TaxTMI 
TaxTMI 
2026 (3) TMI 1000
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....A) erred in law and on facts of the case in deleting the addition of Rs. 3,65,48,404/- made by AO on account of enhancement of income by 10% of the declared gross profit. 5. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 92,77,004/- made by AO on account of unexplained imprest account. 6. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 10,80,546/- made by AO on account of seized documents. 7. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition fo Rs. 70,911/- made by AO on account of disallowance of excess and recovery. 8. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 32,62,614/- made by the AO on account of disallowance of purchases of fixed assets and claim of depreciation thereon. 9. The Ld. CIT(A) erred in law and on fact of the case in deleting the addition of Rs. 6,00,000/- out of total addition of Rs. 12,00,000/- made by AO on account of low withdrawals. 10. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 66,889/- made by AO on account of PF & ESI.....
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....d be upheld even on the ground that the assessment so framed is without jurisdiction as the same is a legal ground and can even be taken at any stage of the proceedings even d-horse Rule 27 of I.T. Rules, being legal in nature. 2. It is most respectfully submitted that since the assessee had succeeded in the appeal fully on merits, it did not prefer an appeal. However, the Revenue has since filed the instant appeal, the assessee-respondent seeks to support the order of the Ld. CIT(A) as provided in Rule 27 of the ITAT, as such, in view of rule 27 of the ITAT Rules, 1963, the respondent seeks to raise, urge and argue the ground challenging the initiation of proceedings, in an appeal filed by the revenue. 3. It is thus prayed, this application be taken as a notice of motion to raise the following legal ground, in support of the order of the Ld. CIT(A). "Additional Ground No. 1 That on the facts and circumstances of the case the approval accorded under section 153D of the Act (if any) is a mechanic al and arbitrary approval without there being any application of mind and also without satisfying the statutory preconditions of the Act and as such, the assessme....
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....ction 153A/143(3) of the Act in the aforesaid matters at Paper Book Serial No. 2 to 8 at pages 11, 22, 32, 44, 58, 64 and 68 which shows that common approval is accorded by the Addl. CIT. Even though, the copy of approval u/s. 153D has not been submitted by the Revenue, despite specific directions given by the Hon'ble Bench on various occasions. However, still bare perusal of the common approval number makes it amply clear that the approval accorded under section 153D of the Act in the instant case is a mechanical approval without there being separate approval for "each assessment year". He relied upon the decision of the Coordinate Bench in the case of the assessee's wife namely Smt. Usha Sharma in ITA No. 480/Del/2015 under similar circumstances. He further relied upon the decision of the Coordinate Bench in the case of ACIT vs. Sant Lal Aggrawal group in ITA No. 6195/Del/2017, pertaining to same group, wherein, identical issue has been decided by the ITAT, Delhi and wherein, it has been held that approval under section 153D is bad in law and thus, assessments so made are vitiated in law, under similar circumstances. He further relied upon various case laws including the Judgment....
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.... Range-4, New Delhi received vide letter No. F.No. 153D/CC-16/2013-14/1334 dated 30.3.2014. AY 2007-08 (Paper Book Page No. 22) 16. This order is passed after obtaining prior approval u/s. 153D of the Income Tax Act, 1961 of the Addl. Commissioner of Income Tax, Central Range-4, New Delhi received vide letter No. F.No. 153D/CC-16/2013-14/1334 dated 30.3.2014. AY 2009-10 (Paper Book Page No. 44) 18. This order is passed after obtaining prior approval u/s. 153D of the Income Tax Act, 1961 of the Addl. Commissioner of Income Tax, Central Range-4, New Delhi received vide letter No. F.No. 153D/CC-16/2013-14/1334 dated 30.3.2014. AY 2010-11 (Paper Book Page No. 58) 19. This order is passed after obtaining prior approval u/s. 153D of the Income Tax Act, 1961 of the Addl. Commissioner of Income Tax, Central Range-4, New Delhi received vide letter No. F.No. 153D/CC-16/2013-14/1334 dated 30.3.2014. AY 2011-12 (Paper Book Page No. 64) 12. This order is passed after obtaining prior approval u/s. 153D of the Income Tax Act, 1961 of the Addl. Commissioner of Income Tax, Central Range-4, New Delhi received vide letter No. F.N....
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....t year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the ....
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....e draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." [Emphasis supplied] 14. During the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. 16. In ....
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.... any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above." 8. Significantly, the Hon'ble Orissa High Court in the case of ACIT vs Serajuddin & Co. 454 ITR 312 (Orissa) had an occasion to examine substantial question of law on the propriety of approval granted under s. 153D of the Act. The Orissa High Court made wide ranging observations towards the manner and legality of approval under s. 153D of the Act. The Hon'ble High Court inter-alia observed that the approval under s. 153D of the Act being mandatory, while elaborate reasons need not be given, there has to be some indication that approving authority has examined draft orders and finds that it meets the requirement of law. The approving authority is expected to indicate his thought process while granting approval, held that it is not correct on the part of the Revenue to contend that the approval i....