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TMI Blog2025 (3) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority been even aware of the fact of the protective and substantive assessments being made, then it was more likely to have been granted in one letter. Rather if the sequence number of letters granting approval is considered the approval was first granted in case of protective addition and then of substantive addition in case of the company . This certainly shows that unmindful of nature of material relied and nature of additions the approvals have been mechanically granted by the JCIT. What ever attempt is now being made by the department to fill in the lacuna by filing letters of then JCIT who granted the approval is dong more damage to the case of the department because when we take into consideration the letter of then JCIT, with the submission, we find that the said JCIT seems to be still under impression that grant of approval is mere formality and for that reasons the JCIT has stated in this letter that, " It is further noted that Approval letter U/s 153D is 'only a formal' culmination of application of mind, which takes place throughout the assessment period." On the contrary law as stands crystallized is that the approval letter should be speaking one and show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned additions on substantive basis while protective addition was made in hands of Director. Ld. CIT(A) has deleted the substantive additions in the hands of company and resultantly protective additions in hands of director were also deleted and against same the Revenue has come in appeal before this Tribunal. 3. At the time of hearing, the ld. Counsel for respondents has pointed out that both the assessee/respondents have raised an additional ground under Rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963 (hereinafter referred to as 'the Rules') whereby the impugned orders have been challenged on the basis that statutory approval u/s 153D has been granted without application of mind, without perusing the records in a mechanical manner. At the same time, by way of an application under Rule 11 of the Rules, the assessee/respondent has sought indulgence of this Tribunal to adjudicate upon jurisdictional grounds. Pertinent to mention is that the assessee had also filed cross objections raising similar ground. However, the same are filed belatedly with justification for filing delayed CO. 4. Now, taking the Bench across the approval granted in case of the both the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of filing of appeal by the Department. Further, it is pertinent to mention here that the assessee moved the above said Applications wherein reasons for delay of about 8 years are not substantiated by any documentary evidence. Hence, the Applications filed by the Assessee on the issue of approval of u/s 153D of the Act may be not admitted on this ground alone. 2) Further, it is pertinent to mention here that in the applications so filed, the Assessee has also mentioned to have filed Cross Objections (CO) dated 04.01.2025 wherein he has raised the similar contentions regarding approval u/s 153D & in which reasons for delay of about 8 years are explained to be some employees leaving the Assessee, Covid-19 etc. It is pertinent to mention here that such reasons are not even supported by any documentary evidences. It is respectfully submitted that such reasons for inordinate delay are not acceptable for the reason that assessee has been attending the hearings before this Hon'ble Tribunal notwithstanding such reasons as cited by him and never has he shown any inability in presenting his side in the past for such reasons as cited now. Thus, for the reasons mentioned above, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s - "I had access to Appraisal report of Splendor Landbase Group and other seized documents. Case of M/s Splendor Landbase & Mr. Hriday Vikram Bhatia were part of this group. The final orders were passed in these cases in March 2015 and during this period of almost 6 months, these cases were discussed regularly with the concerned Assessing Officer and with due application of mind. The case records were brought along by the Assessing Officer herself for discussion and there was no legal requirement of recording the discussion in order-sheet or movement of files movement register. Also, Statute nowhere prescribes the manner for recording the discussion between the Range-Head and Assessing Officer." (Copy enclosed as ANNEXURE-B) 6) Furthermore, it is respectfully submitted that a written statement dated 04/11/2024 of Dr. Ekta Chaddha, presently Addl. DIT (Systems), Vaishali and the then ACIT, Central Circle 3, New Delhi who passed the assessment order with prior approval of the JCIT (Range Head) in terms of section 153D of the Act, categorically stated in the following words - "The facts of the cases, the findings of the appraisal report, the seized material regarding the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovement register. This emphasizes the procedural compliance followed in obtaining the approval. 8) Furthermore, it is respectfully submitted that each approval must be assessed in light of the specific facts of the case, including the number of issues involved, the nature of those issues, the modus operandi, the number of cases, and the interrelationship among the facts of such cases. In instances where identical issues are involved, with the same modus operandi and cases pertaining to the same assessee, it would not be unreasonable to presume that the approving authority can judiciously apply its independent mind to such cases in a single day. Thus, the Range head approving all or a number of cases of an assessee on a single day ought not to be seen as non-application of mind, particularly when the Range Head has perused the records and engaged in discussions with the Assessing Officer from time to time as per the CBDT guidelines referred above. 9) Furthermore, it is respectfully submitted that the assessee has merely contented that the approval u/s 153D of the Act was mechanical in nature, without furnishing any specific evidence to substantiate such a claim (except copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; "11. The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule: Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground. " 7. As with regard to the reasons for admissibility of the legal grounds under Rule 11 and Rule 27 of the Rules, we proceed to examine the issue on the basis of the scope of powers of this Tribunal which section 254(1) of the Act confers to pass an order "as it thinks fit". The Rule 11 only complements the wide powers conferred upon the Tribunal under section 254(1) to render substantive justice to the party before it. Thus we are inclined to accept the submission of ld. Counsel that a constructive reading of section 254(1) of the Act and Rule-11 of Rules makes it amply clear that Tribunal is competent to consider any ground or issue not taken by either of the parties, if the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., [2024] 165 taxmann.com 410 (Ahmedabad - Trib.), wherein the Co-ordinate benches allowed the assessee/respondent to raise a legal and jurisdictional plea facts relating to which were already on record by invoking the powers of Tribunal under Rule 11 of the ITAT Rules irrespective of the fact that the assessee/respondent had not preferred an CO in the appeal filed by the Revenue. 8.1 Regarding right of respondent to raise an additional ground before ITAT under Rule 27 to support the order of the CIT(A), reference can be made to the decision of Hon'ble High Court at Delhi in the case of Sanjay Sawhney v. Principal Commissioner of Income-tax, [2020] 116 taxmann.com 701 (Delhi) wherein while allowing the right of assessee respondent to raise the jurisdictional ground under Rule 27 orally, it was held as under: "14. It emerges that Rule 27 ought not to be applied narrowly and therefore we cannot agree with Mr. Hossain, that by permitting the Appellant- Assessee (respondent before the Tribunal) to invoke Rule 27 before the Tribunal, to challenge the ground decided against him, scope of the subject matter of appeal would get expanded. We must also bear in mind that jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is the essence of the proceedings in appeal before the ITAT which unfortunately has been completely ignored and, instead, the Tribunal has engaged itself in a totally irrelevant issue of the form and structure of the application. " 8.2 Further we find that coordinate benches of the Tribunal in the case of Income-tax Officer v. Bishambhar DayalAgrawal [2024] 161 taxmann.com 1063 (Raipur - Trib.), Asstt. CIT Central Circle-2(1) v. M/s GM Modular Pvt. Ltd.. ITA Nos. 3033 to 3038/MUM/2022 order dated 31/05/2023 and Income-tax Officer v. Parmanand Gupta [2023] 156 taxmann.com 551 (Raipur - Trib.) allowed the assessee to raise a ground of appeal which is jurisdictional in nature and goes to the root of the matter by invoking Rule 27 of the ITAT Rules irrespective of the fact that the ground was not raised before the CIT(A). Thus we are inclined to admit these grounds of respondents. 9. Further on merits of the grounds as contended, we find that Hon'ble Hon'ble jurisdictional High Court in the case of PCIT vs. Shiv Kumar Nayyar in ITA No. 285/2024 (Del), dated 15.05.2024, has decided the similar legal issue in favour of the assessee and against the Revenue. The relevant findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/153D/2014-15/1842 dated 30.3.2015. It is verbatim of approval in case of respondent Hridey Vikram Bhatia. 13. Ld. Counsel has submitted that in between the said approval letters No. JCIT/C, Range-1/153D/2014- 15/1842 dated 30.3.2015 in respect of M/s Splendor Landbase Limited and letter No. JCIT/C, Range-1/153D/2014- 15/1834 dated 30.3.2015 in respect of Vikram Bhatia, there must be other seven approvals on the same day in respect of minimum seven persons. Thus as per ld. Counsel this shows there non application of mind to the facts of each assessee and for each year. 14. Then we find that only draft assessment orders were sent to JCIT without any assessment or search record. The approvals establishes that approving authority has granted the approvals, without reasons or depicting having applied an active mind to the issue involved and the material relied by the AO, but by merely mentioning "Following draft assessment orders are being approved", the impugned approval is granted. 15. Now more particularly in the present set of facts where substantive additions were made in the hands of respondent Splendor Landbase ltd. and protective assessment were made in the hands of its Di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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