SUMER ASSOCIATES, MUMBAI V. DCIT CEN CIR 5(3), MUMBAI

ITA 4916/MUM/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8916 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 26-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Unexplained expenditure; Search and seizure; Opportunity of being heard; Validity of assessment; Procedural lapse; Competent authority; Block assessment
• Section: 69C; 143(3); 153A; 147; 148; 263; 144; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4916/M/2016 ASSESSMENT YEAR: 2011-12 M/S. SUMER ASSOCIATES, 201, COMMERCE HOUSE, 140, N.M. ROAD, FORT, MUMBAI 400 023 PAN: AAAFS2829R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5(3) (ERSTWHILE THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-36, MUMBAI) R.NO.1906, 19 TH FLOOR, AIR INDIA BUILDING, MUMBAI 400 021 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NISHIT GANDHI, A.R. REVENUE BY : SHRI MANJUNATHA SWAMY, D.R. DATE OF HEARING : 04.10.2018 DATE OF PRONOUNCEMENT : 26.12.2018 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 23.03.2016 PASSED BY LD. CIT(A)-53, MUMBAI AND IT R ELATES TO ASSESSMENT YEARS 2011-12. IN THE MAIN GROUNDS OF APPEAL THE A SSESSEE IS CONTESTING THE DECISION OF LD. CIT(A) IN CONFIRMING THE DISALLOWAN CE OF COST OF CONSTRUCTION TO THE TUNE OF RS.69.50 CRORES. THE ASSESSEE HAS A LSO RAISED ADDITIONAL GROUNDS URGING THEREIN VARIOUS LEGAL ISSUES. THE ADDITIONA L GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 53. MUMBAI [ 'THE CIT (A)'] ERRED IN UPHOLDING THE ASSESSMENT ORDER PASSED BY THE LEARNE D ASSESSING OFFICER ('THE AO') UNDER SECTION 143(3) R.W.S. 153C OF THE INCOME TAX ACT. 1961 ('THE ACT') IN THE CASE OF THE APPELLANT FOR THE RELEVANT ASSESSMENT YEAR. 1.1 WHILE DOING SO THE LD. CIT (A) FAILED TO APPRECIATE THAT: ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 2 (A) THE NECESSARY PRE-CONDITIONS FOR THE INIT IATION AS WELL AS COMPLETION OF AN ASSESSMENT UNDER SECTION 153C OF THE ACT WERE NOT FULFILLED IN THE PRESENT CASE; (B) NO SATISFACTION AS CONTEMPLATED UNDER SECT ION 153C OF THE ACT WAS RECORDED BY THE AO IN THE PRESENT CASE SO AS TO FRA ME AN ASSESSMENT UNDER SECTION 153C OF THE ACT; AND (C) IN ANY CASE, THE DOCUMENTS ON THE BASIS O F WHICH THE ASSESSMENT HAS BEEN FRAMED DID NOT BELONG TO THE APPELLANT AND AS A CONSEQUENCE THE AO HAD NO JURISDICTION AT ALL TO FRAME AN ASSESSMENT U NDER SECTION 153C OF THE ACT. 1.2 WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT F URTHER SUBMITS THAT THE ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 153C O F THE ACT IS UNSUSTAINABLE ALSO BECAUSE THE SAME HAS BEEN PASSED WITHOUT OBTAINING THE NECESSARY, PROPER AND JUDICIOUS APPROVAL AS CONTEMPLATED UNDER SECTION 15 3D OF THE ACT WHICH FACT IS ALSO EVIDENT FROM THE ASSESSMENT ORDER AND ASSESSMENT RE CORDS OF THE APPELLANT INCLUDING THE ORDER SHEET NOTINGS OF THE AO AFTER F RAMING THE SAID ASSESSMENT. 1.3 THE APPELLANT THEREFORE PRAYS THAT THE ASSESSME NT SO FRAMED BY THE AO AND AS AFFIRMED BY THE LD. CIT (A) IS BAD IN LAW AND DESER VES TO BE QUASHED. 2 WITHOUT PREJUDICE TO THE ABOVE GROUNDS ALREADY R AISED, THE APPELLANT SUBMITS THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD. CIT (A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DENYING THE APPLI CATION OF INCOME AMOUNTING TO RS. 69,50,00,0007- TREATED AS ADDITIONAL PROJECT WI P COST SOURCED OUT OF THE INCOME DISCLOSED AT THE TIME OF SEARCH, MERELY ON THE GROU ND THAT NO EXPLANATIONS / SUPPORTINGS WERE FURNISHED BY THE APPELLANT REGARDI NG THE SAME. 2.1 WHILE DOING SO THE LD. CIT (A) FAILED TO APPRECIATE THAT: (A) NO SPECIFIC SHOW-CAUSE NOTICE WAS ISSUED BY THE AO CALLING FOR THE DETAILS OF THE ABOVE APPLICATION OF INCOME INCURRED IN ADDITIO NAL PROJECT WIP COST; (B) NO SPECIFIC DETAILS AS REGARDS THE SAID CL AIM WERE CALLED FOR BY THE AO OR EVEN BY THE LD. CIT (A) AT THE TIME OF ASSESSMENT PROCEE DINGS OR THE APPELLATE PROCEEDINGS; AND (C) IN ANY CASE THE DENIAL OF THE SAID APPLIC ATION OF INCOME INCURRED IN THE FORM OF ADDITIONAL PROJECT WIP COST IS ALSO IN CONTRAVEN TION TO THE SETTLED JUDICIAL POSITION IN THIS REGARD AND ALSO IN COMPLETE IGNORANCE OF TH E NATURE OF THE SAID EXPENDITURE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE FACTS LETTING TO THE CASE ARE STATED IN BRIE F. THE ASSESSEE BELONGS TO SUMER GROUP WHICH IS ENGAGED IN THE CONSTRUCTION BU SINESS. THE REVENUE ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 3 CARRIED OUT SEARCH AND SEIZURE OPERATION IN THE HAN DS OF SUMER GROUP IN THE YEAR 2010. CONSEQUENT THERETO THE PRESENT ASSESSME NT WAS COMPLETED BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE UNDE R SECTION 143(3) READ WITH SECTION 153C OF THE ACT. THE ASSESSING OFFICER DIS ALLOWED COST OF CONSTRUCTION TO THE TUNE OF RS.69.50 CRORES CLAIMED BY THE ASSESSEE AS APPLICATION OF INCOME OUT OF THE INCOME SURRENDERED BY SUMER GROUP DURING THE COURSE OF SEARCH. THE AO ALSO DISALLOWED THE C LAIM OF RS.21.13 CRORES RELATING TO AMOUNT PAYABLE TO MBR & R BOARD. THE L D. CIT(A) CONFIRMED BOTH THE ADDITIONS. 3. WE WOULD FIRST PREFER TO DEAL WITH THE LEGAL ISS UES URGED BY THE ASSESSEE. THE LEGAL ISSUE URGED AS GROUND NO.1.2 STATES THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS UNSUSTAINABLE AS IT HAS BEEN PASSED WITHOUT OBTAINING NECESSARY APPROVAL AS PROVIDED UNDER SECT ION 153D OF THE ACT. IN VIEW OF THE SAME, THE LD. D.R. WAS DIRECTED TO OBTA IN COPY OF APPROVAL, IF ANY, GRANTED UNDER SECTION 153D OF THE ACT. IN RESPONSE THERETO THE LD. D.R. HAS SUBMITTED THE COPY OF LETTER DATED 12.09.2018 WRITT EN BY THE ASSESSING OFFICER TO THE PR. CIT(C)-3. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE LETTER WRITTEN BY THE ASSESSING OFFICER. TO THE PR. CIT (C)-3, AIR INDIA BLDG, NARIMAN POINT, MUMBAI. (THROUGH PROPER CHANNEL) SIR, SUB : APPEAL PROCEEDINGS BEFORE THE HON'BLE ITAT 'E ' BENCH IN THE CASE OF M/S SUMER ASSOCIATES PAN: ( AAAFS2830E ), FOR A.Y 2 011-12-REG. REF: LETTER NO. PR.CIT(C)-3/ITAT 'E' BENCH/2018-19 IN REFERENCE TO LETTER NO.CIT(DR)/ITATO-'E' BENCH/2018-19 DATED 07.09.2019 . KIND ATTENTION IS INVITED TO THE ABOVE. IN REFERENCE TO THE ABOVE REFERRED LETTER, IT IS SU BMITTED THAT I HAVE PERUSED THE CASE RECORDS OF THE ASSESSEE FOR THE RELEVANT ASSES SMENT YEAR, HOWEVER THE SATISFACTION NOTE AND THE APPROVAL GRANTED U/ S 153(D] IN THE CASE IS NOT AVAILABLE IN THE CASE RECORDS OF THE ASSESSEE. EFFO RTS WERE ALSO MADE TO TRACE THE ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 4 SEPARATE FOLDER CONTAINING THE SATISFACTION NOTE AN D THE APPROVAL GRANTED U/S 153(D), HOWEVER NO SUCH FILE IS TRACEABLE IN THIS O FFICE. THE UNDERSIGNED HAS ALSO ENQUIRED FROM THE OFFICE O F THE ADDL.CIT AS TO WHETHER ANY SEPARATE FOLDER WAS MAINTAINED IN HIS OFFICE, H AVING COPY OF THE SATISFACTION NOTE AND APPROVAL GRANTED U/S 153D IN THE INSTANT C ASE FOR THE RELEVANT ASSESSMENT YEAR. HOWEVER IT HAS BEEN INFORMED THAT NO RECORD O F SATISFACTION NOTE OR APPROVAL GRANTED U/S 153D IN THE CASE IS TRACEABLE IN THE OF FICE OF THE ADDL. CIT CR-5. UNDER THE CIRCUMSTANCES THOUGH THE ASSESSING OFFICE R WHO HAD PASSED THE SAID ORDER, WHEN CONTACTED, HAD STATED THAT A SEPARATE F ILE WAS MAINTAINED FOR SATISFACTION NOTE AND APPROVAL GRANTED U/S 153(D) B Y THE ADDL.CIT IN THE CASE, THE SAME IS NEITHER AVAILABLE ON RECORD NOR ANY SUCH FI LE CONTAINING SATISFACTION NOTE AND APPROVAL GRANTED U/S 153D IS TRACEABLE IN THIS OFFICE OR THE OFFICE OF THE ADDL. CIT-CR-5. 4. A PERUSAL OF THE LETTER WRITTEN BY THE ASSESSING OFFICER EXTRACTED ABOVE WOULD SHOW THAT THE SATISFACTION NOTE REQUIRED UNDE R SECTION 153C OF THE ACT AND ALSO THE APPROVAL REQUIRED UNDER SECTION 153D O F THE ACT ARE NOT AVAILABLE IN THE CASE OF RECORDS OF THE ASSESSEE. FURTHER, T HE ASSESSING OFFICER HAS ALSO MADE ENQUIRES WITH THE OFFICE OF ADDITIONAL CIT AND THEY HAVE ALSO INFORMED THAT THEY ARE NOT ABLE TO TRACE THE SATISFACTION NO TE AND APPROVAL GRANTED UNDER SECTION 153D OF THE ACT. 5. UNDER THESE SET OF FACTS, THE QUESTION THAT ARIS ES IS WHETHER THE ASSESSMENT ORDER PASSED BY THE AO WITHOUT OBTAININ G APPROVAL FROM THE HIGHER AUTHORITY AS CONTEMPLATED UNDER SECTION 153D OF THE ACT IS VALID OR NOT. WE NOTICE THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE PUNE BENCH OF ITAT IN THE CASE OF AKIL GULAMALI SOMJI (ITA NO.455 TO 458/ PN/2010 DATED 30.03.2012) AND THE TRIBUNAL HAS HELD THAT THE ASSE SSMENT ORDER PASSED WITHOUT OBTAINING APPROVAL UNDER SECTION 153D OF THE ACT IS NULL AND VOID. 6. THE PROVISIONS OF SECTION 153D OF THE ACT READ A S UNDER: 153D. NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE PAS SED BY AN ASSESSING OFFICER BELOW THE RANK OF JOINT COMMISSIONER IN RES PECT OF EACH ASSESSMENT YEAR REFERRED TO IN CLAUSE ( B ) OF SUB-SECTION (1) OF SECTION 153A OR THE ASSESSMENT YEAR REFERRED TO IN CLAUSE ( B ) OF SUB-SECTION (1) OF SECTION 153B , EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSMENT OR REASSESSMENT ORDER, AS THE CASE MAY BE, IS REQUIRED TO BE PASSED BY THE ASSESSING ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 5 OFFICER WITH THE PRIOR APPROVAL OF THE PRINCIPAL CO MMISSIONER OR COMMISSIONER UNDER SUB-SECTION (12) OF SECTION 144BA . 7. THE ABOVE SAID PROVISIONS STATE THAT THE ASSESSI NG OFFICER WHO IS BELOW THE RANK OF JOINT COMMISSIONER SHALL PASS ASSESSMEN T ORDER ONLY AFTER OBTAINING PRIOR APPROVAL OF THE JOINT COMMISSIONER. AS PER PROVISO TO SECTION 153D, THE CONDITION PRESCRIBED IN THAT SECTION WILL NOT APPLY IF THE ASSESSING OFFICER HAS PASSED THE ORDER WITH THE PRIOR APPROVA L OF PR. COMMISSIONER OR COMMISSIONER UNDER SECTION 144BA(12) OF THE ACT. I N THE INSTANT CASE, WE ARE NOT CONCERNED WITH THE PROVISO TO SECTION 153D AS T HE ASSESSMENT ORDER HAS BEEN PASSED BY THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -36, MUMBAI WHO IS BELOW THE RANK OF JOINT COMMISSIONER. HENCE, THE PRIOR APPROVAL OF THE JOINT COMMISSIONER IS REQUIRED TO B E OBTAINED BEFORE PASSING THE ASSESSMENT ORDER AS PER THE PROVISIONS OF SECTI ON 153D OF THE ACT. WE NOTICE THAT THE PUNE BENCH OF THE TRIBUNAL HAS CONS IDERED THIS ISSUE IN A DETAILED MANNER AND HENCE, FOR THE SAKE OF CONVENIE NCE WE EXTRACT BELOW THE ORDER PASSED BY PUNE BENCH IN THE ABOVE SAID CASE. IN THESE APPEALS, THE ASSESSEE HAS QUESTIONED FIRS T APPELLATE ORDER MAINLY ON TWO ISSUES. FIRSTLY THE VALIDITY OF ASSESSMENT ORDER I N ABSENCE OF APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX AS PROVIDED U/S. 153D OF THE ACT AND SECONDLY, THE VALIDITY OF ADDITION OF THE AMOUNT MADE BY A.O. U/S . 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED EXPENDITURE OF INTEREST AND BROKERAGE P AID BY THE ASSESSEE AND OTHER ADDITIONS. 2. THE LD. A.R. PREFERRED TO ADVANCE HIS ARGUMENT ON LEGAL ISSUE. SINCE IT GOES TO THE ROOT OF THE MATTER, WE ALLOWED THE PARTIES TO A DVANCE THEIR ARGUMENT ON THE LEGAL ISSUE TO ADJUDICATE IT FIRST. 3. THE CONTENTION OF THE LD. A.R REMAINED THAT WHIL E FRAMING ASSESSMENT U/S. 153 C OF THE ACT AGAINST THE ASSESSEE, THE ITO HAS FAILE D TO OBTAIN NECESSARY APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX TO THE IMPUGNE D ASSESSMENT ORDERS AS PROVIDED U/S. 153 D OF THE ACT, HENCE ASSESSMENT OR DERS IN QUESTION ARE BAD IN LAW AND DESERVE TO BE ANNULLED. HE SUBMITTED THAT SEC. 153 C OF THE I.T. ACT 1961 PRESCRIBES THAT THE INCOME OF THE PERSON TO WHOM NO TICE HAS BEEN SERVED U/S. 153 C SHALL BE ASSESSED IN ACCORDANCE WITH THE PROVISIO NS OF SEC. 153 A OF THE I.T. ACT 1961. THEREFORE, THE ASSESSMENT HAS TO BE FRAMED U /S. 153 A OF THE ACT AND NOT U/S. 153 C. THE FIRST PROVISO AS WELL AS CLAUSE (I I) OF SECOND PROVISO TO SEC. 153 B (1) SPECIFY THE TIME LIMIT FOR COMPLETION OF ASSESSMENT U/S. 153A IN RESPECT OF PERSON TO WHOM NOTICE IS ISSUED U/S. 153 C OF THE ACT. T HEREFORE, CONJOINT READING OF SEC. 153 A, SEC. 153 B AND SEC. 153 D MAKES IT CLEAR THA T THE APPROVAL AS PRESCRIBED U/S. 153 D IS ALSO REQUIRED TO BE OBTAINED IN CASES WHE RE NOTICE U/S. 153 C HAD BEEN ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 6 SERVED, THE ASSESSMENTS ARE TO BE FRAMED U/S. 153 A . THE LD. A.R. SUBMITTED THAT EVEN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL 2007 SPEAKS THAT APPROVAL U/S. 153 D IS ALSO TO BE OBTAINED IN CASE OF OTHER PERSON AS REFERRED TO SEC. 153 C. IN SUPPORT, HE DREW OUR ATTENTION TO PAGE N O. 338 (STATUTE) OF VOLUME 289 ITR. HE SUBMITTED THAT THE WORD APPROVAL HAS BEE N DEFINED IN BLACKS LAW DICTIONARY -VITH EDITION AS THE ACT OF CONFIRMIN G, RATIFYING, ASSENTING, SANCTIONING OR CONSENTING TO SOME ACT OR THING DONE BY ANOTHER. APPROVAL IMPLIES KNOWLEDGE AND EXERCISE OF DISCRETION AFTER KNOWLEDGE. THE SE C. 153 D USES WORD SHALL WHICH INDICATE THAT THE PROVISIONS ARE MANDATORY ESPECIAL LY WHEN THE SECTION FURTHER PRESCRIBES AS THAT EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER NO ORDER SHALL BE PASSED. THEREFORE IN THE ABSENCE OF APPROVAL OF JOINT COMMISSIONER, THE ORDER PASSED BY THE I.T.O. IS NO T A VALID AND LEGAL ORDER AND THEREFORE HAS NO LEGAL FORCE. HE CONTENDED THAT IN THE EYE OF LAW AN ORDER PASSED WITHOUT SUCH APPROVAL IS A NULLITY. 4. THE LD. A.R. SUBMITTED FURTHER THAT THE PROVISIO NS OF SEC. 153 C OF THE I.T. ACT 1961 ARE ANALOGOUS TO THE PROVISIONS OF SEC. 158 BD OF THE ACT. THE MANUAL OF OFFICE PROCEDURE VOLUME II PUBLISHED IN FEBRUARY 2 003 BY DIRECTORATE OF INCOME TAX (ORGANIZATION AND MANAGEMENT SERVICES ) C.B.D. T. VIDE PAGE NO.2 HAS PRESCRIBED PROCEDURE TO BE FOLLOWED IN CASE OF BLOC K ASSESSMENT. A COPY THEREOF HAS BEEN FURNISHED. THE LD. A.R. SUBMITTED THAT APPROVAL OF SENIOR AUTHORITY PROVIDED TO AVOID ARBITRARY, HIGH PITCHED ASSESSMEN TS BEING FRAMED AND HENCE THE APPROVAL IS MANDATORY. THE OBJECT OF ENACTING SEC. 153 D IS ONE OF GENERAL POLICY AND HENCE IT IS MANDATORY. IN SUPPORT, HE PLACED R ELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KIRSHAN LAL VS . J & K, 1994-(SC2)-GJX-0264-SC. 5. THE LD. A.R. SUBMITTED THAT IT IS A WELL SETTLE D LAW THAT IF THE STATUTE PRESCRIBES THAT A PARTICULAR THING IS TO BE DONE IN A PARTICUL AR MANNER, IT IS TO BE DONE IN THAT MANNER ONLY. AN ORDER PASSED WITHOUT AN AUTHORITY IS NULLITY AND THE SAME IS TO BE ANNULLED. HE PLACED RELIANCE ON THE DECISION OF HO NBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MRS. RATNABAI N.K. DUBHASH, 230 IT R 495 (BOM.). HE SUBMITTED THAT THE ASSESSMENT CANNOT BE RESTORED TO THE A.O TO FOL LOW THE PRESCRIBED PROCEDURE BECAUSE THE TIME LIMIT TO FRAME THE ASSESSMENT HAS ALREADY EXPIRED AND EXTENDED TIME LIMIT CANNOT BE GIVEN OTHERWISE THE LIMITATI ON PROVISION WILL BE FRUSTRATED. HE SUBMITTED THAT IN CASES WHERE THE PROVISIONS OF SEC. 153 D ARE NOT FOLLOWED AND IF THE ASSESSMENTS ARE SET ASIDE TO REMOVE THE ILL EGALITY, WIDE GATES WOULD BE OPENED FOR THE DEPARTMENT TO GET EXTENDED TIME LIM IT BY PASSING ORDERS WITHOUT FOLLOWING THE PROCEDURE PRESCRIBED U/S. 153 D AND INDIRECTLY WILL GET THE EXTENDED TIME LIMIT FOR COMPLETION OF ASSESSMENT. HE SUBMIT TED THAT IT IS A WELL SETTLED LAW THAT WHAT CANNOT BE DIRECTLY DONE CANNOT BE DONE B Y FOLLOWING CIRCUITOUS WAY. HE REFERRED DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE F CIT VS. MRS. RATNABAI N.K. DUBHASH (SUPRA) IN THIS REGARD. 6. THE LD. D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE VALIDITY OF ASSESSMENT ORDER IN QUESTION. HE SUBMITTED THAT SEC 153 D TALKS OF ON LY APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX FOR ASSESSMENT ORDER PAS SED U/S. 153A OF THE ACT. HE CONTENDED THAT EVEN IF FOR THE SAKE OF ARGUMENT IT IS ACCEPTED THAT A.O FAILED IN HIS MANDATORY DUTY OF OBTAINING PRIOR APPROVAL, WE HAV E TO GO BACK TO LEGISLATIVE INTENT BEHIND THE RELEVANT SECTION. THE LD. D.R. SUBMITTED THAT THE PURPOSE OF APPROVAL IS TO AVOID HIGH PITCHED ASSESSMENT AND IN CONVENIENCE TO THE ASSESSEE. ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 7 THIS PRE-SUPPOSES THE PARTICIPATION OF BOTH THE A. O AND ASSESSEE IN THE PROCESS OF ASSESSMENT. IN THE PRESENT CASE, ALL THE ASSESSMEN TS FOR 4 YEARS HAS BEEN PASSED U/S. 153 C READ WITH SEC. 144 WHICH ITSELF IMPLIES THAT THERE WAS LACK OF CO- OPERATION FROM THE ASSESSEE DURING THE COURSE OF A SSESSMENT PROCEEDINGS ON VARIOUS COUNTS. SIMILARLY, EVEN DURING THE APPELL ATE PROCEEDINGS, THERE HAS BEEN NO APPEARANCE OF THE ASSESSEE BEFORE THE LD CIT(A) AND THERE WAS NO COMPLIANCE TO STATUTORY NOTICES. THE LD. D.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS TO SUPPORT HER ARGUMENT THAT A.O IS WELL WITHIN THE JU RISDICTION TO CONTINUE WITH THE PROCEEDINGS FROM THE STAGE AT WHICH THE ILLEGALITY HAS OCCURRED : 1) GUDUTHUR BROS. VS. ITO, TC49R, 480 (SC) 2) GAYATHRI TEXTILES VS. CIT, (2000) 243 ITR 674 ( KAR) 3) CIT VS. SARA ENTERPRISES, (1997), 224 ITR 169 (MAD) 4) CIT VS. SARDARILAL BHASHI (1989), 179 ITR 307 ( M.P) 5) PRABHUDAYAL AMICHAND VS CIT (1989), 180 ITR 84 (M.P) 6) CIT VS. DAMODARDAS MURARILAL (1996), 222 ITR 40 1 (M.P) 7. IN AN ALTERNATIVE SUBMISSION, THE LD. D.R. REQUE STED TO SET ASIDE THE FILE TO THE A.O OR LD CIT(A), SO THAT DEFECT IN NOT OBTAINING THE APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX CAN BE CURED. SHE SUBMI TTED FURTHER THAT TRIBUNAL IS ALSO NOT BOUND BY CONSTRAINTS OF LIMITATION AND THE REFORE, IT IS PRAYED THAT THE FILE MAY BE SET ASIDE TO THE LOWER AUTHORITIES FOR NECES SARY ACTION. 8. ON QUERY RAISED BY THE BENCH, THE LD. A.R. SUBMI TTED THAT THE PROVISIONS OF SEC. 153 D OF THE ACT ARE MANDATORY. HE SUBMITTED THAT IT IS A WELL SETTLED LAW THAT IN DETERMINING THE QUESTION, AS TO WHETHER THE PROVISI ON IS MANDATORY OR DIRECTORY, THE SUBJECT MATTER, THE IMPORTANCE OF THE PROVISION , THE RELATION OF THAT PROVISION TO THE GENERAL OBJECT INTENDED TO BE SECURED BY TH E ACT, ARE REQUIRED TO BE LOOKED INTO. HE PLACED RELIANCE ON THE FOLLOWING DECISION S : 1) RE PRESIDENTIAL POLL REPORTED IN 1974- [SC2]-GJX -0912-SC 2) GOVINDLAL CHHAGANLAL PATEL VS. THE A.P.M.C. REPO RTED IN 1975-[SC2]-GJX-0313 SC. 3) KRISHAN LAL VS. STATE OF J & K REPORTED IN 1994- [SC2]-GJX 264-SC (SC) 4) DHIRENDRA NATH GORAI AND OTHERS V/S SUDHIR CHAND RA GHOSH & OTHERS REPORTED IN 1964-[SC2]-GJX-0060-SC. 9. THE LD. A.R. SUBMITTED THAT THE SEC. 153D HAS B EEN ENACTED FOR THE BENEFIT OF GENERAL CLASS OF THE ASSESSEES IN WHOSE CASE THE AS SESSMENTS IN PURSUANCE OF THE SEARCH AND SEIZURE ACTION ARE TO BE COMPLETED. SI NCE THE SECTION STARTS BY NEGATIVE WORDS, THE PROVISION BECOMES MANDATORY, SUBMITTED T HE LD. A.R. 10. HE SUBMITTED THAT IN ABSENCE OF APPROVAL OF THE JOINT COMMISSIONER OF INCOME- TAX OBTAINED ON THE ASSESSMENT ORDER IN QUESTION, T HE ASSESSMENT ORDER BE TREATED AS NULL AND VOID. HE PLACED RELIANCE ON THE FOLLOW ING DECISIONS : 1) BALVANT N. VISHWAMITRA AND OTHERS VS. YADAV SADA SHIV MULE, REPORTED IN 2004-[SC4]-GJX-0636 SC. 2) RAJENDRA KUMAR VERMA VS. D.G.I.T., REPORTED IN [ 2011] 9 TAXMANN.COM 85[ALL]. 3) M/S. ROLSON INTERNATIONAL VS. A.C.I.T, REPORTED IN 2001[ID1] GJX-1089 TBOM. ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 8 4) KHUBESHWAR PRASAD SINGH VS. STATE OF BIHAR, REPO RTED IN 2007-[SC2]-GJX-0241 SC 5) C.I.R. VS. SPLS SIDDHARTHA LTD REPORTED IN ITAT ONLINE.ORG. 11. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS AND HA VE GONE THROUGH THE DECISIONS RELIED UPON BY THE PARTIES IN VIEW OF ORD ERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. THE RELEVANT FACTS A RE THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION ON 29.7.2003 AT THE BUSIN ESS AND RESIDENTIAL PREMISES OF MR. SHRIRAM SONI, CERTAIN DOCUMENTS BELONGING TO TH E ASSESSEE WERE FOUND AND SEIZED. NOTICE U/S. 153C WAS ISSUED TO THE ASSESSE E AND ASSESSMENT U/S. 153C R.W.S. 144 HAVE BEEN FRAMED FOR ALL THE 4 A.YS. U NDER CONSIDERATION. BEFORE THE LD CIT(A), THE ASSESSMENT ORDERS WERE QUESTIONED BOTH ON LEGAL ISSUE AND ON MERITS. ON LEGAL ISSUE, THE VALIDITY OF ASSESSMENT ORDERS I N ABSENCE OF APPROVAL OBTAINED U/S. 153 D OF THE ACT OF JOINT CO MMISSIONER OF INCOME TAX HAS BEEN QUESTIONED. ON MERITS ADDITIONS MADE BY THE A .O WERE IMPUGNED. SINCE THE ASSESSEE COULD NOT SUCCEED IN ITS APPEAL, THE PRESE NT APPEALS HAVE BEEN PREFERRED IN QUESTIONING THE FIRST APPELLATE ORDERS. 12. ON PERUSAL OF THE PROVISIONS LAID DOWN U/S. 15 3C OF THE ACT, IT IS APPARENT THAT AFTER ISSUANCE OF NOTICE U/S. 153C, THE A.O HAVING JURISDICTION OVER SUCH OTHER PERSON (AGAINST WHICH INCRIMINATING MATERIAL HAS BE EN FOUND DURING THE COURSE OF SEARCH CONDUCTED ON A PERSON) AROSE OR RE-ASSESS I NCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SEC. 153A. SEC. 153B TALKS ABOUT TIME LIMIT FOR COMPLETION OF ASSESSMENT U/S. U/S. 153A, WHEREAS S. 153D, TALKS ABOUT NECESSITY OF PRIOR APPROVAL FOR FRAMING ASSESSMENT IN CASE OF SEARCH OR REQUISITION. WE THUS FULLY CONCUR WITH THE SUBMISSION OF THE LD. A.R. TH AT PROVISIONS LAID DOWN U/S. 153D ARE VERY MUCH APPLICABLE IN CASE OF ASSESSMENT OF I NCOME OF ANY OTHER PERSON (I.E. THE PERSON OTHER THAN THE PERSON SEARCHED). NOW TH E ISSUE FOR OUR ADJUDICATION IS AS TO WHETHER ABSENCE OF OBTAINING PRIOR APPROVAL U/S. 153D OF JOINT COMMISSIONER OF INCOME TAX, ASSESSMENT MADE U/S. 153 C WILL MAK E THE ASSESSMENT VOID OR VOIDABLE/CURABLE. FOR A READY REFERENCE, PROVISION S LAID DOWN U/S. 153D OF THE ACT ARE BEING REPRODUCED HEREUNDER : 153D. NO ORDER OF ASSESSMENT OR REASSESSMENT SH ALL BE PASSED BY AN ASSESSING OFFICER BELOW THE RANK OF JOINT COMMISSIO NER IN RESPECT OF EACH ASSESSMENT YEAR REFERRED TO IN CLAUSE (B) OF [SUB S ECTION (1) OF] SECTION 153A OR THE ASSESSMENT YEAR REFERRED TO IN CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153B, EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT C OMMISSIONER]. THE ABOVE PROVISIONS U/S. 153 D HAVE BEEN LAID DOW N UNDER THE HEADING PRIOR APPROVAL NECESSARY FOR ASSESSMENT IN CASES OF SEARC H OR REQUISITION. THIS HEADING ITSELF SUGGESTS THAT OBTAINING PRIOR APPROVAL THE A SSESSMENT IN CASES OF SEARCH OR REQUISITION IS NECESSARY. WE FURTHER NOTE THAT THE PROVISIONS U/S. 153D START WITH A NEGATIVE WORDING NO ORER OF ASSESSMENT OR RE-ASSES SMENT SUPPORTED BY THE FURTHER WORDING SHALL MAKES THE INTENTION OF THE LEGISLATURE CLEAR THAT COMPLIANCE OF SEC. 153D REQUIREMENT IS MANDATORY. NO UNIVERSA L RULE CAN BE LAID DOWN AS TO WHETHER MANDATORY ENACTMENT SHALL BE CONSIDERED DIR ECTORY OR OBLIGATORY WITH AN IMPLIED NULLIFICATION FOR DISOBEDIENCE. AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASES OF BANWARILAL AGARWALLA VS. STAT E OF BIHAR, AIR 1961 SC 849 (853); ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 9 RAZAS BULLAND SUGAR CO.LTD., VS. MUNICIPAL BOARD, A IR 1965 (SC) 895 (899) & OTHERS IF OBJECT OF THE ENACTMENT WILL BE BENEFITED BY HOL DING THE SAME DIRECTORY, IT WILL BE CONSTRUED AS MANDATORY, WHEREAS IF BY HOLDING IT MA NDATORY, SERIOUS GENERAL INCONVENIENCE WILL BE CREATED TO NASCENT PERSONS W ITHOUT VERY MUCH FURTHER OBJECT OF ENACTMENT, THE SAME WILL BE CONSTRUED AS DIRECTORY. BUT ALL THESE DOES NOT MEAN THAT LANGUAGE USED IS TO BE IGNORED, ONLY THAT THE PRIMA FACIE INFERENCE OF THE INTENTION OF THE LEGISLATURE ARISING FROM TH E WORDS USED MAY BE DISPLACED BY CONSIDERING THE NATURE OF THE ENACTMENT, ITS DESIGN ED CONSEQUENCES FLOWING FROM ALTERNATIVE CONSTRUCTIONS. THE WORDINGS AND LANGUAG E USED IN SEC. 153D OF THE ACT AND THE HEADING PRIOR APPROVAL NECESSARY FOR ASSES SMENT IN CASES OF SEARCH OR REQUISITION UNDER WHICH, SEC. 153D HAS BEEN PROVID ED DO NOT LEAVE AN IOTA OF DOUBT ABOUT THE VERY INTENTION OF THE LEGISLATURE T O MAKE THE COMPLIANCE U/S. 153D A MANDATORY. THERE IS NO DISPUTE THAT IF A PROVISI ON IS MANDATORY, AN ACT DONE IN BREACH THEREOF WILL BE INVALID, BUT, IF IT IS DIREC TORY, THE ACT WILL BE VALID ALTHOUGH NON-COMPLIANCE MAY GIVE RISE TO SOME OTHER PENALTY IF PROVIDED BY THE STATUTE. THE GENERAL RULE THAT NON-COMPLIANCE OF MANDATORY R EQUIREMENTS RESULTS IN NULLIFICATION OF THE ACT IS SUBJECT AT LEAST TO ON E EXCEPTION. IF CONTAIN REQUIREMENTS OR CONDITIONS ARE PROVIDED BY A STATUTE IN THE INT EREST OF A PARTICULAR PERSON, THE REQUIREMENTS, OR CONDITIONS ALTHOUGH MANDATORY MAY BE WAIVED HIM IF NO PUBLIC INTEREST ARE INVOLVED AND IN SUCH CASE, THE ACT DO NE STILL BE VALID EVEN IF THE REQUIREMENT OR CONDITION HAS NOT BEEN PERFORMED. HERE, BEFORE US, IS NOT A CASE WHERE CONSENT OF ASSESSEE WILL WAIVE THE CONDITION OF OBTAINING PRIOR APPROVAL U/S. 153D OF THE JOINT COMMISSIONER OF INCOME TAX BY THE A.O FOR FRAMING ASSESSMENT U/S. 153C/ 153A OF THE ACT. CONDITION OF PRIOR APP ROVAL OF JCIT U/S. 153D HAS BEEN PUT IN PUBLIC INTEREST AND NOT IN THE INTEREST OF A PARTICULAR PERSON. THUS IT CANNOT BE WAIVED BY PARTICULAR PERSON. THE USE OF WORD S HALL RAISES A PRESUMPTION THAT A PARTICULAR PROVISION IS IMPERATIVE BUT THIS PRIMA FACIE INFERENCE MAY BE REVERTED BY OTHER CONSIDERATION SUCH AS OBJECT AND SCOPE OF THE ENACTMENT AND CONSEQUENCE FLOWING FROM SUCH CONSTRUCTION. THE REV ENUE HAS NOT BEEN ABLE TO REBUT THE ABOVE INFERENCE BY POINTING OUT OTHER CO NSIDERATION LIKE OBJECT AND SCOPE OF THE ENACTMENT AND THE CONSEQUENCE FLOWING FROM SUCH CONSTRUCTION BEFORE US. CLAUSE 9 OF MANUAL OF OFFICE PROCEDURE , VOLUME II (TECHNICAL) FEBRUARY 2003 ISSUED BY DIRECTORATE OF INCOME TAX ON BEHALF OF CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, READS AS UNDER : 9. APPROVAL FOR ASSESSMENT : AN ASSESSMENT ORDER U NDER CHAPTER XIV-B CAN BE PASSED ONLY WITH THE PREVIOUS APPROVAL OF THE RA NGE JCIT/ADDL.CIT. (FOR THE PERIOD FROM 30-6-1995 TO 31-121996 THE APPROVIN G AUTHORITY WAS THE CIT.) THE ASSESSING OFFICER SHOULD SUBMIT THE DRA FT ASSESSMENT ORDER FOR SUCH APPROVAL WELL IN TIME. THE SUBMISSION OF THE DRAFT ORDER MUST BE DOCKETED IN THE ORDER-SHEET AND A COPY OF THE DRAFT ORDER AND COVERING LETTER FILED IN THE RELEVANT MISCELLANEOUS RECORDS FOLDER. DUE OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE BY THE SUPERVISORY OFFICER GIVING APPROVAL TO THE PROPOSED BLOCK ASSESSMENT, A T LEAST ONE MONTH BEFORE THE TIME BARRING DATE. FINALLY ONCE SUCH A PPROVAL IS GRANTED, IT MUST BE IN WRITING AND FILED IN THE RELEVANT FOLDER IND ICATED ABOVE AFTER MAKING A DUE ENTRY IN THE ORDER-SHEET. THE ASSESSMENT ORDE R CAN BE PASSED ONLY AFTER THE RECEIPT OF SUCH APPROVAL. THE FACT THAT SUCH APPROVAL HAS BEEN OBTAINED SHOULD ALSO BE MENTIONED IN THE BODY OF TH E ASSESSMENT ORDER ITSELF. ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 10 CHAPTER XIVB ALSO DEALS WITH ASSESSMENT OF SEARCH CASES. SECTIONS 153A, 153B & 153 C HAVE BEEN INTRODUCED TO CHAPTER XIV PROCED URE FOR ASSESSMENT W.E.F. 1.6.2003 BY THE FINANCE ACT 2003 WHEREAS SEC. 153 D HAS BEEN INSERTED TO THE CHAPTER W.E.F. 1.6.2007 BY THE FINANCE ACT 2007. THESE PROVISIONS THUS ALSO DEAL WITH THE ASSESSMENT IN CASE OF SEARCH OR REQUISITIO N AND WHEN THE ASSESSMENT ORDERS IN THE PRESENT CASE WERE PASSED THE PROVISIO NS LAID DOWN U/S. 153D WERE VERY MUCH IN OPERATION. IN THE PRESENT CASE, ASSES SMENTS IN QUESTION HAVE BEEN FRAMED ON 27.12.2007. 13. IN THE CASE OF CIT VS. RATNABAI N.K. DUBHASH ( MRS.) (SUPRA), THE DIFFERENCE BETWEEN CANCELLATION AND AMENDMENT OF ASSESSMENT IN VIEW OF THE PROVISIONS OF SECTIONS 143, 144B, 153 AND 251 OF THE I.T. ACT 196 1 HAS BEEN DEALT WITH. THE HONBLE HIGH COURT HAS BEEN PLEASED TO HOLD AS UNDE R : IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CLE AR OPINION THAT INCASES FALLING UNDER SECTION 144B OF THE ACT, THE QUASI-J UDICIAL FUNCTION OF THE INCOME-TAX OFFICER AS AN ASSESSING AUTHORITY COMES TO AN END THEMOMENT THE ASSESSEE FILES OBJECTIONS TO THE DRAFT ORDER. THE POWER TO DETERMINE THE INCOME OF THE ASSESSEE THEREAFTER GETS VESTED IN TH E INSPECT-ING ASSISTANT COMMISSIONER TO WHOM THE INCOME-TAX OFFICER IS REQU IRED TO FORWARD THE DRAFT ORDER TOGETHER WITH OBJECTIONS. THE ONLY THI NG THAT REMAINED TO BE DONE BY THE INCOME-TAX OFFICER IS TO PASS A FINAL O RDER IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE INSPECTING ASSISTANT CO MMISSIONER. THE FUNCTION OF THE INCOME-TAX OFFICER TO MAKE THE FINAL ASSES SMENT UNDER SECTION 144B(5) OF THE ACT IS MORE IN THE NATURE OF A MINIS TERIAL FUNCTION BECAUSE HE CAN PASS THE ORDER ONLY IN ACCORDANCE WITH THE DIRE CTIONS OF THE INSPECTING ASSISTANT COMMISSIONER. HE CANNOT VARY OR DEPART FROM THE DIRECTIONS GIVEN BY THE INSPECTING ASSISTANT COMMISSIONER. MO REOVER, THE REQUIREMENTS OF SECTION 144B OF THE ACT RE MANDATOR Y. THE INCOME-TAX OFFICER HAS NO OPTION BUT TO FOLLOW THE SAME. HE CANNOT MAKE THE FINAL ORDER ON THE BASIS OF THE DRAFT ORDER WITHOUT FORWA RDING THE SAME TO THE INSPECTING ASSISTANT COMMISSIONER ALONG WITH THE OB JECTIONS AND WITHOUT OBTAINING THE DIRECTIONS OF THE INSPECTING ASSISTA NT COMMISSIONER. AN ASSESSMENT MADE BY THE INCOME-TAX OFFICER IN VIOLAT ION OF THE PROVISIONS OF SECTION 144B OF THE ACT WOULD BE AN ASSESSMENT WIT HOUT JURISDICTION. IN THE INSTANT CASE, THE ADMITTED POSITION IS THAT ON REC EIPT OF THE DRAFT ORDER OF ASSESSMENT, THE ASSESSEE DID FILE OBJECTIONS AND TH E INCOME-TAX OFFICER COMPLETED THE ASSESSMENT HIMSELF ON THE BASIS OF T HE DRAFT ORDER WITHOUT FORWARDING THE DRAFT ORDER AND THE OBJECTIONS TO TH E INSPECTING ASSISTANT COMMISSIONER AND OBTAINING DIRECTIONS FROM HIM. SU CH AN ORDER, ON THE FACE OF IT, IS BEYOND THE POWERS OF THE INCOME-TAX OFFICER UNDER SECTION 143 READ WITH SECTION 144B OF THE ACT AND, HENCE, WITHO UT JURISDICTION. THE TRIBUNAL, IN OUR OPINION, WAS, THEREFORE, JUSTIFIED IN ITS CONCLUSION THAT THE ASSESSMENT WAS LIABLE TO BE ANNULLED. IT WAS RIGHT IN HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE INCOME-TAX OFFICER T HE INSTANT CASE WITHOUT REFERENCE TO THE INSPECTING ASSISTANT COMMISSIONER HAD RIGHTLY BEEN ANNULLED BY THE COMMISSIONER OF INCOME-TAX (APPEALS ). IN VIEW OF THE ABOVE, WE ANSWER THE QUESTION REFERRED TO US ACCORD INGLY IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 11 THIS REFERENCE IS DISPOSED OF ACCORDINGLY WITH NO O RDER AS TO COSTS.' 14. IN THE CASE OF CIT VS. SPLS SIDDHARTH LTD. (S UPRA), BEFORE THE HONBLE DELHI HIGH COURT, THE FACTS WERE THAT NOTICE ISSUED BY THE A.O U/S. 147 R.W.S 148 OF THE ACT FOR RE-OPENING THE ASSESSMENT FOR THE A.Y. 2002-03 WAS SET ASIDE BY THE TRIBUNAL ON THE GROUND THAT THE REQUISITE APPROVAL OF ADDL. CO MMISSIONER OF INCOME TAX, WHICH IS MANDATORILY REQUIRED, WAS NOT TAKEN. SINCE 4 Y EARS HAD ELAPSED FROM THE END OF THE RELEVANT A.Y, THE A.O U/S. 151(1) OF THE ACT WA S REQUIRED TO TAKE APPROVAL OF THE COMPETENT AUTHORITY. THE HONBLE DELHI HIGH COURT AFTER DISCUSSING THE ISSUE IN DETAIL AND THE CASE LAWS CITED BEFORE IT HAS BEEN P LEASED TO APPROVE THE DECISION OF TRIBUNAL. IN VIEW OF THESE DECISIONS AND THE POSI TION OF LAW PROVIDED U/S. 153D OF THE ACT, WE HOLD THAT THE ASSESSMENT ORDERS IMPUGNE D FRAMED IN ABSENCE OF OBTAINING PRIOR APPROVAL OF THE JOINT COMMISSIONER FOR THE A.YS. UNDER CONSIDERATION ARE INVALID AS NULL AND VOID AND ARE QUASHED ACCORDINGLY. 15. THE DECISIONS RELIED UPON BY THE LD. D.R ARE HA VING DIFFERENT FACTS AND ISSUE, HENCE ARE NOT HELPFUL TO THE REVENUE. IN THE CASE OF GUDUTHUR BROS. VS. ITO (SUPRA) THE LEVY OF PENALTY WITHOUT AFFORDING A HEARING TO THE ASSESSEE WAS QUESTIONED BEFORE THE APPELLATE AUTHORITY, WHO SET ASIDE THAT ORDER. THE MATTER ULTIMATELY TRAVELLED TO THE HONBLE SUPREME COURT AND IT WAS H ELD THAT THE ITO WAS WELL WITHIN HIS JURISDICTION TO CONTINUE THE PROCEEDINGS FROM THE STAGE AT WHICH THE ILLEGALITY HAS OCCURRED AND TO ASSESS THE APPELLANTS TO A PENA LTY, IF ANY. BEFORE THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. SARDARILAL H ASIM (SUPRA), THE ISSUE WAS REGARDING APPLICABILITY OF PRESCRIBED LIMITATION U/ S. 275 IN A PENALTY ORDER PASSED AFTER THE CASE IS REMANDED BY AN APPELLATE AUTHORIT Y. THE HONBLE COURT WAS PLEASED TO HOLD THAT THE LIMITATION PRESCRIBED U/S. 275 OF THE ACT IS NOT APPLICABLE TO THE PENALTY ORDER PASSED AFTER THE CASE IS REMANDED BY AN APPELLATE AUTHORITY. IN THE CASE OF GAYATRI TEXTILES VS. CIT (SUPRA) NON-OB TAINING OF PRIOR APPROVAL OF I.A.C U/S. 271(1)( C ) (III) FOR DIRECTION FOR PAYMENT O F PENALTY WAS HELD AS PROCEDURALLY DEFECTIVE. THE PROVISIONS LAID DOWN U/S. 153D OF T HE ACT UNDER CONSIDERATION IN THE PRESENT CASE BEFORE US, ARE DIFFERENT AS HERE THE PRIOR APPROVAL OF JOINT COMMISSIONER IS NOT REQUIRED MERELY FOR DIRECTION F OR PAYMENT OF THE DUE AMOUNT OF TAX BUT OVERALL APPROVAL OF THE ASSESSMENT FRAM ED BY THE I.T.O. THUS, THE CITED DECISION IS NOT APPLICABLE IN THE PRESENT CASE. IN THE CASE OF CIT VS. SARA ENTERPRISES (SUPRA), THE ISSUE WAS AS TO WHETHER THE BAR OF LIM ITATION CONTAINED U/S. 275 OF THE ACT WOULD ATTENUATE OR CURTAIL THE POWERS OF CIT, VESTED IN HIM U/S. 263 OF THE SAID ACT. THE HONBLE MADRAS HIGH COURT WAS PLEASE D TO HOLD THAT IT IS NOT HIT BY PROVISIONS OF SEC. 275 OF THE ACT. IN PRABU DAYAL AMICHAND VS. CIT (SUPRA), THE HONBLE HIGH COURT OF MADHYA PRADESH WITH REFERENCE TO SEC. 271(1)(C ) OF THE ACT WAS PLEASED TO HOLD THAT A PROCEDURAL IRREGULARITY NOT INVOLVING THE QUESTION OF JURISDICTION CAN BE CURED. IT IS NOT HELPFUL TO TH E REVENUE IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE A.O WAS HAVING NO JURISDICTION TO FRAME ASSESSMENT ORDER WITHOUT PRIOR APPROVAL OF JCIT AS NECESSARY REQUIREMENT TO COMPLY WITH U/S. 153D OF THE ACT. IN THE CASE OF CIT VS.DAMODHAR MURALILAL (SUPRA), THE HONBLE HIGH COURT DID NOT APPROVE THE VIEW OF THE TRIBUNAL IN HOLDING THAT IN VIEW OF CLAUSE (B) OF SEC. 251(1) OF THE AC T, THE FIRST APPELLATE AUTHORITY HAD NO POWER OF REMAND AND THEREFORE, THE PROCEDURAL I LLEGALITY WOULD NOT BE CORRECTED BY RECOURSE TO REMANDING THE CASE TO THE ITO. HERE IN THE PRESENT CASE, AS WE HAVE ALREADY DISCUSSED, AND ALSO CITED THE RE CENT DECISION OF HONBLE ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 12 JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT VS. RATNABAI N.K. DUBHASH (MRS.) (SUPRA) AND OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SPLS SIDDHARTH LTD. (SUPRA) THAT REQUIREMENT U/S. 153 D FOR OBTAINING APPROVAL OF JCIT IS NOT PROCEDURAL ONLY BUT A MANDATORY REQUIREMENT, HE NCE THE CITED DECISION BY THE LD. D.R IS NOT APPLICABLE IN THE CASE OF PRESENT AS SESSEE. UNDER ABOVE CIRCUMSTANCES, THE ISSUE RAISED REGARDING THE VALID ITY OF ASSESSMENT ORDERS IN QUESTION WITHOUT OBTAINING PRIOR APPROVAL U/S. 153 D OF THE ACT IS DECIDED IN FAVOUR OF THE ASSESSEE. THE ASSESSMENT ORDERS IN QUESTIO N ARE THUS QUASHED AS NULL AND VOID. 8. THE LD. A.R. BROUGHT TO OUR NOTICE THAT THE ORDE R PASSED BY PUNE BENCH OF THE TRIBUNAL IN THE ABOVE SAID CASE HAS BEEN UPH ELD BY THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT, VIDE ITS ORDER DA TED 15.01.2013 PASSED IN INCOME TAX APPEAL (L) NO.1416 OF 2012 AND OTHERS. THE COPY OF THE SAME IS PLACED IN PAGES 15 & 16 OF THE PAPER BOOK. THE LD. A.R. ALSO SUBMITTED THAT THE REVENUE FILED PETITION FOR SPECIAL LEAVE TO APP EAL BEFORE HONBLE SUPREME COURT OF INDIA AND THE HONBLE SUPREME COURT VIDE I TS ORDER DATED 05.08.2013 IN CIVIL APPEAL NO.19389/2013 HAS DECLINED TO ENTER TAIN SPECIAL LEAVE PETITION. 9. THE LD A.R ALSO PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF PR. CIT VS. SUNRI SE FINLEASE (P.) LTD. (2018) 252 TAXMAN 407, WHEREIN IT WAS HELD THAT THE ASSESS MENT ORDER UNDER 153C OF THE ACT CAN BE PASSED BY THE INCOME TAX OFFICER ONL Y AFTER OBTAINING PRIOR APPROVAL UNDER SECTION 153D OF THE ACT FROM THE JOI NT COMMISSIONER IN AS MUCH AS COMPLIANCE OF SECTION 153D REQUIREMENT IS A BSOLUTE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVAT IONS MADE BY HONBLE GUJARAT HIGH COURT IN THIS REGARD. 9. AS REGARDS PROPOSED QUESTIONS [B] AND [C] VIZ., WHETHER LACK OF APPROVAL UNDER SECTION 153D WOULD INVALIDATE THE ASSESSMENT ORDER AND WAS NOT A CURABLE DEFECT, IT MAY BE NOTED THAT SECTION 153D OF THE ACT MANDAT ES THAT NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE PASSED BY AN ASSESSING OFF ICER BELOW THE RANK OF JOINT COMMISSIONER IN RESPECT OF EACH ASSESSMENT YEAR REF ERRED TO IN CLAUSE (B) OF SUB- SECTION (1) OF SECTION 153A OR THE ASSESSMENT YEAR REFERRED TO IN CLAUSE (B) OF SUB- SECTION (1) OF SECTION 153B, EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER. IN THE PRESENT CASE, THE ASSESSMENT O RDER HAS BEEN PASSED BY AN INCOME TAX OFFICER, WHO ADMITTEDLY IS AN OFFICER BE LOW THE RANK OF JOINT COMMISSIONER; THEREFORE, THE PROVISIONS OF SECTION 153D OF THE ACT WOULD BE APPLICABLE. SECTION 153D STARTS WITH THE WORDS 'NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE PASSED....'. IN OTHER WORDS, THE LANGUAGE EMPLOYED IN THE ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 13 PROVISION IS COUCHED IN THE NEGATIVE AND THEREFORE, THERE IS A PROHIBITION AGAINST PASSING OF AN ASSESSMENT OR REASSESSMENT ORDER, EXC EPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER. 10. IN SHIN-ETSU CHEMICAL CO. LTD. V. AKSH OPTIFIBR E LTD. [2005] 7 SCC 234, THE SUPREME COURT HAS OBSERVED THAT IF THE REQUIREMENTS OF A STATUTE WHICH PRESCRIBES THE MANNER IN WHICH SOMETHING IS TO BE DONE ARE EXP RESSED IN NEGATIVE LANGUAGE, THAT IS TO SAY, IF THE STATUTE ENACTS THAT IT SHALL BE DONE IN SUCH A MANNER AND IN NO OTHER MANNER, IT HAS BEEN LAID DOWN THAT THOSE REQU IREMENTS ARE IN ALL CASES, ABSOLUTE, AND THAT NEGLECT TO ATTEND TO THEM WILL I NVALIDATE THE WHOLE PROCEEDING. IN VIJAY NARAYAN THATTE V. STATE OF MAHARASHTRA [20 09] 9 SCC 92, THE SUPREME COURT HAS HELD THAT IT IS WELL SETTLED THAT WHEN A STATUT E IS COUCHED IN NEGATIVE LANGUAGE IT IS ORDINARILY REGARDED AS PEREMPTORY AND MANDATORY IN NATURE. THE SUPREME COURT, IN SOME DECISIONS HAS HELD THAT MERELY BECAUSE A PR OVISION OF LAW IS COUCHED IN A NEGATIVE LANGUAGE IMPLYING MANDATORY CHARACTER, THE SAME IS NOT WITHOUT EXCEPTIONS. HOWEVER, THE PRESENT CASE DEALS WITH TH E INTERPRETATION OF A TAXING STATUTE. IT IS WELL SETTLED THAT A TAXING STATUTE H AS TO STRICTLY CONSTRUED, THEREFORE, FROM THE LANGUAGE EMPLOYED IN SECTION 153D OF THE A CT, THE REQUIREMENT OF OBTAINING THE PRIOR APPROVAL OF THE JOINT COMMISSIO NER HAS TO BE REGARDED AS MANDATORY IN NATURE. 11. IN THE FACTS OF THE PRESENT CASE, AS THE ASSESS MENT ORDER HAS BEEN PASSED BY AN INCOME TAX OFFICER, THE REQUIREMENT OF OBTAINING TH E PRIOR APPROVAL OF THE JOINT COMMISSIONER UNDER SECTION 153D OF THE ACT WAS ABSO LUTE. THE TRIBUNAL, HOWEVER, HAS RECORDED A FINDING OF FACT THAT THERE IS NOTHIN G ON RECORD TO INDICATE THAT THE PRIOR APPROVAL OF THE JOINT COMMISSIONER WAS OBTAIN ED. AS A NATURAL COROLLARY THEREFORE, IN THE ABSENCE OF THE REQUIREMENT OF PRI OR APPROVAL OF THE JOINT COMMISSIONER BEING SATISFIED, THE WHOLE PROCEEDING WOULD STAND INVALIDATED. THE TRIBUNAL WAS, THEREFORE, WHOLLY JUSTIFIED IN HOLDIN G THAT THE IMPUGNED ORDER OF ASSESSMENT WOULD STAND VITIATED IN VIEW OF NON-COMP LIANCE OF THE PROVISIONS OF SECTION 153D OF THE ACT. ON THIS COUNT ALSO, THEREF ORE, THE APPEAL, DOES NOT MERIT ACCEPTANCE. 10. IN VIEW OF THE LEGAL POSITION STATED ABOVE, THE IMPUGNED ASSESSMENT ORDER PASSED BY THE AO WITHOUT OBTAINING PRIOR APPR OVAL FROM THE JOINT COMMISSIONER OF INCOME TAX IS NULL AND VOID AND IS LIABLE TO BE QUASHED. ACCORDINGLY, WE QUASH THE ORDERS PASSED BY THE TAX AUTHORITIES. 11. SINCE WE HAVE QUASHED THE ORDERS PASSED BY THE TAX AUTHORITIES ON THE ABOVE SAID LEGAL ISSUE, WE DO NOT FIND IT NECESSARY TO DEAL WITH THE OTHER LEGAL ISSUES AS WELL AS GROUNDS URGED ON MERITS. ITA NO.4916/M/2016 M/S. SUMER ASSOCIATES 14 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2018. SD/- SD/- (PAWAN SINGH) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 26.12.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.