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TMI Blog2025 (3) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an application under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 (ITAT Rules, in short) and raised one additional ground which reads as under: Ground 7: "That, the assessment order dt. 28.12.2010 passed under section 153A r.w.s. 143(3) of the Act by the Assistant Commissioner of Income Tax, Central Circle, Dehradun is illegal & bad in law as the same is passed without valid statutory approval in terms of Section 153D of the Act as the same was granted mechanically and without application of mind." 3. The ld. AR submits that the additional ground now raised is purely a legal ground and goes to the root of the matter thus the same may be admitted and adjudicated first. He placed reliance on the decision of Hon'ble Supreme court in the case of NTPC Ltd. reported in 229 ITR 383 (SC). After considering the submission and looking to the nature of additional ground No. 7 raised by the assessee, we find that in this ground the assessee has challenged the legality of approval granted by the Addl. CIT in terms of section 153D which is purely a legal ground and requires no further verification. Thus, in the interest of justice and in view of the ratio laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to make sure whether additions on account of specified marriage expenses were made in AY 2009-10 or not. It was the submission that such approval is mechanical and ld. Addl. CIT even has not refer the draft assessment orders otherwise he himself could have found that whether any addition towards marriage expenses were proposed in AY 2009-10 or not since he was also supposed to grant approval for AY 2009-10. Further the approval for various assessment years and for two different assessee's was granted by a single order. He placed reliance on the judgement of Hon'ble Jurisdictional High Court in the case of PCIT Vs. Shiv Kumar Nayyar in ITA No. 285/2024 wherein the Hon'ble jurisdictional high court vide order dt. 15.05.24 in para 09-18 has held as follows: 9. We have heard the learned counsels appearing on behalf of the parties and perused the record. 10. Before embarking upon the analysis of the factual scenario of the instant appeal, we deem it apposite to examine the underlying intent of the relevant provision of the Act i.e., Section 153D, which is culled out as under:- "153-D. Prior approval necessary for assessment in cases or requisition.--No order of assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A." [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately. 13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC Online Ori 992] to understand the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically noting that the approval was granted on the same day when the draft assessment orders were sent, has observed as under:- "10. We have gone through the approval granted by the ld. Addl. CIT on 30.12.2018 u/s 153D of the Act which is enclosed at page 36 of the paper book of the assessee. The said letter clearly states that a letter dated 30.12.2018 was filed by the ld. AO before the ld. Addl. CIT seeking approval of draft assessment order u/s 153D of the Act. The ld. Addl. CIT has accorded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt. Neetu Nayyar. It is also pertinent in this regard to refer to pages 68 and 69 of the paper book which contains information obtained by Smt. Neetu Nayyar from Central Public Information Officer who is none other than the ld. Addl. Commissioner of Income-tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page 36 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P filed by the revenue. It was the submission that the approval granted in assessee's case was similar to the approval granted in the case of Shiv Kumar Nayyar (supra) and also in the Rishabh Buildwell (supra) and on this ground the approval being vitiated consequently the assessment order is required to be annulled. 5. In reply, ld. CIT-DR vehemently supported the order of the lower authorities and drew our attention to the approval accorded by the ld. Addl. CIT. It was the submission that the approval letter refers to the records submitted in 7 volumes which was returned by the Addl. CIT along with approval. It was the submission that the Adl. CIT has gone through the assessment records available before him in the case. It was the submission that the Addl. JCIT has applied his mind before making the approval and the same is liable to be upheld. 6. We have considered the rival submissions. In the instant case from the perusal of the approval it is seen that the approval was granted conditionally with certain directions. The approval so given has been reproduced herein above. From the perusal of the same it appears that though the Addl. CIT has granted approval for Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-16 6 Sh. Chander Mohan Sethi AASPS1246A 2009-10 to 2015-16 7 Sh. Gulshan Sethi AASPS1248Q 2009-10 to 2015-16 8 M/s East View Developers P. Ltd. AABCE5324R 2009-10 to 2015-16 9 Sh. Desh Bhushan Jain AAFPJ6467R 2009 10 to 2015-16 10 M/s Max City Developers Pvt. Ltd. AAECM5401A 2009-10 to 2015-16 11 Sh. Sanjeev Jain ACFPJ3817P 2009-10 to 2015-16 12 M/s Sethi Buildwell Pvt. Ltd. AAICS9/42C 2009-10 to 2015-16 13 Sh. Satpal Nagar AAFPN6467M 2009 10 to 2015-16 14 M/s Risabh Buildwell Pvt. Ltd. AACCR9776R 2009-10 to 2015-16 15 Srnt. Magan Jain AIMPJ8085G 2009-10 to 2015-16 16 M/s Angel Buildcon Pvt. Ltd. AAFCAI968H 2009-10 to 2015-16 2. A technical approval is accorded to pass assessment orders in the above cases on the basis of the drafts assessment orders submitted for the assessment years in reference years. You are directed to ensure taking into account the seized documents/papers and comments in the appraisal report pertaining to AYs. The fact of initiation of penalty proceedings, wherever, applicable, must also be incorporated in last para of the order. The initiation of correct penalty provisions of I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional approval subjected to modifications by the DCIT after receiving of the approval which makes it an invalid, qualified, uncertain approval. This is not the mandate of the Act. It has also been laid down that whenever any statutory obligation is cast upon any authority, such authority is legally required to discharge the obligation by application of mind. The approval has to be statutory nature after due application of mind, it should be neither technical nor proforma approval which is envisaged u/s 153D of the Act. Reliance is placed the judgment of Coordinate Bench in the case of M3M India Holdings (ITA 2691/2018). And the judgment of Hon'ble High Court of Bombay in the case of Pr CIT vs. Smt. Shreelekha Damani [ ITA no 668 of 2016 Dated: 27th November, 2018 ] is as under: "1. This appeal is filed by the Revenue challenging the judgment of Income Tax Appellate Tribunal ("the Tribunal" for short) dated 19th August 2015. 2. Following question was argued before us for our consideration: - "Whether on the facts and circumstances of the case and in law, the tribunal was justified in holding that there was no 'application of mind' on the part of the Authority grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eft to analise the issue of draft order on merit. Therefore, the draft order is being approved as it is submitted. Approval to the above said draft order is granted u/s 153D of the I.T. Act, 1961." 7. In plain terms, the Additional CIT recorded that the draft order for approval under Section 153D of the Act was submitted only on 31st 3 of 4 Uday S. Jagtap 668-16-ITXA-15=.doc December, 2010. Hence, there was not enough time left to analyze the issues of draft order on merit. Therefore, the order was approved as it was submitted. Clearly, therefore, the Additional CIT for want of time could not examine the issues arising out of the draft order. His action of granting the approval was thus, a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectly justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted, or the approval granted must be recorded. Nevertheless, when the Additional CIT while granting the approval recorded that he did not have enough time to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Rishabh Buildwell (supra) of the coordinate bench of Delhi, ITAT delivered under similar facts, the approval u/s. 153D of the Act granted in the impugned appeal by the Addl. CIT, is held to be invalid and the consequential assessment order is hereby annulled. As the appeal of the assessee is allowed by allowing the legal grounds of appeal, other grounds taken on merits by the assessee and by the revenue become academic and not adjudicated upon. Thus, the appeal of the assessee is allowed and of the revenue is dismissed. 7. Since, we have already annulled the assessment framed by the AO in the case of Ramesh Batta, while dealing with the appeal in ITA Nos.2163/Del/2017 & 3137/Del/2017 for A.Y. 2008-09, by holding the approval u/s. 153D of the Act granted by the ld. Addl. CIT as invalid, therefore, the remaining two cross appeals filed by the assessee and revenue in the case of Ramesh Batta as Agent of Kavita Ahuja as mentioned in the cause title above, which also come under the invalid approval of the Addl. CIT, having identical facts thus the by following the observation made in ITA Nos.2163/Del/2017 & 3137/Del/2017 appeal of the assessee is hereby allowed and of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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