TMI Blog2021 (4) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... scussion between the A.O. and JCIT, the JCIT could not make his mind. Hence, this kind of casual approval/technical approval without going to the matter and without applying his mind to the material available on record is not an approval at all. Therefore, A.O. has no jurisdiction to pass the assessment order. In other words, the assessment order passed by A.O. as confirmed by C.I.T.(A) is void, nullity, non-est, hence, cannot be stand in the eye of law. An irregularity in the assessment order may be rectified by remitting back the matter to the assessment. In the case on hand it is not an irregularity in the assessment order, it is a jurisdictional error. The A.O. has no jurisdiction to pass the assessment order unless the JCIT granted approval. This Tribunal is of the considered opinion that this is not a rectifiable error since it is a jurisdictional error and not an irregularity in the assessment proceeding. Moreover, even if the matter is remitted back, the AO cannot do anything better, since time limit provided under the Act has already expired. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of both the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 153D of the Act. Referring to section 153D of the Act , the ld. representative for the assessee vehemently argued that unless the JCIT applies his mind to the material available on record and the draft assessment order as proposed by AO, it cannot be construed as approval as required u/s 153D of the Act. Placing reliance on the order of the Delhi Benches of this Tribunal in Sanjay Dungal Others vs. M/s. ACIT in ITA No. 1813/Del/2019 Ors. (copies of which available in the P.B). Submitted that approval of JCIT is not a mere formality or ritual. It is mandatory requirement of the statutory provision. 3. The ld. representative for the assessee further submitted that since the JCIT has not applied his mind to the facts of the matter and granted only a technical approval, the A.O. has no jurisdiction to pass the assessment order. Therefore, the entire assessment order as confirmed by the C.I.T.(A) is invalid, non-est and void, hence, the assessment order as confirmed by C.I.T.(A) cannot stand in the eye of law. The ld. representative for assessee also placed a copy of the order of this bench of the Tribunal in the Paper Book in case of Tarachand Khatri vs. ACIT in ITA No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al function that can render the assessment invalid. The Act of Administrative Approval by Additional C.I.T. does not take away the quasi-judicial powers which still vests in A.O. Therefore, even if there is some defect in the technical approval granted by the JCIT, the same may not invalidate the order of assessment. 6. We have carefully gone through the orders of both the authorities below in the light of the arguments advanced on both the sides and the material available on record. The issue of approval u/s 153D goes to the very root of the matter. For the purpose of convenience, the provision of section 153D is reproduced herewith. [SECTION 153D. Prior approval necessary for assessment in cases of search or requisition 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 [sub-section (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.] 7. This provision clearly says that no assessment order shall be passed unless it is approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PUR HOLDING ADDITIONAL CHARGE OF RANGE-II, JABALPUR RANGE-SATNA, KATNI, CHHINDWARA AND SAGAR F.No.JCIT/Range/Katni/Mittail/2011-12 Dated: 26.12.2011 To The Asstt. Commissioner of Income Tax, Circle, Katni Sub: Statutory approval of Draft Assessment order u/s 153D in the cases of different assesses of Mittal Group, Katni- Reg. Please refer to your letter No.ACIT/KTE/MITTAL/153D/11-12 dated 23rd December, 2011 forwarding therewith draft assessment orders in Mittal Group of cases for AY 2004-05 to 2010-11: Covering letter date Name of the assessee Assessment year 23.12.2011 1. Katni Bauxite Pvt. Ltd. 2. V.K. Tractors Automobiles P. Ltd. 2004-05 to 2010-11 2004-05 to 2010-11 2. Due to shortage of time, as I am holding charge of six Ranges, it is not possible for me to go into the deep, therefore, the draft assessment orders in the following cases submitted by you are hereby approved u/s 153D as per technical requirement. Case records as received are returned herewith. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04-05 to 2010-11: Covering letter date Name of the assessee Assessment year 15.12.2011 1. Aditya Welfare Trust 2004-05 to 2010-11 2. Vedansh Welfare Trust 2004-05 to 2010-11 3. Vineet Welfare Trust 2004-05 to 2010-11 4. Ankur Welfare Trust 2004-05 to 2010-11 5. C.R. Mittal Sons (HUF) 2004-05 to 2010-11 6. Pawan Kumar Mittal(HUF) 2004-05 to 2010-11 7. Lalit Kumar Mittal (HUF) 2004-05 to 2010-11 8. Suresh Kumar Mittal (HUF) 2004-05 to 2010-11 9. Vijay Kumar Mittal (HUF) 2004-05 to 2010-11 2. Due to shortage of time, as I am holding charge of six Ranges, it is not possible for me to go into the deep, therefore, the draft assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge/Katni/Mittail/2011-12 Dated: 26.12.2011 To The Asstt. Commissioner of Income Tax, Circle, Katni Sub: Statutory approval of Draft Assessment order u/s 153D in the cases of different assesses of Mittal Group, Katni- Reg. Please refer to your letter No.ACIT/KTE/MITTAL/153D/11-12 dated 20th December, 2011 forwarding therewith draft assessment orders in Mittal Group of cases for AY 2004-05 to 2010-11: Covering letter date Name of the assessee Assessment year 20.12.2011 1. Pawan Kumar Mittal(Indl) 2004-05 to 2010-11 2.Suresh Kumar Mittal (Indl) 2004-05 to 2010-11 3. Vijay Marbles Pvt. Ltd. 2004-05 to 2010-11 4. PLM Builders Pvt. Ltd. 2004-05 to 2010-11 5.Trackway Securities Finance Pvt. Ltd. 2004-05 to 2010-11 6. Mittal Tractors Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am withholding the passing of assessment orders till the specific directions are received. I would also like to mention that the time barring date in said assessment orders is 31/12/2011. Hence you are requested to issue clear directions in each and every case assessment year wise. Yours Sincerely, Date: 22/12/2011 (Sanjay Kumar) ACIT-Katni Office of the Assistant Commissioner of Income tax Icome tax Circle Katni, Katni(MP) F.No.ACIT-KTE/Mittal /153D approval/ Camp- Jabalpur, dated the 22Dece. 2011 To The Joint Commissioner of Income tax, Range Katni at Jabalpur. (By name) Sir, Sub:-Approval of Draft assessment order u/s 153A/143(3) in the case of different Assessees of Mittal Group Katni.. Regarding- Ref:- Your office letter no.JCIT/R-Katni/Mittal Group/11-12 dated 20.12.2011- addressed to CIT-II Jabalpur and copy endorsed to me dated 21/12/2011 addressed to me and copy to CIT-II Jabalpur-Clarificationregarding- Please refer to the above. It may be clarified that till 20/12/2011 in 21 cases draft orders were submitted to your office. However, from the letter address to me, I am unable to understand it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re bench, such additions were made. 4. Another point raised is Fixed deposit Receipts in the cases of Ankit/Novas/Nippon. It may be clarified that the case of Nippon is neither assessed at Katni nor where it is being assessed has given by Mittal. As regards this I want to say that the issue of Nippon is beyond the jurisdiction. As regards the Ankit Novas, the draft order is yet to be finalized and the decision is still pending at my end due to the fact that on 20/12/2011 during the course of discussion, it was told to me that the matter is being referred to DI(Inv.) for clarification. Only on receipt of the clarification, the assessment order needs to be finalized. It may further be stated that in the case of Ankit Tracom Pvt. Ltd., the standing counsel had informed telephonically that passing of assessment order is stayed. However, it was made clear that assessment order may be prepared and not to be released. 5 Investment in Jewellery and capital gain on sale of these jewellery items linked to land purchased by the assessee in the name of Shri Kale- First of all, I may made it clear that the capital gain on sale of jewellery was made on account of purity of gold i.e. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments; statements of various employees at the time of search and post sea rch enquiries. The addition was made on account of unaccounted transactions. 8. From the perusal of the letter dated 21/12/2011, it is not clear, whether the assessment orders submitted to your office was approved or otherwise under sec.153D or the instructions are under sec.144A. 9. As per the appraisal report, the proposed additions were more than 125 crores and if there is major deviation from such proposal, as per instructions of the Board, deviation report should be furnished to the Investigation wing. From your above referred letter, it is not clear, whether any deviation report was furnished to the Investigation wing or not. This may also be made clear to me so that with the short time span, I could complete the search seizure assessments. 10. It may be made clear that recently my Sister-in law(Bhabhi) expired on 21 Dec.2011 and due to these time barring cases, I could not even see her during her alling time or otherwise to attend the funeral which was held on 22/12/2011. At the same time, my mother was already a paralytic patient and recently suffered a second paralytic attack. 10. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, since time limit provided under the Act has already expired. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of both the authorities below were set-aside and the entire assessment order as confirmed by C.I.T.(A) are quashed. 14. In the result, all the appeals of the assessee stand allowed. Order pronounced in the open court on 04.03.2021. In Re: Sarika Mittal Ors. v. Asst. CIT (IT(SS)A Nos. 12 to 14/Jab/2018 Ors.) 1. I have perused the Order proposed by my ld. brother, JM, and am principally in agreement therewith in that the impugned assessments fail for want of the necessary approval u/s. 153D. My reasons for the same take a different trajectory and, accordingly, are being stated per a separate, assent order, which is to be read in conjunction with the said order. 2. The appeal raises the issue of maintainability of the impugned assessments in view of the approval u/s. 153D of the Act dated 26/12/2011 by the Joint Commissioner of Income Tax, Jabalpur ( Jt. CIT for short). Section 153D reads as under: 153D. Prior approval necessary for assessment in cases of search or requisition No ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on his approval and, of course, within the time prescribed therefor. That his directions to the AO in the matter were not in clear terms and, besides, did raise concerns, not addressed, is the substance of AO s letter dated 22/12/2011 to the Jt. CIT. The assessment order as passed the said non-approval being manifest from the order granting approval , can therefore only be regarded as not bearing his approval. 3. It was vehemently argued before us on behalf of the Revenue that the approval cannot be regarded as invalid only for want of the approving authority having, as clearly stated therein, not gone into depth , i.e., as much as he would have otherwise, i.e., without the time constraint, preferred to, that being itself a subjective matter, which would vary from person to person. Rather, as the communications exchanged between the two authorities would reveal, there was consideration of and application of mind to the various aspects of the assessment/s. It may, toward this, be relevant to traverse the provision, considering it in light of the legislative intent leading to its enactment. The provision of section 153D was brought on the statute-book by Finance Act, 2007, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar on the issue of an order of assessment/reassessment without prior approval by the Range head in such cases. Where, therefore, the approving authority states of being constrained for time to go into the depth of the matter, it only indicates his non-satisfaction with the draft order. That this nonsatisfaction obtains despite his examination of the various aspects of the assessment/s makes it all the more relevant. The same results from his application of mind and not otherwise. At the same time, he using the same phrase in all the approvals , given at the same time , it could and as it appears, that while he had gone into some depth in some cases, though not satisfied therewith, he might not have in others and, overwhelmed by the volume of work involved in the short span of time available, recused himself so to speak, by issuing technical approvals. Either way, the object and intent of the law gets defeated . Nothing, therefore, turns in law on the fact of deliberations between the assessing and the reviewing authority which Ms. Pradhan, the ld. CIT-DR, was at pains to emphasize before us, as the assessment order/s that came to be finally passed cannot be regarded as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a condition precedent for the exercise of the said power, has been met or not. In the instant case/s as well, it would be a different matter where the Jt. CIT had issued some direction/s to the AO, subject to and on the basis of which he accords his approval. It will not, in that case, be open for an appellate court to review the same or sit in judgment thereon. No criterion for approval , except of course his satisfaction with the draft order, which is in fact implicit as otherwise the exercise (of approval) itself would be rendered meaningless, has been provided by the statute. The requisite of due application of mind is also toward this satisfaction inasmuch as there could be circumstances, as indeed have been found by the Appellate Courts, as in Tarachand Khatri v. Asst. CIT (in ITA No. 21/Jab/2019, dated 17/01/2020), of there being in fact no satisfaction inasmuch as the same could not arise under the given facts and circumstances, as, for example, apparent inconsistencies and anomalies in the approved assessment order. Needless to add, this again can be examined by the Courts only from the stand-point of a prima facie satisfaction of the competent authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be laid down, and that in every case the object of the statute must be looked at. The cases on the subject will be found collected in Maxwell on Statutes, 5th Edn. p. 596 and following pages. When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done. The principle of the Privy Council case was also applied by the Federal Court in Biswanath Khemka vs. King Emperor [1945] F.C.R. 99 and there, as pointed out by this Court, the words of the provision were even more emphatic and of a prohibitory character. The essence of the rule is that where consultation has to be made during the performance of a public duty and an omission to do so occurs, the action cannot be regarded as altogether void, and the direction for consultation may be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essments as well as the notices. He relies upon a decision of the Privy Council in John Lemm vs. Mitchell [1912] A.C. 400, Eyre vs. Wynn-Mackenzie [1896] 1 Ch. 135 and Butcher vs. Henderson [1868] LR 3 QBD 335 in support of his proposition. The last two cases have no bearing upon this matter, but strong reliance is placed upon the Privy Council case. In that case, the earlier action which had been commenced when the Ordinance had abrogated the right of action for criminal conversation, had already ended in favour of the defendant and no appeal therefrom was pending, and it was held that the revival of the right of action for criminal conversation did not invest the plaintiff with a right to begin an action again and thus expose the defendant to a double jeopardy for the same act, unless the statute expressly and by definite words gave him that right. The Privy Council case is thus entirely different. No doubt, under section 6 of the General Clauses Act it is provided that where any Act repeals any enactment, then unless a different intention appears, the repeal shall not affect the previous operation of any enactment so repealed or anything duly done thereunder or affect a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It thus becomes as much integral to the procedure for assessment as is the issue of the notice for reassessment . And, further, in discharge of his quasijudicial functions by the Jt. CIT who, as the Range head, has been for the purpose allowed the requisite powers (see ss. 2(7A), 120(4),124(5), 131, 132, 133). There is, thus, no inconsistency between section 153D, the scope of which has been found as toward improving that quality of the assessments by providing for internal review by the supervisory head (refer para 3), and the powers and duties of the Jt. CIT under the Act. The assessment order/s in the instant case, passed in breach of the qualifying, mandatory condition of its passing, i.e., an approval u/s. 153D, is an invalid order/s, to which no cognizance in law can be given. The plea of the approval thereunder being an administrative approval/action is thus to no moment. As explained in Panchamahal Steel Ltd. v. ITO [1997] 225 ITR 458 (SC), in the context of sec. 144B, the AO becomes practically functus officio after forwarding the draft assessment order along with the assessee s objections to the approving authority, and is to thereafter only follow the direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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