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TMI Blog2023 (11) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Orders in pursuant to a search operation being a mandatory requirement of section 153D of the Act, was not granted as per law because such approval is not meant to be given in mechanical manner without application of mind by the Additional CIT which resulted in vitiating the assessment orders per se. We hold that mandatory approval was being granted mechanically without application of mind by Additional Commissioner of Income Tax, Central- Range, Jalandhar, and therefore, this mechanical exercise of power has vitiated entire assessment proceedings and consequently, the said assessment orders are rendered void ab initio. Accordingly, the impugned order is held to be infirm, illegal and bad in law and same is as such quashed. Appeals of the assessee are allowed. - DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER For the Appellant : Sh. Surinder Mahajan, CA For the Respondent : Sh. Hitendra Bhauraoji Ninawe, CIT DR ORDER Per Bench: This bunch of appeal has been filed by the appellant - assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana even dated 17.10.2019 in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cases, in mechanical manner, vide letter number F.No. JCIT/CR/JAL/2018-19/1022 dated 31.12.2018 on receipt of the proposal for approval of draft assessment order in case assessee Sh. Ravinder Singh for assessment years 2012-13, 2013-14, 2015-16, 2016-17 and 2017-18 vide AO s office proposal letter no. CC- I/JAL./153B/CUCB/2018-19/1952 dated 30.12.2018 as per Synopsis Pgs. 9 10) which are reproduced here under: 6. The Ld. AR has filed a brief synopsis and a case law paper book in support of its contentions. The relevant part of the synopsis reads as under: 1. That returns of income for all the years were filed on 05.09.2018 in response to notice u/s 153A of the Act dated 28.05.2018. Assessment proceedings for all the years were initiated by issue of notice u/s 143(2) of the Act dated 12.09.2018 and assessment in all the cases were completed on 31.12.2018. 2. That Assessing Officer vide his letter no. CC-I/JAL./153B/CUCB/2018- 19/1952 dated 30.12.2018 sent proposal to Joint Commissioner of Income Tax, Central Range, Jalandhar for approval of draft assessment orders of assessee Sh. Ravinder Singh for A.Y. 2011-12 to 2017-18 u/s 153D of the Income Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer Central Circle-1 who has passed seven assessment orders of the assessee on 31.12.2018 has also passed assessment orders in case of six other assessee for seven years each. It means on 31 st December of 2018, Assessing Officer had passed forty nine assessment orders which included seven assessment orders of the assessee. 6. To sum up submissions made in para 1 to 5 above, your honor will observe a) Seven assessment orders were received in office of Joint Commissioner of Income Tax, Central Range, Jalandhar on 31.12.2018. b) Total papers seized during search on the basis of which assessments were framed were 2731. c) Total papers of submissions made during assessment proceedings comes to 1000 papers. d) Approval to pass assessment orders was granted on 31.12.2018 itself. e) Joint Commissioner of Income Tax, Central Range, Jalandhar has charge of five Central Circle Offices and on verification one can find that approval in some other cases must have also been granted on 31.12.2018. f) Assessing Officer has passed assessment orders in case of seven assessee (including assessee) for seven years each on 31.12.2018 i.e total asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddl. CIT, Central, Range, Jalandhar on receipt of proposal of draft Assessment Order send by AO, on 31.12.2018, the same date on which the assessment order has been passed that is on 31.12.2018, in the group of 5 Assessments, in mechanical manner, vide letter number F.No. JCIT/CR/JAL/2018-19/1022 dated 31.12.2018, in case of the assessee Sh. Ravinder Singh in respect of the Assessment years 2012-13, 2013-14, 2015-16, 2016-17 and 2017-18. The Ld. AR clarified that it is admitted fact on record that though the proposal for approval of draft Assessment Order vide AO s Office Letter CC-I/JAL./153B/CUCB/2018-19/1952 was dated 30.12.2018 but it was send by the AO and received in the office of the Joint CIT on 31.12.2018 as per office stamp receipt endorsement of the Office of the Joint CIT. 9. It is seen from the approval Letter Number F.No. JCIT/CR/JAL/2018- 19/1022 dated 31.12.2018 of the Joint CIT that there were seven assessment orders, received in office of Joint Commissioner of Income Tax, Central Range, Jalandhar on 31.12.2018. The AR argued that the assessments were framed on the basis of 2731 papers seized during the course of search and written papers of submissions of 1000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, and after due application of mind and ascertaining that the Assessing Officer has appreciated the search material and other evidences in proper perspective, has to give approval to the draft assessment order and only on such approval, the Assessing Officer can pass an assessment order. In the instant case, the Assessing Officer prepared the draft assessment order on 31.12.2017 for assessment year 2015-16. The approval of the draft assessment order under Section 153D was, however, given on 31.12.2017 itself and the final assessment order was passed on the same day i.e. on 31.12.2017 by the Assessing Officer. The attention of the Court is invited to the copy of the approval letter dated 31.12.2017 extracted in the order of the Tribunal wherein the name of the assessee for the assessment year 2015-16 appears at Sr. No. 6. It is demonstrated by the learned counsel for the assessee that as per this approval letter, the Additional C.I.T. granted approval of draft assessment orders under Section 153D in 38 cases which also included the case of the present assessee. The Tribunal having taken note of the said undisputed facts, came to the conclusion that it was humanly imposs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial question of law arises for consideration before us. 12. In the case of Rajesh Ladhani v. Deputy Commissioner of Income Tax dated 6th November, 2019 [2019] 57 CCH 0261 Agra Tribunal has adjudicated the merits of approval u/s 153D of the Act and held as under: Search and seizure Prior approval necessary for assessment in cases of search or requisition Assessee contended that approval as granted by ACIT u/s 153D which is foundation for passing impugned Assessment order u/s 153A is no Approval in the eye of law as purported Approval was granted without due application of mind Held, in State Bank of India Vs ACIT, Bombay High court held that sanction u/s 151 is a condition precedent to issue reopening notice Therefore, Assessee is entitled to ask Revenue whether or not, condition precedent for reopening assessment This attitude of not supplying copy of necessary sanction to Petitioner when asked for is not justified Besides, also whether it has obtained from specific authority provided in Section 151 can also be subject of jurisdictional challenge to reopening notice It is an elementary law that whenever any statutory obligation is casted upon any statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide letter No. DCIT/CC-II/JAL/2014-15/2190, dated 20.03.2015 which was placed before the Addl. CIT, Central, Range, Jalandhar the Competent Authority on 20.03.2015, which not only included the case of appellant assessee but the cases of other assessees as well. All these cases were approved on same date i.e. 20.03.2015. In our view, it is humanly impossible to apply independent mind to satisfy the competent authority perse se to grant the approval u/s 153D of the Act on same date i.e. 20.03.2015 to complete the entire exercise of sending and receipt, of draft proposal, dispatch and deliver in the office of Competent authority and vice versa who had to go through the records and assessment orders of 5 cases in one day. Meaning thereby, that in the instant case, the approval granted was a mechanical exercise of power. 7. In the case of Principal Commissioner of Income-tax v. Siddarth Gupt , [2023] 147 taxmann.com 305 Hon ble Allahabad High Court observed as under: 18. The careful and conjoint reading of section 153A(1) and section 153D leave no room for doubt that approval with respect to each assessment year is to be obtained by the Assessing Officer on the draft asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval must reflect the application of mind to the facts of the case. The requirement of approval under section 153D is pre-requisite to pass an order of assessment or re-assessment. Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A which provides for assessment in case of search under section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of each assessment year falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). 20. In the instant case, the draft assessment order in 38 cases, i.e. for 38 assessment years placed before the Approving Authority on 31-12-2017 was approved on same day i.e. 31-12-2017, which not only inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 'see' 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 Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the AO should submit the draft assessment order well in time . Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind; (ii) the final approval must be in writing; (iii) The fact that approval has been obtained, should be mentioned in the body of the assessment order. 23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking his approval or of the Additional CIT having granted such approval. Interestingly, the assessment orders were passed on 30th December 2010 without mentioning the above fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndered void ab initio. Consequently, the impugned order is held to be infirm, illegal and bad in law and same is as such quashed. 14. In the present cases, the draft proposal of Assessment Orders was sent on 31.12.2018 and approval u/s 153D was granted on 31.12.2018 itself. From the Letter of proposal for approval, it is revealed that the AO has written in office letter No. section 153B whereas in the subject he had written section 153D of the Act per se reveals the application of mind by the AO in framing the Assessment and the approving authority in granting approval u/s 153 D of the Act on the same date. In our considered view, a mere endorsement to a list of cases of Assessment Orders by putting signature with rubber stamping on the letter without application of mind will not satisfy the requirement of the law for approval or sanction u/s 153D of the Act. Therefore, we hold that in the present case, the prior approval of the Additional CIT required before passing of the Assessment Orders in pursuant to a search operation being a mandatory requirement of section 153D of the Act, was not granted as per law because such approval is not meant to be given in mechanical manner w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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