TMI Blog2020 (4) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... cal formality without application of mind. Further, as mentioned earlier, there is nothing on record to suggest that the files have in fact moved from Dehradun to Meerut for obtaining approval. Therefore, in our opinion, the mandatory provisions as required u/s 153D has not been complied with. We hold that there is no proper approval given u/s 153D in the instant case for which the assessment orders passed by the AO are not in accordance with law. We, therefore, have no hesitation in holding that the assessments completed by the DCIT do not stand in the eyes of law and, therefore, these orders are treated as null and void. - Decided in favour of assessee. - ITA Nos.48 to 52/DDN/2019, ITA No.130/DDN/2019 - - - Dated:- 30-4-2020 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER For the Assessee : Shri Salil Kapoor, Advocate, Shri Sidharth Kanwar, Advocate, Shri Sumit Lal Chandani, Advocate Shri Swaran Singh, CA For the Revenue : Ms Pramita M. Biswas, CIT, DR ORDER PER R.K. PANDA, AM: ITA Nos.48 to 52/DDN/2019 filed by the assessee are directed against the common order dated 28th March, 2019 of the CIT(A)-4, Kanpur relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 8. M/s Alaknanda Realtors Prop. Smt. Rama Gautam w/o Sh. Sushil Kumar r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 9. M/s Confinite Prop. Sushil Kumar r/o Devbhoomi Institutes residential flats, Manduwala, Dehradun. 10. M/s Negi Builders Suppliers Prop, Mukesh Negi, r/o Dhalwala near Doon Steel, Rishikesh. 4. The AO further noted that other than the above concerns and their bank accounts, there were certain entities/concerns which are existing concerns doing business, but, their bank accounts were fraudulently used by Mr. Sanjay Bansal who transferred funds of the society and then withdrawn the same for personal use. Those concerns are as under:- 1. M/s Edisons Sales corp, Prop. Smt. Bimal Bansal who is mother of Sh. Sanjay Bansal: 2. M/s Strategic Marketing Pvt. Ltd. 29/3 Rajpur Road Dehradun. 3. Account number 14500100010404 in Federal Bank, Dehradun in Name of Smt. Satyeshwar Dhyani. 4. M/s Wali Gramudyog, Roorkee in the name of trust by Shri Sanjay Bansal. The evidences unearthed and examined during the search action, post-search enquiries and scrutiny proceedings h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced the income of the assesseee to the tune of ₹ 40,20,100/- as per Para 7.3 of his order. 8. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal raising the following grounds:- 1. That the notice issued U/s 153A and /the assessment order passed u/s 153A r.w.s. 143(3) of the Income Tax Act ( Act ) is illegal, bad in law, without jurisdiction and barred by time limitation. 2. That the CIT(A) has grossly erred in law and on facts in upholding the assessment order passed by the Assessing officer u/s 153A r.w.s. 143(3) of the Act. 3. That no valid search is conducted on the Appellant, hence the notice issued u/s 153 A of the Act is illegal, bad in law and without jurisdiction. Thus, the order passed u/s 153A r.w.s. 143(3) of the Act is also illegal bad in law and without jurisdiction. 4. That the assessment order passed without valid approval U/s 153D of the Act is illegal, bad in law and without jurisdiction and the CIT(A) has erred in law and on facts in upholding the same. 5. That the alleged approval u/s 153D of the Act is illegal, bad in law and without any application of mind and the Assessment order passed without obt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law and on facts in upholding the additions of ₹ 33,01,340 /- for the relevant Assessment Year as against the returned income at Nil. The addition is illegal, bad in law and arbitrary without considering the explanations/ evidences available on record and based upon mere surmises and conjectures. 18. That having regard to the facts and circumstances-of the case, AO/CIT(A) has erred in recording incorrect facts and findings and without providing the alleged adverse material used against the appellant, without providing opportunity of cross examination and without considering the submissions and evidences of the appellant. 19. That CIT(A) has erred in upholding the disallowance of ₹ 178/- on account of interest paid on OD account. The addition is illegal, bad in law and arbitrary without considering the explanations/ evidences available on record and based upon mere surmises and conjectures. 20. That CIT(A) has erred in upholding the of ₹ 3,20,000/- on account of depreciation on building. The addition is illegal, bad in law and arbitrary without considering the explanations/ evidences available on record and based upon mere surmises and conjectures. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the learned CIT(A) in confirming the assessment is based on misconceived and erroneous assumption and on non existent facts and hence is unsustainable in law. 31. That the evidence filed and materials available on record have not been properly construed and judiciously interpreted, hence the addition/disallowance made are uncalled for. 32. That the observation and the additions by the AO and by the CIT(A) made are unjust, illegal, arbitrary, bad in law, highly excessive and based on surmise conjecture. 33. That interest U/s 234A, 234B and 234C of the Income Tax Act, 1961 has been wrongly and illegally charged and has been wrongly worked out. 34. That the applicant craves leave to add, amend, alter and/or delete any of the above grounds of appeal at or before the time of hearing. 9. Identical grounds have been taken by the assessee for other years. 9.1 These appeals were heard on the preliminary issue of validity of the assessment in absence of proper approval given by the Addl.CIT, Central Range, Meerut u/s 153D of the IT Act. 10. The ld. Counsel for the lassessee, at the outset, drew the attention of the Bench to page 37 of the paper book Volume-I which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how many search cases approval to draft assessment order made u/s 153A r.w. section 143(3) and 153C of the Act, 1961 were given on 30th March, 2015 by the Joint/Addl. CIT, Central Circle, Meerut, in terms of the provisions contained in section 153D of the Act, copy of which is placed at paper book page 42 of the consolidated paper book, he submitted that the total draft orders approved on 30th March, 2015 were only 10 (ten). He submitted that the total number of approval obtained as per the letter F. No. Addl. CIT/CR/MRT/153D/2014-15/1158 dated 30.03.2015 totals to 21 assessees and total number of orders covered in such approval is 130. However, in the order passed u/s 7(1) of the RTI Act, 2005 dated 14th February, 2017, it is mentioned to be 10 which itself shows that no valid approval u/s 153D has been given. He submitted that the approval so granted by the Addl.CIT is merely a formality to pass the assessment orders in the cases as recorded in the approval letter. According to the ld. Counsel, it is not possible to go through the files of each and every case on the day of receipt of draft order for approval and granting the approval on the same day. He submitted that the distan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. DR, on the other hand, strongly challenged the submissions made by the ld. Counsel for the assesseee. She submitted that the AO has passed the order after obtaining prior approval of the JCIT/Adddl.CIT and due process of law has been followed. Therefore, the assessee now cannot challenge the manner of approval obtained from the Addl.CIT/JCIT by the AO. She submitted that nowhere the AO has taken cognizance of the reply which the assessee claims before the Tribunal was furnished on 30th March, 2015. She submitted that this was only a dilatory tactice adopted by the assessee in order not to comply with the show cause notice dated 24th March, 2015 issued by the AO. She submitted that the AO accepted the reply furnished by the assessee on 26th March, 2015, incorporated the same in the draft assessment order which was approved by the JCIT/Addl.CIT, Central Range, Meerut u/s 153D on 30th March, 2015. The final assessment order was issued by the AO and received by the assessee on 30th March, 2015. Therefore, not only approval was granted by the JCIT/Addl.CIT, Central Range, Meerut u/s 153D in accordance with the provisions of the IT Act, but, there was adequate application of mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding Kindly refer to the subject cited above. 2 In this context, it is submitted that in compliance to your directions the Draft Assessment Orders in the following cases u/s 153A of the I T Act 1961 are being submitted for your kind perusal and necessary approval. Sl.No. Name of the assessee PAN Asstt. Years 1. Sh. Sanjay Bansal ACZPB9725A 2007-08 To 2013-2014 2. Uttarakhand Uthan samiti AAAAU1376N 2007-08 To 2013-2014 3. Wali Gram Udhyog sansthan AAAAW1501B 2007-08 To 2013-2014 ; 4. Shri Krishna Educational Trust AAATS 3624 C 2007-08 To 2013-2014 It is requested that approval may kindly be accorded to the draft assessment orders. Yours faithfully, Encl: Case records: Sd/- (Poonam Sharma) Dy. Commissioner of income Tax, Central Circle, Dehradun. 15. We find, Addl.CIT, Central Range, Meerut, gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 to 2013-14 12 Sumer chand and sons AACFS6622C 2007-08 To 2013-2014, 13 Sh. Sanjay Bansal ACZPB9725A 2007-08 To 2013-2014 14 Uttarakhand Uthan samiti AAAAU1376N 2007-08 To 2013-2014 15 Wali Gram Udhyog sansthan AAAAW1501B 2007-08 To 2013-2014 16 Shri Krishna Educational Trust AAATS 3624 C 2007-08 To 2013-2014 u/s 153C Sl.No. Name of the assessee PAN Asstt. Years 01 Rama Gautam ADQPA8706L 2007-08 To 2013-2014 02 Mamta Dandriyal AYDPD5055F 2007-08 To 2013-2014 03 Gulzar Ahmed AFGPA7405Q 2007-08 To 2013-2014 04 Sohan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h available in her office at Dehradun on 30th March, 2015. The Office of the Addl.CIT is situated at Meerut which is about 250 Kms from Dehradun. There is no other record to suggest that the files containing the draft orders were, in fact, moved from the office of the AO at Dehradun to the office of the Addl.CIT at Meerut who went through the same and has given approval with certain amendments. It is not possible on the part of the Addl.CIT to go through the orders in about more than 100 cases on the very same day and give approval. Even if such approval has been given, it can be said that the same is nothing but a technical formality without application of mind. Further, as mentioned earlier, there is nothing on record to suggest that the files have in fact moved from Dehradun to Meerut for obtaining approval. Therefore, in our opinion, the mandatory provisions as required u/s 153D has not been complied with. 17.1 We find identical issue had come up before the Delhi Bench of the Tribunal in the case of Rishabh Buildwell Pvt Ltd. (supra). The Tribunal, after considering the various decisions, quashed the assessment orders by observing as under:- 11. We have heard the argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 to 2015-16 14 M/s Risabh Buildwell Pvt. Ltd. AACCR9776R 2009-10 to 2015-16 15 Srnt. Magan Jain AIMPJ8085G 2009-10 to 2015-16 16 M/s Angel Buildcon Pvt. Ltd. AAFCAI968H 2009-10 to 2015-16 2. A technical approval is accorded to pass assessment orders in the above cases on the basis of the drafts assessment orders submitted for the assessment years in reference years. You are directed to ensure taking into account the seized documents/papers and comments in the appraisal report pertaining to AYs. The fact of initiation of penalty proceedings, wherever, applicable, must also be incorporated in last para of the order. The initiation of correct penalty provisions of I.T. Act u/s 271 (1)(c)/ 271AAB, as per facts of the ease, must be ensured. 3. This office reference no of approving the draft orders shall invariably be quoted in the assessment orders to be passed. A copy of final assessment orders passed in these cases should be sent to this office for record immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to discharge the obligation by application of mind. The approval has to be statutory nature after due application of mind, it should be neither technical nor proforma approval which is envisaged u/s 153D of the Act. Reliance is placed the judgment of Coordinate Bench in the case of M3M India Holdings (ITA 2691/2018). And the judgment of Hon ble High Court of Bombay in the case of Pr CIT vs. Smt. Shreelekha Damani [ ITA no 668 of 2016 Dated: 27th November, 2018 ] is as under: 1. This appeal is filed by the Revenue challenging the judgment of Income Tax Appellate Tribunal ( the Tribunal for short) dated 19th August, 2015. 2. Following question was argued before us for our consideration:- Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that there was no 'application of mind' on the part of the Authority granting approval? 3. Brief facts are that the Tribunal by the impugned judgment set aside the order of the Assessing Officer passed under Section 153A of the Income Tax Act, 1961 ( the Act for short) for Assessment Year 1 of 4 Uday S. Jagtap 668-16-ITXA15=.doc 2007-08. This was on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 153D of the Act was submitted only on 31st 3 of 4 Uday S. Jagtap 668-16-ITXA-15=.doc December, 2010. Hence, there was not enough time left to analyze the issues of draft order on merit. Therefore, the order was approved as it was submitted. Clearly, therefore, the Additional CIT for want of time could not examine the issues arising out of the draft order. His action of granting the approval was thus, a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectly justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted or the approval granted must be recorded. Nevertheless, when the Additional CIT while granting the approval recorded that he did not have enough time to analyze the issues arising out of the draft order, clearly this was a case in which the higher Authority had granted the approval without consideration of relevant issues. Question of validity of the approval goes to the root of the matter and could have been raised at any time. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Apex Court in the case of Sahara India (Firm) v. CIT (supra), we hold that the Joint Commissioner has failed to grant approval in terms of section 153D of the Act i.e., after application of mind but has rather carried out exercise in utmost haste and in a mechanical manner and, therefore, the approval so granted by him is not an approval which can be sustained. Accordingly, assessments in three COs and nineteen appeals of the assessee(s), on identical facts, are liable to be annulled as suffering from the incurable defect of the approval not being proper. Accordingly, we annul the assessment orders in CO Nos, 8 to 10/Jodh/2016 and ITA Nos.325 to 331/Jodh/2016. Thus, all the three Cos and the nineteen appeals of the assessee, as aforesaid are allowed. (emphasis supplied by us) 19. Since the facts of the instant case are identical to the facts of the case cited (supra), therefore, respectfully following the decisions cited above, we hold that there is no proper approval given u/s 153D in the instant case for which the assessment orders passed by the AO are not in accordance with law. We, therefore, have no hesitation in holding that the assessments completed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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