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TMI Blog2024 (7) TMI 1562X X X X Extracts X X X X X X X X Extracts X X X X ..... b initio as the approval u/s 153D of the Act has been granted by the learned Joint Commissioner of Income Tax (Ld. JCIT in short) in a mechanical manner in the instant case. The ground raised by the assessee is reproduced herein below for the sake of convenience:- "1. That approval, as granted by Addl./Joint Commr. of Income Tax u/s 153D of the Income Tax Act, 1961, approving the order of the Assessing officer, in a mechanical manner and without application of mind and consequently the order as passed by the Assessing order in furtherance a such alleged mechanical approval is invalid and bad in law." 3. We have heard the rival submissions and perused the material available on record. A search and seizure operation u/s 132 of the act was carried out on Shahi Exports group, Span Group, U K Paints and Orris Group simultaneously on 16.01.2013. A separate search warrant of authorization u/s 132 of the Act was issued in the name of the assessee also on 16.01.2013. The case of the assessee stood centralized vide order dated 15.07.2013. A notice u/s 153A of the Act stood issued to the assessee and return of income was filed by the assessee on 24.12.2013 for the Asst Year 2013-14 declari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pleaded that this type of approval cannot be treated as a valid approval contemplated u/s 153D of the Act and consequentially, the entire assessment framed in the hands of the assessee for Asst Year 2013-14 requires to be quashed as void ab initio. In support of this argument, the ld AR placed heavy reliance on the decision of the coordinate bench decision of this tribunal in the case of Shiv Kumar Nayyar Vs. ACIT in ITA Nos. 1282 to 1285/Del/2020; ITA No. 1078/Del/2021 and ACIT Vs. Shiv Kumar Nayyar in ITA No. 1867/Del/2021 dated 26.07.2023 wherein, this Tribunal had placed reliance on the decision of the Hon"ble Orissa High Court in case of ACIT Vs. M/s. Serajuddin and Co. in ITA Nos. 39 to 45 of 2022 dated 15.03.2023; decision of Hon"ble Allahabad High Court in the case of PCIT Vs. Subodh Aggarwal in Income Tax Appeal No. 86/2022 dated 12.12.2022 and the decision of the Hon"ble Jurisdictional High Court in the case of ACIT Vs. Anju Bansal in ITA 368/2023 dated 13.07.2023 had quashed the search assessment proceedings as there was no valid approval u/s 153D by the ld JCIT. He also placed on record that this tribunal decision in the case of Shiv Kumar Nayyar has been approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of approval being granted u/s 153D of the Act in a mechanical manner was never raised by the assessee before the ld. CIT(A). The ld. DR also relied on the decision of Hon"ble Karnataka High Court in the case of Rishabchand Bhansali vs DCIT reported in 267 ITR 577 (Kar) and also on the guidelines issued by the Central Board of Direct Taxes (CBDT) dated 22.12.2006 on the subject of Search and Seizure Assessments. 6. At the outset, we find that the decision relied by the ld. DR of Hon"ble Karnataka High Court referred supra is factually distinguishable as it was dealing with the issue of whether it is mandatory on the part of the ld JCIT or ld Additional CIT to give opportunity of hearing to the assessee before granting approval of draft assessment orders under the erstwhile block assessment proceedings in terms of section 158BG of the Act . This is not the issue involved herein in the instant case. The issue here is whether the approval has been granted by the ld. JCIT or ld. Additional CIT u/s 153D of the Act after due application of mind and not the question of granting opportunity to the assessee before granting approval. Hence the reliance placed by the revenue on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application of mind. Even though as vehemently argued by the Ld. CIT-DR, the ld. JCIT is involved with the search assessment proceedings right from the time of receipt of appraisal report from the Investigation Wing, still, the ld. JCIT, while granting the approval u/s 153D of the Act has to independently apply his mind dehors the conclusions drawn either by the Investigation Wing in the appraisal report or by the Ld. AO in the draft assessment order. The copy of the appraisal report submitted by the Investigation Wing to the Ld. AO and ld. JCIT are merely guidance to the Ld. AO and are purely internal correspondences on which the assessee does not have any access. Moreover, the Act mandates the Ld. AO to frame the assessment after getting prior approval from ld. JCIT u/s 153D of the Act. The ld. JCIT getting involved in the search assessment proceedings right from inception does not have any support from the provisions of the Act as no where the Act mandates so. The scheme of the Act mandates due application of mind by the Ld. AO to examine the seized documents independently dehors the appraisal report of the Investigation Wing and seek explanation/clarifications from the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious way after due application of mind or not, in the instant case. We have gone through the approval granted by the ld. JCIT on 27.03.2015 u/s 153D of the Act. The said approval letter clearly states that a letter dated 27.03.2015 was filed by the Ld. AO before the ld. JCIT seeking approval of draft assessment order u/s 153D of the Act. The ld. JCIT has accorded approval for the said draft assessment order on the very same day i.e. on 27.03.2015 for various assessment years for 232 files on a single day. In any event, whether is it humanly possible for an approving authority like the ld. JCIT to grant judicious approval u/s 153D of the Act for all the assessment years on a single day is the subject matter of dispute before us. Further, we find that similar issue has been addressed by the Hon'ble Jurisdictional High Court in the case of PCIT vs. Anju Bansal in ITA 368/2023 order dated 13.07.2023 wherein, under similar circumstances, the Hon'ble Delhi High Court categorically held that statutory approval given by a quasi judicial authority without due application of mind as contemplated in section 153D of the Act would be fatal to the entire search assessment proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, thus ordered accordingly. The ground raised by the Assessee is accordingly allowed". [Emphasis is ours] 14. In this appeal, we are required to examine whether any substantial question of law arises for our consideration. 15. Having regard to the f indings returned by the Tribunal, which are findings of fact, in our view, no substantial question of law arises for our consideration. The Tribunal was right that there was absence of application of mind by the ACIT in granting approval under Section 153 D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B of the Act. 16. We are not inclined to interdict the order of the Tribunal." 10. The ld. AR also placed on record the recent decision of Hon"ble Jurisdictional High Court in the case of PCIT vs Shiv Kumar Nayyar reported in 163taxmann.com9 (Del) wherein it was held that where order of approval u/s 153D of the Act for relevant assessment year was granted by Additional Commissioner who had granted approval for 43 cases on a single day without perusing the draft assessment orders at all and without an independent application of mind, impugned assessment order was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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