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TMI Blog2020 (4) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... same day and give approval. Even if such approval has been given, it can be said that the same is nothing but a technical formality without application of mind. Further, as mentioned earlier, there is nothing on record to suggest that the files have in fact moved from Dehradun to Meerut for obtaining approval. Therefore, in our opinion, the mandatory provisions as required u/s 153D has not been complied with. We hold that there is no proper approval given u/s 153D in the instant case for which the assessment orders passed by the AO are not in accordance with law. We, therefore, have no hesitation in holding that the assessments completed by the DCIT do not stand in the eyes of law and, therefore, these orders are treated as null and void. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... rakash r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 8. M/s Alaknanda Realtors Prop. Smt. Rama Gautam w/o Sh. Sushil Kumar r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 9. M/s Confinite Prop. Sushil Kumar r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 10. M/s Negi Builders & Suppliers Prop, Mukesh Negi, r/o Dhalwala near Doon Steel, Rishikesh. 4. The AO further noted that other than the above concerns and their bank accounts, there were certain entities/concerns which are existing concerns doing business, but, their bank accounts were fraudulently used by Mr. Sanjay Bansal who transferred funds of the society and then withdrawn the same for personal use. Those concerns are as under:- 1. M/s Edisons Sales corp, Prop. Smt. Bimal Bansal who is mother of Sh. Sanjay Bansal: 2. M/s Strategic Marketing Pvt. Ltd. 29/3 Rajpur Road Dehradun. 3. Account number 14500100010404 in Federal Bank, Dehradun in Name of Smt. Satyeshwar Dhyani. 4. M/s Wali Gramudyog, Roorkee in the name of trust by Shri Sanjay Bansal. The evidences unearthed and examined during the search action, post-search enquiries and scrutiny proceedings have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding the assessment order passed by the Assessing officer u/s 153A r.w.s. 143(3) of the Act. 3. That no valid search is conducted on the Appellant, hence the notice issued u/s 153 A of the Act is illegal, bad in law and without jurisdiction. Thus, the order passed u/s 153A r.w.s. 143(3) of the Act is also illegal bad in law and without jurisdiction. 4. That the assessment order passed without valid approval U/s 153D of the Act is illegal, bad in law and without jurisdiction and the CIT(A) has erred in law and on facts in upholding the same. 5. That the alleged approval u/s 153D of the Act is illegal, bad in law and without any application of mind and the Assessment order passed without obtaining valid approval is liable to be quashed. 6. That the notice for enhancement by the CIT(A) and the enhancement made by CIT(A) are illegal, bad in law and without jurisdiction. 7. That CIT(A) has erred both on facts and in law, in enhancing the income of the appellant and making further additions. 8. That the additions made by the AO and also additions made by CIT(A) by way of enhancement are illegal, bad in law and without jurisdiction. 9. That without prejudice, the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant, without providing opportunity of cross examination and without considering the submissions and evidences of the appellant. 19. That CIT(A) has erred in upholding the disallowance of ₹ 178/- on account of interest paid on OD account. The addition is illegal, bad in law and arbitrary without considering the explanations/ evidences available on record and based upon mere surmises and conjectures. 20. That CIT(A) has erred in upholding the of ₹ 3,20,000/- on account of depreciation on building. The addition is illegal, bad in law and arbitrary without considering the explanations/ evidences available on record and based upon mere surmises and conjectures. 21. That the AO and the CIT(A) has failed to appreciate the fact that the Appellant society is eligible for registration U/s 12AA and exemption U/s 10(23)( C) of the Act. 22. That CIT(A) has erred in upholding the disallowance of the exemption admissible under the Act and has further erred in calculating the surplus at ₹ 29,81,162/- instead of ₹ 29,71,297/- as claimed by appellant in the return. 23. That CIT(A) has erred in treating the surplus to the tune of ₹ 29,81,162/- instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33. That interest U/s 234A, 234B and 234C of the Income Tax Act, 1961 has been wrongly and illegally charged and has been wrongly worked out. 34. That the applicant craves leave to add, amend, alter and/or delete any of the above grounds of appeal at or before the time of hearing." 9. Identical grounds have been taken by the assessee for other years. 9.1 These appeals were heard on the preliminary issue of validity of the assessment in absence of proper approval given by the Addl.CIT, Central Range, Meerut u/s 153D of the IT Act. 10. The ld. Counsel for the lassessee, at the outset, drew the attention of the Bench to page 37 of the paper book Volume-I which is the order sheet entries for the A.Y. 2008-09 and submitted that the AO on 30th March, 2015 has submitted the draft assessment order for approval u/s 153D. He submitted that the Addl.CIT had given the approval on the very same day u/s 153D and the order was also passed and served on the assessee on the very same day. He submitted that a perusal of the approval letter u/s 153D, copy of which is placed at page 38 and 39 of the paper book Volume-I shows that the approval has been granted on a condition that the final order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T/153D/2014-15/1158 dated 30.03.2015 totals to 21 assessees and total number of orders covered in such approval is 130. However, in the order passed u/s 7(1) of the RTI Act, 2005 dated 14th February, 2017, it is mentioned to be 10 which itself shows that no valid approval u/s 153D has been given. He submitted that the approval so granted by the Addl.CIT is merely a formality to pass the assessment orders in the cases as recorded in the approval letter. According to the ld. Counsel, it is not possible to go through the files of each and every case on the day of receipt of draft order for approval and granting the approval on the same day. He submitted that the distance between Dehradun and Meerut is 250 Kms and request for approval as well as granting of approval was on the very same date and the assessment orders were also passed on the very same day which shows that no independent satisfaction has been recorded by the Addl.CIT and there is no application of mind while passing the final assessment order. He further submitted that the assessee has filed its submissions dated 30th March, 2015 in assessee's own case which was received by the AO on 30.03.2015 which further strengthens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as only a dilatory tactice adopted by the assessee in order not to comply with the show cause notice dated 24th March, 2015 issued by the AO. She submitted that the AO accepted the reply furnished by the assessee on 26th March, 2015, incorporated the same in the draft assessment order which was approved by the JCIT/Addl.CIT, Central Range, Meerut u/s 153D on 30th March, 2015. The final assessment order was issued by the AO and received by the assessee on 30th March, 2015. Therefore, not only approval was granted by the JCIT/Addl.CIT, Central Range, Meerut u/s 153D in accordance with the provisions of the IT Act, but, there was adequate application of mind by the JCIT/Addl.CIT, Central Range, Meerut from the date of receipt of appraisal report from the Investigation Wing till the date of granting approval u/s 153D to the draft assessment order on 30th March, 2015. She accordingly submitted that the plea raised by the ld. Counsel for the assessee should be rejected and the appeals should be decided on merits and not on this preliminary issue. 13. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 To 2013-2014 It is requested that approval may kindly be accorded to the draft assessment orders. Yours faithfully, Encl: Case records: Sd/- (Poonam Sharma) Dy. Commissioner of income Tax, Central Circle, Dehradun." 15. We find, Addl.CIT, Central Range, Meerut, granted approval vide letter dated 30th March, 2015, the relevant scanned copy of which reads as under:- "OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX, CENTRAL RANGE, MEERUT F. No. Addl. CIT/CR/MRT/153D/2014-15/1158 Dated: 30.03.2015 To' The Dy. Commissioner of Income Tax Central Circle, Dehradun Sub.: Draft Assessment Orders u/s I53A/153C in DBIT Group of cases, Dehradun - Approval u/s 153D of Income Tax Act, 1961 - regarding - Please refer to your letters F.No. DCIT/CC/DDN/2014-15/2338 dated 27.3.2015 and F.No. DCIT/CC/DDN/2014-15/2339 dated 30.03.2015 on the above the above mentioned subject. 2. In the following case of DBIT Group' of ca.ses, prior approval u/s 153D of the Income Tax Act, 1961 is accorded for passing assessment orders u/s 153A/143(3) or 144 and 153C/143(3) of the I.T. Act, 1961 in respect of the assesses for the assessment years as mentioned below:- U/s. 153 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister is available to verify as to whether the files were sent to the Addl.CIT at Meerut, the ld.CIT- DR submitted that there is no separate movement register for the purpose of sending for approval of the draft assessment orders by the AO to the JCIT/Addl.CIT, Central Range, Meerut. She submitted that it is customary practice that staff go with file and after discussion/approval get it back. The relevant portion of the reply given by the ld. CIT-DR at para 10 of her written synopsis reads as under:- "10. It has been submitted by the Assessing Officer that the there is no separate movement register for the purpose of seeking approval of draft order by the Assessing Officer from the JCIT/Addl. CIT, Central Range Meerut. It is customary practice that staff go with file and after discussion/approval get it back." 17. A perusal of the above clearly shows that the approval was given in a mechanical manner by the Addl.CIT to the draft assessment orders passed by the AO. As mentioned earlier, the AO has submitted the draft assessment orders on 30th March, 2015 as per the order sheet entry which indicated that the AO was very much available in her office at Dehradun on 30th March, 2015. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 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 ensured. 3. This office reference no of approving the draft orders shall invariably be quoted in the assessment orders to be passed. A copy of final assessment orders passed in these cases should be sent to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority 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 part of the Authority granting approval? 3. Brief facts are that the Tribunal by the impugned judgment set aside the order of the Assessing Officer passed under Section 153A of the Income Tax Act, 1961 ("the Act" for short) for Assessment Year 1 of 4 Uday S. Jagtap 668-16-ITXA15=.doc 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 Additional CIT while granting the approval recorded that he did not have enough time to analyze the issues arising out of the draft order, clearly this was a case in which the higher Authority had granted the approval without consideration of relevant issues. Question of validity of the approval goes to the root of the matter and coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying the ratio of the judgement of the Hon'ble Apex Court in the case of Sahara India (Firm) v. CIT (supra), we hold that the Joint Commissioner has failed to grant approval in terms of section 153D of the Act i.e., after application of mind but has rather carried out exercise in utmost haste and in a mechanical manner and, therefore, the approval so granted by him is not an approval which can be sustained. Accordingly, assessments in three COs and nineteen appeals of the assessee(s), on identical facts, are liable to be annulled as suffering from the incurable defect of the approval not being proper. Accordingly, we annul the assessment orders in CO Nos, 8 to 10/Jodh/2016 and ITA Nos.325 to 331/Jodh/2016. Thus, all the three Cos and the nineteen appeals of the assessee, as aforesaid are allowed." (emphasis supplied by us) 19. Since the facts of the instant case are identical to the facts of the case cited (supra), therefore, respectfully following the decisions cited above, we hold that there is no proper approval given u/s 153D in the instant case for which the assessment orders passed by the AO are not in accordance with law. We, therefore, have no hesitation in holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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