TaxTMI 
TaxTMI 
2024 (4) TMI 1426
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....nd No. 1 of the present appeal is subsequently revised by the assessee on 19.12.2022, which reads as under: 4. Learned Authorized Representative ('AR') on behalf of the assessee has also submitted additional grounds of appeals. Application for revised/additional grounds dated 29.10.2022 submitted on 31.10.2022, challenging the validity of jurisdiction in absence of order u/s 127 has been withdrawn by the assessee vide application dated 16.12.2022, thus, the same stands dismissed as withdrawn. The AR of the assessee has further submitted fresh applications for admission of additional grounds of appeal assailing the validity of approval granted u/s 153D of the Act and change of incumbent who does not hold valid jurisdiction as per provisions of section 120(2). The additional grounds raised are reproduced as under: 5. The additional ground no. 2 disputing the jurisdiction of the Ld. AO referring to the provisions of section 120(2) of the Act was also subsequently withdrawn by the Ld. AR and requested to not press the same, accordingly additional ground no. 2 of the present appeal also dismissed as withdrawn/ not pressed. 6. The brief facts of the case as stated are th....
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....ed: 9. Additional Ground No.1: Approval U/s 153D: Ld. AR of the assessee in order to furnish the facts of the present case have submitted before us the copy of the approval u/s 153D dated 27.12.2016, which for the sake of completeness of the facts is extracted as under: 10. Ld. AR indicating the language used in the aforesaid approval u/s 153D have submitted that the approval granted by the JCIT, Range-II, Raipur is in mechanical & routine manner, it is mere formality, the approval granted is directing the Ld. AO to ensure the seized material and findings of the appraisal report to be incorporated in the final Assessment Order, which clearly proves that the approval accorded was not a final approval as required u/s 153D of the Act but the same is subject to modifications, therefore, the approval granted should not be considered as a valid approval, rather the same is a direction by the supervisory authority to the Ld. AO to prepare the final assessment order. It is further submitted by the Ld. AR that such directions shows that the Ld. JCIT, who has accorded the so-called approval has never perused the final assessment order before granting the approval. It is the prayer t....
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....2015-16 8 M/s East View Developers P. Ltd. AABCE5324R 2009-10 to 2015-16 9 Sh. Desh Bhushan Jain A AFPJ6467R 2009 10 to 2015-16 10 M/s Max City Developers Pvt. Ltd. AAECM5401A 2009-10 to 2015-16 11 Sh. Sanjeev Jain ACFPJ3817P 2009-10 to 2015-16 12 M/s Sethi Buildwell Pvt. Ltd. AAICS9/42C 2009-10 to 2015-16 13 Sh. Satpal Nagar AAFPN6467M 2009 10 to 2015-16 14 M/s Risabh Buildwell Pvt. Ltd. AACCR9776R 2009-10 to 2015-16 15 Srnt. Magan Jain AIMPJ8085G 2009-10 to 2015-16 16 M/s Angel Buildcon Pvt. Ltd. AAFCAI968H 2009-10 to 2015-16 2. A technical approval is accorded to pass assessment orders in the above cases on the basis of the drafts assessment orders submitted for the assessment years in reference years. You are directed to ensure taking into account the seized documents/papers and comments in the appraisal report pertaining to AYs. The fact of initiation of penalty proceedings, wherever, applicable, must also be incorporated in last para of the order. The initiation of correct penalty provisions of I.T. Act u/s 271 (1)(c)/ 271AAB, as per facts of the ease, must be ....
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....onditional approval subjected to modifications by the DCIT after receiving of the approval which makes it an invalid, qualified, uncertain approval. This is not the mandate of the Act. It has also been laid down that whenever any statutory obligation is cast upon any authority, such authority is legally required to discharge the obligation by application of mind. The approval has to be statutory nature after due application of mind, it should be neither technical nor proforma approval which is envisaged u/s 153D of the Act. Reliance is placed the judgment of Coordinate Bench in the case of M3M India Holdings (ITA 2691/2018). And the judgment of Hon'ble High Court of Bombay in the case of Pr CIT vs. Smt. Shreelekha Damani [ ITA no 668 of 2016 Dated: 27th November, 2018 ] is as under: "1. This appeal is filed by the Revenue challenging the judgment of Income Tax Appellate Tribunal ("the Tribunal" for short) dated 19th August 2015. 2. Following question was argued before us for our consideration: - "Whether on the facts and circumstances of the case and in law, the tribunal was justified in holding that there was no 'application of mind' on the p....
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....aft order has been submitted on 31.12.2010. Hence there is no much time left to analise the issue of draft order on merit. Therefore, the draft order is being approved as it is submitted. Approval to the above said draft order is granted u/s 153D of the I.T. Act, 1961." 7. In plain terms, the Additional CIT recorded that the draft order for approval under Section 153D of the Act was submitted only on 31st 3 of 4 Uday S. Jagtap 668-16-ITXA-15 =. doc December, 2010. Hence, there was not enough time left to analyze the issues of draft order on merit. Therefore, the order was approved as it was submitted. Clearly, therefore, the Additional CIT for want of time could not examine the issues arising out of the draft order. His action of granting the approval was thus, a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectly justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted, or the approval granted must be recorded. Nevertheless, when the ....
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....ns stated by him, he could not apply his mind and has accorded the approval mechanically to meet the requirements of law as the requirement was merely a formality. The Supervisory Authority although has given approval u/s. 153D of the Act but at the same time, he also pointed out and observed that the Assessing Officer will pass the assessment order only after making verification, necessary enquiries and investigations in the light of the suggestions made by him in the order dated 27.3.2015. It is also noted that notice u/s. 142(1) of the Act issued by the AO on 30.3.2015, in pursuant to the direction of the Add. CIT in the order dated 27.3.2015, copy of which is placed in paper book at pages 1 to 3, to explain/reconcile/justify in the respective assessment years as under: 2011-12 Please reconcile the investments shown at Rs.3,26,68,955/- as on 31.3.2011 with those as on 31.3.2010 at Rs.4,60,00,000/- and explain why disallowance u/s.14A should not be made in the facts and circumstances of the case. Please justify the reasons of abrupt increase of the total sales of 14.76% in comparison to that in the previous year and abrupt increase in the claim of expen....
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....d A.R. of the assessee submitted that a reading of the first, second and third paras of the Addl. CIT of his letter dated 27.3.2015 read as under: "Despite a reminder given on 19th March, 2015 tb submit the time barring draft assessment orders for approval u/s. 153D on or beforej23i03.2015, the draft orders in M/s. Neelachal Carbo Metalicks Pvt. Ltd. Group of cases has been received in this office only on ill 26th March, 2015 in the afternoon. The draft orders having being submitted only 5 days before final orders are getting barred by limitation,, I have no other option but to accord the approval to the same as the approval is statutorily required u/s. 153D, even though there is no time left for undersigned to ensure that all the points raised in the appraisal report, the appellate proceedings, audit inspection etc. are duly taken into account, and the enquiries and investigations that are required to be made are actually made before finalization of the assessment orders. It would have been much better and in the interest of Revenue, if you had submitted the draft orders atleast one month earlier so as to allow the undersigned sometime to go through and analyse the same vis-a-vis ....
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....n. However, despite all this, I have gone through the material available on records and some of the observations, in respect of the following cases are given in subsequent paras." 24. In our considered view, the provisions contained in Section 153D as enacted by the Parliament cannot be treated as an empty formality. The provision has certain purpose. It is apparent that the purpose behind the enactment of the above provision in the Statute by the Parliament are two folds. Firstly, the approval of the Senior Authority will ensure that the assessee is not prejudiced by the undue or irrelevant addition or assessment. Secondly, the approval by Senior Authority will also ensure that proper enquiry or investigation are carried out by the Assessing Authority. Thus, the above provision provides for mental application of a Senior Officer of the Department, which in turn, provides safeguard to both i.e. Revenue as well as the assessee. Therefore, this important provision laid down by the legislature cannot be treated as a mere empty formality. The same view was expressed by the Pune Benches of the Tribunal in the case of Akil Gulamali Somji vs ITO, in IT Appeal Nos.455 to 458 (Pune....
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....he assessment order after adhering to all such directions. Ld. AR submitted that all such directions by the Ld. JCIT to the Ld. AO shows that the draft order perused by the Ld. JCIT was not a final order on which the approval was granted, however the subjective approval shows that the mandate of law u/s 153D was violated, which requires the JCIT to approve the order u/s 153A(1)(b) or 153B(1)(b), which in no case shall be passed without prior approval u/s 153D. It was the prayer that under such facts and circumstances and according to the settled position of law, the order passed in the present case u/s 143(3) r.w.s. 153A by the Ld. AO is liable to be quashed, dehors, a valid approval u/s 153D. 12. In rebuttal, Ld. CIT DR on behalf of the revenue strongly opposed the contentions of the assessee. In this regard assessment records were produced, and Ld. CIT DR explained that on perusal of the records, it cannot be said that there was no application of mind by the Ld JCIT in granting approval u/s 153D, the said approval should not be treated as mechanical and in routine manner. It was the plea that on examination of the case records it is well established that there was complete inv....
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....y with certain riders as pointed out by Ld. AR that the Ld. AO was required to follow the instructions of the Ld. JCIT before finalizing the order such as reverifications of important issues including the highlighted one in the appraisal report, to consider the confidential note on the issue in the assessment order, it is presumed that all seized and impounded documents found during the course of search have been properly scrutinized, direction to re-check the amounts of credits appearing in the balance sheet / books of accounts of the assessee and also to finalize the assessment order after adhering to all such direction. Such directions by the supervisory authority entails further actions by the Ld. AO in order to finalize the assessment order, whether such final order was thereafter communicated to the supervisory authority and a final approval was granted towards such final order could not be established by the revenue, therefore, the approval granted u/s 153D does not constitute the approval which is envisaged under the said Section, such finding is well supported by the observations of ITAT, CUTTUCK in the case of Geetarani Panda (supra). The argument of the department in the....