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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 ..... go on the said day. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Appellant : Mr. Sunil Agarwal, Sr. Standing Counsel with Mr. Shivansh B. Pandya, Jr. Standing Counsel, Mr. Viplav Acharya, Jr. Standing Counsel and Mr. Utkarsh Tiwari, Advocates. For the : Respondents : Mr. Tarun Gulati, Sr. Advocate with Mr. Sumit K. Batra, Mr. Manish Khurana, Ms. Priyanka Jindal and Mr. Devansh Garg, Advocates. ORDER 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Approval‟ and Appellate power‟ and thus, the ITAT has erroneously held that the requisite approval has been granted in a mechanical manner. The said submission was, however, vehemently opposed by the learned counsel for the assessee who contended that the mandate of law prescribed under Section 153D of the Act must be scrupulously followed at the time of grant of approval by the concerned authority. According to him, since the approval has not been appropriately granted, the orders of the ITAT deserve to be set aside. 9. We have heard the learned counsel appearing for the parties and perused the record. 10. The brief controversy involved in the present appeals pertain to whether the competent authority has granted approval under Section 153D of the Act in an inappropriate manner, dehors the settled position of law? 11. Recently, in the case of Pr. Commissioner of Income Tax -15 v. Shiv Kumar Nayyar [ITA 285/2024], we had an occasion to deal with an almost identical issue i.e., grant of approval under Section 153D of the Act in a mechanical manner and without application of mind. The relevant discussion of the said decision in Paragraph nos. 10 to 15, is reproduced h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 Section 153A. [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. [Emphasis supplied] 12. A perusal of the discussion extracted hereinabove would lead us to safely conclude that after placing reliance on various judicial pronouncements, this Court was of the opinion that approval under Section 153D cannot be accorded in a casual or mechanical manner. Rather, the said exercise involves due application of mind which must be reflected in the order of approval passed by the concerned statutory authority. 13. In the instant case, with respect to the inappropriate approval accorded by the relevant authority, the ITAT has 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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