SHRI ASHOK NARULA, FEROZEPUR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE , AMRITSAT

ITA 616/ASR/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5753 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 153A; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & DR. M.L. MEENA, ACCOUNTANT MEMBER) ITA. Nos: 616 & 617/Asr/2018 (Assessment Years: 2009-10 & 2010-11) ITA. Nos: 648 & 649/Asr/2018 (Assessment Years: 2014-15 & 2008-09) Shri Ashok Narula, Meghe Walian Wali Gali, Guru Harsahai, Feorzpur PAN No. ACWPN5307K V/S Dy. Commissioner of Income Tax, Amritsar (Appellant) (Respondent) Appellant by : Shri Ashray Sarana, C.A. Respondent by : Smt. Abha Rani Singh, CIT/DR (आदेश आदेशआदेश आदेश)/ORDER Date of hearing : 07 -12-2021 Date of Pronouncement : 23-12-2021 Shri Ashok Narula, Meghe Walian Wali Gali, Guru Harsahai, Feorzpur PAN No. ACWPN5307K V/S Dy. Commissioner of Income Tax, Central Circle, Amritsar (Appellant) (Respondent) ITA Nos. 616 & 617/Asr/2018 & Ors. . A.Ys. 2009-10 & 2010-11 2 PER MAHAVIR PRASAD, J.M. 1. These four appeals have been filed at the instance of the Assessee are directed against the order of the Commissioner of Income Tax (‘hereinafter called CIT(A)’) order no. 39/IT/CIT(A)-5/LDH/2016-17 order dated 11/10/2018 arising out of assessment order dated 22/03/2016. Since matters are common and grounds appeals are also common and assessee has taken following additional legal grounds: 1 That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action Ld. AO in passing the impugned assessment order u/s. 144 r.w.s. 153A of the Act and that too without complying with the mandatory requirements and conditions u/s. 153D as envisaged under the Income Tax Act, 1961. Since the above ground does not require fresh facts to be investigated and goes to the root of the matter, it is prayed that it may please be admitted in view of the Hon’ble Supreme Court decision in the case of NTPC Limited 229 ITR 383. 2. Since above legal ground will cover all the appeals therefore, for the sake of brevity, we would like to dispose of all the appeals by way of a common order. 3. Brief facts of the case are that original return u/s. 139(1). In this case, assessee filed on 31.03.2015 declaring income of Rs. 2,57,000/- A search u/s. 132(1) of the Income Tax Act, 1961 was conducted at the residence of the assessee and his family on 05.12.2013. Accordingly, proceedings u/s. 153A were vitiated vide notice dated 18.07.2014. The assessee responded to the notice vide his letter dated 31.03.2015 and stated that the original return filed may be treated as having been filed in response to this notice. After the statutory notices were issued along with the questionnaire, the case was fixed for hearing from time to time. Thereafter, notices dated 08.05.2015, 14.09.2015 and 28.09.2015 and detailed questionnaire dated 08.05.2015 and 05.08.2015 were issued but no compliance to the same was made by the assessee. As ITA Nos. 616 & 617/Asr/2018 & Ors. . A.Ys. 2009-10 & 2010-11 3 such notices u/s. 144 dated 26.11.2015 and 12.01.2016 were issued but no compliance to these notices were issued made by the assessee. Since assessee had no intention to extend the desired cooperation in completion of assessment in a mechanical manner. Accordingly the assessment was completion u/s. 144 to the best judgment taking into account. The relevant facts of the case and finally made addition. (i) The deduction claim of Rs. 60,000/- under Chapter VI-A of the Act was disallowed by the Ld. A.O. since no details and supporting documents were furnished before the authority. (ii) The assessee has shown agricultural income of Rs. 1,40,000/-. But no supporting documents were filed before the Ld. A.O. Thus, he disallowed the claim of the assessee and added above amount to the income of the assessee. (iii) Income from lease: The assessee is one of the main directors of M/s Narula Solvex P. Ltd., Moga. During the search at the premises of that company, it was stated that the land on which the plant of this company situated is on lease from the assessee and his brother Sh. Ashok Narula. The assessee was asked to intimate the amount of lease rent earned in respect of this land but no details were filed by the assessee. Therefore an amount of Rs. 70,000/- was added to the income of the assessee. (iv) At page no. 49 of Annexure 3 seized from the residence of the assessee, Sh. Ashok Narula shows that the assessee paid Rs. 70,00,000/- to Sh. Amrik Singh Chatha and Smt. Ranjit Kaur. Vide questionnaire dated 22.02.2016 , the assessee was asked to intimate the nature of this payment and its source. No such reply was filed by the assessee. Therefore an amount of Rs. 70,00,000/- added to the income of the assessee. 4. Thereafter assessee preferred first statutory appeal before the Ld. CIT(A) who partly allowed the appeal of the assessee. ITA Nos. 616 & 617/Asr/2018 & Ors. . A.Ys. 2009-10 & 2010-11 4 5. Now assesse has come before us. 6. Ld. A.R. chosen to argue on legal ground wherein approval u/s. 153D of the Act has been given in a mechanical manner and Additional Commissioner of Income Tax has not applied his mind and has not recorded satisfaction and approval u/s. 153D has been given in the case of 14 cases. Therefore, the assessee has challenged legality of this approval. 7. Section 153D contemplate that: Section 153D: No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect 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.] 8. We have gone through the relevant record and impugned order. The approval u/s. 153D on File NO. Addl.CIT/CR/JAL/153D/15-16/1523 dated 31.03.2016 was given in the case of all four assesses including 10 more assesses. 9. The Co-ordinate Bench in the case of Sh. Madan Lal Vs. DCIT , Central Circle-1, Jhalandhar in ITA No. 112 to 118/Asr/2018 for Assessment Year 2007-08 & 2013- 14 wherein it is held that approval which is granted in a mechanical, stereotype manner, without assigning any reasons and without considering the draft assessment order is not sustainable in the eyes of law. 10. In the case of Inder International vs. ACIT in ITA No. 1573/Chd/2018 for Assessment Year 2016-17, the Tribunal has held that approval u/s. 153 was obtained ITA Nos. 616 & 617/Asr/2018 & Ors. . A.Ys. 2009-10 & 2010-11 5 mechanically and ritualistically without any application of mind on the part of the Addl. CIT is purely legal in nature not requiring examination of new facts as the relevant facts are available in the assessment records and, therefore, the additional ground of the assessee was admitted. 11. In the case of Arch Pharmalabs Ltd. Vs. ACIT and M/s. Arch Impex P. Ltd. vs. ACIT in ITA NO. 3748/Mum/2012, ITAT, Mumbai has held that if an approval accorded u/s. 153D in a mechanical manner and without application of mind in such case assessment proceedings held to be vitiated. 12. On the other hand, Ld. CIT/DR objected to admitting the additional and argued that matter was discussed by the A.O. with the Addl. CIT to prior to approval. Since in similar matter, Co-ordinate Bench have taken a view where approval u/s. 153D has been given in a mechanical manner and without application of mind in such cases assessment proceedings are to be vitiated. 13. Therefore, in view of the above discussion and in parity with the above said Co- ordinate Bench order, we allow the appeal of the asssessee on this legal ground. However, we do not want to comment on merit of the case since no arguments have been advanced by the Ld. A.R. on merit of the case. 14. In the result, all the appeals of the Assessee are allowed. Order pronounced U/R 34(4) on 23-12-2021 Sd/- Sd/- (DR. M. L. MEENA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 23/12/2021 Copy of the Order forwarded to: - ITA Nos. 616 & 617/Asr/2018 & Ors. . A.Ys. 2009-10 & 2010-11 6 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER Deputy/Asstt.Registrar ITAT,Amritsar