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TMI Blog2024 (5) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... R PER: PURUSHAINDRA KUMAR KAURAV, J. 1. The instant appeals have been preferred by the Revenue, assailing two separate orders of the Income Tax Appellate Tribunal ["ITAT"] dated 25.11.2021, whereby, the appeal of the Revenue has been dismissed on the ground of lack of appropriate approval as per Section 153D of the Act. The appeals pertain to Assessment Years ["AYs"] 2009-10, 2010-11 and 2011-12. Since they raise a common issue, hence, the same are being decided by this common order. For the sake of clarity, the facts are being extracted from ITA 243/2023. 2. As per record, the assessee appears to be a Proprietor of a company namely, Tirupati Construction Company and earns business income from the said proprietorship firm. He is additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the Revenue filed an appeal before the ITAT, which held that the assessment orders were themselves vitiated. According to the ITAT, the said orders lacked a valid approval under Section 153D of the Act and thus, no such additions could have been made against the assessee. 7. The Revenue has, therefore, proposed the following substantial questions of law for our consideration: - " I. On the facts and circumstances of the case and in law, the ITAT erred in holding that the approval under Section 153D of the Act was mechanical and invalid, without even going into the merits of additions made by AO? II. On the facts and circumstances of the case and in law, ld. ITAT erred in dismissing Revenue‟s appeal on a mere technical gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the underlyingintent of the relevant provision of the Act i.e., Section 153D, which is culled out as under:- "153-D. Prior approval necessary for assessment in cases or requisition.-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 153-A] or the assessment year referred to in clause (b) of sub-section (1) of Section 153-B, except with the prior approval of the Joint Commissioner : 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 ..... led. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the Assessing Officer should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a categorical finding, which reads as under: - "36. A perusal of the approval sought by the Assessing Officer shows that he has requested to grant necessary approval u/s 153D for the cases completed u/s 153A/143(3) of the Act. A combined perusal of the approval sought by the Assessing Officer, the approval given by the Addl. CIT and the copy of remand report of the Assessing Officer show that there is only some namesake approval given by the Addl. CIT on the very same day on which the Assessing Officer sought approval. The Addl. CIT without verifying the records has given approval in a mechanical manner. This is more so evident from the fact that the opening balance of unsecured loans of Rs.8 Crores was added by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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