TMI Blog2012 (4) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer as an assessing authority comes to an end the moment the assessee files objections to the draft order and the power to determine the income of the assessee thereafter gets vested in the Inspecting Assistant Commissioner to whom the Income-tax Officer is required to forward the draft order together with objections – in favour of assessee. - ITA Nos. 455 to 458/PN/2010 - - - Dated:- 30-3-2012 - I. C. Sudhir And D. Karunakara Rao, JJ. Appellant by : Sunil Ganoo Respondent : Ann Kapthuama ORDER Per I. C. Sudhir, JM In these appeals, the assessee has questioned first appellate order mainly on two issues. Firstly the validity of assessment order in absence of approval of the Joint Commissioner of Income Tax as provided u/s. 153D of the Act and secondly, the validity of addition of the amount made by A.O. u/s. 69C of the Act on account of unexplained expenditure of interest and brokerage paid by the assessee and other additions. 2. The Ld. A.R. preferred to advance his argument on legal issue. Since it goes to the root of the matter, we allowed the parties to advance their argument on the legal issue to adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Organization and Management Services ) C.B.D.T. vide Page No.2 has prescribed procedure to be followed in case of Block Assessment. A copy thereof has been furnished. The Ld. A.R. submitted that approval of senior authority provided to avoid arbitrary, high pitched assessments being framed and hence the approval is mandatory. The object of enacting Sec. 153 D is one of general policy and hence it is mandatory. In support, he placed reliance on the decision of Hon ble Supreme Court in the case of Kirshan Lal Vs. J K, 1994-(SC2)-GJX-0264-SC. 5. The Ld. A.R. submitted that it is a well settled law that if the Statute prescribes that a particular thing is to be done in a particular manner, it is to be done in that manner only. An order passed without an authority is nullity and the same is to be annulled. He placed reliance on the decision of Hon ble Bombay High Court in the case of CIT Vs. Mrs. Ratnabai N.K. Dubhash, 230 ITR 495 (Bom.). He submitted that the assessment cannot be restored to the A.O to follow the prescribed procedure because the time limit to frame the assessment has already expired and extended time limit cannot be given otherwise the limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the approval of the Joint Commissioner of Income Tax can be cured. She submitted further that Tribunal is also not bound by constraints of limitation and therefore, it is prayed that the file may be set aside to the lower authorities for necessary action. 8. On query raised by the Bench, the Ld. A.R. submitted that the provisions of Sec. 153 D of the Act are mandatory. He submitted that it is a well settled law that in determining the question, as to whether the provision is mandatory or directory, the subject matter, the importance of the provision, the relation of that provision to the general object intended to be secured by the Act, are required to be looked into. He placed reliance on the following decisions : 1) Re Presidential Poll reported in 1974- [SC2]-GJX-0912-SC 2) Govindlal Chhaganlal Patel Vs. The A.P.M.C. reported in 1975-[SC2]-GJX-0313 SC. 3) Krishan Lal Vs. State of J K reported in 1994-[SC2]-GJX- 264-SC (SC) 4) Dhirendra Nath Gorai and others v/s Sudhir Chandra Ghosh others reported in 1964-[SC2]-GJX-0060-SC. 9. The Ld. A.R. submitted that the Sec. 153D has been enacted for the benefit of general class of the assessees in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isition. We thus fully concur with the submission of the Ld. A.R. that provisions laid down u/s. 153D are very much applicable in case of assessment of income of any other person (i.e. the person other than the person searched). Now the issue for our adjudication is as to whether absence of obtaining prior approval u/s. 153D of Joint Commissioner of Income Tax, assessment made u/s. 153 C will make the assessment void or voidable/curable. For a ready reference, provisions laid down u/s. 153D of the Act are being reproduced hereunder : 153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [subsection (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner]. The above provisions u/s. 153 D have been laid down under the heading prior approval necessary for assessment in cases of search or requisition . This heading itself suggests that obtaining prior approval the assessment in cases of search or requisition is necessary. We further not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153C/ 153A of the Act. Condition of prior approval of JCIT u/s. 153D has been put in public interest and not in the interest of a particular person. Thus it cannot be waived by particular person. The use of word shall raises a presumption that a particular provision is imperative but this prima facie inference may be reverted by other consideration such as object and scope of the enactment and consequence flowing from such construction. The revenue has not been able to rebut the above inference by pointing out other consideration like object and scope of the enactment and the consequence flowing from such construction before us. Clause 9 of Manual of Office Procedure, Volume II (Technical) February 2003 issued by Directorate of Income Tax on behalf of Central Board of Direct Taxes, Department of Revenue, Government of India, reads as under : 9. Approval for assessment : An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT. (For the period from 30-6-1995 to 31-12- 1996 the approving authority was the CIT.) The Assessing Officer should submit the draft assessment order for such approval well in time. The submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly in accordance with the directions of the Inspecting Assistant Commissioner. He cannot vary ordepart from the directions given by the Inspecting Assistant Commissioner. Moreover, the requirements of section 144B of the Act re mandatory. The Income-tax Officer has no option but to follow the same. He cannot make the final order on the basis of the draft order without forwarding the same to the Inspecting Assistant Commissioner along with the objections and without obtaining the directions of the Inspecting Assistant Commissioner. An assessment made by the Income-tax Officer in violation of the provisions of section 144B of the Act would be an assessment without jurisdiction. In the instant case, the admitted position is that on receipt of the draft order of assessment, the assessee did file objections and the Income-tax Officer completed the assessment himself on the basis of the draft order without forwarding the draft order and the objections to the Inspecting Assistant Commissioner and obtaining directions from him. Such an order, on the face of it, is beyond the powers of the Income-tax Officer under section 143 read with section 144B of the Act and, hence, without jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 275 of the Act is not applicable to the penalty order passed after the case is remanded by an appellate Authority. In the case of Gayatri Textiles Vs. CIT (Supra) non-obtaining of prior approval of I.A.C u/s. 271(1)( c ) (iii) for direction for payment of penalty was held as procedurally defective. The provisions laid down u/s. 153D of the Act under consideration in the present case before us, are different as here the prior approval of Joint Commissioner is not required merely for direction for payment of the due amount of tax but overall approval of the assessment framed by the I.T.O. Thus, the cited decision is not applicable in the present case. In the case of CIT Vs. Sara Enterprises (Supra), the issue was as to whether the bar of limitation contained u/s. 275 of the Act would attenuate or curtail the powers of CIT, vested in him u/s. 263 of the said Act. The Hon ble Madras High Court was pleased to hold that it is not hit by provisions of Sec. 275 of the Act. In Prabu Dayal Amichand Vs. CIT (Supra), the Hon ble High Court of Madhya Pradesh with reference to Sec. 271(1)(c ) of the Act was pleased to hold that a procedural irregularity not involving the question of jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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