9911796707
TMI Blog2024 (5) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. On the basis of input out of search action carried by the Economic Offence Wing CID, Bangalore in M/s PSK Finance Solutions Pvt. Ltd. group at Bangalore on 05.08.2015, a search under Section 132A of the Act was conducted at the premises of PSK Finance Solutions Pvt. Ltd. at Bangalore and on the residential premises of the shareholders of the said company at Noida on 08.08.2015 wherein statement of one Mr. Naresh Mohan, Director of PSK Finance Solutions Pvt. Ltd. was also recorded by the Revenue Department under Section 132(4) of the Act on 08.08.2015 at his residential premises at Noida. Certain documents allegedly belonging to the appellant company were found and seized during the search action. Thereafter, the case of the appellant company was centralized with the Central Circle - 28, New Delhi. The case of the searched party namely the entity of PSK Group was also assigned with the same AO and the case of the search of Shri Naresh Mohan and Mithilesh Saxena, too. The Learned AO has recorded satisfaction and conveyed to the Learned AO of the appellant that the documents seized belong to the assessee. After recording the satisfaction for initiating proceedings under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT dated 18.06.2018 along with other 6 matters of different assessment year. In this regard he has drawn our attention to the approval dated 18.06.2018 issued under the signature of the ACIT, Central Range - 7, New Delhi annexed at page 453 to the paper book filed before us. On the other hand the Ld Dr supported the order passed by the authorities below and submitted that the approval so granted is in accordance with law. 7. We have heard the rival submissions made by the respective parties and we have further considered the relevant materials available on record. 8. We have further perused the copy of the approval dated 18.06.2018 issued under the signature of the ACIT, Central Range - 7, New Delhi is annexed at page 453 to the paper book filed before us, the content whereof is as follows: 9. On this aspect the Learned AR submitted that the Common approval is itself bad in law since it has to be granted separately for each assessment year for each assessee and in absence of it, approval so granted is not in accordance with law. He further contended that the approval was granted on same day when the Learned Assessing Officer sought for approval from the Learned Additional Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s Representative relied on the order of the Co-ordinate Bench in the case of Shiv Kumar Nayyar Vs. ACIT in ITA No. 1282 to 1285/Del/2020 dated 26/07/2023 and also the Judgment of the Jurisdictional High Court in the case of Maruti Suzuki reported at 244 ITR 303. 7. The Ld. Departmental Representative submitted that there is no infirmity the approval granted u/s 153D of the Act and the Ld. Additional CIT has applied his mind and further submitted that the facts in the Judgments referred by the Assessee's Representative are distinguishable. The Ld. Departmental Representative further submitted that there is no format for recording the approval, therefore, the assessees Additional Ground is liable to be dismissed. 8. We have heard both the parties and perused the material available on record and gave out thoughtful consideration. For the purpose of adjudicating the issue in hand and for the ready reference the approval accorded by the Additional Commissioner of Income Tax, Central Circle, Range-7, New Delhi dated 21/12/2018 is reproduced as under: E-Z, Jhandewalan Extension New Delhi F. No. Addl. CIT/CR-7/2018-19/1044O Dated: 21.12.2018 To The Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no year wise reasoning in the said approval granted u/s 153D of the Act. (ii) There is only a reference of a letter F No. ACIT/CC-25/2018-19 dated 21.12.2018 of Assistant Commissioner of Income Tax, Central Circle-25, but there is no reference regarding the draft assessment order being sent for approval of the Additional Commissioner of Income Tax. (iii) The letter requesting accord of approval u/s 153D of the Act has been returned by the Assistant Commissioner of Income Tax on 21.12.2018, the Additional Commissioner of Income Tax granted the approval u/s 153D of the Act on the very same date i.e. on 21.1.2018 and the impugned assessment order has also been passed on 21.12.2018. (iv) The approval dated 21.12.2018 was not absolute, while granting the approval u/s 153D of the Act, the Additional Commissioner of Income Tax in Para 3 mentioned as under:- "Office notice indicating additions in relevant assessment years should be indicated In all Assessment Yean,. A.0 to certify about perusal and verification of data seized in electronic format through working copies having certified hash values as that of original hard drives/CDs/ pen drives/mobile data & any other electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retion by the AO. The approval granted under section 153D of the Act should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. There are long line of judicial precedents which provides guidance in applying the law in this regard. 13. At the cost of repetition, it may be reiterated that in the instant case, approving authority did not mention anything in the approval memo towards his/ her process of deriving satisfaction so as to exhibit his/her due application of mind. We may observe that the above approval letter issued by the Addl. Commissioner says that the approval has been granted subject to certain conditions. 14. Plain reading of the letter of approval granted by the Addl. Commissioner, clearly depicts that the Addl. CIT had routinely given approval to the AO to pass the order only on the basis of letter of the Ld. A.O. without any application of mind. From the said approval, it can be easily inferred that the approved has been accorded with certain conditions. Thus, the sanctioning authority had in effect abdicated its statutory functions and delightfully relegated its s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on consideration of relevant material on record. 5. The learned Counsel for the Revenue submitted that the question of legality of the approval was raised by the assessee for the first time before the Tribunal. He further submitted that the Additional CIT had granted the approval. The Tribunal committed an error in holding that the same is invalid. 6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks : "To, The DCIT(OSD)1, Mumbai Subject: Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-08 reg. Ref: No. DCIT (OSD)1/ CR7/Appr/2010-11 dt. 31.12.2010 As per this office letter dated 20.12.2010, the Assessing Officers were asked to submit the draft orders for approval u/s 153D on or before 24.12.2010. However, this draft order has been submitted on 31.12.2010. Hence there is no much time left to analise the issue of draft order on merit. Therefore, the draft order is being approved as it is submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous assessment years as a consequence of such inexplicable approval lacks legitimacy. Consequently, the impugned assessments orders in the captioned appeals are non-est and a nullity and hence the same are quashed. 18. In view of prima facie merits found in the legal objections raised in the Addl. Grounds of the Assessees, we do not consider it expedient to look into the aspects on merits of additions/disallowance as the legal objections on sanction granted under Section 153D of the Act has been answered in favour of the Assessee. Thus the other Grounds raised in the Appeals of the Assessee in both the Appeals have rendered in- fructuous, which do not need any separate adjudication. 19. In the result, the Appeals filed by the Assessee in ITA Nos. 294/Del/2022 and ITA No. 295/Del/2022 are allowed. 11. Upon considering the entire aspect of the matter, we find that the approval has been granted not separately for each assessment year for the assessee whereas the provision of Section 153D of the Act stipulates conditions that no order of assessment or reassessment shall be made by an Assessment Officer below the rank of Joint Commissioner in respect of each assessment year referre ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
