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TMI Blog2023 (12) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... so gets strong support from the judgement of Anuj Bansal [ 2023 (7) TMI 1214 - DELHI HIGH COURT ] as relied by the ld. AR. Our conclusion drawn for AY 2011-12 would also apply mutatis mutandis to other three appeals pertaining to AY 2012-13, 2013-14 2015-16 and consequently impugned reassessment orders in other three appeals are also quashed - Cross objection no. 1 is allowed - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND GIRISH AGRAWAL, ACCOUNTANT MEMBER For the Appellant : Assessee : Shri Amit Goel, CA and Shri Pranav Yadav, Adv. For the Respondent : Ms. Suneeta Verma, CIT(DR) ORDER PER BENCH:- Above captioned appeals of revenue and cross objection of assessee have been filed against the order of CIT(A)-4, Kanpur dated 14.02.2022 for AYs 2011-12 to 2013-14 2015-16. 2. Since grounds raised by the Revenue are identical and similar therefore we are taking AY 2011-12 as lead case for the sake of convenience and brevity. The grounds raised by the Revenue in ITA No. 1436/Del/2022 for A.Y. 2011-12 are as under:- 1. The Ld. CIT(A) is not correct in law and on facts. 2. a. On the facts and circumstances of the case, the Id. CIT(A) has erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g additions u/s. 68 of the Act, and disallowances of certain expenses. The assessee carried the matter before first appellate authority and ld. CIT(A) decided appeal in favour of the assessee on merits. Therefore the Revenue has filed appeals under consideration challenging the deletion of addition. However while adjudicating legal ground no. (v) the ld. CIT(A) dismissed contention of assessee that the assessment order has been passed by the Assessing Officer without having valid approval as per mandate of sec 153D of the Act. Against said conclusion of ld. CIT(A) the assessee has filed cross objections challenging the validity of assessment orders on account of invalid approval as well as supporting the first appellate order on the conclusion recorded in favour of the assessee on merits. As agreed by the ld. Representative both the sides, at the outset, we proceed to adjudicate cross objections of assessee. Cross objection no. 41 to 43 45/Del/2023 of Assessee 5. Pressing into service ground no. 1 of cross objection of assessee the ld. Assessee Representative (AR) submitted that the identical legal ground has been adjudicated by the Tribunal by order dated 08.05.2023 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the JCIT are extracted below. 9.1.1 The communication made by the AO (stationed at Noida) to the JCIT (stationed at Meerut) seeking approval under Section 153D of the Act is reproduced here under: 9.1.2 Likewise, the approval memo in response to the communication made by AO seeking approval under S. 153D is also reproduced here under: 9.2 On perusal of communication dated 30/12/2016 (para 9.1.1) addressed by the AO to the JCIT, the salient features that emerge are: a) The approval is merely a technical approval. The JCIT in the communication letter himself has made a discordant remark that the draft orders have been received on the last date and thus he is having very little time / no time at his disposal for proper examination of facts of the case or for conducting enquiries etc. The JCIT in its last minute approval letter, in dated 31/12/2016 (para no. 9.1.2) while granting approval under Section 153D, in turn, has again noted that the technical approval has been accorded to pass assessment orders in 18 cases including assessee, for which draft assessment orders were submitted by the Assessing Officer Noida. b) The JCIT in his approval m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order i.e. on 31/12/2016. It is a classic case of approval by giving a complete go bye to the inbuilt safeguards intended by insertion of S. 153D of the Act. 9.4 It may be pertinent to observe at this stage that the impugned assessment order was passed under Section 143(3) r.w.s. 153A of the Act pursuant to search carried out under Section 132 of the Act. For passing such assessment orders, the Assessing Officer is governed by Section 153D of the Act whereby the AO should complete the assessment proceedings and prepare a draft assessment order which needs to be placed before the approving authority i.e. Joint / Addl. Commissioner (designated authority giving approval to search assessment under Section 153D of the Act) for his perusal and prior approval. The approving authority is necessarily required to objectively evaluate such draft assessment order with due application of mind on various issues contained in such order so as to derive his/ her conclusive satisfaction that the proposed action of AO is in conformity with subsisting law and with underlying factual matrix. The AO is obligated is pass the assessment order exactly, as per approval / directions of the desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad High Court in the case of PCIT vs. Sapna Gupta judgment dated 12-12-2022 Income Tax appeal no. 88 of 2022. The Hon'ble High Court inter alia observed that the compliance of S. 153D qua each assessee and for each assessment year is expected. (v) The mundane approval under Section 153D in a cosmetic manner gives infallible impression of approval on dotted line and without discharging the onus placed on competent authority thus defeats the intrinsic purpose of supervision of search assessments. Such hawkish approval has thus tarred the assessment and rendered it bad in law. 11. It may be pertinent to observe, Section 153D bestows a supervisory onus on the designated authority in respect of search related assessment and thus enjoins a salutary duty of statutory nature. The designated superior authority is thus expected to confirm to the statutory requirements in letter and spirit. As noted in the preceeding paragraphs, it is a classic case of collective abdication of statutory responsibility assigned under Act and yet putting civil consequences of onerous nature on a tax payer. It is axiomatic from the plain reading of approval memo that the JCIT is in complete dark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose action the JCIT, was supposed to supervise as per the scheme of the Act. Manifestly, the JCIT, without any consideration of factual and legal position in proposed additions/disallowances and without contents of appraisal report before him or incriminating material collected in search etc. has buckled under statutory compulsion and proceeded to grant a simplicitor approval with caveats and disclaimers. This approach of the JCIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and can not thus be countenanced in law. 12. The identical issue has been favourably adjudicated in assessess s own case in ITA 3306/Del./2018 order dated 23-08-2021 concerning other AY 2015-16 where coordinate bench found total lack of propriety in such statutory approval. There are plethora of decisions of various co-ordinate benches including Sanjay Duggal ors (ITA 1813/Del/2019 ors; order dated 19.01.2021 which have also echoed the same view o n similar fact situation. 13. The CIT(A) in para 7 of first appellate order has brushed aside the legal objection summarily merely on an inept indifferent premise that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly out of the scene in the final assessed income shows volumes. 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 income 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 groun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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