TaxTMI 
TaxTMI 
2026 (4) TMI 392
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....d interest earned on the interest bearing amount stated to have been deposited by the appellant. The addition made is unjustified, unwarranted and bad in law. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(A) / Ld. AO erred in making addition of income of the appellant based on the typed out loose sheet found from the premise of one. Sh. Deepak Kumar which was never confronted to the appellant. The addition made is unjustified, unwarranted and bad in law. 4. That on the facts and circumstances of the case and in law, the Ld. CIT(A) / Ld. AO erred in assuming and consequently making addition of alleged amount of Rs. 4.74.455/- to the income of the appellant. No such corresponding documents was found during search from the possession of the appellant so as to co-relate the alleged investment with the appellant. The typed statement used by the assessing officer does not inspire confidence and addition made is thus illegal and bad in law. 5. That on the facts and circumstances of the case and in law, the Ld. CIT(A) / Ld. AO erred and went wrong to make an addition of Rs. 1,20,00,000/- to the income of the appellant under section 69....
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....h the provisions of section 153D and in violation of mandatory procedure laid down by CBDT in Circular No. 03 of 2008 dated 12.03.2018." 4. And he has also submitted para 5 & 6 of the above application, which read as under: "5. It is well established that an assessee can raise an additional legal ground or even a new legal plea at any stage of the proceedings. In support of this, the appellant/assessee seeks to rely on the judgments of the Hon'ble Apex Court in the cases of CIT vs. Varas International, reported in 284 ITR 80 (SC), National Thermal Power Co. Ltd. vs. CIT, reported in 229 ITR 383 (SC), and the Special Bench decision in DHL Operators, reported in 108 TTJ 152 (SB). 6. Furthermore, these grounds raise jurisdictional issues that are purely legal and go to the root of the matter. Equity and justice also demand that these grounds be admitted for the reasons stated above." 5. On the other hand, the Ld. DR objected to the additional grounds of appeal on the issue of approval u/s 153D of the Act and submitted that these grounds were never raised before lower authorities. 6. Considered the submissions of both parties and found that the additional....
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..... CIT under section 153D in a perfunctory manner, without applying his mind, reviewing the relevant records and without issuing separate approvals in case of "each assessee" for "each assessment year". 2. On perusal of order, the following facts emerge which establish that the approval was granted mechanically, without reviewing the draft assessment orders or the relevant assessment records: a) That vide letter F.No. AddI.CTT/CR/MRT/Approval/153D/2018-19/2004 dated 28.12.2018, the Addl. CIT approved all orders of the assessee pertaining to 7 AYs in a consolidate manner; b) That vide letter F.No. Addl.CIT/CR/MRT/Approval/153D/2018-19/2004 dated 28.12.2018, the Addl. CIT not only approved the assessment orders of 7 AYs of assessee only, but also approved 14 orders of two different assessees c) That on 28.12.2018, the Addl. CIT not only approved the 7 orders of the assessee, but also approved 63 other orders of the assessee group pertaining to different assessees; 3. Moreover, in all the assessment orders, it is stated on the last page that present order has been passed with the prior approval of Addl. CIT, and common approval number is men....
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....IT v. Sapna Gupta [2023] 147 taxmann.com 288 and PCIT v. Shiv Kumar Nayyar, [2024] 163 taxmann.com 9 (Delhi), and PCIT v. Siddarth Gupta [2023] 147 taxmann.com 305 (Allahabad) (SLP dismissed by SC on 09.8.2024) amongst other case law. f) The Assessee also draws support from the CBDT Circular No. 3 of 2008 dated 12.03.2008, which explains the section 153D of the Act and states that approval under section 153D has to be granted for the each assessment year falling within block under section 153A of the Act. Relevant portion of the circular is reproduced hereunder for reference: "50.2 A new section 153D has been inserted to provide that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the previous approval of the Joint Commissioner. Such provision has been made applicable to orders of assessment or reassessment passed under clause (b) of section 153A in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 1324. The provis....
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....Act and fully cover the issue of validity of impugned approval u/s 153D of the Act. i) It is, therefore, submitted that since the approval granted by the Addl. CIT under section 153D dated 28.12.2018 in the instant case is not in accordance with the law, the assessment orders of all AY's passed under section 153A of the Act in consequent to such approval stand vitiated and accordingly, the same deserve to be quashed." 8. On the other hand, Ld. DR relied on the decision of lower authorities and submitted that procedures of obtaining permissions which are administrative in nature and the procedure was rightly followed. 9. In the rejoinder, Ld. AR brought to our notice the assessment order passed for seven assessment years, which are kept in the paper book, as per the approval reference which are available at pages no. 1 & 2 of the assessment order and submitted that the same approval was granted for all the assessment years, it clearly shows that single common approval was granted u/s 153D of the Act. Further, he brought to our notice that in the connected cases also, a common approval was granted in the cases of Smt. Deepa Tyagi, Shri Praveen Tyagi, Smt. Priyanka ....
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....t year" referred to in Clause (b) of sub-section (1) of Section 153A which provides for assessment in case of search under Section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in Clause (b) of sub-section (1) of Section 153A. The proviso to Section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). 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 Assessing Officer on the draft assessment order before passing the assessment orders under Section 153A. 12. We further, find that Hon'ble Delhi High Court in the case of PCIT vs. Shiv Kumar Nayyar (supra) has decided the similar legal issue in favour of the assessee and against the Revenue. The relevant findings of the Hon'ble Delhi High Cour....
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....efore us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together." 17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above. 18. Therefore, under the facts of the present case, considering the foregoing discussion and the enunciation of law settled through 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 ....
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....rt and the High Courts in support of its conclusion that the approval whenever required under the law, must be preceded by application of mind and consideration of relevant factors before the same can be granted. The approval should not be an empty ritual and must be based on consideration of relevant material on record. 5. The learned Counsel for the Revenue submitted that the question of legality of the approval was raised by the assessee for the first time before the Tribunal. He further submitted that the Additional CIT had granted the approval. The Tribunal committed an error in holding that the same is invalid. 6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks : "To, The DCIT(OSD)1, Mumbai Subject: Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-08 reg. Ref: No. DCIT (OSD)1/ CR7/Appr/2010-11 dt. 31.12.2010 As per this office letter dated 20.12.2010, the Assessing Officers ....
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.... noted in preceding paras, we find considerable force in the arguments advanced by the Ld. the Assessee's Representative on the Additional Ground of Appeal. In our considered opinion the approvals so granted under the shelter of section 153D of the Act does not pass the test of legitimacy. The Assessment orders of various assessment years as a consequence of such inexplicable approval lacks legitimacy. Consequently, the impugned assessments orders in the captioned appeals are non-est and a nullity and hence the same are quashed. 18. In view of prima facie merits found in the legal objections raised in the Addl. Grounds of the Assessees, we do not consider it expedient to look into the aspects on merits of additions/disallowance as the legal objections on sanction granted under Section 153D of the Act has been answered in favour of the Assessee. Thus the other Grounds raised in the Appeals of the Assessee in both the Appeals have rendered in- fructuous, which do not need any separate adjudication. 19. In the result, the Appeals filed by the Assessee in ITA Nos. 294/Del/2022 and ITA No. 295/Del/2022 are allowed. 11. Upon considering the entire aspect of....