TMI Blog2022 (7) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the assessee and therefore did not relate to the assessee. As submitted that non application of mind by approving authority has caused prejudice to the case of the assessee. We noted that the issue involved in the present appeal is duly covered in favour of the assessee as in the case of Shri Naresh Kumar Jain [ 2021 (9) TMI 1080 - ITAT LUCKNOW ] Thus we allow Ground No. 1 of the appeal and annual the assessment order having been passed without approval. Nothing further survives for adjudication nor was any other point argued. - Decided in favour of assessee. - ITA No. 115/LKW/2021 - - - Dated:- 4-7-2022 - SHRI A. D. JAIN , VICE PRESIDENT AND SHRI T. S. KAPOOR , ACCOUNTANT MEMBER Appellant by : Shri Ashish Jaiswal , Advocate Respondent by : Smt. Sheela Chopra , CIT ( DR ) ORDER Per T. S. Kapoor , AM 1. This is assessee's appeal against the order of the ld. CIT(A), Kanpur-4, dated 07.09.2021 for the assessment year 2017-18, raising the following grounds: 1. THAT THE ASSESSMENT FRAMED IS VOID-AB-INITIO AS BEING PASSED ON THE BASIS OF INVALID AND UNLAWFUL APPROVAL U/S 153D BY ADDITIONAL CIT, CENTRAL KANPUR AND ASSESSMENT DESERVE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vited to S. No. 11 where the name of the assessee was mentioned. It was submitted that the ld. CIT, Central Circle has given approval mechanically just to fulfill the administrative requirement and has not applied his mind to each and every case. It was submitted that on the same date of approval dated 30.12.2018 the approving authority was required to go through voluminous pages approximately running into more than 15000 pages including seized material, appraisal report and replies of the assessee. Therefore, it was submitted that the case of the assessee is prejudiced due to mechanical approval granted u/s. 153D of the Act. The ld. AR submitted that failure to conduct any independent enquiry has resulted into making an erroneous addition relating to an RTGS amount mentioned on a loose paper. It was submitted that had the approving authority applied his mind he would have found that RTGS amount mentioned in the loose paper did not relate to the assessee as it was not reflected in the bank account of the assessee. The ld. AR submitted that mandatory provisions of Section 153D are pari materia to provisions of Section 151 where sanction is required for issue of notice u/s. 148 and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, 1961, approval under section 153D of the Act is required to be granted by the JCIT/Addl. CIT. In this regard, the ld. Counsel for the assessee has invited our attention to CDBT Circular 3/2008 , dated 12.3.2008 (APB:672 673). The ld. Counsel for the assessee has further submitted that the Joint Commissioner of Income Tax (the Approving Authority) is required to see and peruse all search material, including the incriminating material, seized document, appraisal report, enquiry made by the Investigation Wing and various enquiries made by the ld. A.O. during the Assessment Proceedings and also the replies submitted by the assessee; that the Joint Commissioner of Income Tax is required to apply his mind on as to whether all search material has been properly appreciated by the A.O. while framing the draft Assessment Order; that the approval cannot be a mere discretion or formality, but is mandatory, being a quasi-judicial function and it should be based on application of mind and proper reasoning; that the facts of this case are identical to the facts contained in the order of ITAT in IT(SS)A No. 639/LKW/2019, in 'Shri Navin Jain vs. Dy. CIT', and therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act, 1961. The JCIT also failed to consider that in contravention to Rules 112(6) and 112(7) of the Income Tax Rules, 1962, and CBDT Search Manual, the signature of independent witnesses were not taken on the aforesaid statement, clearly establishing that the statement recorded has no evidentiary value and supports the retraction of the assessee. d. The JCIT failed to consider that the statement of Shri. Navin Jain purportedly recorded by Shri Vijay Ranjan Sinha, one of the Authorized Officer, has no evidentiary value, since the statement was forcibly recorded out of coercion and subsequently retracted by the assessee within a short span of time. e. The JCIT failed to consider that the AO has not made any enquiry from independent witnesses in relation to retraction and affidavit submitted by the assessee. f. The JCIT failed to observe that although the alleged diary is stated to have been seized on 23.08.2016 but while recording the purported statement of Shri. Navin Jam, questions relating to alleged diary were asked after two days, i.e., on 25.08.2016 without any plausible reasons. The proceedings as recorded in the statement u/s. 132(4) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Rs. 81,00,000/- by treating the same as unexplained money, but the assessee was not found to be the owner of Money . It is humbly submitted that the Money and Bullion are two different class of assets. l. The JCIT failed to consider the fact that margin money/security is always calculated on the value of the transactions in relation to the speculative business/commodity trading business, which was indeterminate at the time of making notings in the diary BK-I, alleged to have been found during the course of search and not on the figure of Profit earned from such trading business Thus, the addition of Rs. 81,00,000/- made by the ld. AO on account of alleged investment by way of providing margin money @ 20% of the alleged speculative profit is based on surmises and conjectures. m. The JCIT received draft assessment order from the AO and granted approval u/s. 153D and the assessment order was also passed on the same date, i.e., on 30.12.2018 in 67 cases. This fact is evident from the copy of approval letter dated 30.12.2018 and copy of assessment order. n. The JCIT also failed to appreciate the fact that the ld. AO failed to conduct any independent enquiry or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a matter of few hours of 30.12.2018, the JCIT had to peruse around more than 17800 pages including seized material, appraisal report and replies of the assessee filed during the assessment proceedings on the same day and many more seized material/replies of other assessees' related to other searches and other groups, which is not possible and against the human probabilities. u. The draft assessment order in respect of each of the assessment year and of each of the assessee is required to be verified and approved by the JCIT as per the provisions of Section 153D of the Income Tax Act, 1961. v. The JCIT passed combined order u/s. 153D with respect to different assessee's/group/searches for different assessment years in 67 cases instead of separate order(s) as envisaged under the provisions of Section 153D of the Income Tax Act, 1961. w. The order u/s. 153D of the Income Tax Act, 1961 dated 30.12.2018 did not specify that he had perused the assessment records/seized material and replies of the assessee. 5. The ld. Counsel for the assessee further submitted that all the above facts clearly show that the assessee's cases are prejudiced due to the mechan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case 11. In view of these facts and circumstances and in view of judicial precedents relied on by Learned AR Ground No. 5 in appeals is allowed and the assessments orders are annulled.... 11. We find that at page 19 of the aforesaid Tribunal order dated 3.8.2021 in the case of 'Shri Navin Jain vs. Dy. CIT' in IT(SS)A Nos. 639 to 641/LKW/2019, wherein the approval dated 30.12.2018 of the ACIT, Central, Kanpur has been reproduced, the name of the assessee, i.e., 'Naresh Kumar Jain' appears at serial number 24. 12. Therefore, as contended by the ld. Counsel for the assessee, the facts of this case are exactly similar to the facts involved in 'Shri Navin Jain vs. Dy. CIT', in IT(SS)A Nos. 639 to 641/LKW/2019, wherein also the approval u/s. 153D of the Act was given through the same letter F. No. Addl. CIT(CR)/KNP/Approval u/s. 153D/2018-19 by the ACIT, Central, Kanpur and the Ground in this regard raised by the assessee was allowed, and the assessment orders were annulled by the Tribunal. While allowing the G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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