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TMI Blog2024 (5) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... on-application of mind on the part of the Learned Addl. Commissioner of Income Tax, Central Range-7, New Delhi. Thus granting approval for all the common years instead of approval u/s 153B for each assessment year separately de horse the rules. The said approval is found to have been given in a mechanical and routine manner. We find that the order issuing authority has not discharged its statutory duties cast upon him even by assigning cogent reasons in respect of the issues involved in the matter. Thus granting approval in the absence of due application of independent mind to the material on record for each assessment year in respect of the assessee s case separately vitiates the entire proceedings; the same is found to be arbitrary and erroneous and therefore, liable to be quashed. We quash the entire proceeding initiated u/s 153C r.w.s 153A of the Act in the absence of a valid approval granted ACIT. Appeal filed by the assessee is allowed. - MR. S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER For the Appellant : Shri Gautam Jain, Adv. Shri Lalit Mohan, C.A. Shri Parth Singhal, Adv. For the Respondent : Shri Anshul, Sr. D.R. ORDER PER MS. MADHUMITA RO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Learned Counsel appearing for the assessee submitted before us that the notice issued under Section 153C of the Act is not valid and the same is liable to be quashed in view of the fact that documents seized from the premises of PSK Group at the most can be said to be relating to the appellant company but not belong to the appellant company. As per the provision of Section 153C(1) of the Act, applicable with the effect from A.Y. 2015- 16, the proceeding under Section 153C of the Act could only be initiated in case of a third party only in the event the AO of the searched party as also the AO of the third party are satisfied that the documents, seized from the premises of the searched belong to the third party. 5. The appellant before us, also filed additional grounds of appeal challenging the order of assessment suffered from jurisdictional error in the absence of valid approval obtained in accordance with law under Section 153D of the Act. As this legal ground preferred before us for the first time, Learned AR relied upon the judgment passed by the Hon ble Supreme Court in the case of National Thermal Power Corporation Ltd. vs. CIT, reported in 229 ITR 383, wherein the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Veena Singh vs. ACIT in ITA Nos.294 295/Del/2022. We find that the Ld DR has not been able to controvert the above submissions made by the Ld AR. Neither has come forward with any judgment contrary to the stand taken by the Ld AR. 10. We have considered the judgment passed by the Hon ble Delhi High Court in the case of Veena Singh vs. ACIT (supra) as relied upon by the assessee. While dealing with this particular issue and finalizing the same in favour of the assessee the Hon ble Court has been pleased to observe as follows: 4. Aggrieved by the assessment order dated 21/12/2018, the assessee preferred an appeal before the CIT (A). The Ld. CIT (A) vide order dated 16/11/2021, partly allowed the Appeal filed by the assessee. Aggrieved by the order of the Ld. CIT(A) dated 16/11/2021, the assessee preferred the present Appeal on the grounds mentioned above. 5. The assessee has raised an additional grounds of Appeal contending that the assessment orders passed by the A.O. and the order of the CIT(A) are void-ab-initio as the assessment orders have been passed consequential to the invalid /illegal approval made u/s 153D of the Act by additional CIT. Since the additional g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erused by you brought to the notice of undersigned. No Name of the assesses PAN KY. Returned Income Assessed Income 1 Ms. Veena Singh AXJPS9588H 2011-12 7,31890/- 14,11,393/- 2 Ms. Veena Sindh AXJPS8588H 2012-13 17,77,440/- 37,27,440/- 3 Ms. Veena Singh AXJPS9588H 2013-14 25,57,350/- 57,87,350/- 4 Ms. Veena Singh AXJPS9588H 2014-15 10,99v220/- 52,29,220/- 5 Ms. Veena Singh AXJPS9588H 2015-16 7,47,730/- 33,69,650/- 6 Ms, Veena Singh AXJPS9588H 2016-17 13,18,830/- 182,31,454/- 7 Ms; Veena Singh AXJPS9588H 2017-18 1165,510/- 2,52,33,8201- 3. Copies of the final assessment orders should be forwarded to this office immediately after passing the orders. Proposal -tor retention of seized- material, should also be forwarded to this, office within time as per IT Act, 1961. Before passing the final order, in case, there is requirement of protecting the- interest of revenue, permission u/s 281B from Pr. CIT(.C)3, New Delhi should be taken: Office notice indicating additions in relevant assessment years should be indicated In all Assessment Yean,. A.0 to certify about perusal and verification of data seized in electronic format through working copies having certified hash values as that of ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 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 as no such draft Assessment order has been referred while according the approval u/s 153D of the Act. 11. The provision of Section 153D of the Act envisages prior approval of JCIT before passing the assessment order, for the purpose of ready reference the provisions of Section 153D of the Act is reproduced as under:- Prior approval necessary for assessment in cases of search or requisition. 153D. No order of assessment or reassessment shall be passed by an 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 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:] 48[Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Income Tax was without application of mind and, therefore, not a valid approval in the eye of law. The Tribunal reproduced the observations made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proval 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. 16. 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 had quashed the Assessment Order on the ground of inadequacy in procedure adopted for issuing approval u/s 153D of the Act by expressing discordant note on such mechanical exercise of responsibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have been given in a mechanical and routine manner. We find that the order issuing authority has not discharged its statutory duties cast upon him even by assigning cogent reasons in respect of the issues involved in the matter. Thus granting approval in the absence of due application of independent mind to the material on record for each assessment year in respect of the assessee s case separately vitiates the entire proceedings; the same is found to be arbitrary and erroneous and therefore, liable to be quashed. We are also inspired by the ratio laid down in the Judgment narrated hereinabove passed by the Hon ble Jurisdictional High Court and respectfully relying upon the same with the above observation, we quash the entire proceeding initiated under Section 153C r.w.s 153A of the Act in the absence of a valid approval granted by the Learned Additional Commissioner of Income Tax, Central Range-7, New Delhi. 12. In the result, appeal of the assessee is allowed. 13. Since the order passed by the Learned CIT(A) is quashed, the appeal filed by the Revenue being ITA No.827/Del/2022 for A.Y. 2015- 16 arising out of the same assessment order dated 30.12.2018 has become infructuous whi ..... 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