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TMI Blog2024 (4) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable on record as no such draft Assessment order has been referred while according the approval u/s 153D of the Act. The approval granted under section 153D of the Act should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. There are long line of judicial precedents which provides guidance in applying the law in this regard. Thus 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 says that the approval has been granted subject to certain conditions. Plain reading of the letter of approval granted by the Addl. Commissioner, clearly depicts that the Addl. CIT had routinely given approval to the AO to pass the order only on the basis of letter of the Ld. A.O. without any application of mind. From the said approval, it can be easily inferred that the approved has been accorded with certain conditions. Thus, the sanctioning authority had in effect abdicated its statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 69C without appreciating that appellant had opted for presumptive taxation u/s 44AD. 2.2 ITA No. 295/Del/2022, (A.Y. 2017-18) 1. The Id CIT(A) erred in facts and circumstances of the Apple case and in law in upholding additions that the AO made u/s 69C of expenses made on foreign travel on an ad-hoc and arbitrary basis, without having any material to precisely pinpoint expenses purported to have been incurred 2. The id CIT(A) erred in facts and circumstances of the case and in law in upholding additions that the AO made under section 68 on protective basis, prior to his making assessment on a substantial basis in case of any assessee and in violation pre-requisites for making addition u/s 68 3. The Id CIT(A) erred in facts and circumstances of the AF case and in law in upholding additions that the AO made under section 69A of cash found-during search 4. The Id CIT(A) erred in facts and circumstances of the case and in law in upholding additions that the AO made under section 69A of demonetized currency found during search. 5. The Id CIT(A) erred in facts and circumstances of the case and in law in only granting partial relief against addition that the AO made under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue, we have heard on the said ground. 6. The Ld. Counsel for the assessee submitted that the assessment order passed u/s 153A/143(3) of the Act is void-ab - initio as the said assessment order has been passed based on combined/consolidated approval issued u/s 153D of the Act by the Additional CIT/Central Range-7 Delhi dated 21/12/2018 without any reference on the order sheet and the same is mechanical one, therefore submitted that the impugned assessment orders and the orders of the Commissioner are liable to be quashed. To support the said submission the Ld. Assessee's Representative relied on the order of the Co-ordinate Bench in the case of Shiv Kumar Nayyar Vs. ACIT in ITA No. 1282 to 1285/Del/2020 dated 26/07/2023 and also the Judgment of the Jurisdictional High Court in the case of Maruti Suzuki reported at 244 ITR 303. 7. The Ld. Departmental Representative submitted that there is no infirmity the approval granted u/s 153D of the Act and the Ld. Additional CIT has applied his mind and further submitted that the facts in the Judgments referred by the Assessee's Representative are distinguishable. The Ld. Departmental Representative further submitted that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obile data any other electronic data, You have also certified to the undersigned that all Information available In AIR/CIB/from other Law Enforcement Agencies have been properly scrutinized by you before finalizing the draft assessment. (Vivek Gupta) Additional Commissioner of Income Tax Central Range -7. New Delhi 9. On plain reading of the above appeal, it is found following:- (i) A common and consolidated approval has been granted for AY 2011-12 to 2017-18 and there is no year wise reasoning in the said approval granted u/s 153D of the Act. (ii) There is only a reference of a letter F No. ACIT/CC-25/2018-19 dated 21.12.2018 of Assistant Commissioner of Income Tax, Central Circle-25, but there is no reference regarding the draft assessment order being sent for approval of the Additional Commissioner of Income Tax. (iii) The letter requesting accord of approval u/s 153D of the Act has been returned by the Assistant Commissioner of Income Tax on 21.12.2018, the Additional Commissioner of Income Tax granted the approval u/s 153D of the Act on the very same date i.e. on 21.1.2018 and the impugned assessment order has also been passed on 21.12.2018. (iv) The approval dated 21.12.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r] Commissioner under sub-section (12) of section 144BA.] Rectification of mistake. 12. It is elementary that whenever any statutory obligation is cast upon any statutory authority, such authority is required to discharge its obligation not mechanically, not even formally but after due application of mind. Thus, the obligation of granting Approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the AO. The approval granted under section 153D of the Act should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. There are long line of judicial precedents which provides guidance in applying the law in this regard. 13. 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 says that the approval has been granted subject to certain conditions. 14. Plain reading of the letter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and came to the conclusion that the same suffered from lack of application of mind. The Tribunal referred to various judgments of the Supreme Court and the High Courts in support of its conclusion that the approval whenever required under the law, must be preceded by application of mind and consideration of relevant factors before the same can be granted. The approval should not be an empty ritual and must be based on consideration of relevant material on record. 5. The learned Counsel for the Revenue submitted that the question of legality of the approval was raised by the assessee for the first time before the Tribunal. He further submitted that the Additional CIT had granted the approval. The Tribunal committed an error in holding that the same is invalid. 6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks : To, The DCIT(OSD)1, Mumbai Subject: Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 153D of the Act. 17. Hence, vindicated by the factual position as noted in preceding paras, we find considerable force in the arguments advanced by the Ld. the Assessee's Representative on the Aditional Ground of Appeal. In our considered opinion the approvals so granted under the shelter of section 153D of the Act does not pass the test of legitimacy. The Assessment orders of various assessment years as a consequence of such inexplicable approval lacks legitimacy. Consequently, the impugned assessments orders in the captioned appeals are non-est and a nullity and hence the same are quashed. 18. In view of prima facie merits found in the legal objections raised in the Addl. Grounds of the Assessees, we do not consider it expedient to look into the aspects on merits of additions/disallowance as the legal objections on sanction granted under Section 153D of the Act has been answered in favour of the Assessee. Thus the other Grounds raised in the Appeals of the Assessee in both the Appeals have rendered in-fructuous, which do not need any separate adjudication. 19. In the result, the Appeals filed by the Assessee in ITA Nos. 294/Del/2022 and ITA No. 295/Del/2022 are a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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