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TMI Blog2024 (9) TMI 1666X X X X Extracts X X X X X X X X Extracts X X X X ..... the records, it was found that both the appellants belong to the town Charkhi Dadri in District Bhiwani, Haryana. The date of search in both the cases is 23.08.2017. Their respective search cases were centralized with Central Circle-I, Gurgaon, vide order u/s 127(2) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') passed by PCIT, Hissar on 09.10.2018. As there was certain relevancy between the two appeals of which we could take judicial notice, we considered it appropriate to dispose of them together by this common order. 3. Heard and perused the record. 3.1 The ld. AR in both the appeals had stressed for disposal of the ground raised in the appeals on the issue of invalid approval u/s 153D of the Act. The ld. DR submitted that this is an additional ground and even if it is of pure legal nature, the assessee is required to explain the reasons for failure to raise such ground of appeal before the ld. First Appellate Authority and for which ld. AR have not established anything. 3.2 In this context, we are of the considered view that when a pure question of law goes to the very root of the exercise of the jurisdiction by any judicial or quasi judicial authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raft assessment order. 4.4 As with regard to the ITA No.1400/Del/2023 Ld. AR has submitted that the very fact that by one stroke approval for six assessee was given establishes non-application of mind by the approving authority while Ld. AR representing assessee in ITA No.429/Del/2024, submitted that approval for multiple years is granted under one approval, while each assessment year is independent. 4.5 As with regard to the ITA No.1400/Del/2023 Ld. AR specifically pointed out that the non-application of mind is very much decipherable from the fact that the approving authority has granted a common and composite approval for six assessee involving 30 assessment years. However, in fact, order of assessment for AY 2012-13 in the case of M/s Makrania group Gum & Chemicals arising out of search dated 23.08.2017 has already been passed on 15.11.2019 u/s 153A r.w.s. 153A of the Act, vide a separate approval dated 15.11.2019 and a copy of this was filed before us and supplied to ld. DR at the time of arguments. 5. The Ld. AR has relied the following decisions, common for both the appeals:- (i) PCIT vs. Anuj Bansal (2023) 117 CCH 0050 Del HC, (ii) PCIT vs. Shiv Kumar Nayyar (2024) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese assessee along with the relevant assessment records to the approving authority and based upon the same, the approvals have been given and, thus, the ld. DR has distinguished the case of the assessee with the case law relied by the ld. AR. 6.1 It is further submitted by the ld. DR that from the content of approval letter, it is evident that the approving authority has accorded approval only after 'considering' all the issues appearing from the material on record and it was submitted that the use of word 'considering' is sufficient to indicate application of mind and the approval orders need not be elaborate or descriptive, but, should only show that the approval is not accorded in a mechanical manner. 6.2 It was submitted that while granting approval the concerned authority has mentioned that proper opportunity of being heard was given to the assessee and all issues appearing from the material on record were duly examined and relevant copies of seized materials were verified before passing the draft order and this shows active application of mind. 6.3 As far as question of granting common approvals, in one stroke is concerned, it was submitted by Ld. DR that in case of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uman limitation was an issue before the Hon'ble Bench. It was submitted that there can be no presumption drawn against approving authority with regard to non- application of mind. 7. We have given thoughtful consideration to the matter on record and the submissions of the ld. representatives and we consider it appropriate to refer to the findings of the coordinate Bench decision in the case of SEH Realtors Pvt. Ltd. (supra) which to a great extent covers the submissions of the ld. DR. In para 8, certain principles with regard to the approval u/s 153D have been acknowledged and we would like to reproduce the same below:- "8. We find as per the scheme of the Act, for framing search assessments, the Ld. AO can pass the search assessment order u/s 153A or u/s 153C of the Act only after obtaining prior approval of the draft assessment order and the conclusions reached thereon from the ld. JCIT, in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the ld. JCIT is a quasi judicial proceeding requiring application of mind by the ld. JCIT judiciously. In order to ensure smooth implementation of the aforesaid provisions, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as argued by the Ld. CIT DR, has no substance. In other words, irrespective of the conclusions drawn in the appraisal report by the Investigation Wing, both the Ld. AO and the ld. JCIT are supposed to independently apply their mind in a judicious way before drawing any conclusions on the contents of the seized documents while framing the search assessments. As far as the argument of the Ld. CIT DR that the details were normally filed by the assessee at the last moment is concerned, the ld. AO has got every right to reject the said replies if not filed within the stipulated time. It is not the case of the revenue that the details were filed by the assessee in the instant case at the last moment. Even if it is so, as stated above, it is the prerogative of the ld. AO to accept the said Page | 8 SEH Realtors Pvt. Ltd letter containing details or reject the same as it was not filed within the stipulated time. On the contrary, if the ld. AO himself grants time to the assessee to furnish the details till the last moment, then no fault could be attributed to the assessee. In such circumstances, the only irresistible conclusion that could be drawn is that the ld. AO is not serious about t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied by the AO for concluding that income was concealed or misreported, was on the basis of incriminating material and its evidentiary value to make addition has been examined by the AO. 10. However, what we find in the two cases before us is that the Assessing Officer had in fact rejected the books of account of both the assessee and, thereupon, proceeded to consider the purchases as bogus and to recalculate the profits. When such is the situation, by mentioning in the approval order that 'relevant copies of seized documents' were verified by AO, before passing the draft order indicates that the approval was given without examining the actual issues and evidences relied in the draft assessment order. 11. The ld. DR has although cited certain distinguishing facts with regard to the decisions relied by the ld. AR, however, we are of the considered view that as far as the proposition of law is concerned, one thing is certain that the approval order should be speaking and from the same itself, it should be reasonably decipherable that there was application of active mind on the draft assessment order and not merely a passive action of granting the approval in a mechanical manner, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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