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TMI Blog2024 (9) TMI 1679X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act nor endorsed by any decisions. Hence, we find lot of force in the arguments advanced by the Ld. AR in support of the ground raised in the appeal of the assessee. - Shri Saktijit Dey, Hon ble Vice President And Shri M. Balaganesh, Accountant Member For the Assessee : Shri Kapil Goel, Adv. For the Revenue Shri T. James Singson, CIT DR. ORDER PER M. BALAGANESH, A. M. : 1. These are the appeals filed by the assessee in ITA Nos. 594 to 598/Del/2023 for AYs. 2012-13 to 2016-17, arise out of the order of the Commissioner of Income Tax (Appeals)-28, New Delhi [hereinafter referred to as ld. CIT(A) , in short] dated 26.12.2022 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 24.12.2018 by the Assessing Officer, ACIT, Central Circle-33, New Delhi (hereinafter referred to as ld. AO ). 2. Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. The grounds of appeal and the facts relevant for AY 2012-13 are being adjudicated herein and the decision rendered thereon shall apply mutatis mutandis for other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-application of mind and further suffers from apparent a) irrationality and b) arbitrariness. 4. We have heard the rival submissions and perused the material available on record. The assessee is having ongoing business of real estate promoters, developers and project management. The original return of income for assessment year 2012-13 was filed u/s 139(1) of the Act on 29.09.2012, declaring business income of ₹3,19,090/-. A search and action u/s 132 of the act was conducted on 23.07.2015 in different business and residential premises of Shri Deepak Agarwal and Mukesh Kumar and others group of cases based at Delhi. According to revenue, this group was found to be group of entry operators, providing accommodation entries to beneficiaries. The ld. AO had observed in his assessment order that during the course of search and search and seizure action, many incriminating papers/ documents were found related to assessee company. Accordingly, the case of the assessee was centralized with DCIT, Central Circle 13, New Delhi vide order passed u/s 127 of the Act by the ld. PCIT on 27.09.2016. After recording the satisfaction note in terms of Section 153C of the Act, notice u/s 153C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced any books of account either during the course of assessment or during the course of appellate proceedings. The Ld. CIT (A) also observed that assessee company had no specific business premises either owned by it or rented or it had no electricity connection in its name etc. Accordingly, the disallowance of expenditure made by the AO was confirmed by the ld. CIT(A). 6. The Assessee also pleaded before ld. CIT (A) by way of an additional ground that approval u/s 153D of the Act was granted by the Addl. CIT in a mechanical manner without due application of mind by stating that the draft assessment order was submitted by the ld. AO to the Addl. CIT on 24.12.2018 and the approval u/s 153D of the Act was granted by the Addl. CIT on the very same day. It was pleaded that the Addl. CIT had not looked into the seized materials, assessment records, various questionnaires issued by the AO etc. before granting the approval u/s 153D of the Act. This ground stood dismissed by the ld. CIT (A) by holding that the copy of appraisal report given by the Investigation Wing is also forwarded to Addl. CIT, who, being the range head is involved in the search proceedings right from the incep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture as deduction. Hence, the assessee succeeds on this ground on merit. Accordingly, the Ground No. 3 raised by the assessee is allowed. 8. Further, we also find that in the instant case, approval proceedings u/s 153D of the Act by the Addl. CIT being granted to the AO is challenged by the assessee to have been granted in an mechanical manner without due application of mind. It is fact on record that the draft assessment order was placed by the assessee before Addl. CIT for seeking approval u/s 153D of the Act. The evidence placed on record shows that the ld. AO i.e. ACIT, Central Circle, New Delhi was also the AO of various other assesses on whom search assessments u/s 153C of the Act were framed. The approval papers sanctioned u/s 153D of the Act by the Addl. CIT dated 24.12.2018 are enclosed in pages 439 to 440 of the paper book and the same is reproduced herein as under:- 9. From this, it could be seen that the Addl. CIT had granted approval u/s 153D of the Act for various assessment years on a single day by a single consolidated approval. Further, the said approval also categorically states that only draft assessment orders were placed by the ld. AO in all these cases. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal High Court in the case of PCIT vs Shiv Kumar Nayyar reported in 163 taxmann.com 9 (Del) dated 15.5.2024. 11. Per contra, the Ld. DR vehemently argued that the role of ld. Addl.CIT, Central Range is totally different from the role of a Addl. CIT in the normal range. He argued that in a Central Range, the ld. Addl. CIT is involved in the search assessment proceedings right from the time of receipt of appraisal report from the Investigation Wing and is involved with the Ld. AO from time to time while issuing various questionnaires to the assessee. The ld. Addl. CIT in Central Range also examine the seized documents in detail immediately after receipt of the appraisal report and provides able assistance to the Ld. AO about the interpretation of the said seized documents while issuing questionnaires to assessee, examining the replies filed by the assessee and drawing conclusions thereon. Hence, it is very easy for the ld. Addl. CIT to grant approval of the draft assessment order on the same day since he is involved with the assessment proceedings right from the inception. Accordingly, he argued that the objection raised by the Ld. AR has no force. Further, the Ld. DR vehemently arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval proceedings to be granted u/s 153D of the Act by the competent authority. It only says that JCIT/ Addl CIT is also part of the assessment proceedings right from the time of receipt of appraisal report. The said guidelines only reiterate the statutory provisions and the manner in which search assessments are to be framed by the Assessing Officer in the manner known to law. It nowhere even whispers that approval u/s 153D of the Act could be granted by the ld. JCIT / ld. Addl CIT without any application of mind. In any event, in our considered opinion, the CBDT guidelines relied upon by the ld. DR does not have any statutory force. Hence the reliance placed thereon would not advance the case of the revenue. 14. We find as per the scheme of the Act, for framing search assessments, the Ld. AO can pass the search assessment order u/s 153A or u/s 153C of the Act only after obtaining prior approval of the draft assessment order and the conclusions reached thereon from the ld. Addl. CIT, in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the ld. Addl. CIT is a quasi judicial proceeding requiring application of mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Addl. CIT getting involved in the search assessment proceedings right from the receipt of copy of appraisal report, as argued by the Ld. CIT DR, has no substance. In other words, irrespective of the conclusions drawn in the appraisal report by the Investigation Wing, both the Ld. AO and the ld. Addl. CIT are supposed to independently apply their mind in a judicious way before drawing any conclusions on the contents of the seized documents while framing the search assessments. As far as the argument of the Ld. CIT DR that the details were normally filed by the assessee at the last moment is concerned, the ld. AO has got every right to reject the said replies if not filed within the stipulated time. It is not the case of the revenue that the details were filed by the assessee in the instant case at the last moment. Even if it is so, as stated above, it is the prerogative of the ld. AO to accept the said letter containing details or reject the same as it was not filed within the stipulated time. On the contrary, if the ld. AO himself grants time to the assessee to furnish the details till the last moment, then no fault could be attributed to the assessee. In such circumstances, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of mind, inasmuch as the ACIT, who granted approval, failed to notice the said error. 12.1 More particularly, the Tribunal notes that all that was looked at by the ACIT, was the draft assessment order. 13. In another words, it was emphasised that the approval was granted without examining the assessment record or the search material. The relevant observations made in this behalf by the Tribunal in the impugned order are extracted hereafter: 17.1 However, in the present case, we have no hesitation in stating that there is complete non-application of mind by the Learned Addl. CIT before granting the approval. Had there been application of mind, he would not have approved the draft assessment order, where the returned income of Rs. 87,20,580/-, Similarly, when the total assessed income as per the AO comes to Rs. 16,69,42,560/-, the Addl. CIT could not have approved the assessed income at Rs. 1,65,07,560/ - had he applied his mind. The addition of Rs. 15,04,35,000/- made by the AO in the instant case is completely out of the scene in the final assessed income shows volumes. 17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Dugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no hesitation in holding that the approval u/s 153D of the Act has been granted by the ld. Addl. CIT in the instant case before us in a mechanical manner without due application of mind, thereby making the approval proceedings by a high ranking authority, an empty ritual. Such an approval has neither been mandated by the provisions of the Act nor endorsed by the decisions of the Hon'ble Orissa High Court; Hon'ble Allahabad High Court, Hon ble Jurisdictional High Court (Delhi High Court) and by the recent decision of Hon ble Supreme Court referred to supra. Hence, we find lot of force in the arguments advanced by the Ld. AR in support of the ground raised in the appeal of the assessee. Hence the assessment framed for the Asst Year 2012-13 by the ld. AO is hereby declared as void abinitio and is hereby quashed. Accordingly, the Ground No. 2 raised by the assessee in this regard is allowed and other grounds are left open and no opinion is given by us on them. 19. The decision rendered by us hereinabove for Asst Year 2012-13 shall apply mutatis mutandis for Asst Years 2013-14 to 2016-17 also. 20. In the result, all the appeals of the assessee are allowed. Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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