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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 ..... referred by the Revenue against the order dated 22.03.2016 of the Ld. FAA in Appeals No.86 & 87/15-16 arising out of the appeals before the ld. FAA by both the assessee's for the respective assessment years against the orders dated 31.03.2015 passed u/s 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ACIT, Central Circle-3, New Delhi (hereinafter referred to as the Ld. AO). Both the assessee's have filed Cross Objections for the respective assessment years also. 2. The background to these appeals is that search and seizure action was carried in Splendor Group on 22.03.2013 and cases of assessee covered in the search were centralized. Assessee/respondent here before us, Splendor Landbase Ltd. is the flagship company of Splendor Group and assessee/respondent Hridey Vikram Bhatia is the Director. Assessment was concluded in the hands of assessee company by making impugned 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for convenience and to be fair to the attempt of ld. DR in defending the issue we are reproducing the written submissions filed in the case respondent Hridey Vikram Bhatia, in totality:- "Sub: Written Submission on behalf of the Department with regard to issue of approval u/s 153D of the I.T Act, 1961 in the above captioned appeals - Reg. MAY IT PLEASE YOUR HONOURS' 1) That, with regard to the above-captioned appeals, Assessee has moved two Applications both dated 04.01.2025 under Rule 11 & 27 of the Income Tax Act (Appellate Tribunal), Rules, 1963, concerning the issue of invalid approval u/s 153D of the Act. In response to the same, the undersigned most respectfully submits that the contentions with respect to approval u/s 153D of the Act were not raised before the Ld. CIT (A) & even before Hon'ble ITAT prior to applications dated 04.01.2025. The same was raised after about 8 years 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the case being submitted to him for approval under section 153D of the Act. The CBDT guideline is a crucial document that provides insight into the manner in which search assessments are handled by field officers. Hence, by any stretch of imagination, it cannot be inferred that the Range Head was not in a position to independently apply his mind in a judicious manner while granting approval under section 153D of the Act and that the approval granted by the Range Head u/s 153D was in a routine and casual manner without considering the facts of the case. (Copy enclosed as ANNEXURE-A) 5) In addition, it is respectfully submitted that a written statement dated 04/11/2024 from Ms. Rinku Singh, presently CIT (Admn & TPS), Bihar and Jharkhand, and the then JCIT/Range Head, Central Range-1, New Delhi, who granted prior approval under section 153D of the Act categorically stated in the following words - "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finalization of the assessment. The case records were also brought to the Range Head's chamber by Dr. Ekta Chaddha for further discussions, ensuring a thorough and considered review of the matter. This evidence decisively establishes that the Range Head was well aware of the proceedings and duly applied their mind before granting approval. Moreover, the written statement of Ms. Rinku Singh, CIT (Admn & TPS), Bihar and Jharkhand, and the then JCIT, Central Range-1, New Delhi, further corroborates the process of approval under section 153D. Ms. Rinku Singh has confirmed that the cases were regularly discussed with the Assessing Officer during the six-month period before the orders were passed in March 2015. Ms. Rinku Singh also clarified that the Assessing Officer brought the case records for discussion and that there was no legal requirement to record these discussions in the order-sheet or movement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndation and fails to recognize the legislative intent behind Section 153D. In the present case, the issues were similar across the assessment years and hence, it cannot be said that the approval granted by common letter was mechanical, more so when the CBDT guidelines require that the assessments of a group be framed simultaneously for better coordination and to arrive at correct picture & facts of the cases involved therein. Therefore, it is most respectfully submitted that the Assessee's contention is entirely without merit and should be categorically rejected. In view of the foregoing submissions, it is most respectfully submitted that the contentions of the assessee on the issue of approval of u/s 153D of the Act may please be rejected and the order of the AO may please be upheld." 6. We have taken the facts and circumstances and at the outset, reproduce the relevant Rule 11, here below; "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to urge a ground in the appeal filed by the other side, the relevant facts on which such ground is to be founded should be available on record. In the absence of such primary facts, in our opinion, neither the assessee nor the Department can be permitted to urge any ground other than those which are incorporated in the memorandum of appeal filed by the other party. In other words, if the assessee or the Department, without filing any appeal or a cross-objection seeks to urge a ground other than the grounds incorporated in the memorandum of appeal filed by the other side, the evidentiary facts in support of new ground must be available on record." 8. Ld. Counsel has further relied upon the decisions of Delhi Bench in the case of Dy. D.I.T Circle 2 (2) New Delhi Versus M/S Travelport L.P. USA, 2021 (3) TMI 208 and of Hon'ble Ahmedabad Bench in the case of Deputy Commissioner of Income-tax v. Suraj 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of maintainability had attained finality. We also do not find that by such an interpretation, the scope of Rule 27 is expanded or that it would be contrary to section 253 (4), or that it would render the provision relating to cross objections redundant and otiose. In Sundaram & Co. (supra), the High Court observed that the reason for such a rule [Rule 27] was that when a decision is favorable to a person and comes to be challenged by his adversary, the person must be in a position to support the decision on every ground urged before the deciding authority whether or not it found favor, else such a person would be a victim of wrong reasons if no such freedom was given. In fact, the court has further held that even if Rule 27 as under the 1946 Rules had not been enacted, scope for invocation of the principle underlying the rule would still be possible based on principles of natural justice. This 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 Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel has been perused by us and for completeness and convenience we reproduce the same below:- 11. This approval establishes that the Ld. AO sent letter bearing No. ACIT/CC- 3/2014-15/2155 on 30.3.2015 seeking approval of the JCIT and the copy of approval shows it was granted on same day. Then a common approval has been sought and granted by single letter in case of appellant Shri Hridey Vikram Bhatia and M.s, Houston Technologies Pvt. Ltd. in respect of all assessment years i.e. for AY 2007-08 to 2013-14 as against individual approval for each "assessment year" in respect of "each assessee" separately. 12. Then it is established that on same day i.e. 30.3.2013, approvals have also been granted in respect of assessment orders for the assessment years for AY 2006-07 to 2013-14 of other assessee/ respondent M/s Splendor Landbase Limited, by the same Ld. JCIT vide common letter No. JCIT/C, Range- 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 lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l letter should be speaking one and show that approval was granted by application of mind. There is inherent fallacy in the belief of JCIT as mentioned in this letter that " there is no requirement in law creating any evidence for discussions before granting the approval u/s 153D." On the contrary this bench is of firm view that not only as quasi-judicial authority but even in administrative capacity, if an approval is to be granted under a statute for initiating any quasi judicial proceedings then such approval should be self contained piece of evidence that due process of law was followed in grant of approval. Which certainly is not the case here.
17. As a sequel to aforesaid discussion we are inclined to sustain the grounds raised by the respondents and hold the approvals granted in case of both the assessee to be vitiated and thus all the consequential proceedings in the form of impugned assessment orders against the respondents deserve to be quashed. Accordingly appeals of revenue are dismissed and cross objections allowed, with consequences to follow as per determination of grounds in favour of respondents.
Order pronounced in the open court on 07.03.2025. X X X X Extracts X X X X X X X X Extracts X X X X
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