TaxTMI 
TaxTMI 
2026 (4) TMI 1542
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....Company M/s JBM Auto Systems Pvt. Ltd. and JBM MA Auto Motive Pvt. Ltd.) SHRI VIKAS AWASTHY, JUDICIAL MEMBER (THIRD MEMBER), MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER For the Appellant : Sh. Salil Aggarwal, Sr. Adv, & Sh. Shailesh Gupta, CA & Sh. Pradeep Jha, CA, Sh. Madhur Aggarwal, Adv. For the Respondent : Sh. Dayainder Singh Sidhu, CIT, DR ORDER PER BENCH: This bunch of cross appeals preferred by the respective parties are against the orders passed by the Ld. Commissioner of Income (A) of the respective zones, arising out of the orders passed by the Assessing Officer under Sections 153A/143(3) of the Income Tax Act, 1961, (hereinafter referred to as 'the Act') for Assessment Years 2008-09 to 2018-19 respectively in respect of different assessees. Since, common question of law and common grounds of appeals are raised in all the matters, these are heard analogously and are being disposed of by a common order for the sake of convenience. 2. The respondents/assessees herein in the appeals preferred by the revenue, made applications under Rule 27 of the Income Tax Appellate Tribunal Rules, 1962 to this effect that the ord....
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.....12.2019 a copy whereof has duly been submitted before us. The same is reproduced hereinbelow for the sake of convenience: 6. Likewise in the case of other assessees similar type of approval were granted by the ACIT, Central Range-7 New Delhi, one of which is reproduced as follows: 7. The Ld.AR also filed all the copies of approvals of each of the matters contents whereof has not been able to be controverted by the Ld. DR. 8. The assessee joins issue here to this effect that the approval so granted by the Additional Commissioner of Income Tax is totally silent about the merit of the case; the said approval has been given on a single letter dated 29.12.2019 on the same day when the approval was sought for. Moreso, the approval is a consolidated one in respect of all the assessment years 2008-09 to 2018-19. Neither there is any indication that the order approving authority has examined the draft orders and finds that it meets requirement of law without which the approval cannot be said to be a valid one. Such approval was, thus, granted mechanically, without application of mind and, therefore, vitiates the entire proceeding and the same deserves to be quashed as was the ulti....
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....ding of the said approval it appears that; (i) it is a common and consolidated approval and it does not bear year wise reasoning. (ii) it only made a reference to letter being F. No. ACIT/CC- 25/2019/20/1122 dated 29.12.2019 neither reference in regard to the draft assessment order being sent for approval of the ACIT, Central Range-7, New Delhi appears. (iii) the approval has been granted on 29.12.2019; the letter seeking approval was on the same day. (iv) the impugned approval passed under Section 153D of the Act is apparently issued in a mechanical and in hot haste without assigning any reason and thus the same has been found to have been passed without due application of mind. Reference to any issue in respect of any of the 11 assessment years is also absent. 13. Initially the matter was heard on 04.09.2024 and then again on 29.10.2024. Thereafter, the matter was fixed for clarification on 20.12.2024 on the following issue: The Ld. DR is directed to produce the following: (i) Copy of office note, if any, in respect of AO's order pending in appeal before Hon'ble ITAT. Similar details regarding any material /correspo....
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.... Reminder: Sir/Madam, The appeals (as per cause list attached) were fixed for hearing on 20.12.2024 before Hon'ble C-Bench, ITAT, New Delhi. 2. During the course of hearing the Hon'ble members, C-Bench, ITAT, New Delhi, has directed to produce following documents/information and adjourned the case for 09.01.2025: (i) Copy of office note if any, in respect of AO's order pending in appeal before Hon'ble ITAT. Similar details regarding any material /correspondence folder showing/containing discussion notes of the AO with Addl.CIT with respect to the assessment orders, approved by Addi.CIT, pending in appeal before Hon'ble ITAT. (ii) Any Deviation Note sent to the investigation wing by the AO in respect of assessment orders in appeal pending before Hon'ble ITAT. 3. The above inputs/documents are requested to be provided by 07.01.2025 positively as the case is fixed for final hearing on 09.01.2025. Office of the CIT-DR/Sr. DR, ITAT, C-Bench, New Delhi Contact Nos. 9013851591 [ITO] Office of the CIT-DR/Sr. DR, ITAT, C-Bench, New Delhi Conta....
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....ioned in the assessment orders of the assessees. The JCIT/Addl. CIT is involved in the search assessment proceedings right from the time of receipt of appraisal report from the Investigation Wing and is involved with the AO from time to time while issuing various questionnaires to the assessee. Further, JCIT in Central Range also examine the seized documents in details immediately after receipt of the appraisal report and provides able assistance to the AO about the interpretation of the said seized documents while issuing questionnaires to assessee, examining the replies filed by the assessee and drawing conclusions thereon, all of which proves that there is application of mind by the ICIT before granting approval, as approval is not just a one-day process, but involves approvals and discussions over a period of time. This is submitted with the prior approval of Ld. CCIT (Central)-2, New Delhi. Regards, ACIT, Central Circle-25, New Delhi ------ Original Message ---- From: "Delhi CIT[DR] [ITAT]-3" Date: Jan 6, 2025 1:51:06 PM Subject: Fwd: Pending appeals in JBM Group: To: delhi.dcit.cen25@inc....
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.... terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the Id. Addl.CIT is a quasi-judicial proceeding requiring application of mind by the Id. Addl.CIT judiciously. In order to ensure smooth implementation of the aforesaid provisions, in consonance with the true spirit of the scheme of the Act, it is the bounden duty of the Id. AO to seek to place the draft assessment order together with copies of the seized documents before the Id. AddI.CIT well in time much before the due date of completion of search assessment. The Id. Addl.CIT is supposed to examine the seized documents, questionnaires raised by the Id. AO on the assessee seeking explanation of contents in the seized documents, replies filed by the assessee in response to the questionnaires issued by the Id. AO and the conclusions drawn by the Id. AO vis-à-vis the said seized documents after considering the reply of the assessee. All these functions, as stated earlier, are to be performed by the Id. Addl. CIT in a judicious way after due application of mind. Even though as vehemently argued by the Id. CIT-DR, the Addl. CIT is involved with the search assessme....
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....concerned authority under Section 153D of the Act is upon due application of mind upon perusal of the search materials and other documents including the draft assessment orders in order to meet the requirement of the Court. Thus, if the best evidence is not placed before the Court even if, such direction is given an adverse inference can be drawn as against the person who ought to have produced it before the Court. It was further submitted by him that had there any document been placed before us by the Revenue that would have caused much prejudice to the Revenue itself. In fact, it appears that in almost on the identical situation the Hon'ble Madras High Court has been pleased to observe as follows: "We have pointed out that in this case, the Tribunal acted on unworthy evidence and, therefore, such a finding has to be rejected as perverse. As a matter of fact, the law of evidence mandates that if the best evidence is not placed before the court, an adverse inference can be drawn as against the person who ought to have produced it. In this case, there were crossed cheques, but they were not produced. Then, the finding of the Tribunal resting solely on the interested stateme....
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....nted under Section 153D of the Act and we also accept the submission made by the Ld. AR. 21. The provision of Section 153D of the Act envisages prior approval of JCIT before passing the assessment order. Having regard to the provision of law, it is found that it is the duty of incumbent upon the statutory authority to discharge its application not mechanically, neither even formally but after due application of mind. The obligation granting approval acts as an inbuilt protection to the tax payer against arbitrary or unjust exercise of discretion by the AO. It should reflect necessarily due application of mind and if, the same is subjected to judicial scrutiny, it should stand for itself and should be self defending. It is evident from the approval dated 29.12.2019 that the Additional CIT, Central Range-7, New Delhi, did not mention anything in the approval memo towards his process of deriving satisfaction so as to exhibit his due application of mind. Further, that the approval letter so issued by the Additional CIT clearly speaks of granting such approval is subjected to certain conditions. Thus, it has granted approval routinely to the AO to pass the orders that too only on the....
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....nder Section 153D of the Act. 25. The same equally must contain the reasons for such approval and further that reflection of due application of mind made by the approving authority on the draft assessment orders in respect of search and seizure operation as placed before him is also necessary, in the absence of which the approval is nothing but a mechanical approval, vitiates the entire assessment proceeding. 26. In this regard, we have further considered the judgment relied upon by the Ld. AR passed by the Hon'ble Orissa High Court in the case of PCIT Vs. Serajuddin and Co. whereby and where under the appeal preferred by the revenue was dismissed whereupon SLP was preferred and the same was not admitted. Thus, order passed by the Orissa High Court on the identical issue attained finality as argued by the Ld. Senior Counsel appearing for the assessee. 27. In this regard, the observation made by the Orissa High Court is as follows: "2. While admitting the present appeals on 4th August 2022, the following question was framed for consideration: "Whether on the facts and circumstances of the case, the ITAT was correct in holding that the Approving Authority h....
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....T) which held the guidelines contained in the aforementioned Circular to be mandatory and binding on the Department. 7. The ITAT has, in the impugned order, referred to the decision of the Bombay High Court in Akil Gulamali Somji and other decisions of the ITAT to come to the conclusion that the approving authority did not apply his mind to the relevant assessment records or to the draft assessment orders prior to granting approval to the AO under Sections 143(3)/144/153A. The assessment orders were accordingly set aside. As a result, the cross appeals of the Revenue were held to be infructuous and disposed of as such. 8. Mr. T.K. Satapathy, learned Senior Standing Counsel for the Revenue made the following submissions: (i) In the present case, prior approval had in fact been taken by the AO from the Additional CIT and there was no illegality in that regard. (ii) The approval of the superior officer was distinct from the assessment order. It was a mere administrative order and not open to challenge before a court of law. In other words, it was submitted that the approval granted by the Additional CIT was not justiciable and could not form the bas....
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....ay not be invalid but only irregular because the intervening irregularity is a curable one. Reliance was placed on the decision of the Kerala High Court in Panicker (CGG) v. CIT, (1999) 237 ITR 443 and CIT v. M. Krishnan (N) (1999) 235 ITR 386. It was submitted that mere technicality should not defeat justice. 9. On behalf of the Assessee submissions were made by Mr. Ramesh Singh, Senior Advocate; Mr. Sidhartha Ray, Senior Advocate; Mr. Ashok Kumar Parija, Senior Advocate as well as Mr. S. Ganesh, Senior Advocate. They drew attention of the Court to the relevant clauses of the CBDT Circular dated 12th March 2008 and the decisions in Sahara India (Firm,) Lucknow v. Commissioner of Income Tax (2008) 14 SCC 151; Rajesh Kumar v. Deputy CIT, (2007) 2 SCC 181 and the decisions of the Delhi High Court in ESS Advertising (Mauritius) v. Assistant Commissioner of Income Tax, (2021) SCC OnLine Del 3613; Principal Commissioner of Income Tax-6 v. M/s. N.C. Cables Ltd., 2017 SCC OnLine Del 6533; Yum ! Restaurants Asia Pte. Ltd. v. Deputy Director of Income Tax, (2017) 397 ITR 665; Syfonia Tradelinks Private Limited v. Income Tax Officer; 2021 SCC OnLine Del 2692 and German Remedies Limi....
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....O having to obtain a previous approval of the JCIT/Additional CIT by submitting a draft assessment order following a search and seizure operation. 13. The CBDT issued the Manual of Office Procedure in February 2003 in exercise of the powers under Section 109 of the Act. Para 9 of Chapter 3 of Volume-II (Technical) of the Manual reads as under: "9. Approval for assessment: An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.). The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the order-sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet.....
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....end that the approval itself is not justifiable. Where the approval is granted mechanically, it would vitiate the assessment order itself. In Sahara India (Firm) Lucknow v. Commissioner of Income Tax (supra), the Supreme Court explained as under: "8. There is no gainsaying that recourse to the said provision cannot be had by the Assessing Officer merely to shift his responsibility of scrutinizing the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the Section is not turned into an empty ritual. Needless to emphasise that before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him the material on the basis whereof an opinion in this behalf has been formed by the Assessing Officer. The approval must reflect the application of mind to the facts of the....
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....ion 151(2) of the Act for initiating proceedings under Section 147 read with 148 of the Act. It was observed as under: "11. The purpose of Section 151 of the Act is to introduce a supervisory check over the work of the AO, particularly, in the context of reopening of assessment. The law expects the AO to exercise the power under Section 147 of the Act to reopen an assessment only after due application of mind. If for some reason, there is an error that creeps into this exercise by the AO, then the law expects the superior officer to be able to correct that error. This explains why Section 151(1) requires an officer of the rank of the Joint Commissioner to oversee the decision of the AO where the return originally filed was assessed under Section 143(3) of the Act. Further, where the reopening of an assessment is sought to be made after the expiry of four years from the end of the relevant AY, a further check by the further superior officer is contemplated." 20. The non-compliance of the requirement was held to have vitiated the notice for reopening of the assessment. Likewise, in Syfonia Tradelinks Private Limited v. Income Tax Officer (supra) the Delhi High Court....
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....lowing assessment years are hereby approved: Assessment Year Income Determined (Rs) 2003-04 11,66,22,771 2004-05 36,46,80,016 2005-06 65,70,12,805 2006-07 60,02,65,791 2007-08 130,03,13,307 2008-09 274,68,87,069 2009-10 301,17,05,952 You are requested to serve these orders expeditiously on the assessee, submit a copy of final order to this office for record. Sd/- Addl. Commissioner of Income Tax, Range-1, Bhubaneswar 22. As rightly pointed out by learned counsel for the Assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking....
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....ms, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute." (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. " 25. For all of the aforementioned reasons, the Court finds that the ITAT has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of Section 153D of the Act and that such approval is not meant to be given mechanically. The....
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....trangely, the AO noted that the returned income was Rs. 11,00,460/-. 10. There were two additions made by the AO. The first addition was made qua cash deposited in the bank amounting to Rs. 15,04,35,000/-. The second addition was made with regard to cash introduced via an entry operator i.e. one, Mr. Vipin Garg The amount added qua this aspect was pegged at Rs. 1,54,07,100/-. 11. Despite these additions, which would have taken the assessed income well beyond what was crystallised by the AO i.e. 1.65,07,560, the ACIT failed to notice the error. 12. This aspect was brought to the fore by the Tribunal in the impugned order. The Tribunal thus concluded there was a complete lack of application of mind, inasmuch as the ACIT who granted approval, failed to notice the said error. 12.1 More particularly, the Tribunal notes that all that was looked at by the ACIT, was the draft assessment order. 13. In another words, it was emphasised that the approval was granted without examining the assessment record or the search material. The relevant observations made in this behalf by the Tribunal in the impugned order are extracted hereafter: "17.....
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....16. We are not inclined to interdict the order of the Tribunal." 30. The SLP preferred by the revenue, was dismissed by the Hon'ble Apex Court. 31. We have further considered the judgment passed by the Hon'ble Delhi High Court in the case of Arvind Kumar Jain as relied upon by the Ld. AR wherein approval granted by the same Addl. CIT in the same manner has been held to be mechanical and without application of mind copy whereof has also been annexed to the paper book at page 18 along with the order passed by the Co- ordinate Bench. With the following observations the Hon'ble Bench held that approval granted by the Addl.CIT under Section 153D of the Act as bad in law: "9. Coupled with this, we are of the considered view that the assessee's latter legal plea challenging validity of the impugned assessment once again for want of Section 153D valid approval(s) also deserves to be accepted. This is for the precise reason that Mr. Agarwal has taken us to the assessee's paper book-III pages 1 to 4 wherein the learned Additional Commissioner, Central Range-7, New Delhi had not only granted his assessee wise common approval but also, he had not examined the earlier case record....
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.... law and vitiates the entire proceedings; the Bench has been pleased to quash the entire assessment proceedings initiated against the assessee with the following observations: "11. Upon considering the entire aspect of the matter, we find that the approval has been granted not separately for each assessment year for the assessee whereas the provision of Section 153D of the Act stipulates conditions that no order of assessment or reassessment shall be made by an Assessment Officer below the rank of Joint Commissioner in respect of each assessment year referred to in Clause (b) of Sub Section (1) of Section 153A of the Act or the assessment year referred to in Clause (b) of Sub Section 153B of the Act except the prior approval of the Joint Commissioner. It further appears from the approval dated 08.06.2018 that the same was a common and composite order whereas the Addl. Commissioner is required to verify and approve that each of assessment year is complied with as well as procedural laid down under the Act. Such fact clearly reveals non-application of mind on the part of the Learned Addl. Commissioner of Income Tax, Central Range-7, New Delhi. Thus granting approval for all ....
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.... is found to be a product of total non-application of mind by the order approving authority. We also note that the approval has been given on the same day i.e. 29.12.2019 when the approval was sought for by the AO to the Addl. CIT Central Range 7, New Delhi which clearly establishes the fact of non review of the assessment records or search materials by the Addl. CIT too. The statutory duty cast upon the Ld. Addl. CIT since not discharged to the minimum degree of appreciation, the approval so granted is, therefore, totally mechanical and thus, liable to be quashed. The judgments relied upon by the Ld. AR are found to be squarely applicable on the identical facts and circumstances of the matter. Such invalid approval vitiates the entire proceedings and thus, the same is also liable to be quashed. With the aforesaid observation, we therefore, quash the entire assessment proceedings. The appeal preferred by the assessee is, thus, allowed. This order will also be applied mutatis mutandis in all the appeals preferred by the assessee before us having regard to the identical facts and circumstances of the cases. 35. We note that since the ground of maintainability of the proceeding as ....
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....of the order in the case of the case of the assessee and on page no.8 in the case of M/s Jai Bharat Maruti Limited made following observation about the said approval in para 12 of her order which is reproduced as under:- 12. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. On the plain reading of the said approval it appears that; i. it is a common and consolidated approval and it does not bear year wise reasoning. ii. it only made a reference to letter being F. No. ACIT/CC- 25/2019/20/1122 dated 29.12.2019 neither reference in regard to the draft assessment order being sent for approval of the ACIT, Central Range-7, New Delhi appears. iii. the approval has been granted on 29.12.2019; the letter seeking approval was on the same day. iv. the impugned approval passed under Section 153D of the Act is apparently issued in a mechanical and in hot haste without assigning any reason and thus the same has been found to have been passed without due application of mind. Reference to any issue in respect of any of the 11 assessment years is also absent. 2.1. ....
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....ther there was any movement of file to the concerned authorities from the ld. AO prior to the grant of approval, the same was not demonstrated by the Ld. DR with supporting documents. My ld. Sister noted that on the contrary, the note prepared by the Revenue Department which was placed on record and reproduced on page nos.13 to16 and discussed in paras no.13 to 20 of her order, noted that the Department could not demonstrate that there was any movement of the file from the AO to the concerned authorities from the AO prior to grant of approval despite number of opportunities given. On these facts, my ld. Sister concluded that the Department was not in possession of any record to establish that the approval has been granted by the concerned authority upon due application of mind and upon examining the documents those are liable to be examined prior to approval granted u/s 153D of the Act and accepted the submissions made by the Ld. AR in this regard. 2.4. My ld. Sister, further considered the judgment relied upon by the Ld. A.R passed by the Coordinate bench of the Tribunal in the case of Neel Metals Products Ltd. belonging to JBM group, being identical in nature wherein the draft....
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....ire assessment proceeding. 2.8. Further, my learned Sister considered the judgment relied by the assessee passed by the Hon'ble Orissa High Court in the case of PCIT Vs. Serajuddin and Co. whereby and whereunder the appeal preferred by the revenue was dismissed whereupon SLP was preferred and the same was not admitted and thus, according to my ld. Sister, this order passed by the Orissa High Court on the identical issue attained finality as argued by the Ld. Senior Counsel appearing for the assessee. 2.9. Further, my learned Sister relied upon the judgment passed by Hon'ble Delhi High Court in the case of PCIT vs Anuj Bansal, whereby the order passed by the Co-Ordinate Bench of the Tribunal quashing the assessment order on the ground of mechanical approval granted under section 153D of the Act has been upheld by the Hon'ble Delhi High Court. 2.10. Similarly, my learned Sister relied upon the decision passed by the Co-ordinate Bench of the Tribunal in the case of Shri Arvind Kumar Jain, [ACIT in ITA Nos.1373 to 1377/Del/2022] wherein, approval granted by the same Addl. CIT in the same manner has been held to be mechanical and without application of mind and the same to ....
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....efore, the approval so granted was totally mechanical and thus, liable to be quashed. She also held that judgments relied upon by the Ld. AR are found to be squarely applicable on the identical facts and circumstances of the matter and since it vitiates the entire proceedings and therefore my ld. Sister quashed the entire assessment proceedings. Accordingly, my learned Sister held that the appeal preferred by the assessee was, thus, allowed and this order will also be applied mutatis mutandis in all the appeals preferred by the assessee before us having regard to the identical facts and circumstances of the cases. 2.14. My learned Sister further held that since the ground of maintainability of the proceeding as challenged by the assessee has been decided in favour of the assessee by quashing the order of approval and consequentially the assessment proceeding itself, other grounds raised by the assessee before us become academic and no order needs to be passed. 2.15. Regarding the appeals filed by the revenue wherein the same issue has been raised by way of applications under Rule 27A by the assessee which has also been considered and having regard to the identical facts of th....
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....ust be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. The requirement of approval under Section 153D is pre-requisite to pass an order of assessment or reassessment. Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of "each assessment 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). 20. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "ea....
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....021 to 20.12.2021) and as PCIT(Central)-3, Mumbai (w.e.f. 21.12.2021 to 25.09.2022). In this regard, I am very much conscious of the fact that I am no longer working in the Income Tax Department but I will be failing in my duties if the functioning of the Department as described below in the Investigation Wing and the Central Charges is not placed before the Tribunal and higher judicial authorities for appreciating the facts in order to arrive at the decision regarding the validity of approval given u/s 153D of the Act by the Approving Authority in the search and seizure cases by a combined standard type letter and the approval being granted either on the same day (or with a very small gap) on which the draft assessment order is put up before the Approving Authority by the AO. 5.1. In a search case after the conduct of search, an appraisal report is prepared by the respective ADIT/DDIT(Inv.), which conducts the search. The appraisal report is the indicative material to guide the AO for framing of search and seizure assessment in that particular case. The appraisal report is prepared with the approval of the Pr. DIT(Investigation). Upon its preparation, the said appraisal report ....
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....e not complied with in the draft assessment order, which he was going to approve. At this moment, it has to be kept in mind that the approval granted by the JCIT/Addl. CIT(Central) does not imply that the additions made by the AO in the assessment order and approved by him will stand the ultimate test of appeal, but the test to examine the validity of the approval order will be as to whether by giving the approval, the said twin conditions as observed by the Hon'ble Allahabad High Court in the case of PCIT vs Sapna Gupta(Supra) as referred above are satisfied or not in the particular case. 5.3. While granting approval, the JCIT/Addl. CIT(Central), is of the bonafide view that the draft assessment order has been framed in a reasonable and in a fair manner and as per law and adhering to the above twin purposes as observed by the Hon'ble Allahabad High Court in the cited case. Prior to the grant of approval, the matter is discussed between the AO and JCIT/Addl. CIT (his Approving Authority) as many times as required for the case and since it's the same set-up of the team, it does not necessarily require any minutes or recording of the proceedings because each is aware of their resp....
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....in writing to evidence the fulfillment of the requirement of section 153D of the Act because the draft assessment order that is put up for approval is a prediscussed order between the AO and his Approving Authority (Addl. CIT/JCIT) before its submission by the AO to his Approving Authority . So, there may be certain issues in drafting of the said approval letters but it does convey about the discussion process between him and the AO and his supervision and overall responsibility taken by him in signing the approval letter. It is a common knowledge that any authority be it in the government or in private will not sign any approval letter unless he was convinced about its correctness. It is even more onerous in a government functioning, where there are legal implications in case of any omission and commission in the discharge of duties of the role assigned to him. This is even more onerous in the Income Tax Department, where the job of the officer/official is to collect the due taxes as per law. 5.4 A view may be taken that by discussing the draft order prior to its submission for approval will dilute the independence of the AO as he being the quasi-judicial authority. But, the in....
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....id seized documents while issuing questionnaires to assessee, examining the replies filed by the assessee and drawing conclusions thereon. Hence, it is very easy for the ld. Addl. CIT to grant approval of the draft assessment order on the same day since he is involved with the assessment proceedings right from the inception. Accordingly, she argued that the objection raised by the AR has no force." 5.7 Thereafter my learned Sister reproduced the observation of the Co- ordinate Bench rejecting the above submissions made by the Ld. CIT(DR), in para no. 8of the said order, which is reproduced as under:- We find, as per the scheme of the Act, for framing search assessments, the ld.AO can pass the search assessment order u/s 153A or u/s 153C of the Act only after obtaining prior approval of the draft assessment order and the conclusions reached thereon from the Addl. CIT in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the Addl.CIT is a quasi judicial proceeding requiring application of mind by the Addl.CIT judiciously. In order to ensure smooth implementation of the aforesaid provisions, in consonance wit....
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....nt, but, certain checks and balances are provided in the Act by conferring powers on the ld. Addl.CIT to grant judicious approval us 153D of the Act to the draft assessment orders placed by the AO." (emphasis supplied by me) 5.8 The aforesaid view (as per the emphasis given by me in the above order ) particularly that (i)The scheme of the Act mandates due application of mind by the AO to examine the seized documents independently de hors the appraisal report of the Investigation Wing and seek explanation/ clarifications from the assessee on the contents of the seized documents and (ii) when the scheme of the Act provides for a leeway to both the AO as well as the Addl. CIT to even ignore the conclusions drawn in the appraisal report by the Investigation Wing and take a different stand in the assessment proceedings, the fact of Addl.CIT getting involved in the search assessment proceedings right from the receipt of copy of appraisal report, as argued by the DR, has no substance, has been carefully considered, but in view of the facts as discussed below, I am of the view that the same is not the correct view to appreciate the functioning of the Investigation Wing, the purpose o....
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....der Section 153D of the Act in the search and seizure assessment case before the final assessment order is passed by the AO. Moreover as held earlier by the Hon'ble Delhi High Court in the case of Kabul Chawla (2016) 380 ITR 573 (Del) and later on affirmed by the Hon'ble Apex Court in the case of Pr. CIT vs. Abhisar Buildwell P. Ltd. (2024) 2SCC 433 that the additions in search & seizure assessment under Section 153A of the Act can be made only on the basis of incriminating materials and since the appraisal report is the analysis of the incriminating materials only and, therefore, the Approving Authority and AO can't work de-hors the appraisal report in framing the search and seizure assessment. It is also stated here that the ADIT/DDIT(Inv.) who processes and conducts the particular search is involved from the beginning of the case i.e. from identification of the case i.e. the writing of the satisfaction note, supervising the search under the supervision of his seniors and thereafter analyzing the seized documents and doing the post search enquiry and then preparing the appraisal report. Therefore, the ADIT/DDIT (Inv.) is the officer who is most conversant with the facts of the se....
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....he Additional CIT seeking his approval or of the Additional CIT having granted such approval and the assessment orders were passed on 30th December 2010 without mentioning the above fact and these two orders were therefore not in compliance with the requirement spelt out in para 9 of the 'Technical Manual of Official Procedure'. Para 9 of the said manual is reproduced as under: "9. Approval for assessment: An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.). The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the order-sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due....
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....t stage he is required to consider the matter and not at a subsequent stage, viz., after the approval is given." 6.5 The same has been carefully perused. In the case of special audit under section 142(2A) of the Act, the Approving Authority will come to know about the proposal of the Assessing Officer to have special audit in a particular case or group of cases as the case may be only when it is put up before him or before putting up (by way of consultation between the AO and the Approving Authority), whereas, in the search and seizure assessment cases, the Approving Authority from the very beginning of the case knows very well that he has to approve the order under section 153D of the Act and he gets involved with the assessment proceedings right from the word go and, therefore, the context of approval in both the situations is quite distinct and different. As stated earlier, the Approving Authority receives the appraisal report simultaneously with the AO where the Assessing Officer apart from the appraisal report receives all other documents like the Panchama/seized document and post search information collected by the Investigation Wing. But all of these materials have the re....
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....roceedings right from the word go and peruses all the relevant materials from the very beginning till the grant of the approval and, therefore, the context of approval in both the situations is quite distinct and different. 6.8 Further, Hon'ble Orissa High Court held that "Technical Manual of Office Procedure" as spelt out in para no.13 of the order, referring to para no.9 of the Manual held in para no.24 that such guidelines issued by the CBDT under section 119 of the Act for passing of search and seizure assessments u/s 119 of the Act was certainly binding on the Officers of the Department. This was noted in the context of similar approval by the Approving Authority/CIT/JCIT/Addl.CIT(Central) of search and seizure u/s 158BG of the Act. Under Section 158BG of the Act, the draft assessment orders required the approval of the CIT (after 30.06.1995 but before the 1st Day of January, 1997) and thereafter the JCIT/Addl. CIT u/s 158BG of the Act was required before the final assessment orders were passed in respect of search and seizure assessments. In para-9 of the Office Manual, it is stated that the AO has to submit the draft assessment order (well in time) and in view of the para....
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....means of communication as the case may be when the Assessing Officer and the Approving Authority are not in the same station as the case may be or as per the requirement of the situation. Further as stated in the approval letter dated 29.12.2019 of the Addl. CIT, Central Range-7, Delhi, in this case, this fact has been stated by him that he had detailed discussion with the AO from time to time. 6.9 Similarly, in the case of PCIT vs Anuj Bansal (supra) at para nos.9.1, 10 and 11, it was noted that there was a glaring mistake in the assessment order that the assessee had declared income amounting to Rs. 87,20,500/- but while making the addition, the AO noted the returned income was Rs. 11,00,460/-. Further, it was noted by the Hon'ble Court, despite making the two additions firstly addition made qua cash deposit in the bank account amounting to Rs. 15,04,35,000/- and the second addition with regard to the cash introduced by an entry operator was pegged at Rs. 1,54,07,100/- but when the AO finalized the assessed income, it was taken at Rs. 1,65,07,560/- and the Addl. CIT failed to notice the error. However, in the case of the assessee no such error was demonstrated by the Ld. AR de....
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.... even though it looks like one being a stereo type letter for all the approvals. However, in view of the analysis later in this order, it is stated that the approval letter dated 29.12.2019 signed by the Approving Authority i.e. Addl. CIT, Central Range-7, New Delhi indicates the reasoning and the basis of the approval of the Approving Authority. 6.12 In a similar situation, in all the orders of the Co-ordinate Benches of the Tribunal, the other Member who is not the author of the order signs the order without any comments except in cases wherein the other Member disagrees with the view of the author Member and writes a dissenting note. In such a situation, the answer would be categorical 'No' to the inference if any drawn to the effect that the other Member has signed the order of the other Member without appreciation of facts and the decision taken by the other Member. Even though, the signing of the order by the other Member shows an agreement between the two members but the same is also a kind of an approval though in a little lesser degree than approval. Therefore, what I am trying to persuade is that while signing any order as a co-author or signing an approval letter show....
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....JBM group cases on 05.10.2017. Thereafter, a notice u/s 153A of the Act was issued on 25.07.2019 asking the assessee to furnish its return of income within 15 days from the date of the receipt of the same. The return was, however, filed on 26.11.2019 almost after four months from the issue of notice u/s 153A dated 25.07.2019. After the receipt of the return, the notice u/s 143(2) of the Act was issued on 15.12.2019 fixing the case for hearing on 17.12.2019. The AO noted in the assessment order that on the basis of findings of search and seizure in this group, a detailed questionnaire under Section 142(1) of the Act for AY 2008-09 to 2017-18 was issued in the name of the assessee company on 07.10.2019 fixing the case for hearing on 18.10.2019. According to the AO, the assessee after repeated adjournments and also noting the fact that the assessee did not make compliance to the summons issued u/s 131 of the Act and also did not participate in the post search investigation before the Investigation Wing finally submitted its reply on 20.12.2019 to the questionnaire dated 07.10.2019 in order to escape detailed scrutiny and examination of relevant facts. The AO further noted that since b....
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....2018 01.03.2019 12.03.2019 29.03.2019 258 34 2858 2948 3176 Not complied Not complied Not complied Not complied Not complied 4. Sh. Suresh Kumar Mishra 24.10.2017 26.12.2018 01.03.2019 12.03.2019 09.04.2019 259 1983 2815 2945 12 Not complied Not complied Not complied Not complied Not complied 5. Sh. Prasahesh Arya 10.12.2018 01.03.2019 12.03.2019 29.03.2019 09.04.2019 1788 2862 2974 3175 11 Not complied Not complied Not complied Not complied Not complied However, neither any request for adjournment was received nor anybody attended the proceedings in response to above summons. Thus, you have failed to avail the opportunity provided to explain the nature and nomenclature of the documents and the unaccounted income generated from under invoicing of scrap sales as well as unrecorded sale of scrap. 6.17 During the hearing on 20.12.2024 before us, on a specific query, the Ld. AR submitted that there was no compliance during the post search and seizure proceedings before the Investigation Wing. During the said hearing, the ld. Counsel fo....
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....f accounts, other documents, money, bullion jewellery or other valuable article or thing belong or belongs to the person on whom the search was conducted and the contents of such books of accounts were true. Even though it is not mentioned in the said sections but if the above two provisions are read together then the fact is the assessee is the best person to know the contents and the implications of said incriminating materials and the delay in submission of the reply will raise a presumption that it is making an attempt to escape the taxation of the undisclosed income on the basis of said incriminating materials and to thwart any further enquiry in its case by the AO during the search and seizure assessment proceedings. In view of the above discussion, it is held that the assessee made non -compliance in order to escape scrutiny in this case and this is also a distinguishing fact of this case and in view of the fact that only 10 days was left for the completion of the assessment proceeding from the date on which the assessee made its final submission and therefore its plea that the approval u/s 153D given by the Approving Authority was mechanical can't be accepted as similar fac....
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.... 93496167 63747387 157243554 2012-13 JBM Auto Limited 15838555 403993283 25.51 2159803 17998358 31.88 638 100998321 68862492 169860812 2013-14 JBM Auto Limited 16512548 380629387 23.05 2251711 18764259 28.81 5.76 95157347 64880009 160037356 2014-15 JBM Auto Limited 17308501 419729002 24.25 2360250 19668751 30.31 6.06 104932251 71544716 176476967 2015-16 JBM Auto Limited 16800125 303032960 18.04 2290926 19091051 22.55 4.51 75758240 51653345 127411585 2016-17 JBM Auto Limited 20305995 334681592 16.48 2768999 23074994 20.6 4.12 83670398 57047999 140718396 2017- 18 JBM Auto Limited 22501375 484651220 21.54 3068370 25569746 26.92 5.38 121162805 82611003 203773808 158910047 3260416639 21669552 180579600 815104161 555752835 1370856995 6.20 Therefore, though the number looks very large, but the addition based on the incriminating materials as relied by the AO in all the 67 appeals is common to all t....
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....s written by the AO at the end of the assessment order in appropriate cases wherein the AO gives the reasons for not making any addition which has been recommended in the appraisal report or if any further inquiry was required in that case or for sharing of relevant information available on record which has a bearing on the income in the case of other assessee(s) to their respective AOs. 9. You have certified about perusal and verification of data seized in electronic format through working copies having certified hash values as that of original hard drives/CDs/ pen drives/mobile data & any other electronic data. To protect the security and the sanctity of the seized data . 10. You have also certified to the undersigned that all information available in AIR/CIB/from other Law Enforcement Agencies have been properly scrutinized by you before finalizing the draft assessment order. For ensuring compliance 11. 11. Please ensure that penalty is levied under proper section of the Income Tax Act, 1961 For ensuring compliance 7. As per my understanding, my Learned Sister in holding the view that the approval granted by the Addl. CIT, Central Range-7 in this ca....
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....h and seizure assessment case and its approval by the Approving Authority and thereafter the passing of the final assessment order before the limitation period in a particular case. 8. In view of facts and discussion made hereinabove and more particularly bringing the facts about the working of the investigation and central charges and role of the AO, Appraisal Report and the role and the interaction of the AO and his Approving Authority in putting up the draft assessment orders and its approval and its passing of the final order more particularly discussed in para nos. 5 to 5.9 of the order which were not before the Hon'ble High Courts and the Co-ordinate Benches of the Tribunal and, therefore, the judgements/orders based on non- appreciation of the above facts relied upon by Ld. Sister is not acceptable in the present case. Therefore, I do not agree with the findings of my Ld. Sister and hold that the approval granted by the Addl. CIT, Central Range, New Delhi vide letter dated 29.12.2019 has been given in a valid manner and in accordance with the provisions of section 153D of the Act and as per law in the lead case and other remaining cases which are subject matters of 67 app....
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....eizure action u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') was carried out in the case of JBM Group on 05.10.2017. Consequent to the search action, assessments in the case of all group concerns, which inter alia include JBM Auto Ltd., Jay Bharat Maruti Ltd., Sunil Kumar Aggarwal, Neel Industries Pvt. Ltd., JBM Industries Ltd., and JBM Auto Ltd. (amalgamated company of M/s JBM Auto Systems Pvt. Ltd. and JBM MA Automotive Pvt. Ltd.), were made under sections 153A/153C of the Act for multiple assessment years. In the present set of 67 appeals by various group entities, 61 appeals are by the Department and 6 cross-appeals have been filed by the assessees. The details of the appeals are already given in the cause title. 3. The respondents/assessees in appeals by the Department have made Applications under Rule 27 of the Income-tax (Appellate Tribunal) Rules, 1962, raising a legal ground challenging validity of the assessments, alleging that approval accorded u/s.153D of the Act in the respective cases is mechanical, arbitrary and without there being any application of mind. Thus, the assessees are seeking quashing of the assessment orders for the impugne....
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....t that search was carried out in the case of JBM Group on 05.10.2017 and the AO sought approval for making assessment u/s.153A of the Act for AY 2008-09 which clearly falls beyond the period of six years from AY 2008-09 and the Addl. CIT(A) has granted approval for making assessment for AY 2008-09. 8. The ld. Counsel submitted that in the case of assessees group concern i.e. Neel Metal Products Ltd. in ITA No. 295/Del/2021 for AY 2010-11 and other group appeals, the assessee in appeal by the Revenue before Tribunal had moved an Application under 27 Rule, raising a legal ground challenging validity of approval accorded u/s.153D of the Act by the Addl. CIT, on identical ground that the approval is mechanical and without there being application of mind by the Superior Authority. The Coordinate Bench vide order dated 09.07.2024 after examining the approval came to the conclusion that since approval was accorded on the same date and even the final order was passed on the same date gives arise to a valid apprehension that there was complete non-application of mind and mechanical approval was granted by the higher authority. Accordingly, the issue was decided in favour of the assessee.....
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....ession "Yes I am satisfied". The Hon'ble High Court has held that the use of mere expression "approved" says nothing and cannot be considered as application of mind, whereas, the satisfaction recorded with the words "Yes I am satisfied" shows application of mind. The said expression satisfies the mandate of section 151A of the Act. Hence, such approval cannot be held to be mechanical. The ld. Special Counsel further placed reliance on the decision rendered in the case KK Leisure & Tourism International (P) Ltd. vs. DCIT, (2025) 8 TMI 541, ITAT Cochin and in the case of Yamini Kapoor vs. DCIT, 171 taxmann.com 247 (Delhi-Trib.) where the approval u/s.153D of the Act was held to be valid. 11.1. The ld. Special Counsel further submitted that initial burden to prove that the approval is improper lies on the assessee. In the present case, the assessee has failed to discharge such onus. The Addl. CIT while according approval u/s.153D of the Act has considered information available on record, appraisal report and the seized material. It is thereafter, the Addl. CIT has granted approval u/s.153D of the Act. Therefore, it cannot be said that the Addl. CIT has not examined the relevant mat....
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....isal report/seized material, etc. was examined by the Addl. CIT before according approval under section 153D of the Act. The ld. Counsel for the assessee, while concluding his submissions, placed reliance on findings of the ld. JM in paras 13 to 15 of the proposed order. 13. A specific query was raised by the Bench to the ld. Special Counsel for the Department regarding his arguments that the assessment order was passed by the AO in consultation with the Addl. CIT, juxtapose to the law explained by the Hon'ble High Court in the judgment rendered in the case of FinDoc Finevest Pvt. Ltd. vs. DCIT, 172 taxmann.com. 773 (Punjab & Haryana High). In response to the said query, the ld. Special Counsel furnished written submissions as under: "Applicability of FinDocFinvest (P) Ltd. v. Deputy Commissioner of Income Tax, Central to the facts of JBM Auto Ltd. 1. It is respectfully submitted that FinDocFinvest (P) Ltd. v. Deputy Commissioner of Income Tax, Central ("FinDocFinvest") was passed by the Punjab & Haryana High Court in the context of passing of assessment order u/s 143(3) by the assessing officer. 2. In the present case, there was administrative oversig....
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.... accorded clearly shows that the approval has been reduced merely to the level of formality instead of a structural safeguard against arbitrary exercise of power as envisaged under the Act. The Courts have repeatedly emphasized that the competent authority granting approval must considered the relevant material placed before it and form an independent opinion. A meaningful safeguard as provided under the provisions of section 153D of the Act has been reduce to ritualistic exercise by the Addl. CIT while granting the approval. 16. In the case of ACIT vs. Serajuddin& Co. (supra), the Department assailed findings of the Tribunal in holding approval u/s.153D of the Act invalid, as the approving authority had not applied its mind for giving approval. Following submissions were made on behalf of the Department as under:- "8. Mr. T.K. Satapathy, learned Senior Standing Counsel for the Revenue made the following submissions: (i) In the present case, prior approval had in fact been taken by the AO from the Additional CIT and there was no illegality in that regard. (ii) The approval of the superior officer was distinct from the assessment order. It was a mere ad....
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.... Corporation v. Kailash Chandra Ahuja [2008] 9 SCC 31; State Bank of Patiala v. S.K. Sharma [1996] 3 SCC 364; P.D. Agrawal v. State Bank of India [2006] 8 SCC 776 and State of U.P. v. Sudhir Kumar Singh [Civil Appeal No. 3498 of 2020, dated 16-10-2020] It was then submitted that where initiation was valid but completion was not correct, the order may not be invalid but only irregular because the intervening irregularity is a curable one. Reliance was placed on the decision of the Kerala High Court in (CGG) Panicker v. CIT [1999] 237 ITR 443 and CIT v. N. Krishnan [1999] 235 ITR 386. It was submitted that mere technicality should not defeat justice." The Hon'ble High Court after examining provisions of section 153D of the Act held, that a plain reading of section 153D of the Act itself makes its abundantly clear that the legislative intent was to obtain "prior approval" by the AO when he is below the rank of a Joint Commissioner, before he passes an assessment order or reassessment order u/s. 153A or 153B of the Act. Such an approval of a Superior Officer cannot be a mechanical exercise. Where the approval is granted mechanically it would vitiate the assessment order itself. The ....
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....n appeal before the Hon'ble High court, the Hon'ble Court held that where the ACIT granted approval u/s.153D of the Act without noticing discrepancy in the assessment order or search material such a mechanical approval without application of mind would be in valid in eyes of law. In the instant case, the Addl. CIT has granted approval without realizing the fact that the AO has sought approval in some of the case which are beyond period of limitation. Thus, the approval granted by the Addl. CIT u/s.153D of the Act was absolutely without application of mind and mechanical. 18. In the case of PCIT vs. Shiv Kumar Nayyar (supra), the substantial question of law for consideration of Hon'ble Delhi High Court was:- "Whether the ITAT has erred in law, in considering the Assessment Order under Section 153A of the Act, as invalid and bad in law by stating that the approval granted by the Range head under section 153D of the Act is void as the same was granted in a mechanical manner without application of mind?" The Hon'ble High Court after examining provisions of section 153D of the Act held as under: "11. A plain reading of the aforesaid provision evinces an uncont....
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....Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately. [Emphasis supplied] 19. The Hon'ble High Court also placed reliance on the decision rendered in the case of ACIT vs. Serajuddin& Co. (supra) and also noted the fact that the SLP preferred by the Revenue in the case of Serajuddin& Co. (supra) was dismissed by the Hon'ble Supreme Court of India. The Hon'ble High Court noted that the approval was granted on the same day when the draft assessment order was sent for approval by the AO, as are the facts in the present set of appeals. The Hon'ble High Court on such single approvals for multiple assessment years observed as under:- "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 ....
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....tary rules of judicial procedure, and in particular to conduct the case himself, and not allow somebody else, even his superior officer, to interfere in the conduct of the case. What to talk of superior authority, Hon'ble Supreme Court in the case of Union of India Vs. Tata Engineering & Locomotive Co.Ltd. - AIR 1998 SC 287, 288, held that the Assessing Officer is entitled to complete the assessment as per the provisions of Section 143(3) of the Act and, for this purpose, he can call for and examine whatever document he considers relevant. Hon'ble Supreme Court held that, if the Assessing Officer fails to follow any judgment of the High Court or of the Supreme Court, the assessee has adequate statutory remedies by way of an appeal and revision against the assessment order but, the Court should not try to control the mode and manner in which an assessment should be made. Hence, the higher authority including the Additional CIT/JCIT or CIT or CCIT, being administrative controlling authorities of the Assessing Officer, are not entitled to interfere in the judicial process of the Assessing Officer while framing assessment. In view of the above, I am of the view that, while maki....
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.... cases. According to the Manual, the Assessing Officer should submit the draft assessment order for such approval well in time along with docketed in the order sheet, a copy of the draft assessment order, covering letter filed in the relevant miscellaneous records folder. Even, it is noted that due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. It is further noted that once such approval is granted, it must be in writing and filed in the relevant folder indicating above after making due entry in the order sheet. This is the mandate provided in the office manual of the Department. In view of above, I am of the view that the 'approval', as mandated u/s 153D of the Act, signifies a product of human thoughts based on the given set of facts and interpretation of the applicable law. It provides equality in treatment and thus prevents bias, prejudice and arbitrariness. It also prevents and avoids inconsistent and divergent views. The power of approval to the specified authority i.e., Superior authority has been envisaged with the objectives that no ille....
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....e order was passed by the Assessing Officer, the same has been approved by the Joint Commissioner. As such, we find that the Joint Commissioner has in fact comprehensively and actively participated in the making of the assessment order while his role was only limited to the approval of the assessment order in terms of the CBDT Circular. Thus, we find the order to be vitiated in law. 24. In view of the above, the assessment order cannot be result of an independent application of mind and exercise of discretionary power by the Assessing Officer in terms of Section 143(3) of the Act and but is an order passed under the influence and directions of the superior officers. It is to be noticed that the consultation with a superior officer would be akin to directions of the superior. There is no room available for discretion where consultation is sought from a superior officer while if a superior officer consults his subordinates, the discretion continues to stay with him. He may choose not to follow the advice of his subordinate but the opposite would be untrue. We are, thus, of firm view that the order has been passed whereby the Assessing Officer has abdicated his authority and,....
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....time appraisal report or the relevant seized material was forwarded by the AO to the Addl. CIT before according approval u/s. 153D of the Act. Nor it is emanating from the records made available to the Bench that the Appraisal Report, relevant seized material or other relevant documents were examined/perused by the Addl. CIT before according approval. 25. In light of above discussion and the legal position, I answer the question referred as under:- Question framed by the Bench Answer to the Questions 1. As to whether under the present facts and circumstances of the matters whether the assessment orders based on the erroneous, nonspeaking orders of approval under section 153D of the Income Tax Act, dated 29.12.2019 issued by the Ld. Addl. CIT are sustainable in the eyes of law or not. 2. Whether in the facts and circumstances of the case, the respective approvals under section 153D of the Income Tax Act, 1961 dated 29.12.2019 granted by the Addl. CIT for the assessment orders subject matter of the appeals are as per law or not? In the given facts of the case and the legal position, I am of considered opinion that the approvals u/s.153D of the Act accorded by the Ad....
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.... Office of the Additional Commissioner of Income Tax Central Range-7, Room No. 329 E-2, Jhandewalan Extension New Delhi Dated: 29.12.2019 F. No. Addl. CIT/CR-7/2019-20/ 1369 To The Assistant Commissioner of Income Tax Central Circle-25, New Delhi Sub: Approval u/s 153D of the Income Tax Act, 1961 In the case of M/s JBM Auto Ltd. (PAN: AAACJ9630N) , A.Y. 208-09 to 2018-19 :- reg. please refer to your letter F. No. ACIT/CC-25/2019-20/1122 dated 29.12.2019 on the above subject. 2. Approval is hereby accorded u/s 153D of the Income Tax Act, 1961 to the draft assessment orders as amended in the following cases, on the basis of the detailed discussion with you time to time, information available on record, facts mentioned in the Appraisal Report and relevant seized documents perused by you & brought to the notice of undersigned. and relevant S. No. seized documents perused Name of Assessee A.Y. brought to the notice of Return Income undersigned. Assessed Income JBM Auto Ltd. 2008-09 8049714 36702734 2 JBM Auto Ltd. 2009-10 110656794 144205492 3 JBM Auto Ltd. 2010-11 173361873 236143349 4 JBM Auto Ltd. 2011-12 147629922 258033345 5 JBM Auto Ltd. 2....
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....ord, facts mentioned in the Appraisal Report and relevant seized documents perused by you & brought to the notice of undersigned. S. No. Name of Assessee A.Y. Return Income Assessed Income 1 Jay Bharat Maruti Ltd. 2008-09 232438434 363210060 2 Jay Bharat Maruti Ltd. 2009-10 131148266 268537022 3 Jay Bharat Maruti Ltd. 2010-11 304012935 304132215 4 Jay Bharat Maruti Ltd. 2011-12 474588590 691607078 5 Jay Bharat Maruti Ltd. 2012-13 NIL 220604397 6 Jay Bharat Maruti Ltd. 2013-14 237171010 553480610 7 Jay Bharat Maruti Ltd. 2014-15 200044460 466159731 8 Jay Bharat Maruti Ltd. 2015-16 122890180 440732223 9 Jay Bharat Maruti Ltd. 2016-17 422644940 666698072 10 Jay Bharat Maruti Ltd. 2017-18 325234090 552341956 11 Jay Bharat Maruti Ltd. 2018-19 618975500 978002344 3. Copies of the final assessment orders should be forwarded to this office immediately after passing the orders. Proposal for retention of seized material should also be forwarded to this office within time as per IT Act, 1961. Before passing the final order, in case, there is requirement of protecting the interest of revenue, permission u/s 281B from Pr. CIT(C)-3, New Delhi should be take....