TaxTMI 
TaxTMI 
2026 (5) TMI 399
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee in its appeal has taken as many as 11 grounds, but he only argued the legal ground no. 2, which reads as under:- "2. That on the facts and circumstances of the case and the provision of law, that the Ld. CIT(A) has failed to appreciate that the impugned assessment order passed is illegal and bad in law as no valid approval under section 153D has been obtained before passing the assessment order and thus assessment made requires to be quashed." 5. Before us, ld. AR for the assessee first make submission on the Ground of appeal No. 2 wherein, validity of approval granted u/s 153D of the Act is challenged. 6. In support of the said ground taken, Ld.AR submits that the AO vide letter dt. 28.09.2021 sought approval for passing the assessment order u/s 153A/143(3) of the Act in the case of assessee and neither the assessment records nor any other material nor draft order was sent to the Joint CIT. He further submits that the approval was granted by Ld. Joint. CIT, Central Range-8, New Delhi vide letter No. JCIT/CR-8/153D/2021- 22/1328 dt. 29.9.2021 wherein JCIT has not referred as to for which order, approval was granted i.e. no reference of any draft assessment order w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3D of the Act which is reproduced as under: 10. The approval granted by Ld. JCIT, Range 8, New Delhi in the case of assessee vide letter dt. 29.9.2021 is reproduced as under: 11. As per section 153D of the Act, every order needs to the approved by the Additional / Joint CIT, Central Range however, as could be seen from the correspondence between the AO and the JCIT, as reproduced above, it is clear that approval was taken for passing the order u/s 153A and no approval was taken/given of the draft assessment order. The AO in the letter seeking approval, should refer to the draft assessment order and the material including the assessment records, full appraisal report and seized material pertaining to Assessment Year with reference to the addition proposed by the AO and after considering all such material, the JCIT should grant the approval of the draft assessment order. In the present case as no draft assessment order was sent by the AO, it is not known for which order approval u/s 153D of the Act was given by the Joint CIT. 12. The Hon'ble Orissa High Court in the case of ACIT vs Serajuddin & Co. reported in 454 ITR 312 (Orissa) had an occasion to examine substantial q....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC OnLine Ori 992] to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under:- "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 Commissioner of Income- tax. 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 sanction by using similar words like "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act 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 formality. Needless to say that before granting approval, the Additional CIT/Joint CIT, 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 and the approval must reflect the application of mind to the facts of the case. The CBDT itself recognized the importance of this provision and the above laid down principle and hence issued Manual of Office Procedure in February, 2023 in exercise of powers under Section 119 of the Act. Vide Para 9 of Chapter 3 of Volume-II (Technical), a clear procedure is devised i.e., how an approval is to be granted for draft assessment for passing of assessment order in search 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, stands vitiated and thus quashed by allowing ground of appeal No. 2 taken by the Assessee. 16. Since we have already quashed the assessment order by allowing ground of appeal No. 2 taken by the assessee, other grounds of appeal taken by the assessee become academic and thus not adjudicated. 17. In the result appeal of the assessee for AY 2016-17 is allowed. 18. Now we take the revenue's appeal in ITA No. 5598/Del/2024 for AY 2016-17. 19. Since we have already allowed assessee's ground of appeal No. 2 and quashed the assessment order passed u/s 153A r.w.s. 143(3) of the Act, this appeal of the revenue is thus dismissed. 20. In the result appeal of the revenue for AY 2016-17 is dismissed. 21. As regards other appeals of the Assessee being ITA Nos. 4846 & 4847/Del/2024 (Ayrs. 2017-18 & 2019-20) as well as Revenue's appeals being ITA No. 5585/Del/2024 & 5582/Del/2024 for AYrs 2017-18 & 2019-20 respectively are concerned, admittedly, the facts in the present appeals are identical to the fact as existed in AY 2016-17 where the letter seeking approval u/s 153D of the Act issued by the AO to ld. JCIT, Central Range is common for these assessment years, and the ld. JCIT....