TaxTMI 
TaxTMI 
2025 (10) TMI 1408
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....Act, 1961 (hereinafter referred as "the Act") arising out of various assessment orders of Learned Assistant Commissioner of Income Tax, Central Circle-16, New Delhi (hereinafter referred as "Ld. AO") under Section 143(3) of the Act for different assessment years. Six appeals in ITA Nos. 7034 to 7039/Del/2019 are against orders of Ld. CIT(A) arising out of penalty orders under Section 271(1)(c) of the Act. 2. All the appeals involve similar facts and issues and were heard together for the sake of convenience. In all 43 appeals against assessment orders, assessee filed identical additional ground that the search was pursuant to the approval granted under Section 153D of the Act by Ld. Joint CIT in mechanical manner liable to be quashed. 3. It is quite relevant to note that the approval granted under Section 153D of the Act had been accorded by the Ld. JCIT within a short span of time of one day on which draft orders were forwarded to him. The details of various draft orders forwarded by the Ld. AO to the Ld. CIT(A) for various assessment years and the date of approval granted under Section 153D of the Act by the Ld. JCIT for various assessee are tabulated hereunder: Sr. N....
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....orders for four assessee were sent for approval by the Ld. AO to the Id. JCIT and the Id. JCIT had granted approval for all the cases either on same or next day. The Ld. AR reiterated the fact that 23 draft orders under Section 153A of the Act were approved by the Id. JCIT u/s 153D of the Act either on same or next day on which the draft assessment orders were forwarded to the Id. JCIT by the Id AO. Based on this, the Ld. AR submitted that the Id. JCIT had granted approval by devoting very few minutes for each case in a mechanical manner u/s 153D of the Act without due application of mind. Accordingly, the Ld. AR argued that the entire search assessments framed in the hands of the various assessee listed in the cause title u/s 153A r.w.s. 143(3) of the Act dated 29.12.2017 for various Asst Years under consideration required to be quashed as void ab initio. Reliance was placed in case of PCIT vs. Shiv Kumar Nayyar reported in 467 ITR 186 (Delhi) (pages 234-240 of JPB) affirming the decision of Delhi Bench of Tribunal in case of Shiv Kumar Nayyar vs. ACIT in ITA No. 1282/Del/2020 dated 26.07.2023. 6. Per contra, the Ld. DR vehemently argued and submitted that Section 153-D of the ....
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.... of Smt. Usha Satish Salvi vs ACIT Central Circle-4(4), Mumbai in ITA Nos. 4239,4237 & 4238/Mum/2023 dated 23.01.2025 has examined all the following judgements of the Tribunal and Hon'ble High Courts [Para 6.2] and rejected the objection raised by the assessee that approval granted u/s 153D of the Act has been accorded on presumption and without application of mind rather opined that approval was granted by the Addl CIT after due application of mind. 6.3 Without prejudice to above objection, It is submitted that combined reading of letter dated Joint CIT/CR-5/153D/2016-17/1105 dated 30.12.2016 giving approval under section 153 D of the I.T. Act and letter dated 30.12.2026 seeking approval under section 153D of the I.T, make it amply evident that in the instant case, approving authority i.e. Joint Commissioner of Income Tax, Central Range, 05, New Delhi had applied his mind independently in judicious manner while granting his approval in accordance with the provisions of the Act. 6.4 It is not a gainsaying that the Joint CIT hold the concurrent jurisdiction and that the assessment is a continuous process involving administrative as well statutory roles being donned by the ....
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....records and relevant material to arrive at decision granting approval Under Section 153D of the I.T Act in judicious manner in the instant case, 6.7 Further, in search cases, a Joint CIT is well aware about progress of the assessment proceedings, relevant issues of different assessee, nature and content of the seized material in light of the fact that the as per the CBDT guideline F. No. 286/161/2006-IT (Inv. II) dt. 22.12.2006, copy of appraisal report is shared by Investigation Wing with both that the assessing officer and Joint CIT. In fact, CBDT guideline dated 22.12.2006 (Copy enclosed) on the subject of the search and Seizure Assessments clearly outlines such close coordination. Thus, as per the prevailing Practice and Guidelines, the approving authority has good idea of issues involved in particular case before hand i.e. much before the cases are sent to him for approval Under Section 153D of the Act. This guideline of CBDT is relevant piece of information, which throws light on the way search assessments are taken up by the filed officers. 6.8 Therefore in light of such peculiar fact of instant case, it cannot be inferred that the Joint CIT was not in a position to in....
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....h factual information that granting of approval for 43 cases in a single day was viewed by the Hon'ble High Court. Further, in the instant case, approval is given for the case of assessee only. Therefore, facts of the instant case are distinguishable. ITAT NEW DELHI in the case of Seh Realtors Pvt. Ltd. v. ACIT Central Circle-8 ITA no.2503/Del/2017 Dated 23.07.2024 The approving authority had granted approval in 232 cases in a single day. Therefore, issue of judicious approval for such large number of cases from the angle of human limitations was an issue before Hon'ble High Court. Reliance is placed in the case of Home Finders Housing Ltd. v Income-tax Officer Ward 2(3), Chennai [2018] 93 taxmann.com 371 (Madras) wherein it was held that in case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated. 6.10 We therefore make the position clear that non-compliance of the procedure indicated in the GKN Driveshafts (India) Ltd. 's case (supra) would not make the order void or non-est. Such a violation in the matter of procedure is only an irregularity which could be cured by remitting th....
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....ses will be considered unreasonably high and how many cases will be considered reasonable? It is submitted that every approval needs to be examined in light of its peculiar facts such as number of issue involved, nature of issue involved, modus-operandi involved, number of cases involved and inter-relationship among facts of such cases. If identical issues are involved involving same modus-operandi and cases are of same search group only, it would not be unreasonable to consider that an approving authority will be able to apply its independent mind judiciously to relatively larger number of cases in a single day. Ultimately, it boils down to factual matrix of the cases sent for approval. In the instant case, in light of the factual matrix that additions were made in different cases of the group on the same ground based on same factual position with regard to same accommodation entry provider and involving same modus-operandi, it would be justified to consider that the approving authority would have been in a position to apply his mind to all such cases sent for approval by the AO on the same day, particularly when number of such cases is not too high and facts/issues involved are i....
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....rejudice the assessee and also protect the interest of Revenue. 6.17 Therefore, it is submitted that even if there were any procedural infirmities, the same do not constitute jurisdictional defects. The Hon'ble Tribunal may kindly remand the matter for fresh approval rather than annulling the entire assessment. 7. 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 Id. JCIT in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the Id. JCIT is a quasi judicial proceeding requiring application of mind by the Id. JCIT 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 Ld. AO to seek to place the draft assessment order together with copies of the seized documents before the Id. JCIT well in time much before the due date of completion of search assessment. The Id. JCIT is supposed to ex....
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.... assessments. In our considered opinion, if the arguments of the Ld. CIT DR are to be appreciated that the Id. JCIT need not apply his mind while granting approval of the draft assessment orders u/s 153D of the Act as it is not provided in section 153D of the Act, then it would make the entire approval proceedings contemplated u/s 153D of the Act otiose. The law provides only the Ld. AO to frame the assessment, but, certain checks and balances are provided in the Act by conferring powers on the Id. JCIT to grant judicious approval u/s 153D of the Act to the draft assessment orders placed by the Ld. AO. 8. Let us now examine whether in the aforesaid background of the scheme of the Act, whether the approval in terms of section 153D of the Act has been granted by the Id. JCIT in a judicious way after due application of mind or not, in the instant case. 9. Regarding M/s. Impress Estates Pvt. Ltd., the approval granted by the Id. JCIT on 30.12.2016 as mentioned in the table hereinabove u/s 153D of the Act. The said approval letter clearly states that a letter dated 29.12.2016 was filed by the Ld. AO before the Id. JCIT seeking approval of draft assessment order u/s 153D of the Act....
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.... 17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessment order without any assessment records what to say about the search material. As mentioned earlier, there are infirmities in the figures of original return of income as well as total assessed and the Addl. CIT while giving his approval has not applied his mind to the figures mentioned by the AO. Therefore, approval given in the instant case by the Addl. CIT, in our opinion, is not valid in the eyes of law. We, therefore, hold that approval given u/s 153D has been granted in a mechanical manner and without application of mind and thus it is invalid and bad in law and consequently vitiated the assessment order for want of valid approval u/s 153D of the Act. In view of the above discussion, we hold that the order passed u/s 153A r.w.s. 43(3) has to be quashed, thus ordered accordingly. The ground raised by the Assessee is accordingly allowed". [Emphasis is ....