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TMI Blog2025 (3) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... he said case was similarly worded wherein JCIT has directed the DCIT to ensure the seized material and the findings of the appraisal report to be incorporated in the final assessment order.
ITAT Delhi has observed that such directions clearly proves that the approval given by the JCIT is not a final approval as required u/s 153D of the Act but a conditional approval subject to modifications by the DCIT after receiving of the approval which makes it invalid, qualified, uncertain approval against the mandate of the Act. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961 were issued for the assessment years 2003-04 to 2009-10: Srl. No. Name of the assessee PAN Approval for orders u/s 153D A. Yrs. 1 Shri Ramesh Batta as agent of Mrs. Kavita Ahuja - 2003-04 to 2009-10 2 Mrs. Kavita Ahuja 2003-04 to 2009-10 3. You are directed to pass necessary orders as amended in the above cases for all the relevant assessment years in the hands of Shri Ramesh Barta as agent of Mrs. Kavita Ahuja after taking into account the seized documents/papers and comments in the appraisal report pertaining to the assessee. This may be treated as prior approval in accordance with section 153D. Approval is also accorded for filing notices under section 153A issued to Mrs. Kavita Ahuja. 4. This office letter approving the draft orders may invariably be quoted in the final order. A copy of final order passed in these cases may be sent to this office for record." 4.1 It was submitted that there were total 2 cases and this approval is for the assessment years from 2003-04 to 2009-10 in both the cases thus, approval was granted for total 14 assessment years. The approval in both the cases was sought vide two separate letter dated 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of PCIT v. Sapna Gupta [2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- "each assessment year" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under:- "13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply independent mind to the material on record for "each assessment year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." [Emphasis supplied] 14. During the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above. 18. Therefore, under the facts of the present case, considering the foregoing discussion and the enunciation of law settled through judicial pronouncements discussed hereinabove, we are unable to find any substantial question of law which would merit our consideration. 19. Consequently, the appeal stands dismissed. Pending application(s), if any, are also disposed of. 4.3 He further relied upon the decision of the coordinate bench of ITAT Delhi in the case of Rishabh Buildwell in ITA No. 2122/Del/2018 wherein the Hon'ble bench vide order dt. 10.06.2019 has quashed the assessment order as the approval was conditional. Reliance is also placed on the decision of Hon'ble Orrisa High court in the case of Serajuddin and Co. reported in [2023] 150 taxmann.com 146 (Orissa), wherein the Hon'ble High Court has quashed the assessment order due to mechanical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the JCIT is not a final approval as required u/s 153D of the Act but a conditional approval subject to modifications by the DCIT after receiving of the approval which makes it invalid, qualified, uncertain approval against the mandate of the Act. The categorical observations of the tribunal in the case of Rishabh Buildwell (supra) are extracted as under: 11. We have heard the arguments of both the parties and gone through the record and documents filed before us. For ready reference the entire part of the letter of approval dated 30.12.2016 is reproduced as under: Subject: Prior approval u/s 153 D in the cases of Cloud-9 & Sethi Group regarding. Please refer to your office letter F. No. DCIT/ CC/ GZB/ S&S/153D 2016- 17/2904, 2908 & 2911 dated 28-12-2016 & 30-12-2016 on the above mentioned subject. 2. In the following cases of Cloud-9 & Sethi Group, prior approval u/s 153D of the IT Act, 1961 accorded for passing assessment orders in respect of the assesses for the assessment years as mentioned below: S. No. Name of the assessee PAN A. Yrs. 1 M/s Risabh Buildcon Pvt. Ltd. AACCR7502F 2009-10 to 2015-16 2 M/s R.G.V. Fininvest Pvt. Ltd. AAACR4383G 2009-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed be sent to the JCIT. 13. The Income Tax Act envisages prior approval of the JCIT before passing the assessment order. The provisions read as under: "no order of assessment or reassessment shall be passed by the assessing officer below the rant of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section(1) of Section 153A or assessment year referred to in clause (b) of sub- section (1) of Section 153B except with the prior approval of Joint Commissioner." 14. When the approval given by the JCIT, Meerut is juxtaposed against the directions and provisions of the Income Tax Act pertaining to completion to assessment u/s 153B(1) of the Act, it can be said that the approval given by the JCIT is invalid. The Act envisages that the JCIT's approval before passing of the final order. There is no provision to alter, change, modify, adjust, amend or rework the order once the approval has been accorded. The approval to be given is statutory in nature and legally binding. In the instant case, the approving authority has clearly mentioned that the approval given is a technical approval. Moreover, he has directed the DCIT to ensure the seized ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the Supreme Court and the High Courts in support of its conclusion that the approval whenever required under the law, must be preceded by application of mind and consideration of relevant factors before the same can be granted. The approval should not be an empty ritual and must be based on consideration of relevant material on record. 5. The learned Counsel for the Revenue submitted that the question of legality of the approval was raised by the assessee for the first time 2 of 4 Uday S. Jagtap 668-16-ITXA-15=.doc before the Tribunal. He further submitted that the Additional CIT had granted the approval. The Tribunal committed an error in holding that the same is invalid. 6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks:- "To, The DCIT(OSD)-1 Mumbai Subject : Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-08 reg. Ref : No. DCIT (OSD)-1/CR-7/Appr/2010-11 dt. 31.12.2010 As per thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire records needs to be carried to Meerut from Dehradun and the Addl. CIT has to examine all the material. As mentioned earlier by the ld. AR that there are 14 cases in this group. It is surprising that Addl. CIT has been able to go through the assessment orders, appraisal reports and other related materials for a minimum of 14 cases within such a short period of time more particularly looking to the fact that the entire records must have been shifted from Dehradun to Meerut for the perusal of the Addl. CIT. We use the word "minimum of 14 cases" because this group alone contains 14cases and the Addl. CIT could avail his other files also before him. The assessment orders, in the instant case is of 14 pages, appraisal reports was also to be quite a few pages and the submissions of the assessee would be innumerable. We are not aware about the nature and issues involved in other assessment years. This is physically impossible task which has been admitted to by the ld. Addl.CIT. Consequently, the approval granted in this case is without application of mind. This being so, by respectfully following the principle laid down by the Hon'ble Jurisdictional High Court in the case of Shiv Kuma ..... 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