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TMI Blog2024 (9) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. We are unhesitatingly disposed to hold that the assessment order for AY 2014-15 in question, in pursuance of a hollow cosmetic approval accorded u/s 153D and undeniably without application of mind, is rendered unenforceable in law and hence quashed. Decided in favour of assessee. - Shri S.Rifaur Rahman, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Amit Goel, CA, Shri Pranav Yadav, Advocate For the Revenue : Shri Subhra Jyoti Chakraborty, CIT DR ORDER PER S. RIFAUR RAHMAN, AM: 1. These six cross appeals have been filed by the Assessee and Revenue against the orders of Learned Commissioner of Income Tax (Appeals)-4, Kanpur [ Ld. CIT(A) , for short], all dated 14.02.2022 for Assessment Years 2011-12 to 2013-14 respectively. 2. All these appeals are interconnected having common issues. All these appeals are heard together and disposed off by this common order. We are taking ITA No.650/Del/2022 as a lead case. 3. Brief facts of the case are, a search and seizure operation under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment or reassessment shall be passed by the assessing officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of Section i53A or assessment year referred to in clause (b) of subsection (1) of Section i53B except with the prior approval of 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 proforma approval. 1.2. The letter addressed by the AO to JCIT seeking his approval is reproduced as under: - F.No. DCIT/cc/Noida/S S/1530/20 16-17/2623 Dated : 30.12.2016 To, The Joint Commissioner of Income Tax, Central Range, Aayakar Bhawan,Bhainsali Ground, Meerut. Sir, Sub: Draft assessment orders u/s 153A1153C/143(3) of the I.T. Act, 1961 in Apple Group (D.O.S 11111/2014)- Approval u/s 153D of the I.T. Act, 1961- regarding. Please find herewith revised list of cases for your kind approval u/s 1530 of the IT Act. Sl.No. Name of the assessee PAN A.Yrs. 1 Sh. Narender Kumar Garg AEKPG6296A 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2015-16 7 Sh. Pawan Kumar Garg AAHPG8132G 2009-10 to 2015-16 8 M/S Apple Industries Ltd. AAGCA9960N 2009-10 to 2015-16 9 M/S Nirman Stelco Pvt. Ltd. AACCN4842Q 2009-10 to 2015-16 10 M/s M. G. Metalloy Pvt. Ltd. AAGCM5789D 2011-12 to 2015-16 11 M/S Promart Retail India Pvt. Ltd. AAFCP8743B 2009-10 to 2015-16 12 M/s Apple Sponge Power Limit. AAFCAI965L 2009-10 to 2015-16 13 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 Pvt.Ltd AAECA5320N 2009-10 to 2015-16 16 M/S Zync Global Pvt. Ltd. AAACZ5235H 2012-13 to 2015-16 17 M/S Apple Iron Enterprises Pvt. Ltd AAHCA8642G 2010-11 to 2013-14 18 M/S Mastermind Trade-in-Private 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 A Yd. The fact of initiation of penalty proceedings, wherever, applicable, must also be incorporated in the last para of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etalloy Pvt. Ltd. (in the matter Apple Buildtech Pvt. Ltd.) ITA No. 4461-44641DEL/2019 - Ruchi Garg ITAT No. ITA Nos. 1436 to 1438 1440/Del/2022 3. Reliance is also placed on the following decisions of Hon'ble jurisdictional Allahabad High Court:- PCIT v Sapana Gupta - 2022 (12) TMI 887 - Allahabad High Court PCIT v Siddharth Gupta - 2022 (12) TMI 1021- Allahabad High Court PCIT v Subhodh Agarwal- 2023 (2) TMI 1072 - Allahabad High Court 4. Reliance is also placed on the following case laws wherein, on similar facts as in the case of the assessee, the approval under section 153D was held to be invalid and consequently the assessment order was held to be null and void:- The Pr. Commissioner of Income Tax Versus Smt. Shreelekha Damani 2018 (11) TMI 1563 - BOMBAY HIGH COURT M/S Inder International Versus the A.C.I.T., Central Circle-II 2021 (6) TMI 416 - ITAT CHANDIGARH Sh. Inder Pal Singh Arora, Sh Sunrinder Pal Singh Kohli v. Dy. CIT, Central Circle, Dehradun - 2021 (6) TMI 933 - ITAT Dehradun Rajesh Ladhani v. Dy. CIT - Central Circle, Agra - 2019 (11) TMI 920 - ITAT Agra Uttarakhand Uthan Samiti v. ITa, Ward -45(5), New Delhi 2020 (4) TMI878 - ITAT Delhi Rishabh Buildwell P. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- 9.5 In the instant case, it is a matter of record by the own admission of JCIT that the approval granted is merely technical and without appraisal of evidences or enquiries. Thus fact thus need not be traversed any further. In the backdrop of the unequivocal observations made by the JCIT, approval granted under Section 1530 apparently does not meet the requirement of law and hence 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 S. 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 hence such approval is in the realm of an abstract approval of draft assessment orders and consequently suffered from total non-application of mind. (ii) approval granted hurriedly in a spur involving voluminous assessments spanning over 5 assessment years admittedly a symbolic exercise to meet the requirement of law. The JCIT himself has made such fact abundantly clear wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing 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 assessment in search cases is that the Additional/ Joint CIT concerned, with his experience and maturity of understanding, should at least minimally scrutinize the seized documents and any other material forming the foundation of Assessment. 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 enjoins 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. At the cost of repetition, it may be rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded under S. 153D and undeniably without application of mind, is rendered unenforceable in law and hence quashed. 15. In view of legal objection answered in favour of the Assessee, the aspects of other objections on jurisdiction or merits of additions/ disallowance does not call for separate adjudication. 16. In the result, the appeal of the Assessee is allowed. 11. Respectfully following the above decision, the facts in the present appeal are exactly similar to the above facts, therefore, we do not see any reason to defer from the above conclusions reached by the Co-ordinate Bench. Accordingly, ground raised by the assessee in this regard is allowed. Since, we have decided ground No.2 in favour of the assessee on the legal issue, ground no.1 with regard to addition u/s 68 of the Act does not survive as the assessment itself is bad in law, hence set aside. Accordingly, appeal filed by the assessee is allowed and Revenue s appeal is dismissed. 12. Since, the facts in other Assessment Years i.e., AYs 2011-12 2012-13 are exactly similar, the findings in Assessment Year 2013-14 are applicable mutatis mutandis. Accordingly, the appeals filed by the assessee are allowed and Revenue are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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