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TMI Blog2024 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... endered 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. Accordingly, respectfully following the precedent as above, we hold that the assessment in the assessment year 2009-10 in pursuance of invalid approval accorded u/s 153D is invalid and liable to be quashed and quashed as such. Appeals filed by the Revenue are dismissed. - Shri Shamim Yahya, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Pranav Yadav, Advocate For the Revenue : Shri Subhra Jyoti Chakraborty, CIT DR ORDER 1. Shamim Yahya (Accountant Member). These are appeals by the Revenue and the cross-objections by the assessee against the common order of the learned Commissioner of Income-tax (Appeals)-IV, Kanpur dated February 25, 2019 pertaining to the assessment years 2009-10 and 2011-12. The order of the learned Commissioner of Income-tax (Appeals) was common for the assessment years 2009-10 to 2013-14. 2. Since, the issues are common and connected the appeals and cross-objections were heard together and these are being consolidated and disposed of by this common order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer be restored. C. O. No. 128/Delhi/2019 (the assessee's C. O.) 1. On the facts and in the circumstances of the case and in law, the notice under section 153C issued by the Assessing Officer is bad-in-law, barred by limitation, without jurisdiction and illegal. 2. On the facts and in the circumstances of the case and in law, the Assessing Officer has not complied with the provisions of section 153C and other allied provisions for issuance of notice under section 153C of the Act, therefore, the said notice along with the assessment order passed on the foundation of such notice are liable to be quashed. 3. On the facts and in the circumstances of the case and in law, the addition of unsecured loans of Rs. 16,95,19,950 made by the Assessing Officer under section 68 of the Act on account of alleged unexplained cash credits is erroneous and without jurisdiction. The addition made is beyond the scope/jurisdiction of provisions of section 153C read with section 153A of the Income-tax Act, 1961. 4. On the facts and in the circumstances of the case and in law, the Assessing Officer has erred in making addition of unsecured loans of Rs. 16,95,19,950 on the account of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee raised a preliminary ground and submitted that the assessment framed in the case is bad in law on account of absence of valid and effective approval under section 153D of the Act by the competent authority. The detailed submissions of the learned counsel of the assessee in this regard are as under : 1. The assessment order passed by the Assessing Officer is contrary to the provisions of section 153D of the Act. The provisions of section 153D are as under : 'No order of the assessment or reassessment shall be passed by an Assessing Officer below the rank of the 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.' 1.1. Whenever any statutory obligation is cast upon any authority, such authority 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 pro forma approval. 1.2. The letter addressed by the Assessing Officer to Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. AAFCA8106K 2009-10 to 2015-16 15. M/s. Apple Insurance Brokers P. Ltd. AAECA5320N 2009-10 to 2015-16 16. M/s. Zync Global P. Ltd. AAACZ5235H 2012-13 to 2015-16 17. M/s. Apple Iron Enterprises P. Ltd. AAHCA8642G 2010-11 to 2013-14 18. M/s. Mastermind Trade-in-P. Ltd. AAECM9435E 2009-10 to 2015-16 Draft assessment order received date, i. e., on December 31, 2016 Beyond the time as per internal action plan. And thus having a very little time/almost no time for proper. Examination of facts of the case/further enquiries, etc. Yours sincerely, Sd/ Deputy Commissioner of Income-tax Central Circle Noida For Joint Commissioner of Income-tax Central Range (Meerut) 1.3. The letter addressed by the Joint Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Apple Metal Industries Ltd. AAACD7670E 2009-10 to 2015-16 14. M/s. Apple Buildtech Ltd. AAFCA8106K 2009-10 to 2013-14 15. M/s. Apple Insurance Brokers P. Ltd. AAECA5320N 2009-10 to 2015-16 16. M/s. Zync Global P. Ltd. AAACZ5235H 2012-13 to 2015-16 17. M/s. Apple Iron Enterprises P. Ltd. AAHCA8642G 2010-11 to 2013-14 18. M/s. Mastermind Trade-in-P. Ltd. AAECM9435E 2009-10 to 2015-16 3. 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 the assessment years. The fact of initiation of penalty proceedings, wherever, applicable, must also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company M.G. Metalloy P. Ltd., involving the same approval under section 153D has been considered and allowed in favour of the assessee by the hon'ble Income-tax Appellate Tribunal in I. T. A. No. 3693/Delhi/2018 vide order dated May 8, 2023 M. G. Metalloy P. Ltd. v. Dy. CIT. Therefore, the issue involved in the present appeal stands covered in favour of the assessee-company. 8. Per contra, the learned Departmental representative for the Revenue relied upon the order of the Assessing Officer. 9. Upon careful consideration, we find that the Income-tax Appellate Tribunal on the basis of similar batch of approvals has considered the identical issue for the assessment year 2014-15 and decided the plea raised by the assessee in the assessee's favour. We may gainfully refer to the adjudication of the Income-tax Appellate Tribunal as under : 8. We have carefully considered the rival submissions and material placed on record and case laws cited. The legal objection of transgression of requirements of approval under section 153D is in question which has the effect on the very substratum of the assessment and appellate proceedings. We, thus require to address ourselves int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing into consideration the above points, a copy of the final orders passed be sent to the Joint Commissioner of Income-tax. (d) As many as 18 draft assessment orders including the assessment order of the assessee herein were combinedly placed before the Joint Commissioner of Income-tax in one go seeking statutory approval under section 153D of the Act in relation to multiple assessment years of the each assessee. (e) No reference to the assessment records being sent along with the draft assessment order to the Joint Commissioner of Income-tax stationed long away is found in the communication addressed to Joint Commissioner of Income-tax by the Assessing Officer. (f) The communication letter dated December 30, 2016 have been delivered to the office of Joint Commissioner of Income-tax on December 31, 2016, i. e., the very last date of limitation for completion of the assessment. Subject to these broad observations, the approval was granted vide approval memo F. No. JCIT/Central Range/Meerut/S S/153D/2016-17/1477, dated December 31, 2016. By implication, the Joint Commissioner of Income-tax, while granting the approval, was not privy to seized material, appraisal report, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrence of the designated authority. Inevitably, this evaluation is to be made on basis of material gathered at time of search as well as obtained in the course of the assessment proceeding. The requirement of law is to grant approval not merely as a formality or a symbolic act but a mandatory requirement. 9.5 In the instant case, it is a matter of record by the own admission of Joint Commissioner of Income-tax that the approval granted is merely technical and without appraisal of evidence or enquiries. Thus, fact thus need not be traversed any further. In the backdrop of the unequivocal observations made by the Joint Commissioner of Income-tax, approval granted under section 153D apparently does not meet the requirement of law and, hence, the assessment orders passed in consequence of such non est approval is a nullity in law. The assessment order thus passed is vitiated in law which illegality cannot be cured. 10. In nutshell, the approval under section 153D is repugnant for more than one reasons : (i) the approval accorded under section 153D is admittedly without any occasion to refer to the assessment records and seized materials, if any, incriminating the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiomatic from the plain reading of approval memo that the Joint Commissioner of Income-tax is in complete dark on the facts while being called upon to grant his clearance to the draft assessment orders. It is evident from the Central Board of Direct Taxes Circular No. 3 of 2008, dated March 12, 2008 ([2008] 299 ITR (St.) 8 ) that the Legislature in its highest wisdom made it obligatory that the assessments of search cases should be made with the prior approval of superior authority, so that the superior authority apply their mind on the materials and other attending circumstances on the basis of which the Assessing Officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authority is required to accord approval the respective assessment order. The solemn object of entrusting the duty of approval of the assessment in search cases is that the Additional/Joint Commissioner of Income-tax concerned, with his experience and maturity of understanding, should at least minimally scrutinise the seized documents and any other material forming the foundation of the assessment. It is elementary that whenever any statutory obligation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2015-16 where co-ordinate Bench found total lack of propriety in such statutory approval. There are plethora of decisions of various co-ordinate Benches including Sanjay Duggal v. Asst. CIT I. T. A. No. 1813/Delhi/2019, dated January 19, 2021 ; order dated which have also echoed the same view on similar fact situation. 13. The Commissioner of Income-tax (Appeals) in para 7 of first appellate order has brushed aside the legal objection summarily merely on an inept and indifferent premise that the assessment order makes mention of the approval from Joint Commissioner of Income-tax under section 153D of the Act. The cryptic conclusion drawn by the Commissioner of Income-tax (Appeals) is bereft of any reasons whatsoever and thus cannot be reckoned to be a judicial finding on the point. The observations so made are not tenable in law. 14. In the light of foregoing discussions, we are unhesitatingly disposed to hold that the assessment order for the assessment year 2014-15 in question, in pursuance of a hollow and cosmetic approval accorded under section 153D and undeniably without application of mind, is rendered unenforceable in law and, hence, quashed. 15. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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