TaxTMI 
TaxTMI 
2026 (9) TMI 978
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....) of the Act. 2. Precisely stated, the background facts leading to present appeals are such that the assessee-individual is engaged in the business of dealing in real estate. The income-tax authorities carried out a search u/s. 132 of the Act upon "Piyush Patel Group" including assessee on 27.12.2012, pursuant to which the AO framed special assessments u/s. 153A r.w.s. 143(3) for AYs 2011-12 & 2012-13 and regular assessment u/s. 143(3) for AY 2013-14 which are the subject-matters of present appeals. While framing those assessments, the Ld. AO made certain additions/disallowances. Aggrieved, the assessee carried matters in first-appeals before Ld. CIT(A) whereupon the Ld. CIT(A) granted certain reliefs. Now, the assessee and revenue, both are aggrieved by the orders passed by Ld. CIT(A) and have come in present appeals before ITAT. 3. Since these appeals involve identical/similar issues, they were heard together at the request of parties and are being disposed of by this consolidated order for the sake of convenience, brevity and clarity. We will first adjudicate assessee's appeals and thereafter take up revenue's appeals. Assessee's Appeals: 4. Initially, the assessee h....
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....arted approval of the superior authority i.e. the JCIT, Central Range, Surat, resulted into pure violation of the CBDT's Circular No. 3 of 2008 dtd. 12-03-2008 and hence, being patently in violation of the provisions of the law, arbitrary, baseless and without jurisdiction, is liable to be quashed." Additional grounds in IT(SS)A 15/SRT/2022 - AY 2013-14: "1. On the facts and in the circumstances of the case as well in law, the learned CIT (Appeals) ought to have quashed the impugned assessment order passed by the JAO, on the ground that the JAO had not taken a valid approval u/s. 153D in accordance with the law and therefore, the assessment order passed for the relevant assessment year in question based on mere non speaking, mechanical and half-hearted approval of the superior authority i.e. the JCIT, Central Range, Surat, resulted into pure violation of the CBDT's Circular No. 3 of 2008 dtd. 12-03-2008 and hence, being patently in violation of the provisions of the law, arbitrary, baseless and without jurisdiction, is liable to be quashed." 5. Ld. AR for assessee submitted that the additional grounds are legal in nature, go to the root of the matter, do not ....
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.... "6. We take notice of the principal argument that was canvassed by the assessee before the ITAT. The principal argument has been noted by the ITAT in para 7, which reads as under: "7. Feeling aggrieved and dissatisfied, the assessee has come up before this Tribunal by way of this appeal. The learned counsel for the assessee submitted that section, 153C of Income Tax Act, 1961, prescribed a mandatory requirement of recording of satisfaction by the AO of seized person about the belonginess of seized material by other person. The AO of the searched person is also required to hand over such searched material to the AO of the other person who then proceed for making the assessment of other person. In the instant case, the AO of the searched person has not recorded the satisfaction in the assessment of the assessee. The assessee has raised this issue before the learned CIT(A) but learned CIT(A) has taken adverse view by holding that the AO had jurisdiction over under section 153 C of the Act as the satakhat belonged the assessee. Hence, the AO was fully empowered to initiate proceedings under section 153C of the Act. The learned counsel for the assessee, referred the CBDT circu....
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.... ITR 295 (Delhi) (2014) 50 taxmann. com 199 (Delhi) wherein it was observed as follows: "In the instant case, it is nobody's case that Jaipuria Group had disclaimed those documents as belonging to them. Unless and until it is established that the documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of section 153C do not get attracted because the very expression used in section 153C is that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A...." In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing officer of the searched person must be satisfied that the seized material (which included documents) does not belong to the person referred to in section 153A, i.e., the searched person. In the satisfaction note, which is the subject matter of these writ petitions, there is nothing therein to indicate that the seized documents do not belong to the ....
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....as these documents are concerned. In the present case, there is not satisfaction that seized document belonged to the assessee. therefore, proceeding initiated under section 153 C are bad in law." The similar issue had come up before the Hon'ble High Court of Madhya Pradesh in the case of CIT Vs Mechmen (2015) 60 taxmann.com 484 (MP), wherein the Hon'ble High court discussing the various judgments has held that the AO is obliged to record satisfaction (in case of the searched person) that the assets or documents do not belong to the searched person and these in fact belong to some other person other than the searched person. This is sine quo non despite the fact that the AO of searched and non-searched person is same. Thereafter, he has to handover the material to the AO of non- searched person having jurisdiction over him (may be the same AO). After receipt of the material and due verification, the AO of non-searched person has to issue notice under section 153C of the Act and to proceed in the matter. Thus, we are of the view that the Assessing officer of the person searched has to necessarily form a satisfaction that the item referred to in section 153 C belongs or belon....
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....ow the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner. In the present case, the assessment order has been passed by an Income Tax Officer, who admittedly is an officer below the rank of Joint Commissioner, therefore, the provisions of section 1530 of the Act would be applicable Section 153D starts with the words "No order of assessment or reassessment shall be passed " In other words, the language employed in the provision is couched in the negative and therefore, there is a prohibition against passing of an assessment or reassessment order, except with the prior approval of the Joint Commissioner. 10. In Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Lad [2005] 7 SCC 234, the Supreme Court has observed that if the requirements of a statute which prescribes the manner in which something is to be done are expressed in negative language, that is to say, if the statatte enacts that it shall be done in such a manner and in no other manner, it has been laid down th....
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....n.com 118 (SC). (ii) Hon'ble Delhi High Court in Principal Commissioner of Income-tax (Central)-2 Vs. Anuj Bansal (2024) 165 taxmann.com 2 (Delhi) - The SLP filed by revenue has already been dismissed by Hon'ble Supreme Court (2024) 165 taxmann.com 3 (SC). 11. Ld. AR submitted that even if the Revenue were to contend that the approval was in fact granted by the Addl. CIT, the Tribunal would still be required to examine the approval-letter to ascertain whether the statutory authority had applied its mind before granting such approval. According to Ld. AR, when the alleged approval-letters themselves are not available on record and have admittedly not been produced before the Tribunal, neither the existence nor the validity of the alleged approvals can be examined by ITAT. 12. Ld. AR, therefore, submitted that the mere mention of the particulars of the alleged approval-letters in the assessment-orders cannot cure the defect arising from non-production of the approval-letters themselves. It was contended that the statutory requirement is of obtaining prior approval u/s. 153D and not merely of making a recital in the assessment-order that such approval had been obtained.....
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....d that the approval-letters were not traceable. Thus, despite the specific challenge raised by the assessee regarding the validity of approval u/s. 153D, the Revenue has not been able to place before us the approval-letters mandated u/s. 153D. The Hon'ble Jurisdictional High Court has, in Pr. Commissioner of Income-tax, Surat-1 Vs. M/s Munisuvrat Corporation (supra) quashed the proceeding done by assessing authority where the authority failed to produce the satisfaction note required by assessee. The decision of Hon'ble Jurisdictional High Court, though rendered in the context of satisfaction note u/s. 153C, is relevant for the broader principle that a statutory requirement going to the assumption of jurisdiction cannot be presumed to have been complied in absence of the relevant statutory record. 18. We are conscious of the fact that the assessment-orders contain references to the particulars of the alleged approval-letters. However, in our considered view, such recital, by itself, cannot be treated as conclusive proof of the existence of a valid approval, particularly when the assessee has specifically disputed the same and the Revenue has failed to produce the approval-letter....