO was excessive and that the CIT(A) herself upholding the action of the AO in rejecting the books of accounts as unreliable. 2. On facts & circumstances of the case and in law, the CIT(A) crred in restricting the GP rate @23% instead of 30% applied by the AO, without giving any finding as to why the GP rate of 30% as applied by AO was excessive when the CIT(A) herself upheld the action of the AO in applying GP rate of 25% in AY 2009-10 in assessee's own case in same line of business. 3. On facts & circumstances of the case and in law the CIT(A) erred in restricting the GP rate @23% instead of 30% applied by the AO, without appreciating that no bills/vouchers, etc. were produced by assessee either before the AO or even before the CIT(A) and that the CIT(A) herself upheld the action of the AO in rejecting the books of accounts as unrelia....
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....tional evidence without giving opportunity to AO, when the assessee had failed to produce any evidence/explanation regarding the justifying the fulfillment of exceptional conditions for applicability of Rule 6DD(j) in respect of cash payments exceeding 20,000 That the CIT(A) has accepted the explanation of assessee without giving a finding on veracity of such claims made before her for first time and existence of the exception exceptional circumstances as provided u/r 6 DD(j) 10. On facts & circumstances of the case and in law, the CIT(A) while deleting the addition u/s 40A(3), erred in admitting the additional evidence as the CIT(A) under which the assessee was prevented from producing those evidence/explanations before the AO, when CITEA) herself records a finding that the AO has given adequate opportunity to the assessee during the assessment proceedings. 11. On facts & circumstances of the case and in law, the CIT(A) erred in admitting the additional evidence without passing any order u/r 46A(2) 10 show that the conditions for filing addl evidence u/r 46A(1) are satisfied, thereby violating the principles of admissions of addl. Evidence as explained in Ranjit ....
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....the addition of Rs. 2,08,97,456 on account of gross profit earned and Rs. 1,44,00,000 on account of stock for the unaccounted mining turnover as mentioned in seized annexure-23 by accepting the fanciful reply of the assessee without alluding to the relevant facts and probative value of the evidences in the background that the assessee never produced my books of accounts or stock, register before the AD to show that the entries were duly recorded. 18. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds me without prejudice to each other." In the case of M/s Vijay Stone Products, the assessee filed the following grounds of appeal in the Cross Objection No. 06/ALLD/2019 arising out of ITA No. 65/ALLD/2019, as under:- "1. That in any view of the matter the learned Commissioner of Income Tax (Appeal) was perfectly justified in reducing the G.P. rate specially when books are properly maintained and no specific defect found in books therefore the action of Commissioner of Income Tax (Appeal) is correct. 2. That in any view of the matter finding and observation of Com....
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....153D of the I.T. Act on 26.03.2013 without examination of record & seized material and granted approval in mechanical manner without application of proper mind therefore the assessment framed u/s 153A r.w.s. 143(3) on 30.03.2013 is illegal and nonest and consequential assessment made on the basis thereof is illegal and deserved to annulled. 2. That in any view of the matter approval has taken from Joint Commissioner of Income Tax Central Range Lucknow dated 26.03.2013 is not an approval in the eye of law and therefore the assessment as framed on 30.03.2013 for all the block year are null and void hence liable to be declared illegal and more so without jurisdiction and specially in the light of decision of jurisdiction High Court, Orissa High Court and decision of Hon'ble Supreme Court in SLP and as well as decision of other Hon'ble I.T.AT. Benches. 3. That in any view of the matter there is no year-wise reasoning in the said approval dated 26.03.2013 granted u/s 153D of the Act but there is only a reference of a letter dated 25.03.2013 of the I.T. Act there is no reference regarding the draft assessment order being sent for approval of JCIT hence the entir....
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....e same would be common to all assesses of the group who have challenged the validity of the orders on account of the manner of approval under section 153D. 12. Commencing their arguments, Shri Suyash Agarwal, Advocate and Sh. Praveen Godbole, C.A. (hereinafter referred to as the ld. ARs) submitted that in the present case, a search and seizure operation under section 132 of the Act was conducted on 03.02.2011, at the residential and business premises of the assessee. After the date of search, notices under section 153A were issued on 17.07.2012 and in compliance to those notices, returns were filed on 22.08.2012. After issuance of notices, to which compliance was made, the ld. AO framed assessment orders on 30.03.2013 under section 153A/143(3) of the Act. In the assessment order for each year, on the last page of the order, the Assessing Officer narrated that the order had been passed after approval from the Joint Commissioner of Income, Central Range, Lucknow. It was submitted that while preparing the appeal against the decision of the ld. CIT(A), the assessee came to know that a legal issue was involved and therefore, a prayer had been made by the assessee for admission of add....
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.... pertaining to the assessee for consideration on 25.03.2013. It was submitted that in the said letter, which was placed on page no. 39 of the assessee's paper book, a total of 290 orders pertaining to 45 assessees had been submitted for approval. Thus, it was submitted that in view of the fact that the reference to the JCIT was made on 25.03.2013 and the approval was also given on 26.03.2013, it was humanly impossible for any person to grant approval in so short a period of time, after examining the voluminous details (documents and books etc.) in a single day. Thus, it was argued that it was self-evident that the approval granted on 26.03.2013 was given in a mechanical manner without due application of mind and that the entire proceeding was vitiated on this account. Since the approval under section 153D was the foundation for passing the impugned assessment order dated 30.03.2013, but the same was in fact not an approval in the eyes of law, because it was given mechanically, the said assessment order was rendered illegal and void. The ld. ARs submitted that there was no indication in the letter dated 26.03.2013, issued by the JCIT, that the JCIT had examined the draft order and f....
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....terial placed before it and the reasoning given in the assessment order. The Court had held that prior approval of a superior authority meant that the said authority should appraise the material before it, so as to appreciate the factual and legal aspect to ascertain that the entire material had been examined by the Assessing Authority before preparing the draft assessment order. It held that it was clear that the approval must be granted only on the material available on record and the approval must reflect the application of mind to the facts of the case. Accordingly, it was held that requirement of approval in this manner was not met in the case of that assessee, where draft assessment orders in 123 cases were placed before the Approving Authority on 30th December, 2017 and approved by him on 31st December, 2017, as it was impossible to go through records of so many cases in one day so as to apply independent mind to the material before the Approving Authority. After a conjoint reading of sections 153A(1) and section 153D, the Court had held that approval had to be obtained with respect to, "each assessment year" before passing the assessment orders under section 153A and since ....
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....ies all the legal and procedural requirements and if an approval had 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 would be defeated. The Tribunal had held in that case, that the Approving Authority would have to apply its independent mind to the material on record for, "each assessment year" in respect of, "each assessee" separately. The Tribunal had noted that the provisions contained in section 153A to 153D provide for separate notices to be given to the assessee for each assessment year and for passing of separate assessment orders. Therefore, separate approval of draft assessment orders for each assessment year was required to be obtained under section 153D of the Income Tax Act. The Tribunal in that case had held, that the approval of the Approving Authority serves two purposes i.e. it has to ensure the interest of Revenue by guarding against any omission or negligence by the Assessing Officer and it also had to do justice to the taxpayer by granting protection against arbitrary or baseless tax liability. Therefore, an order passed mechanically, which did no....
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....rt in the case of NTPC Limited vs. CIT 229 ITR 383 (SC), on the grounds that they were of the opinion that the additional ground raised by the assessee was a purely legal ground which was germane to the issue involved in the appeal. Similarly, in the case of Subodh Agarwal in ITA No.674/LKW/2018, the ld. CIT DR had not voiced any objection to the admission of the additional ground since the ground was a purely legal ground. Reference was also invited to the decision of the ITAT in various cases where the additional grounds questioning the validity of the approval under section 153D had been admitted. On the issue of validity of proceedings under section 153D, it was once again reiterated that there was series of decisions in support of the contention that if many orders were approved on the same day, it reflected non application of mind. Therefore, it was prayed that the legal ground may be admitted as the issues involved were identical to various other cases, where the Courts had admitted challenges to the approval under section 153D, on account of the fact that it was purely a legal ground. 15. Further, in response to an affidavit of the JCIT, who had given the approval under ....
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....not get validated by additional grounds that were later brought out. Therefore, it was submitted that the affidavit of the retired officer was liable to be ignored and justice ought to be provided to the assessee, in the light of settled law and the contention of the Department that a legal issue could not be raised before the Hon'ble Bench, had no force and therefore should be ignored. The ld. ARs also emphasized that the legal issue that had been raised as an additional ground was required to be adjudicated first, keeping other issues on merits pending, until the legal issue had been determined. As per Order XIV Rule 2 of the CPC, it had been laid down in Rule II (2) that where issues of law and of fact arise in the same suit and the court finds that the suit or any part thereof may be disposed of on an issue of law only, it may try that suit first. They also drew reference to the decision of the Hon'ble Supreme Court in the case of Major S.S. Khanna vs. Brigadier F.J. Dhillon (AIR 1964) SC 497, where the Hon'ble Supreme Court had held, that the jurisdiction to try an issue of law under Order XIV Rule 2 CPC, may be exercised only where the whole suit or a part thereof could be di....
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....risdiction of the ITAT and the powers of the ITAT were two different things. The issue of approval under section 153D, which did not emanate out of the orders of the ld. CIT(A), was beyond the jurisdiction of the ITAT in the present appeal. The ld. DRs argued that had the issue been within the jurisdiction of the ITAT, (in terms of the subject matter of appeal), then it would have had the widest powers to adjudicate upon the same, but it is not so in the present case. Therefore, since the Tribunal did not enjoy the jurisdiction to rule upon an approval under section 153D dehors of the matter being considered by the ld. CIT(A), where was the question of the Tribunal exercising the power to do so. Thus, it was submitted that the additional ground should not be entertained by the ITAT on account of this. 17. The ld. DRs also submitted, that the question as to whether in a given case, approval under section 153D has been accorded with due application of mind or not, is essentially a question of fact, which would depend upon the facts of each case and therefore, this was not a legal issue which could be raised as an additional / legal ground for the first time before the ITAT. The ld....
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....osed by the ld. AO and had conveyed his approval for the same, the requirement of law was fulfilled. It was argued that if the Hon'ble Tribunal was to venture into whether the approval could have been accorded by the JCIT under certain circumstances or not, it was only creating fetters (which the Legislature did not consider it necessary to do) and thereby exceeding its jurisdiction. The artificial requirement imposed by the Tribunal that the JCIT should go through the entire body of material available on record at the time of according approval was not only harsh but vicious, because by such logic as the final fact-finding authority, the Tribunal was also required to go through the entire body of material available on record and if it did not do so, its decisions ought not to pass muster. There was, therefore, no occasion to annul any assessment on this count, without finding any fault in the assessment, due to which it could be said to be incapable of receiving approval of a person reasonably instructed in law. It was further submitted that the difference between procedural irregularity and judicial defect was well known. While the latter was incurable, the former may not be. In ....
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....nder the direct and constant supervision of the JCIT Central, and the draft assessment order was formally submitted to him as and when the order was ready to be made. It was submitted that the view of the Tribunal that the JCIT should go through the entire assessment records (including the seized material etc.) while according approval, was based on the assumption that the JCIT was a stranger to the assessment work until he was provided with the draft assessment order. But that was factually incorrect. It was, therefore unfair and improper to say that the JCIT should go through the voluminous records at the time of recording approval and hold that the same was, "humanly impossible" in the short time that it took for giving an approval, to hold that the said approval had been given without application of mind. The ld. DRs sought to explain the issue by pointing out that the Assessing Officer was expected to make an assessment after thoroughly familiarizing himself with the facts of a case and evaluating the entire body of evidences. He naturally could not make such orders in one day, but kept working throughout the year during which the assessment work went on as work in progress an....
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....y of the same was filed before us. It was submitted that in a search case, after the conclusion of search, the Investigation Wing prepared an appraisal report with regard to the findings in the search and the documents recovered and sent copies of the same to the ld. AO, Range Head and Pr. CIT, Central within a period of 60 days. It was submitted that as per para 1.2 of the said guidelines, the seized material should be handed over to the Assessing Officer within a week of sending of the said appraisal report. The Board has laid down that in case of any delay, the CIT, Central is to be informed. The ld. DRs thereafter pointed out, that as per para 1.3 of the said guidelines, after receiving the said appraisal report, the CBDT has directed that the Assessing Officer and Range Head would jointly scrutinize the appraisal report and seized material in order to prepare an examination note to decide where cases were required to be taken up under section 153A, 153C or section 148 and such cases where the seized material pertained to cases other than those which had been centralized with the ld. AO. Thus, it was submitted that the JCIT was acquainted with the seized material and the apprai....
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....e the JCIT who gave the approval under section 153D) had already seen the seized material and participated in the assessment various stages and therefore, the approval under section 153D was only for the purposes of meeting the statutory requirement, so that the assessee should not allege that the order had not been passed in accordance with law. However, as the JCIT had been involved in the assessment process throughout the period of assessment, it was not necessary for him at the stage of granting of approval, to examine the material and records again. He only had to see that the orders had been passed in accordance with the discussions held by him with the Assessing Officer. Thus, any imputation that he did not apply his mind and acted mechanically, only because he did not require a long time to grant such approvals, was unfounded in the light of these facts. It was submitted that there is no instrument that could measure application of mind. However, the JCIT was a responsible officer having sufficient experience and therefore would know what is to be seen in which case and no conclusion could be reached regarding non application of mind, only on account of the fact that the ap....
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....r used to give the draft orders in my e-mail and after due diligence, I used to return those draft order, after necessary correction and modification, through e-mail. 8. That, this is the reason that approval process took minimum time. 9. That, the regular monitoring was also necessary because in the most of cases assessee took long time for giving responses and submitted final reply at the fag-end of the year. 10. That, the approval has been accorded after due diligence and proper application of mind. DECLARATION I, Buddhadeb Mukhopadhyay, S/o Late Amiyalal Mukherjee aged about 69 years R/o Flat No.- 301, Moore Heights, 93, M. B. Sarani, Kolkata- 700040, solemnly affirm that contents of point no. 1 to 10 are true and correct to the best of my knowledge and belief." 21. The ld. DRs pointed out that only because these extensive discussions between the Assessing Officer and the Range Head were not recorded in the order- sheet of the assessment folder, it could not be presumed that the said joint examination of seized material or joint consideration of the case over a period of time had not taken place. It was submitted that since the role of ....
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....he issue had been raised by the assessee in appeal. The ld. DRs also drew our attention through the decision of the Hon'ble Supreme Court in the case of Chuharmal vs. CIT 172 ITR 250. It was submitted that in the said case, the Hon'ble Supreme Court had held that there was a presumption in law, specifically section 114(e) of the Evidence Act that Judicial and Official Acts supposed to be performed in a particular manner had actually been performed in the way they were supposed to be conducted. There could not be presumption of illegality. Thus, when the guidelines existed that search assessments had to be carried out in a particular manner and the officer giving the approval had come on record to swear that he had involved himself in the assessment proceedings and given approval after due application of mind, the burden of proof was clearly on the assessee to prove non-application of mind. In the instant case, the assessee had not brought on record a single instance of arbitrariness or unjust behavior, so how could it be proved that the actions of the Assessing Officer and the JCIT were illegal. Since, the fact of approval was not denied, the Department was protected by the said pr....
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.... 23. Without prejudice to this argument, the ld. DRs submitted that even otherwise there was no reason to hold the assessments to be invalid on account of any irregularity in the approval process. It was submitted that cases had come up for decision where there was absolute lack of approval and there too the Courts had not held such assessments to be invalid. The lack of approval had been held to be a procedural irregularity that was not fatal to the order passed. Our attention was invited to the judgment of the Hon'ble Karnataka High Court in the case of Gayathri Textiles vs. CIT (2000) 111 taxman 123 (Kar) wherein the ld. CIT(A) had cancelled the penalty levied under section 271(1)(c), holding that the ld. AO had not obtained the previous approval of the IAC as required under section 274(2). On appeal by the Revenue, the Tribunal had reversed the order, holding that the failure to obtain the previous permission from the IAC for imposing penalty under section 271(1)(c) was only a procedural error and it was not fatal to the order of penalty under section 271(1)(c). The Hon'ble High Court held that in the said case, the proceedings were validly initiated and the proceedings under....
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....r section 153A. It was not dependent upon the approval under section 153D, therefore, it was argued that when the proceedings had been validly and lawfully initiated, the resultant assessment orders could not be void ab initio and therefore could not be nullified. The obtaining of approval in a particular manner could be held to be a procedural irregularity and following the decision of the Hon'ble Supreme Court, as rendered in the case of Guduthur Bros. vs Income-Tax Officer (supra), the proceedings were to continue from the stage of such illegality. Therefore, if the Tribunal was of the opinion, that any irregularity had crept in to the approval process, then the right course of action would be to send it back to the JCIT for the removal of lacuna / irregularity. In support of this stance, the ld. DRs further relied upon the judgments of the Hon'ble Madhya Pradesh High Court in the case of Prabhudayal Amichand vs. CIT (1989) 44 taxman 213 (M.P.) and CIT vs. Damodar Das Muralilal (1997) 93 taxman 651 (M.P.), where this principle was that a procedural irregularity can be corrected at the point in which the regularity occurred when it was discovered, was re-affirmed. Acknowledging t....
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....7 cases had been approved on the same day, while in the case of Serajuddin, the approval given by the Additional Commissioner was not even mentioned in the assessment order. It was submitted that in none of these cases had the Courts been made aware of the CBDT guidelines dated 22.11.2006 nor had the approving authority come forward to refute the assessee's allegations. Thus, it was submitted that none of these cases were binding precedents in the case of the assessee as they were all based on the different set of facts. Our attention was invited to the reference to the decision of Ashok Kumar Sahu vs. Union of India AIR 2006 SC 2879, wherein the Hon'ble Apex Court had observed that when the power of approval was rested in a higher authority and such authority approves an order of the lower authority, it means that he has gone through the order of the lower authority. The word, 'Approval' in the context of an administrative act, does not mean anything more than the aforesaid acts. Therefore, it was submitted that considering the meaning of, 'approval' in the context of an administrative act, the consent/confirmation of the draft assessment orders by the approving authority was good....
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....biguity in the section, but if the section had been judicially explained then also it was not required to look into the matter afresh every time. The ld. ARs thereafter proceeded to point out that it had been judicially held that the word 'Approval' did not mean writing of one word of approval but natural justice was of wide import and application of mind was required to fulfil it, as the assessee's rights were affected by non-application of mind. The ld. ARs drew our attention to the principal of Stare Decisis and pointed out that as per the same, judgments which had held the field for a long time should be followed and not unsettled by deviation. Our attention was thereafter invited to the decision of the Hon'ble Supreme Court in the case of Shankar Raju vs. Union of India (2011) 2 SCC 132, in which the Hon'ble Supreme Court had explained the doctrine of stare decisis and pointed out that binding precedents must be followed and must not be disregarded. In this case, the binding precedents laid down that there must not be rubber stamping of assessment orders but independent application of mind to the law. Secondly, it had been laid down that, if approval is there, it must be demon....
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.... the JCIT was an afterthought. They also invited our attention to the judgment by the Jodhpur Bench of the Tribunal in the case of Indira Bansal in ITA numbers 321-324,279 - 281,325-331& 404-404/Jodh/2016 where the Tribunal had reaffirmed that the approval given in similar circumstances to the assessee's case was mechanical thus vitiating the assessment. They submitted that prior knowledge of the matter, as argued by the learned DRs, had no value. What was essential was proper application of mind to the approval process and since the circumstances indicated that this had not been done in this particular case, the orders were vitiated and deserving of being quashed .Finally, they argued that the judgment of the Supreme Court in the case of Mohinder Singh Gill was rendered by a constitution bench and still held the fort and therefore no credence should be given to the affidavit filed by the JCIT, who was since retired. 27. We have duly considered the rival arguments raised by the assessee and the Revenue on this matter and in our view, the preliminary question to be decided is whether the additional grounds that have been raised by the assessee are questions of fact or whether the....
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....ce judgment upon an issue to determine the case finally, notwithstanding that the judgment of the Court from whose decree the appeal is preferred has preceded wholly upon some other ground other than on which the Appellate Court proceeds. Furthermore, the Hon'ble Bombay High Court in the case of PCIT vs. Sreelekha Damani (2019)307 CTR 218 (Bom) has held that the question of validity of approval goes to the root of the matter and could have been raised at any time. In these circumstances, and in view of these precedents, we cannot accept the arguments offered by the ld. DRs that the Tribunal does not have the jurisdiction to hear such issues simply because they did not emanate out of the orders of the ld. CIT(A). The ld. DRs have also argued that the assessee could have raised these issues before the ld. CIT(A) so that the CIT(A) could apply his/her mind to the issue, but we observe that the ld. ARs have admitted that it was only when drawing up the grounds of appeal for the appeal before us, that it came to their knowledge that this legal issue had not been raised earlier. We would look at this submission, in the context of the legal developments happening with regard to the approv....
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.... Tribunal, the objections on such grounds are again held to be not maintainable. Rule 29 deals with the production of the additional evidence. The ld. DRs have argued that since the assessee was not a party to the proceeding between the ld. AO and the ld. JCIT, the letters written by the Assessing Officer to the ld. JCIT seeking his approval and the subsequent approval rendered by the JCIT constitute additional evidences as far as the assessee is concerned and before admitting any such document, the Tribunal must record its reason in writing pointing out that the conditions outlined in Rule 29 have been met. Our observation upon this objection is that documents which form a part of the assessment record cannot be classified as additional evidences merely because they have not been relied upon a previous occasion by either party. Therefore, the objections raised by the ld. DRs against the admission of the additional grounds are held to be not maintainable and we accordingly admit the additional grounds of appeal for consideration and adjudication. Moreover, as the additional grounds of appeal challenge the very validity of the assessments that are before us, it is appropriate that t....
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....e of law emerging from a catena of decisions of this Court including Supreme Court Employees' Association vs. Union of India and Anr and State of Punjab vs. Davinder Pal Singh Bhullar, that the dismissal of the SLP in limine simply implies that the case before this Court was not considered worthy of examination for a reason, which may be other than the merits of the case. Such in limine dismissal at the threshold, without giving any detailed reasons, does not constitute any declaration of law or a binding precedent under article 141 of the Constitution." Thus, in view of the judgment of the Hon'ble Supreme Court itself on this subject, the contention of the ld. ARs that the Hon'ble Supreme Court has affirmed the order of Hon'ble Orissa High Court is not maintainable. 31. We may, thereafter, turn our attention to the judgments of the Hon'ble Allahabad High Court which have been cited by the ld. ARs as precedents that, in their opinion would bind us to concluding that the approvals given in the instant case were mechanical and therefore, the assessments were vitiated on that account. It is observed that in the case of PCIT vs. Subodh Agarwal (2023) 450 ITR 526 (Alld), the Hon'b....
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....ment orders under section 153A in the case of 123 assessee's placed before the approving authority on December 30, 2017 and December 31, 2017 that were approved under section 153D on December 31, 2017, not only included the case of the assessee but the cases of other groups. Having regard to this fact, the Hon'ble High Court held that it was humanly impossible to go through the records of 123 cases in one day to apply independent mind to appraise the material before the approving authority. Therefore, the conclusion drawn by the Tribunal that it was a mechanical exercise of power by the approving authority was not perverse or contrary to the material on record and no question of law arose for the consideration of the Court. Approvals had to be obtained for, 'each assessment year' on the draft assessment orders before the passing of the assessment orders. In the case of PCIT vs. Sapna Gupta, 147 taxmann.com 288, the Hon'ble High Court reiterated its position that the ld. AO was required to obtain prior approval of the Joint Commissioner in respect of, 'each assessment year' for which assessment was being done under section 153A and that before such approval was granted, the superior....
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....hat the case of the assessee fits squarely under the parameters laid down by the Hon'ble High Court in these matters as in the instant case also, the draft assessment orders in respect of the assessee had been put up on 25.03.2013 along with other cases of the group and the same had been approved on the next working day i.e. on 26.03.2013. Thus, it was clear that there was no time for the approving authority to go through the voluminous material and assessment records before granting the approval, thereby rendering the said approval to be a mechanical exercise of power and in terms of the aforesaid judgments of the Hon'ble High Court rendering such assessments to be void on this account. The ld. DRs, on the other hand, have argued that the judgments of the Hon'ble Allahabad High Court in the aforesaid three cases have been rendered with reference to the specific facts of those cases. They have attempted to demonstrate that in the instant case, the JCIT was involved with the assessment process throughout the assessment period and therefore, was not a stranger to the materials or records at the time of according the approvals. Therefore, the ratio laid down by the Hon'ble jurisdictio....
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....ed, there had to be some indications that the approving authority had examined the draft orders and find that it meets the requirements of law. The Hon'ble High Court held that merely rubber stamping of the letter seeking sanction with an approval would not satisfy the requirements of law. 35. The ld. ARs have held that in their case also, the approval issued by the approving authority merely rubber stamped the proposals of the Assessing Officer and this made the approvals mechanical, thereby vitiating the assessment. Further, it was argued that the contravention of the guidelines so quoted by the Hon'ble Orissa High Court in the instant case also, the orders were put up at the last minute and therefore, were in contravention of the Board's guidelines. On the other hand, the ld. DRs have argued that the facts of the assessee's case are entirely different. A fresh set of guidelines for search and seizure assessment had been issued vide F. No. 286/161/2006-IT (Inv. II) on 22.12.2006, which had not been considered by the Hon'ble High Court while passing the said order. Furthermore, there was no corresponding prescription in the new guidelines of orders being placed before the appro....
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....ings right from the receipt of copy of appraisal report as not material and held that the ld. Additional CIT is supposed to independently apply his mind in a judicious way before drawing any conclusions on the contents of the seized documents while framing the search assessments. The Tribunal had held that the law provides that only the AO can frame the assessment but checks and balances are provided in the act by conferring powers on the approving authority to grant judicious approval under section 153D of the Act, de hors the conclusions drawn by the Investigation Wing in the appraisal report or by the ld. AO in the draft assessment order. Thus, it has been argued that by implication, the Hon'ble Delhi High Court has debunked the arguments of the Department on joint application of mind being a substitute for independent approval by the JCIT. On the other hand, the ld. DRs have submitted that the Hon'ble Tribunal did not consider the guidelines issued F. No. 286/161/2006-IT (Inv. II) on 22.12.2006 before coming to the conclusions that they had and, in any case, the issue in question was not decided by the Hon'ble Delhi High Court, which upheld the orders of the Tribunal only on th....
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....y appreciated by the ld. AO. The Joint Commissioner was also required to verify whether or not the required procedure had been followed by the ld. AO in framing the assessment. In that case, the ITAT observed that the Assessing Officer had passed the draft assessment orders on the same day that approval under section 153D was accorded by the Additional Commissioner in 67 cases. It held that the panchnama prepared by the Revenue authorities consisted of 15,800 pages and the replies filed by the assessees belonging to the group consisted of about 2000 pages. There were also documents belonging to other groups, approvals for which had also been granted by the same approving authority along with the assessees on the same day through the same approval letter. Accordingly, the ITAT held that it was humanly impossible for a person to apply his mind on all cases individually and that too on a single day. Therefore, the approval granted by the Additional Commissioner under section 153D was mechanical in nature, without proper application of mind and therefore, it was illegal and non-est. Consequentially, the assessment made on the basis of such approvals were also illegal and deserved to be....
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....consider the case of Anuj Bansal, which is one of the cases cited by the assessee. On similar facts as presented to the Hon'ble Allahabad High Court, the Hon'ble Delhi High Court in its order in ITA 368 of 2023 dated 23rd July 2023, upheld the decision of the Tribunal to quash the assessment order. However, subsequently in another assessment year pertaining to the same assessee, Department filed another appeal in which it brought the fact of the Departmental guidelines dated 22.11.2006 (contained in Search and Seizure Manual 2007) and an internal correspondence folder that showed monitoring by the Addl CIT, to the knowledge of the Court. The Hon'ble Court in ITA No. 8 of 2024, after considering these arguments was pleased to admit the following question of law for consideration; "1. Whether the supervisory and advisory involvement of the Approving authority would be liable to be borne in consideration while examining the validity of approval accorded under section 153D of the Act ?" The Hon'ble Delhi High Court ultimately dismissed that appeal on account of the fact that a common and composite approval was given in the case of the assessee and the invalidity of that app....
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....lines laid down for search assessments under Chapter XIV that have been brought to our knowledge by the ld. DRs through the third supplementary paper book filed on 22.10.2024 would be the parameter under which these particular assessments must be judged. Thus, to our mind, the decision rendered by the Hon'ble Orissa High Court in the case of ACIT vs. Serajuddin & Co. (supra) would not be applicable to the facts of the assessee's case, as it was based on an inapplicable guideline. It is pertinent to mention that the Cuttack Bench of the ITAT in the case of Gobardhan Matia in IT(SS)A Nos. 62-68/CTK/2018, has differed with the judgment of the Hon'ble High Court on this account. 40. Coming to the assessee's case, it has been brought to our notice by the ld. DRs that the CBDT has issued guideline for search and seizure assessments in F. No. 286/161/2006-IT (Inv. II) on 22.12.2006 contained in Appendix V of the Search & Seizure Manual 2007 which involves the Range Head in the assessment process right from the stage of receipt of the appraisal report and the seized material to the granting of the final approval. As brought out by the ld. DRs, it is observed that the Range Head (approvi....
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.... conclusions drawn by the Investigation Wing in the appraisal report or the draft assessment order do not appear to account for the association of the Range Head in the conceptualization and drafting of the assessment order itself. After all, if the Range Head is to be involved in the preparation of the questionnaire and thereafter in the preparation of the show cause notice upon receipt of replies from the assessee and if he is to be consulted on major additions, then it is clear that he would have duly appraised all the materials upon which the case of the ld. AO was sought to be made out and the responses of the assessees to the queries made in this regard. Having already familiarized himself with the same material and the line of enquiry being pursued by the ld. AO, with his concurrence, the only action left for the Additional CIT at the time of granting of approval was to ensure that the issues had been marshalled properly while giving the final shape to the assessment order. We are, therefore, unable to agree with the Co-ordinate Bench that the law only provides that the ld. AO will frame the assessment and because, in the aforesaid scheme laid down by the CBDT under the powe....
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....rily presumes familiarity with the materials on record and in fact the entire assessment proceedings that were conducted by the ld. AO, an approval given at the fag end of the process, in a short span of time after the submission of the draft assessment order cannot be held to be mechanical, when such guidelines are considered. It is observed that in none of the cases that were argued before the Lucknow Bench of the ITAT have the facts of the existence of these guidelines and the functioning of the assessment authorities in accordance with them, have ever been brought to the attention of the Tribunal. Accordingly, the same has led to a premise that the approval have been issued in a large number of cases without examination of the materials on record or without considering the issues involved, thereby rendering the said approvals to be mechanical and thereby invalid and vitiating the assessment process itself. Neither were these guidelines brought to the knowledge of the Hon'ble High Court by the Revenue, when the orders of the ITAT were challenged before it. In the circumstances, the conclusions that approvals granted in a large number of cases were mechanical because they did not....
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....so argued that irrespective of the guidelines, the JCIT is a stranger to the assessment process after the preparation of the Action Report and till the receipt of the draft assessment order and therefore, he is required to independently examine the material after he receives the draft assessment order. The Department on the other hand had furnished an affidavit from the approving authority which reads as under:- Affidavit "I, Buddhadeb Mukhopadhyay, S/o Late Amiyalal Mukherjee aged about 69 years P./o Fiat No. 801, Moore Heights, 93, M. B. Sarani, Kolkata 700040 Solemnly affirm as under: 1. That, during the period 19.07.2012 to 15.10.2014, 1 was posted as Joint/Addi Commissioner of Income Tax, Central Range, Lucknow. 2. That, apart from other supervisory roles, I was also approving authority for the Assessment orders prepared by Assessing Officer of Central Circle within jurisdiction of these ranges. 3. That, vide letter F.No. DCIT(CC)/Alld/Vaish Groups/2012-13/1037 dated 125.03.2013, the A.O. sought approval for passing assessment orders in the case of Shri Ramji Vaish for A.Y. 2005-05 to 2011-12 which are under appeal for Hon'ble ITAT. ....
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....or this purpose. He submits that in these cases regular monitoring was necessary because the assessees took a long time to respond to queries. He has also submitted that the Assessing Officer and he were regularly exchanging e-mails wherein draft orders were submitted, corrected and returned. The ld. AR have protested to the submission of consideration of this affidavit by the approving authority (since retired) on two counts. Firstly, that in terms of the judgment of the Hon'ble Supreme Court in the case of Mohinder Singh Gill and Anr vs. Chief Election Commissioner, New Delhi & Ors, (1978) 1 SCC 405, an order had to be judged by the reasons stated while making the order and supplementary reasons in the shape of affidavits were to be excluded. It has argued that the affidavit submitted by the approving authority is nothing but an attempt to improve upon the defect of mechanical approval in the existing assessment order and therefore, cannot be accepted as evidence before the Tribunal. It has also been argued that the affidavit having been filed after eleven years of the assessment, had no evidentiary value due to the lag of time. It has also been submitted that by filing such an a....
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....t out. The facts of the assessee's case are totally different. The affidavit filed by the ld. approving authority does not seek to add anything to the order that was passed by the ld. Assessing Officer. The ld. JCIT, by virtue of filing an affidavit has refuted the allegations levelled upon him for the first time on 27.04.2023 that he acted mechanically while giving the approval in the case and he has sought to defend his actions by pointing out that he had done all that he was required to do as a Supervisory Officer and as evidence of this, he has referred to his numerous visits to Allahabad for this purpose and the exchange of e-mails with the Assessing Officer. Therefore, in our view, an affidavit filed by the officer refuting the allegations levelled against him cannot be equated with an affidavit supplementing the reasons for a particular course of action in a particular order and accordingly we hold that the challenge to the admission of the affidavit by the assessee has no basis. We also observe that while the ld. Range Head may not have specifically referred to the CBDT guidelines in question, he has pointed out the activities that he undertook during the assessment proceed....
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....ority happened regularly based on the appraisal reports and seized / impounded materials. Similarly, the approving authority also deposed that all the issues involved in the assessment were regularly discussed since the stage of issuing notice for query letter to the stage of making draft assessment order. The ITAT observed that in the affidavits filed before it, it had been unequivocally stated by the ld. AO and the Additional CIT that all the issues involved in the assessments were discussed on regular basis from time to time between the two authorities and each issue dealt with in the draft assessment order had been examined properly and only thereafter had approval been granted. The Tribunal noted that certain modifications were suggested to the ld. AO in the draft assessment order, which had been carried out by the ld. AO in the assessment order that was passed which also showed that the approving authority approved the draft order, not in a mechanical manner, but after due application of mind. The fact of modification suggested in the order showed that the approving authority had gone through the assessment order and analyzed the issue involved therein. The ITAT, thereafter r....
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....issue. Thus nothing has been placed before us that would lead us to reject the affidavit and hold that the JCIT had granted the approval 'mechanically' without application of mind to the materials or record. In the case of Chuharmal vs. CIT 172 ITR 250 (SC) the Hon Supreme Court has held that there was a presumption in law, specifically section 114(e) of the Evidence Act that Judicial and Official Acts supposed to be performed in a particular manner had actually been performed in the way they were supposed to be conducted. There could not be presumption of illegality. Therefore, as the assessee has not been able to prove that the JCIT gave the approvals mechanically, while the Department has placed both the guidelines and the uncontroverted affidavit of the Approving Authority, we are not able to hold the view that the approvals have been rendered mechanically, without reference to the materials or the records. 45. Be that as it may, perusal of the letter seeking approval in respect of the assessee's case and the letter granting the approval under section 153D in respect of the assessee's case reveals that in neither of the two letters have the approvals been solicited for or gr....
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....na Gupta and Sh. Subodh Agarwal, could render the assessment vitiated to the extent that it was required to be annulled. The ld. ARs have drawn our attention to the orders of the ITAT Lucknow Bench in the cases of Sh. Navin Jain and Ors, Sh. Siddhartha Gupta, Smt. Sapna Gupta and Sh. Subodh Agarwal in which after consideration of orders of various Coordinate Benches, the Lucknow Bench of the Tribunal has annulled all these orders on finding them to be without proper approval that vitiated the entire assessment. They have pointed out that the Hon'ble Allahabad High Court has affirmed the orders passed by the Tribunal and therefore, set a binding precedent that we are obliged to follow. On the contrary, the ld. DRs have submitted that the Hon'ble Supreme Court in the case of Guduthur Bros. vs Income-Tax Officer (1960) 40 ITR 298 (SC) had observed that in case an illegality vitiated the proceedings after it was lawfully initiated, the proceedings were to be restored back to the stage at which the illegality occurred and not quashed altogether. They have also pointed that the decision to annul the proceedings in the cases of Sh. Navin Jain, Sh. Siddhartha Gupta, Smt. Sapna Gupta and Sh....
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....ppreciate the binding force of a decision is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent interpretation in the use of precedents " 47. On consideration of these arguments, we observe that the fact of what should be the fate of an assessment if the approval had not been granted in the manner as envisaged under section 153D, was not a matter argued before the Court and was not a matter on which the Court exercised its mind, even while it held that it could find no perversity in the decision of the ITAT in holding the assessment to be bad in law, in view of the facts on record. Thus, any assumption that the Hon'ble Allahabad High Court affirmed the principle that if the approval under section 153D was not given in the prescribed manner, it would necessarily lead to annulment of assessment does not automatically emerge from its findings that it could find no perversity i....
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....ed and only required prior approval of the IAC for direction for payment of penalty and not for the initiation of proceedings, the failure to obtain approval was a procedural defect and the Tribunal was justified in holding that the failure to obtain previous permission from the IAC was not fatal to the order of penalty passed under section 271(1)(c) and the Tribunal was right to remand the matter back to the Department to pass fresh penalty order. In the case of CIT vs. Vijay Dal Mills (1998) 230 ITR 301 (M.P.), the Hon'ble Madhya Pradesh High Court followed its earlier order in the case of Prabhudayal Amichand vs. CIT (1989) 180 ITR 84 (M.P.) and held that a procedural irregularity not involving the question of jurisdiction can be cured. It held that there could be no doubt that the levy of penalty by the ITO without the previous approval of the IAC was illegal, but the case could go back to the AO for curing the defect by obtaining that prior approval. In the case of CIT vs Damodardas Murarilal (1996) 222 ITR 401 (MP) the Hon High Court held that the procedural irregularity in passing a penalty order without taking the approval of the IAC could be cured by remanding the case to ....
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....9) 68 ITD 148 (Kol), observed, "In our opinion the purpose / necessity to take approval u/s 158BG by AO to pass block assessment order appears to be that the CIT should monitor and supervise the assessment of the block period for the reason of this not being a routine assessment but a special assessment being a case of search and seizure and involving a block period of 10 years. It is from this angle that the Board's instruction contained in its circular letter dated 2nd January 1996, directs the CIT to keep themselves involved in search assessments proceedings right from the beginning and for proper monitoring of search cases, internal correspondence folder should be maintained. While considering the giving of approval u/s 158BG the CIT may on perusal of record consider some part of the draft assessment order to need a modification or some addition not to be made, and to advise / instruct the AO accordingly. This process may rid the appellate authority of some its exercise. Therefore, even if their appears to be some irregularity in giving approval, the same hardly has any fatal consequence inasmuch as the resultant block assessment order remain very much assailable in ap....
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....refrom in accordance with law. 50. Accordingly, in view of our findings that the Range Head was bound by the guidelines issued by the CBDT on 22.11.2006, to associate himself with the assessment process right from the inception of the seized material to the preparation of the draft assessment order and considering that he had filed an affidavit where he rebutted the allegations made against him by the assessee that he had not applied his mind to the facts of the case, it could not be said that the Range Head had granted the approvals under section 153D in a mechanical manner without reference to the materials on record or the facts of the case. However, considering that the approvals had not been granted in respect of each assessment year and in respect of each assessee as envisaged under the act and as pointed out by the Hon'ble Allahabad High Court and the Lucknow Bench of the Tribunal in its various orders referred to earlier, we hold that the resultant orders under section 153A are defective on this account. However, after considering the judgment of the Hon'ble Supreme Court in the case of Guduthur Bros. vs Income-Tax Officer (supra), the decisions of the Karnataka and Madh....