9911796707
TMI Blog2024 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ality or a symbolic act but a mandatory requirement. Section 153D of the Act bestows a supervisory jurisdiction 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 requirement in letter and spirit. A bare glance at the approval so accorded makes it evident that such approval is generic and listless and accorded in a blanket manner without any reference to any issue in respect of any of the 5 assessment years. Apparently, the approval has been granted on a dotted line without any availability of reasonable time which firms up the belief towards non application of mind. Besides, the approval has been granted in a consolidated manner for all assessment years for which voluminous assessment orders were prepared. The whole sequence of action apparently appears to be illusory to merely meet the requirement of law as an empty formality. It is also alleged on behalf of assessee that the draft assessment orders are not available on record which allegation has not been rebutted. The draft assessment orders showing some marking / initials e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S., JUDICIAL MEMBER ITA Nos. 621/Del/2012, 622/Del/2012 and 968/Del/2012 to 970/Del/2012, Cross Objection No.110/Del/2023 Arising out of ITA No.621/Del/2012, Cross Objection No. 111/Del/2023 Arising out of ITA No.968/Del/2012, Cross Objection No.112/Del/2023 Arising out of ITA No.622/Del/2012, Cross Objection No.113/Del/2023 Arising out of ITA No.969/Del/2012, Cross Objection No.114/Del/2023 Arising out of ITA No.970/Del/2012, 5213/Del/2011, Cross Objection No.109/Del/2023 Arising out of ITA No.5213/Del/2011 For the Appellant : Sh. Salil Kapoor, Adv., Sh. Vibhu Jain, Adv. and Sh. Manoranjan Nayak, Adv. For the Respondent : Sh. Waseem Arshad, CIT-DR ORDER PER YOGESH KUMAR U.S., JM: The captioned five Appeals in ITA No. 621, 968, 622, 969/ 970/Del/2012 are filed by the Revenue and the Cross Objections No. 110, 111, 112, 113 114/Del/2023 filed by the Assessee Janak Raj Gupta for the Assessment Years i.e. AY 2005-2006 to 2009-10 by challenging the order dated 30.11.2011, 30.11.2011, 13.11.2011 and 05.12.2011 respectively. The Revenue filed ITA No. 5213/Del/2011 for the AY 2009-10 and the Cross Objection No. 109/Del/2023 filed by the Assessee Shri. Bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f undisclosed income on the basis of seized document. 2. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 3. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. ITA No.970/Del/2012 for AY 2009-10 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,51,00,000/- made by the Assessing Officer on account of undisclosed income on the basis of seized document. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,51,21,958/- made by the Assessing Officer on account of undisclosed income by holding that the seized documents was dumb in nature. 3. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 4. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. C.O.No.109/Del/2023 1. That the assessment order dated 30.12.2010 passed u/s 153A of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout jurisdiction as no incriminating material was found from the assessee at the time of search. The additions are not made on the basis of incriminating material and as such the same are illegal, bad in law, and without jurisdiction. 3. That in view of the facts and circumstances of the case, and in law, the approval u/s 153D of the Income Tax Act, 1961 is mechanical and without any application of mind and is not a valid approval. Thus the impugned assessment order is illegal, bad in law, and liable to be quashed. 4. That the assessee/Respondent seeks permission to raise additional grounds at the time of hearing. C.O.No.112/Del/2023 1. That the assessment order dated 30.12.2010 passed u/s 153A of the Income Tax Act, 1961 ( the Act ) by the Assessing Officer ( A.O. ) and the additions made therein are illegal, bad in law and without jurisdiction and the same are liable to be deleted. 2. That the assessment order passed under section 153A of the Act and the additions made are illegal, bad in law and without jurisdiction as no incriminating material was found from the assessee at the time of search. The additions are not made on the basis of incri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the impugned assessment order is illegal, bad in law, and liable to be quashed. 4. That the assessee/Respondent seeks permission to raise additional grounds at the time of hearing. 3. The brief facts of the case are that, a search and seizure operation was conducted u/s 132 of the Income Tax Act, 1961 ( Act for Short) on 06/11/2008 in respect of M/s Nimtaya Croup of Companies. Consequent to search, proceedings u/s 153A of the Act was imitated for AY 2005- 06, 2006-07, 2007-08, 2008-09 and 2009-10 in the case of Janak Raj Gupta Co. by issuing notice u/s 153A of the Act which was duly served on the assessee and in response to notice, the assessee furnished return of income declaring the income at Rs. 4,94,778/-, Rs. 4,98,897/-, Rs. 5,28,658/-, Rs. 4,73,845/- and Rs. 1,59,835/- respectively for AY 2005-06 to 2009-10. The assessment orders came to be passed u/s 153A r/w/s.143(3) of the Act on 30/12/2010 by making additions in all the assessment years (2005-06 to 2009-10) in the case of Janak Raj Gupta and Company. 4. In the case of Shri Brij Mohan Mahajan, consequent to the very same search and seizure action dated 06/11/2008, notice u/s 142(1) of the Act wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir Authorized Representative verbally raising the issue of validity of assessments and the additions made u/s 153A of the Act under Rule 27 of the ITAT Rules on various dates of hearing. However, the Appeals were not decided, in order to bring more clarity to the issues raised by the Assessee. Further submitted that the Assessees have also filed applications under Rule 27 of the ITAT Rules wherein raised the issue of validity of assessments and additions in view of the provisions of Section 153A and 153D of the Act. The Ld. Authorized Representative further submitted that the said issue of validity of assessment order being purely question of law, which goes to the root of the matter, which can be raised for the first time in the Cross Objection before the Tribunal and present C.Os have been filed only to avoid technicalities in deciding the said issue. Thus, submitted that delay caused in filing the captioned C.Os are not intentional but for the bona-fide reasons mentioned in the application coupled with the affidavit. 8. For the reasons stated in the applications seeking for condonation of delay in filing the Cross Objections and considering the fact that the issue raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2009-10, a mandatory approval u/s 153D of the Act were accorded by Additional Commissioner of Income Tax on 30.12.2010 vide collective approval letter for the AY 2005-06 to 2009-10 and the details are as under:- (a) approval u/s 153D in the case of M/s Janka Raj Gupta and Co.: No.F.No.Addl.CIT/CR- 5/approval/2010-11/834 dated 30/12/2010. (b) approval u/s 153D in the case of sh. Brij Mohan Mahajan: No.F.No.Addl.CIT/CR-5/approval/2010-11/843 dated 30/12/2010. 12. The legal objection of transgression of requirements of approval under section 153D of the Act is in controversy. Pursuant to search carried out on 06/11/2008 on M/s. Nimtaya group of Companies, the assessment proceedings u/s. 153A of the Act carried out. The Assessing officer forwarded the draft assessment orders for 5 years (AY 2005-06 to AY 2009-10) in both the cases of the Assessees for endorsement and approval of the superior authority at the fag-end of the limitation period on 30/12/2010 to meet the legal requirement imposed by section 153D of the Act. The Addl. CIT i.e. the superior authority, in turn, granted a combined and consolidated approval for all 5 assessment years in promptly on 30/12/2010 itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded vide F. No. Add. CIT/CR-5/Approval/2010-11/843 dated 30/12/2010 and the Order u/s 143(3) of the Act passed on the very same day. Though the Department of Revenue has not placed the copy of the approval u/s 153D of the Act to prove that there were separate approval for all the Assessment Years in the case of Sh. Brij Mohan Mahajan, based on the Order Sheets for A.Y 2005-06 to 2009-10 and on going through the Assessment Order and other records it is found that a single Approval u/s. 153D of the Act has been accorded covering all the Assessment Years. The Ld. DR has also submitted that the similar collective approval order has been issued in the case of Sri. Brij Mohan Mahajan also. 17. Thus, there is nothing else before us to prove the facts differently. A bare glance at the approval so accorded makes it evident that such approval is generic and listless and accorded in a blanket manner without any reference to any issue in respect of any of the 5 assessment years. Apparently, the approval has been granted on a dotted line without any availability of reasonable time which firms up the belief towards non application of mind. Besides, the approval has been granted in a consol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or itself and should be self-defending. There are long line of judicial precedents which provides guidance in applying the law in this regard. 19. At the cost of repetition, it may be reiterated that in the instant case, approving authority did not mention anything in the approval memo towards his/ her process of deriving satisfaction so as to exhibit his/her due application of mind. We may observe that the above approval letter issued by the Addl. Commissioner merely says that the approval has been granted in view of the letter of the A.O. The letter of approval issued under Section 153D reads as under: Please refer to your office letter F. No. ACIT/CC/22/Approval 2010-11/644, dated 30/12/2010 on the above mentioned subject. In view of your letter, approval is hereby granted to the draft assessment orders in the following cases:- Sr. No. Name of the Assessee Assessment Year Assessed Income (Rs.) 1 M/s Janak Raj Gupta Co. 2005-06 3,49,57,345/- 2 M/s Janak Raj Gupta Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved by jurisdictional High Court subsequently, reported in 307 CTR 218 affirms the plea of the Assessee, wherein the Hon ble Bombay High Court held 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 2007- 08. This was on the ground that the mandatory statutory requirement of obtaining an approval of the concerned authority as flowing from Section 153D of the Act, before passing the order of assessment, was not complied with. 4. This was not a case where no approval was granted at all. However, the Tribunal was of the opinion that the approval granted by the Additional Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepting 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 could have been raised at any time. In the result, no question of law arises. 8. Accordingly, the Tax Appeal is dismissed. 22. In the case of ACIT, Circle-1 (2) Vs. Serajuddin and Co. the Hon ble Supreme Court in SLP (Civil) Dairy No. 44989/2023 vide order dated 28/11/2023 dismissed the Appeal filed by the Department of Revenue against the order dated 15/03/2023 in ITA No. 43/2022 passed by the Hon ble High Court of Orissa at Cuttack, wherein the Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould have arrived subjective satisfaction on each issue in each assessment year independently and should have approve it u/s 153D of the Act. In the present cases, on perusing the approval granted by the Additional CIT, it shows that Additional CIT has not independently applied his mind on the issue raised by ACIT Central Circle-22 in each assessment year commencing from assessment year 2005-06 to 2009-10. We are conscious that the statute does not provide for any format in which the approval must be granted or the approval 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 assessment order. Clearly, these are the cases in which the higher authorities had granted the approval without consideration of relevant issues. In our opinion, validity of the approval goes to the root of the matter. In these cases, it is a clear case of non-application of mind by Additional CIT while granting approval of draft assessment order in these assessment years, which cannot be said that there is a valid approval of draft assessment order in these assessment years. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
