9911796707
TMI Blog2024 (9) TMI 1660X X X X Extracts X X X X X X X X Extracts X X X X ..... lidity of the assessment framed by the AO on various grounds. Among other grounds raised by the assessee before the learned CIT-A, one of the grounds was that the approval granted by the ld. Additional Commissioner of Income Tax for framing the impugned assessment was without the application of mind and consequently the impugned assessment framed by the AO is bad in law. However, the ld. CIT-A rejected the ground raised by the assessee vide his order dated 27-03- 2024. 3. Being aggrieved, the assessee has challenged the order of the ld. CIT-A before us on various grounds including the validity of the assessment order being bad in law. 4. The ld. AR before us filed a paper book running from pages 1 to 663 and synopsis of the arguments having 15 pages containing various contentions. Among other contentions, it was submitted by the learned AR that the approval of the ld. Additional CIT obtained under the provisions of section 153D of the Act was without the application of mind and therefore the assessment framed is not sustainable. According to the Ld. AR all the draft orders involving 6 assessment years i.e. assessment years 2015-16 to 2020-21, were sent to the ld. additional CIT f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the provisions of Section 153D can be gathered from the CBDT Circular No. 3 of 2008, dated 12-3-2008 which read as under: "50. Assessment of search cases Orders of assessment and reassessment to be approved by the Joint Commissioner. 50.1 The existing provisions of making assessment and reassessment in cases where search has been conducted under section 132 or requisition is made under section 132A does not provide for any approval for such assessment. 50.2 A new section 153D has been inserted to provide that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the previous approval of the Joint Commissioner. Such provision has been made applicable to orders of assessment or reassessment passed under clause (b) of section 153A in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A. The provision has also been made applicable to orders of assessment passed under clause (b) of section 153B in respect of the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have approved the assessed income at Rs. 1,65,07,560/- had he applied his mind. The addition of Rs. 15,04,35,000/- made by the AO in the instant case is completely out of the scene in the final assessed income shows volumes. 17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessment order without any assessment records what to say about the search material. As mentioned earlier, there are infirmities in the figures of original return of income as well as total assessed income and the Addl. CIT while giving his approval has not applied his mind to the figures mentioned by the AO. Therefore, approval given in the instant case by the Addl. CIT, in our opinion, is not valid in the eyes of law. We, therefore, hold that approval given u/s 153D has been granted in a mechanical manner and without application of mind and thus it is invalid and bad in law and consequently vitiated the assessment order for want of valid approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153D of the Act has examined the draft order, written submission, seized material, sworn statement etc. 6.8 Admittedly, there is no form, or the manner specified under the Act in which the approval needs to be obtained by the AO from the ld. Joint Commissioner which has been specified, but the approval cannot be treated as mere administrative approval as observed by the learned CIT-A as evident in the light of the case laws cited above. The application of mind of the joint Commissioner is sine qua non while granting the approval under the provisions of section 153D of the Act. 6.9 Now the controversy arises whether the ld. Additional Commissioner applied his mind while granting the approval under section 153D of the Act. At the threshold, it can be inferred from the finding of the ld. CIT-A, discussed above, that there was no application of mind. On the contrary, according to the ld. CIT-A, the application of mind was not necessary while granting the approval under the provisions of section 153D of the Act. 6.10 Our view is further fortified about the nonapplication of mind by the ld. additional Commissioner of income tax while granting the approval under section 153D of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted." 6.12 The above observation of the ld. CIT-A does not consonance with the letter written by the AO dated 30 March 2022 for taking the approval from the ld. Additional Commissioner of Income Tax under the provisions of section 153D of the Act. As such, the above finding of the ld. CIT-A does not match with the letter written by the AO for seeking the approval under section 153D of the Act. All these details in fact strongly indicate that there was no application of mind by the ld. additional Commissioner of income tax while granting the approval under section 153D of the Act in the given facts and circumstances. 6.13 Besides the above, we note that the checklist enclosed along with the letter of the AO suffers from graving errors as highlighted below: i. The assessee filed original return of income dated 15 February 2021 whereas the checklist says the original return was filed under section 139(1)/139(4) of the Act dated 9th of January 2021. ii. As per the checklist, the assessee has declared return income of Rs. 7,00,24,760.00 whereas the assessee has declared business loss of Rs. 3,52,59,770.00 only. iii. In the checklist, the reference was made to the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt left the issue of DIN open in view of stay by the Hon'ble Supreme court as discussed above but decided the other relevant issue. With this observation, the impugned ground of appeal raised by the assessee challenging the validity of the assessment order on account of non-application of mind/mechanical approval by the ld. additional Commissioner of income tax while granting the approval under section 153D of the Act is thereby allowed. Hence ground of appeal of the assessee is allowed. 7. In the result, the appeal filed by the assessee is partly allowed. Coming to ITA No. 1080/Bang/2024, an appeal by the assessee. 8. In the present case, the appeal was filed by the assessee against the intimation generated u/s 143(1) of the Act dated 4/11/2022 before the ld. CIT(A) with the delay of 395 days which was not condoned by the ld. CIT(A). Thus, the appeal filed by the assessee was dismissed by the ld. CIT(A) as non-maintainable. 9. Being aggrieved by the order of ld. CIT(A), the assessee filed an appeal before us. The ld. AR before us submitted that the assessee was subject to a search under section 132 of the Act dated 9/2/2024 and, therefore, the assessments for the asst. years ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
