Shri Siddarth Gupta, Kanpur V. Deputy Commissioner of Income Tax, CC-I, Kanpur

ITSSA 420/LKW/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3922 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 24-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEELA CHOPRA
• Keywords: Search and seizure; Loose papers; Document seized; Opportunity of being heard; Question of law; Assessment record; Block assessment; Documents seized
• Section: 148; 132; 143(3); 153A; 274; 142(2A); 158BC; 113; 13; 153; 22; 153C; 20

Judgement Text

I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASST. YEARS:2013-14, 2015-16 & 2016-17 SHRI SIDDARTH GUPTA, 3/7, VISHNUPURI, KANPUR. PAN:AEJPG0532N VS. DY.C.I.T., CENTRAL CIRCLE-1, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER BENCH: THESE THREE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LEARNED CIT(A)-IV, KANPUR DAT ED 29/03/2019 PERTAINING TO ASSESSMENT YEARS 2013-14, 2015-16 & 2 016-17. THE ASSESSEE HAS TAKEN SIMILAR GROUNDS OF APPEAL IN ALL THE ASSE SSMENT YEARS AND THESE WERE HEARD TOGETHER THEREFORE, FOR THE SAKE OF CONV ENIENCE, A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. AT THE OUTSET, LEARNED A. R. INVITED OUR ATTENTI ON TO ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE VIDE HIS APPLICATIO N DATED 29/08/2021 AND IT WAS ARGUED THAT SINCE THE GROUND OF APPEAL TAKEN BY THE ASSESSEE IS PURELY APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SMT. SHEELA CHOPRA, CIT (D.R.) DATE OF HEARING 02 / 09 /20 21 DATE OF PRONOUNCEMENT 07 / 10 /20 21 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 2 A LEGAL GROUND AND GOES TO THE ROOT OF THE MATTER, THEREFORE, THE SAME SHOULD BE ADMITTED. RELIANCE IN THIS RESPECT WAS P LACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF NTPC LIMITED V S. CIT 229 ITR 383 (SC). THE ADDITIONAL GROUND OF APPEAL TAKEN BY THE ASSESSEE READS AS UNDER: BECAUSE THE APPROVAL GIVEN BY THE JCIT U/S 153D OF THE ACT TO THE ORDER PASSED U/S 153A IS WITHOUT APPLICATION OF MIND, PURELY IN A MECHANICAL MANNER, WITHOUT APPRECIATING THE FACTS AND NOT FOLLOWING THE PROVISIONS/MANDATE OF THE SEC TION, WHICH MAKES THE ORDER PASSED U/S 153A NONEST, VOID ABINIT IO BAD IN LAW, THE SAME BE QUASHED. 3. LEARNED CIT, D. R. HAD NO OBJECTION TO THE ADMIS SION OF ADDITIONAL GROUND AND SINCE THE GROUND IS PURELY A LEGAL GROUN D AND GOES TO THE ROOT OF THE MATTER, THE SAME WAS ADMITTED AND ASSESSEE W AS ASKED TO PROCEED WITH HIS ARGUMENTS. 4. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE I.T. ACT WAS CONDUCTED ON 31/08/2015 ON GOLDIEE MASALA AS WELL AS SANTOSH KUM AR AGARWAL GROUP OF CASES AND THE ASSESSEE WAS REQUIRED TO FILE INCOME TAX RETURNS U/S 153A OF THE ACT. IN RESPONSE TO THE NOTICE, THE ASSESSEE F ILED RETURNS U/S 153A OF THE ACT ON 14/07/2017, 14/07/2017 AND 21/09/2017 RE SPECTIVELY WHICH WERE ORIGINALLY E-FILED ON FORM ITR-2 ON 19/08/2016 , 19/08/2016 AND 22/08/2016 RESPECTIVELY. THE ASSESSMENTS IN THESE C ASES WERE COMPLETED U/S 153A/143(3) OF THE ACT BY DY. CIT, CENTRAL CIRC LE-1, KANPUR VIDE ORDER DATED 31/12/2017 AND VARIOUS ADDITIONS WERE MADE. IT WAS SUBMITTED THAT AS PER THE PROVISIONS OF LAW, IN SEARCH CASES, THE ASSESSING OFFICER, BEFORE PASSING ASSESSMENT ORDER FRAMED U/S 153A, 153C AND 143(3), IS REQUIRED TO TAKE THE APPROVAL FROM JT. CIT U/S 153D OF THE ACT IF THE ASSESSING OFFICER IS BELOW THE RANK OF JT. CIT AND IN THIS RESPECT OUR A TTENTION WAS INVITED TO THE PROVISIONS OF SECTION 153D OF THE ACT. IT WAS SUBM ITTED THAT JT. CIT I.E. IS I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 3 THE APPROVING AUTHORITY WHO, BEFORE GRANTING APPROV AL, IS REQUIRED TO SEE ALL SEARCH MATERIAL INCLUDING INCRIMINATING MATERIAL, S EIZED DOCUMENTS, APPRAISAL REPORT, ENQUIRIES MADE BY THE INVESTIGATION WING AN D VARIOUS ENQUIRIES MADE BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDINGS AND THE REPLIES SUBMITTED BY THE ASSESSEE AND AFTER DUE APPLICATION OF MIND AND AFTER ASCERTAINING THAT THE ASSESSING OFFICER HAS APPRECI ATED THE SEARCH MATERIAL AND OTHER EVIDENCES IN PROPER PERSPECTIVE HAS TO GI VE APPROVAL TO THE DRAFT ASSESSMENT ORDER AND ONLY AFTER THAT ASSESSING OFFI CER CAN PASS THE ASSESSMENT ORDER. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE ADMITTEDLY, THE ASSESSING OFFICER IS BELOW THE RANK OF JT. CIT AND THEREFORE, APPROVAL WAS A PREREQUISITE BEFORE PASSING THE FINA L ASSESSMENT ORDER. IT WAS SUBMITTED THAT THE ASSESSING OFFICER PASSED THE DRAFT ASSESSMENT ORDERS ON 31/12/2017 FOR ASSESSMENT YEAR 2015-16 AN D 2016-17 AND ON 30/12/2017 FOR ASSESSMENT YEAR 2013-14 AND ON 31/12 /2017 ITSELF, APPROVAL U/S 153D WAS GRANTED AND FINAL ASSESSMENT ORDER WAS ALSO PASSED BY THE ASSESSING OFFICER ON THE SAME DAY I.E. 31/12/2017. IN THIS RESPECT OUR ATTENTION WAS INVITED TO COPY OF APPROVAL LETTER DA TED 30/12/2017 PLACED AT PAGE 5 WHERE THE NAME OF THE ASSESSEE FOR ASSESSME NT YEAR 2013-14 APPEARS AT SR.NO. 25 AND FURTHER WE WERE TAKEN TO A PPROVAL LETTER DATED 31/12/2017 WHERE THE NAME OF ASSESSEE FOR ASSESSMEN T YEAR 2015-16 AND 2016-17 APPEARS AT SR.NO. 29 & 30. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER THESE APPROVAL LETTERS, THE A DDL. CIT GRANTED APPROVAL U/S 153D IN 123 CASES WHICH INCLUDED THE PRESENT AS SESSEE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS HUMAN LY IMPOSSIBLE TO GO THROUGH 123 DRAFT ASSESSMENT ORDERS ON A SINGLE DAY . IT WAS FURTHER SUBMITTED THAT BESIDES THE DOCUMENTS SEIZED FROM AS SESSEE, THERE WERE SEIZED DOCUMENTS BELONGING TO OTHER GROUPS ALSO, TH E APPROVAL OF WHICH HAS I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 4 ALSO BEEN GIVEN THROUGH THE SAME APPROVAL LETTER. THEREFORE, IT WAS SUBMITTED THAT IT IS HUMANLY NOT POSSIBLE TO EXAMIN E VOLUMINOUS LOOSE PAPERS AND MANY MORE PAPERS OF VARIOUS ASSESSEES IN A SINGLE DAY. IT WAS SUBMITTED THAT WHENEVER A SUPERIOR AUTHORITY GRANTS APPROVAL TO AN ORDER OF SUBORDINATE AUTHORITY THEN THE SUPERIOR AUTHORIT Y MUST APPLY HIS MIND TO ALL MATERIAL ON RECORD, BASIS OF ORDER MADE BY SUBO RDINATE AUTHORITY AND SUPERIOR AUTHORITY MUST ENSURE THAT THE SUBORDINATE AUTHORITY HAS FOLLOWED DUE PROCESS OF LAW AND HAS NOT TAKEN ARBITRARY DECI SIONS. IT WAS SUBMITTED THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE LUC KNOW BENCH OF THE TRIBUNAL IN THE CASE OF SHRI NAVIN JAIN VS. DCIT IN I.T.A. NO. IT(SS)A NO. 639 TO 641, VIDE ORDER DATED 31/08/2021 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THEREFORE, IT WAS PRAYED THAT IN T HE PRESENT CASE ALSO THE ADDITIONAL GROUND OF APPEAL MAY BE ALLOWED AND ASSE SSMENT ORDER BE QUASHED. 6. LEARNED CIT, D.R., ON THE OTHER HAND ARGUED THAT PROPER APPROVAL, AS REQUIRED UNDER THE PROVISIONS OF SECTION 153D, HAS BEEN OBTAINED BY THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE APPRO VAL WAS TAKEN WELL WITHIN THE TIME BEFORE LIMITATION AND THE HIGHER AUTHORITY HAS FULLY APPLIED HIS MIND TO GRANT APPROVAL. IT WAS SUBMITTED THAT THOUGH TH E JT. CIT HAS NOT WRITTEN IN SO MANY WORDS ABOUT HIS SATISFACTION FOR GRANTIN G APPROVAL BUT THE FACT REMAINS THAT HE HAS GRANTED APPROVAL TO THE DRAFT A SSESSMENT ORDER AND ONLY AFTER THAT THE ASSESSING OFFICER HAS PASSED TH E FINAL ASSESSMENT ORDER AND THEREFORE, THE ADDITIONAL GROUND OF THE APPEAL BE DISMISSED AND APPEAL BE HEARD ON MERITS. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS UNDISPUTED FA CT THAT THE APPROVAL U/S 153D HAS BEEN SOUGHT ON 30/12/2017 AND 31/12/2017 A ND ON 31/12/2017 APPROVAL HAS BEEN GRANTED IN 123 CASES VIDE TWO APP ROVAL LETTERS, WHICH I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 5 INCLUDED CASES OF OTHER GROUPS ALSO. IN THE APPROV AL LETTER, PLACED IN PAPER BOOK PAGES 4 & 5, EVEN THE FACT OF HAVING GRANTED A PPROVAL HAS ALSO NOT BEEN MENTIONED. FOR THE SAKE OF COMPLETENESS, COPY OF SUCH APPROVAL LETTERS HAS BEEN MADE PART OF THIS ORDER, WHICH ARE REPRODUCED BELOW: I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 6 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 7 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 8 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 9 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 10 WE FIND THAT THE ISSUE INVOLVED IN THESE APPEALS IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS TRIBUNAL IN THE C ASE OF SHRI NAVIN JAIN AND OTHERS IN I.T.A. NOS. 639 TO 641/LKW/2019 AND OTHER S AND THE FINDINGS OF THE TRIBUNAL ARE REPRODUCED BELOW: 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THE SE CASES, IN VIEW OF A SEARCH CARRIED OUT ON THE SIGMA GROUP, TH E ASSESSMENTS OF VARIOUS ASSESSEES WERE REOPENED AND VARIOUS ASSESSEES WERE REQUIRED TO FILE INCOME TAX RETURNS AS REQUIRED UNDER THE PROVISIONS OF SECTION 153A OF THE ACT. T HE SEARCH WAS CONDUCTED ON 23/08/2016 WHICH CONTINUED UPTO 25/08/2016 AND THEREFORE, ASSESSMENT YEAR 2017-18 B ECAME THE SEARCH YEAR AND THE YEARS PRECEDING THE SEARCH YEAR BECAME THE SUBJECT MATTER OF REOPENING U/S 153A OF THE ACT. THE ISSUE RAISED BY LEARNED COUNSEL FOR THE ASSESSE E IS THAT THE APPROVAL GRANTED BY THE ADDL. CIT IS BAD IN LAW AS IT IS HUMANLY IMPOSSIBLE TO GO THROUGH DOCUMENTS EXCEEDIN G 17,800 IN A SINGLE DAY AND THEN GRANT APPROVAL ON T HE SAME DAY. SINCE THE CONTROVERSY INVOLVED HERE IS WITH R ESPECT TO APPROVAL U/S 153D OF THE ACT, IT WOULD BE APPROPRIA TE TO FIRST VISIT THE PROVISIONS OF SECTION 153D OF THE ACT, WH ICH FOR THE SAKE OF COMPLETENESS ARE REPRODUCED BELOW: SECTION 153D. PRIOR APPROVAL NECESSARY FOR ASSESSMENT IN CASES OF SEARCH OR REQUISITION [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 WHERE THE ASSESSMENT OR REASSESSMENT ORDER, A S THE CASE MAY BE, IS REQUIRED TO BE PASSED BY THE I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 11 ASSESSING OFFICER WITH THE PRIOR APPROVAL OF THE [P RINCIPAL COMMISSIONER OR COMMISSIONER] UNDER SUB-SECTION (12 ) OF SECTION 144BA.] 9.1 THE ABOVE PROVISIONS OF SECTION 153D OF THE ACT WERE INSERTED BY FINANCE ACT, 2007 WITH EFFECT FROM 01/0 6/2007. IN OUR HUMBLE UNDERSTANDING OF THE SAID PROVISIONS, WE ARE OF THE OPINION THAT THE LEGISLATURE WANTED THE ASSESSMENT/REASSESSMENT OF THE SEARCH CASES SHOULD BE MADE AND ORDER SHOULD BE PASSED WITH THE PRIOR APPROVAL OF SUPERIOR AUTHORITY. THE WORD APPROVAL HAS NOT BEEN DEFINED IN THE INCOME TAX ACT BUT THE GENERAL MEANING OF WORD APPR OVAL CAN BE UNDERSTOOD FROM BLACK LAW OF DICTIONARY WHICH DE FINES APPROVAL AS: 'THE ACT OF CONFIRMING, RECTIFYING, SANCTIONING OR CONSENTING TO SOME ACT OR THING DONE BY ANOTHER. TO APPROVE MEANS TO BE SATISFIED WITH, TO CONFIRM, RECTIFY, SANCTION OR 'CONSENT TO SOME ACT OR THING DONE BY ANOTHER, TO CONSENT OFFICIALLY, TO RECTIFY, TO CONFIRM, TO PRONOUNCE GOOD, THING OR JUDGMENT OF, ADMITTING PROPRIETY OR EXCELS OR TO PLEAS WITH.' 9.2 THE HON'BLE SUPREME COURT OF SOUTH CAROLINA IN STATE VS. DUCKETT 133 SC 85 [SC 1925], 130 SE 340 DECIDED ON 05.11.1925 HELD THAT APPROVAL IMPLIES KNOWLEDGE AND , THE EXERCISE OR DISCRETION AFTER KNOWLEDGE. 9.3 FURTHER HON'BLE SUPREME COURT IN THE CASE OF VI JAYADEVI NAVAL KISHORE BHARATIA VS. LAND ACQUISITION OFFICER [2003] 5 SCC 83 HAS HELD AS UNDER: 'WHENEVER THERE IS AN ADMINISTRATIVE APPROVAL GIVEN BY HIGHER AUTHORITY, HIGHER AUTHORITY APPLIES ITS MIND TO SEE WHETHER THE PROPOSED AWARD IS ACCEPTABLE TO THE GOVERNMENT OR NOT ? SUCH AUTHORITY MAY SATISFY ITSELF AS TO THE MATERIAL RELIED UPON BY THE ADJUDICATOR, BUT, THE APPROVING AUTHORITY CANNOT REVERSE THE FINDING, AS HE IS AN APPELLATE AUTHORITY FOR THE PURPOSE OF REMANDING THE MATTER TO THE ADJUDICATING AUTHORITY AS CAN BE DONE BY THE APPELLATE AUTHORITY. FURTHER, THE APPROVING AUTHORITY ALSO CANNOT EXERCISE ITS POWER I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 12 OF PRIOR APPROVAL TO GIVE DIRECTIONS TO THE ADJUDICATING AUTHORITY IN WHAT BENEFICIAL TO ACCEPT/ APPRECIATE TINE MATERIAL ON RECORD IN REGARD TO THE COMPENSATION PAYABLE. OTHERWISE, IT WOULD TANTAMOUNT TO BLURRING THE DISTINCTION BETWEEN APPROVING AUTHORITY AND APPELLATE AUTHORITY''. 9.4 FURTHER HON'BLE GAUHATI HIGH COURT IN THE CASE OF DHARAMPAL SATYAPAL LTD., VS., UNION OF INDIA [2019] 366 ELT 253 (GAU.) MANU/GH/07070/2018 IN PARA-28 HAS HELD A S UNDER : 'WHEN AN AUTHORITY IS REQUIRED TO GIVE HIS APPROVAL, IT IS ALSO TO BE UNDERSTOOD THAT SUCH AUTHORITY MAKES AN APPLICATION OF MIND AS TO WHETHER THE MATTER THAT IS REQUIRED TO BE APPROVED SATISFIES ALL THE REQUIREMENTS OF LAW OR PROCEDURE TO WHICH IT MAY BE SUBJECTED. IN OTHER WORDS, GRANT OF APPROVAL AND APPLICATION OF MIND AS TO WHETHER SUCH APPROVAL IS TO BE GRANTED MUST CO-EXIST AND, THEREFORE, WHERE AN AUTHORITY GRANTS AN APPROVAL IT IS ALSO TO BE CONSTRUED THAT THERE WAS DUE APPLICATION OF MIND THAT THE SUBJECT MATTER APPROVED AND SATISFIES ALL THE LEGAL AND PROCEDURAL REQUIREMENTS.' THEREFORE, FROM THE DEFINITION OF APPROVAL AS PER A BOVE AUTHORITIES, ITS MEANING WITH RESPECT TO APPROVAL U /S 153D MEANS THAT THE SUPERIOR AUTHORITY SHOULD APPLY HIS MIND ON THE MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICE R IS MAKING OR PASSING ASSESSMENT ORDER AND AFTER DUE APPLICATI ON OF MIND TO MATERIAL IN THE HANDS OF THE DEPARTMENT AND AFTE R GOING THROUGH THE EXPLANATION BY THE ASSESSEE AND DOCUMEN TARY EVIDENCE AND OTHER RELEVANT MATERIAL, THE SUPERIOR AUTHORITY HAS TO GRANT APPROVAL U/S 153D FOR PASSING ASSESSMENT/REASSESSMENT ORDER IN SEARCH CASES. THE APPROVAL U/S 153D OF THE ACT CANNOT BE TREATED MERE FORMALIT Y ONLY AND THE PURPOSE OF INSERTING THIS PROVISION IS TWO FOLD I.E. ONE BEFORE APPROVING THE SENIOR AUTHORITY WILL ENSURE T HAT THE ASSESSEE SHOULD BE PROTECTED AGAINST THE UNDUE AND IRRELEVANT ADDITION AND DISALLOWANCES AND THE APPROVING AUTHOR ITY WILL ALSO ENSURE THAT PROPER ENQUIRY OR INVESTIGATIONS A RE CARRIED I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 13 OUT BY THE ASSESSING OFFICER ON THE RELEVANT MATERI ALS INCLUDING MATERIAL IN THE HANDS OF THE DEPARTMENT. SECONDLY, THE ASSESSING OFFICER ALSO KEEPS IN MIND THE INTEREST O F REVENUE. THEREFORE, THE SAID PROVISION PROVIDES APPLICATION OF MIND BY THE APPROVING AUTHORITY OF THE DEPARTMENT. THEREFOR E, THE PROVISION OF SECTION 153D OF THE ACT CANNOT BE TREA TED AS MERE FORMALITY AND MANDATE THEREIN IS REQUIRED TO BE FOL LOWED BY THE APPROVING AUTHORITY IN A JUDICIOUS MANNER BY DUE AP PLICATION OF MIND IN A MANNER OF A QUASI JUDICIAL AUTHORITY. WE ARE CAUTIOUS ABOUT THE FACT THAT REASONS FOR GRANTING A PPROVAL MAY NOT BE A SUBJECT MATTER OF CHALLENGE OR NOT REQUIRE D TO BE MENTIONED IN THE ORDER OF APPROVAL BUT THE MANNER A ND MATERIAL ON THE BASIS OF WHICH APPROVAL HAS BEEN GR ANTED CAN BE CHALLENGED BY THE ASSESSEE. THE SCOPE AND ISSUE AGITATED BY THE ASSESSEE BY WAY OF LEGAL GROUND IN THE PRESE NT CASES IS NOT THAT OF GRANTING OF APPROVAL BUT THE MAIN GRIEV ANCE OF THE ASSESSEE IS THAT THE APPROVING AUTHORITY HAS GRANTE D APPROVAL WITHOUT APPLICATION OF MIND AND WITHOUT LOOKING INT O THE SEIZED MATERIAL. WE ARE INCLINED TO HOLD THAT IF AN APPRO VAL HAS BEEN GRANTED BY THE APPROVING AUTHORITY IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND THEN THE VERY PURPOSE O F OBTAINING APPROVAL U/S 153D OF THE ACT AND MANDATE OF ENACTME NT BY THE LEGISLATURE WILL BE DEFEATED. IT IS A TRITE LA W THAT FOR GRANTING APPROVAL U/S 153D OF THE ACT, THE APPROVIN G AUTHORITY SHALL HAVE TO APPLY INDEPENDENT MIND TO THE MATERIA L ON RECORD FOR EACH ASSESSMENT YEAR IN RESPECT OF EACH ASSESSE E SEPARATELY. THE RATIONALE OF WORD 'EACH' AS SPECIFI CALLY REFERRED TO IN SECTION 153D AND SECTION 153A DESERVES TO BE GIVEN EFFECTIVE/PROPER MEANING SO THAT UNDERLYING LEGISLA TIVE INTENT AS PER SCHEME OF ASSESSMENT OF SECTION 153A TO 153D IS FULFILLED. THE MEANING OF APPROVAL, AS CONTEMPLA TED U/S 153D OF THE ACT, IS THAT THE JT. CIT IS REQUIRED TO VERI FY THE ISSUES RAISED BY THE ASSESSING OFFICER IN THE DRAFT ASSESS MENT ORDER AND APPLY HIS MIND AND TO ASCERTAIN AS TO WHETHER T HE ENTIRE FACTS HAVE BEEN PROPERLY APPRECIATED BY THE ASSESSI NG OFFICER. THE JT. CIT IS ALSO REQUIRED TO VERIFY WHETHER THE REQUIRED PROCEDURE HAS BEEN FOLLOWED BY THE ASSESSING OFFICE R OR NOT IN FRAMING THE ASSESSMENT. THUS, THE APPROVAL CANNOT BE A MERE DISCRETION OR FORMALITY BUT QUASI JUDICIAL FUNCTION BASED ON REASONING. IN OUR VIEW, WHEN THE LEGISLATURE HAS E NACTED THE PROVISION TO BE EXERCISED BY THE HIGHER AUTHORITY T O PASS ASSESSMENT ORDER IN THE SEARCH CASES THEN IT IS THE DUTY OF THE JT. CIT TO EXERCISE SUCH POWER BY APPLYING HIS JUDI CIOUS MIND. I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 14 THE OBLIGATION OF THE APPROVAL OF THE APPROVING AUT HORITY IS OF TWO FOLD I.E. ON ONE HAND, HE HAS TO APPLY HIS MIND TO ENSURE THE INTEREST OF THE REVENUE AGAINST ANY OMISSION OR NEGLIGENCE BY THE ASSESSING OFFICER IN TAXING RIGHT INCOME IN THE HANDS OF RIGHT PERSON AND IN RIGHT ASSESSMENT YEAR AND ON TH E OTHER HAND, SUPERIOR AUTHORITY IS ALSO RESPONSIBLE AND DU TY BOUND TO DO JUSTICE WITH THE TAX PAYER BY GRANTING PROTECTIO N AGAINST ARBITRARY OR CREATING BASELESS TAX LIABILITY ON THE ASSESSEE. THE PROVISIONS CONTAINED FROM SECTION 153A TO SECTION 1 53D CONTAIN FEATURES BY WHICH THE ASSESSEE IS TO BE GIV EN SEPARATE NOTICE FOR ASSESSMENT FOR EACH YEAR AS SPECIFIED U/ S 153A OF THE ACT. SECONDLY, THE ASSESSEE HAS TO FILE SEPARA TE ITR FOR EACH YEAR AS SPECIFIED IN SECTION 153A OF THE ACT. THIRDLY, SEPARATE ASSESSMENT ORDERS ARE TO BE PASSED FOR EAC H YEAR AS SPECIFIED IN SECTION 153A OF THE ACT. THERE IS AN IMPORTANT CONCEPT MENTIONED IN SECTION 153A OF THE ACT, ABATE D AND NON ABATED WHICH IS PECULIAR TO THE SCHEME OF SECTION 1 53A OF THE ACT. KEEPING IN VIEW THE ABOVE BASIC FUNDAMENTAL F EATURES OF SECTION 153A, IF SECTION 153D IS SCRUTINIZED, THEN, IT WOULD BECOME MANIFEST THAT VERY IMPORTANT PHRASE AS DEPLO YED IN TEXT OF SECTION 153D, IS 'EACH' ASSESSMENT YEAR. T HE WORD 'EACH' HAS BEEN USED EXTENSIVELY AND THIS WORD NEEDS TO BE GIVEN DUE WEIGHTAGE AND ADEQUATE MEANING AND AS SUC H FOR EACH YEAR SEPARATE APPROVAL IS TO BE GIVEN UNDER SE CTION 153D OF THE I.T. ACT WHICH IS LACKING IN THE PRESENT CAS ES. THERE ARE MANY OTHER PROVISIONS WHERE STATUTORY APPROVAL IS R EQUIRED FROM HIGHER AUTHORITIES. FEW OF THEM ARE NOTED LIKE IN SECTION 151 AND SECTION 274 ETC., RESPECTIVELY DEALING WITH THE APPROVALS ON REOPENING CASES AND PENALTY CASES. WH EN SECTION 153D IS JUXTAPOSED WITH SECTION 151 AND SEC TION 274, MOST IMPORTANT DIFFERENCES WHICH IS PECULIAR TO SEC TION 153D IS THE WORD 'EACH'. WORD EACH IS NOT USED IN SECTION 151 AND SECTION 274 AND THE WORD 'EACH' IS SPECIALLY AND CO NSCIOUSLY REFERRED TO IN SECTION 153D SO THAT ASSESSEE-WISE A ND YEAR- WISE APPLICATION OF MIND ON THE PART OF THE APPROVI NG AUTHORITY IS THERE WHICH IS IN ACCORDANCE WITH THE OVERALL SC HEME OF SECTION 153A TO SECTION 153D OF THE I.T. ACT. HON'B LE ALLAHABAD HIGH COURT IN THE CASE OF SHRI MOHD. AYUB VS. ITO [2012] 346 ITR 30 (ALLD) DEALT WITH NON ISSUE OF SE PARATE NOTICE UNDER SECTION 148 OF THE I.T. ACT AND HELD I T TO BE INVALID BECAUSE EACH ASSESSMENT YEAR WAS TO BE TAK EN AS AN INDEPENDENT UNIT OF ASSESSMENT AND THEREFORE, IF TH E ABOVE SETTLED POSITION IS TESTED WITH THE PROVISIONS OF S ECTION 153D, IT I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 15 WOULD EMERGE THAT WHEN IN A CASE WHERE REQUIREMENT OF SEPARATE NOTICE UNDER SECTION 148 OF THE I.T. ACT WAS GIVEN ABSOLUTE PRIMACY THEREFORE, IN THE CONTEXT OF SECTI ON 153D OF THE I.T. ACT (WHERE EACH WORD IS EXPRESSLY USED AND WHICH IS A YEAR CENTRIC SPECIAL SCHEME OF ASSESSMENT WITH CONC EPT OF ABATED/NON-ABATED ASSESSMENTS) THERE IS ABSOLUTE NE CESSITY OF SEPARATE APPROVAL FOR EACH YEAR AND FOR EACH ASSESS EE. IN THE PRESENT CASES JT. CIT HAS GIVEN APPROVAL U/S 153D O F THE ACT FOR ALL THE YEARS ALTOGETHER INVOLVED IN SEARCH AND THE APPROVING AUTHORITY IN A MECHANICAL MANNER AND AS A N IDLE FORMALITY HAS GRANTED APPROVAL. IN ONE LINE THE AP PROVING AUTHORITY HAS GIVEN BLANK GO AHEAD TO PASS ORDER UN DER SECTION 153A WITHOUT EVEN TAKING MINIMUM POSSIBLE PAINS TO TAKE APPROPRIATE NOTE OF YEAR-WISE INCOME AS COMPUTED. THE LEGISLATIVE INTENT BEHIND SECTION 153D CAN BE DISCERNED/GATHERED FROM THE CBDT CIRCULAR NO.3/2008 DATED 12.03.2008 IN WHICH IT IS HIGHLIGHTED THAT APPROVAL OF THE APPROVING AUTHORITY IS MANDATORY. FOR THE SAKE OF COMPLETENESS, THE CONTENTS OF CIRCULAR NO. 3/2008 A RE REPRODUCED BELOW: 50. ASSESSMENT OF SEARCH CASES ORDERS OF ASSESSMEN T AND REASSESSMENT TO BE APPROVED BY THE JOINT COMMISSIONER. 50.1 THE EXISTING PROVISIONS OF MAKING ASSESSMENT A ND REASSESSMENT IN CASES WHERE SEARCH HAS BEEN CONDUCT ED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECT ION 132A DOES NOT PROVIDE FOR ANY APPROVAL FOR SUCH ASSESSMENT. 50.2 A NEW SECTION 153D HAS BEEN INSERTED TO PROVI DE THAT NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL B E PASSED BY AN ASSESSING OFFICER BELOW THE RANK OF JO INT COMMISSIONER EXCEPT WITH THE PREVIOUS APPROVAL OF T HE JOINT COMMISSIONER. SUCH PROVISION HAS BEEN MADE APPLICABLE TO ORDERS OF ASSESSMENT OR REASSESSMENT PASSED UNDER CLAUSE (B) OF SECTION 153A IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDE R SECTION 132 OR REQUISITION IS MADE UNDER SECTION 13 2A. THE PROVISION HAS ALSO BEEN MADE APPLICABLE TO ORDE RS OF I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 16 ASSESSMENT PASSED UNDER CLAUSE (B) OF SECTION 153B IN RESPECT OF THE ASSESSMENT YEAR RELEVANT TO THE PREV IOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A. 50.3 APPLICABILITY-THESE AMENDMENTS WILL TAKE EFFE CT FROM THE 1ST DAY OF JUNE, 2007.' 9.5 IT IS EVIDENT FROM THE CBDT CIRCULAR THAT THE L EGISLATURE IN ITS HIGHEST WISDOM MADE IT COMPULSORY THAT THE A SSESSMENTS OF SEARCH CASES SHOULD BE MADE WITH THE PRIOR APPRO VAL OF SUPERIOR AUTHORITY, SO THAT THE SUPERIOR AUTHORITY COULD APPLY HIS MIND ON THE MATERIALS AND OTHER CIRCUMSTANCES O N THE BASIS OF WHICH THE OFFICER IS MAKING THE ASSESSMENT AND A FTER DUE APPLICATION OF MIND AND ON THE BASIS OF SEIZED MATE RIALS, THE SUPERIOR AUTHORITY HAVE TO APPROVE THE ASSESSMENT O RDER. THE OBJECT OF ENTRUSTING THE DUTY OF APPROVAL OF ASSESS MENT IN SEARCH CASES IS THAT THE JT. CIT, WITH HIS EXPERIEN CE AND UNDERSTANDING COULD SCRUTINIZE THE SEIZED DOCUMENTS AND ANY OTHER MATERIAL FORMING THE FOUNDATION OF ASSESSMENT . IT IS AN ELEMENTARY LAW THAT WHENEVER ANY STATUTORY OBLIGATI ON IS CASTED UPON ANY STATUTORY AUTHORITY, SUCH AUTHORITY IS REQUIRED TO DISCHARGE ITS OBLIGATION NOT MECHANICALLY, NOT E VEN FORMALLY BUT AFTER DUE APPLICATION OF MIND. THE APPROVAL GRA NTED UNDER SECTION 153D OF THE ACT SHOULD NECESSARY REFLECT DU E APPLICATION OF MIND AND IF THE SAME IS SUBJECTED TO JUDICIAL SCRUTINY, IT SHOULD STAND FOR ITSELF AND SHOULD BE SELF DEFENDING. IN THE ABOVE BACKGROUND OF LAW AND IN THE LIGHT OF ORDER DATED 30.12.2018 PASSED UNDER SECTION 153D OF THE ACT, WH ICH GIVES LEGALITY TO THE IMPUGNED ASSESSMENT ORDERS, QUESTIO N WHICH ARISES FOR OUR CONSIDERATION IS WHETHER THE APPROVA L GRANTED BY THE ADDITIONAL CIT, CENTRAL, KANPUR VIDE HIS ORDER DATED 30.12.2018 CAN BE HELD TO BE GRANTED AFTER DUE APPL ICATION OF MIND AND CAN BE HELD TO BE VALID IN THE EYES OF LAW . LEARNED COUNSEL FOR THE ASSESSEE, DURING THE PROCEEDINGS BE FORE US HAD FILED A CHART SHOWING NUMBER OF DOCUMENTS SEIZED DU RING SEARCH BELONGING TO THE GROUP TOTALING 15,800 PAGES . BESIDES THE ABOVE DOCUMENTS, REPLIES FILED BY ASSESSEES BEL ONGING TO THE GROUP CONSISTED OF ABOUT 200 PAGES AND IN FACT THERE WERE DOCUMENTS BELONGING TO OTHER GROUP ALSO, THE APPROV AL OF WHICH HAS ALSO BEEN GRANTED ALONG WITH ASSESSEES ON THE SAME DAY THROUGH THE SAME APPROVAL LETTER. THEREFORE, KE EPING IN I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 17 VIEW HUGE NUMBER OF DOCUMENTS INVOLVED, IT IS HUMAN ELY IMPOSSIBLE FOR A PERSON TO APPLY HIS MIND ON ALL CA SES INDIVIDUALLY AND THAT TOO IN A SINGLE DAY. FOR THE SAKE OF COMPLETENESS, THE SAID APPROVAL DATED 30/12/2018 HA S BEEN MADE PART OF THIS ORDER AND IS REPRODUCED BELOW: I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 18 I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 19 THE CONTENTS OF THE APPROVAL SPEAKS FOR ITSELF LOUD AND CLEAR. THE FOLLOWING INFERENCES ARE INEVITABLE FROM THE BA RE READING OF THE SAID ORDER. THE DRAFT ASSESSMENT ORDERS WERE PL ACED BEFORE THE ADDITIONAL CIT, CENTRAL, RANGE- KANPUR ON 30/12 /2018 FOR THE FIRST TIME AND ON THE SAME DAY APPROVAL WAS GRA NTED. AS CLEARLY MENTIONED IN THE APPROVAL UNDER CHALLENGE, PRIOR TO THIS DATE THE CASE WAS NEVER DISCUSSED WITH THE AUTHORIT Y GRANTING THE APPROVAL. THE ADDITIONAL CIT WITHOUT ANY CONSID ERATION ON MERITS IN RESPECT OF THE ISSUES ON WHICH ADDITION W AS MADE, GRANTED THE APPROVAL AND SUCH APPROVAL IS AN EYEWAS H AND IDLE FORMALITY AND SUCH A MECHANICALLY GRANTED APPROVAL IS NO APPROVAL IN THE EYES OF LAW. THE ENTIRE GAMETE OF LAW, AS CONTEMPLATED U/S 153D OF THE ACT, HAS BEEN CONSIDER ED BY DELHI BENCH OF THE TRIBUNAL IN A BUNCH OF 52 APPEALS IN I .T.A. NO.1813/DEL/2019 IN THE CASE OF SANJAY DUGGAL AND O THERS WHEREIN THE HON'BLE BENCH VIDE ORDER DATED 19/01/20 21 HAS QUASHED THE ASSESSMENT ORDERS BY HOLDING THAT THE A PPROVAL GRANTED U/S 153D OF THE ACT WAS IN A MECHANICAL MAN NER AND THUS CANNOT BE HELD TO BE AN APPROVAL AS REQUIRED U /S 153D OF THE ACT. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE CONTAINED IN PARA 11 ONWARDS, WHICH FOR THE SAKE OF COMPLETENESS ARE REPRODUCED BELOW: I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 20 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE WRITTEN SUBMISSIONS FILED BY THE PARTIE S AND CONSIDERED THE MATERIAL ON RECORD. IT IS AN ADMITTE D FACT THAT SEARCH AND SEIZURE ACTION WERE CARRIED-OUT IN THE CASES OF THE ASSESSEES ON 29.12.2015. SECTION 153A HAVE BEEN INSERTED INTO THE INCOME TAX ACT W.E.F. 01.06. 2003. PRIOR TO THAT THERE WERE PROVISIONS CONTAINED UNDER SECTION 158BC BEING THE SPECIAL PROCEDURE FOR ASSES SMENT OF SEARCH CASES. THUS, THE PROVISIONS OF SECTION 15 3A TO 153D ARE APPLICABLE IN THE CASE OF ASSESSEES. ACCOR DING TO SECTION 153A OF THE I.T. ACT, THERE SHOULD BE A SEA RCH INITIATED UNDER SECTION 132 OF THE I.T. ACT AND PANCHANAMA DRAWN, THE A.O. SHALL HAVE TO ISSUE NOTI CE TO THE ASSESSEE REQUIRING HIM TO FURNISH THE RETURN OF INCOME WITHIN THE SPECIFIED TIME IN RESPECT OF EACH ASSESS MENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. THE A.O. SHALL ASSESS OR RE-ASSESS THE TOTAL INCOME OF SIX ASSESSM ENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUC TED OR REQUISITION IS MADE. PROVIDED THAT THE A.O. SHALL A SSESS OR RE-ASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSES SMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. IT I S FURTHER PROVIDED THAT ASSESSMENT OR RE-ASSESSMENT, IF ANY, RELEVANT TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTI ON 132 OR MAKING OF REQUISITION UNDER SECTION 132A AS THE CAS E MAY BE, SHALL ABATED. THUS, WHEN PROVISIONS OF SECTION 153A ARE APPLICABLE IN A CASE OF ASSESSEE, A.O. SHALL HA VE TO GIVE SEPARATE NOTICE OF EACH ASSESSMENT YEAR AND ASSESSEE SHALL HAVE TO BE DIRECTED TO FILE RETURN O F INCOME FOR EACH YEAR AND SEPARATE ORDERS SHALL HAVE TO BE PASSED FOR EACH ASSESSMENT YEAR. IN SECTION 153A OF THE I. T. ACT, THE A.O. SHALL HAVE TO SEE WHETHER THERE ARE ABATED OR NON-ABATED ASSESSMENTS WHICH WAS NOT PROVIDED IN EA RLIER PROVISIONS FOR BLOCK ASSESSMENTS. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS., KABUL CHAWLA [2016] 3 80 ITR 573 (DEL.) CONSIDERED THE ISSUE OF ABATED AND NON-A BATED ASSESSMENTS AND WITH REGARD TO COMPLETED ASSESSMENT S HELD THAT THE SAME CAN BE INTERFERED WITH BY THE A. O. WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 21 THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. IT IS ALSO HELD IN THE SAME JUDGMENT TH AT IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL HAVE TO BE MADE SEPARATELY FOR EAC H ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON RECOR D BY THE A.O. THEREFORE, THESE WERE THE MANDATORY PROVIS IONS CONTAINED IN SECTION 153A WHICH SHALL HAVE TO BE SA TISFIED BY THE A.O. BEFORE PROCEEDING TO FRAME ASSESSMENT I N THE CASES OF PERSONS SEARCHED UNDER SECTION 132 OF THE I.T. ACT, 1961. FURTHER SAFEGUARD HAVE BEEN PROVIDED FOR FRAMING THE ASSESSMENTS UNDER SECTION 153A THAT PRI OR APPROVAL SHALL BE NECESSARY FOR ASSESSMENTS IN THE CASES OF THE SEARCH OR REQUISITIONED, UNDER SECTION 153D OF THE IT. ACT. SECTION 153D OF THE I.T. ACT IS REPRODUCED AS UNDER : '153D - NO ORDER OF ASSESSMENT OR RE-ASSESSMENT 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 (II) 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 OFFICER WITH THE PRIOR APPROVAL OF THE COMMISSIONER UNDER SUB-SECTION (12) OF SECTION 144BA.'. 11.1. IT IS AN ADMITTED FACT THAT IN ALL THE ABOVE APPEALS ASSESSMENTS UNDER SECTION 153A HAVE BEEN FRAMED BY ACIT, CENTRAL CIRCLE, NEW DELHI, THEREFORE, PRIOR A PPROVAL OF THE JCIT IN RESPECT OF EACH ASSESSMENT YEAR REFE RRED TO UNDER SECTION 153A OR 153B SHALL HAVE TO BE OBTAINE D. THUS, NO ORDER OF ASSESSMENT OR RE-ASSESSMENT SHALL BE PASSED BY THE A.O. IN THE PRESENT CASES IN RESPECT OF EACH I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 22 ASSESSMENT YEARS UNDER SECTION 153A/153B OF THE I.T . ACT, 1961, EXCEPT WITH THE PRIOR APPROVAL OF THE JO INT COMMISSIONER. LEARNED COUNSEL FOR THE ASSESSEE HAS ARGUED THAT THE APPROVAL UNDER SECTION 153D HAVE BE EN GRANTED BY THE JCIT WITHOUT GOING THROUGH THE SEIZE D MATERIAL, APPRAISAL REPORT AND OTHER MATERIAL ON RE CORD. THUS, THE APPROVAL IS GRANTED IN A MOST MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND. THEREFORE, SAME IS INVALID, BAD IN LAW AND VOID AB INITIO AND AS SU CH ALL ASSESSMENTS UNDER SECTION 153A GOT VITIATED AND AS SUCH A.O. WAS NOT HAVING JURISDICTION TO PASS THE ASSESS MENT ORDERS UNDER SECTION 153A OF THE I.T. ACT, 1961. 11.2. THE MEANING OF THE WORD 'APPROVAL' AS DEFINE D IN BLACK LAW DICTIONARY IS 'THE ACT OF CONFIRMING, RECTIFYING, SANCTIONING OR CONSENTING TO SOME ACT OR THING DONE BY ANOTHER. TO APPROVE MEANS TO BE SATISFIED WITH, TO CONFIRM, RECTIFY, SANCTION OR 'CONSENT TO SOME ACT OR THING DONE BY ANOTHER, TO CONSENT OFFICIALLY, TO RECTIFY, TO CONFIRM, TO PRONOUNCE GOOD, THING OR JUDGMENT OF, ADMITTING PROPRIETY OR EXCELS OR TO PLEAS WITH.' 11.3. THE HON'BLE SUPREME COURT OF SOUTH CAROLINA I N STATE VS., DUCKETT 133 SC 85 [SC 1925], 130 SE 340 DECIDED ON 05.11.1925 HELD THAT 'APPROVAL IMPLIES KNOWLEDGE AND, THE EXERCISE OR DISCRETION AFTER KNOWLEDGE.' 11.4. THE HON'BLE SUPREME COURT IN THE CASE OF VIJA YADEVI NAVAL KISHORE BHARATIA VS., LAND ACQUISITION OFFICE R [2003] 5 SCC 83 WHEREIN IT HAS BEEN HELD THAT : 'WHENEVER THERE IS AN ADMINISTRATIVE APPROVAL GIVEN BY HIGHER AUTHORITY, HIGHER AUTHORITY APPLIES ITS MIND TO SEE WHETHER THE PROPOSED AWARD IS ACCEPTABLE TO THE GOVERNMENT OR NOT ? SUCH AUTHORITY MAY SATISFY ITSELF AS TO THE MATERIAL REL IED UPON BY THE ADJUDICATOR, BUT, THE APPROVING AUTHORITY CANNOT REVERSE THE FINDING, AS HE IS AN APPELLATE AUTHORITY FOR THE PURPOSE OF REMANDING THE MATTER TO THE ADJUDICATING AUTHORITY AS CAN BE I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 23 DONE BY THE APPELLATE AUTHORITY. FURTHER, THE APPROVING AUTHORITY ALSO CANNOT EXERCISE ITS POWER OF PRIOR APPROVAL TO GIVE DIRECTIONS TO THE ADJUDICATING AUTHORITY IN WHAT BENEFICIAL TO ACCEPT / APPRECIATE TINE MATERIAL ON RECORD IN REGARD TO THE COMPENSATION PAYABLE. OTHERWISE, IT WOULD TANTAMOUNT TO BLURRING THE DISTINCTION BETWEEN APPROVING AUTHORITY AND APPELLATE AUTHORITY''. 11.5. THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF DHARAMPAL SATYAPAL LTD., VS., UNION OF INDIA [2019] 366 ELT 253 (GAU.) MANU/GH/07070/2018 IN PARA-28 HAS HE LD AS UNDER : 'WHEN AN AUTHORITY IS REQUIRED TO GIVE HIS APPROVAL , IT IS ALSO TO BE UNDERSTOOD THAT SUCH AUTHORITY MAKES AN APPLICATION OF MIND AS TO WHETHER THE MATTER THAT IS REQUIRED TO BE APPROVED SATISFIES AL L THE REQUIREMENTS OF LAW OR PROCEDURE TO WHICH IT MAY BE SUBJECTED. IN OTHER WORDS, GRANT OF APPROVAL AND APPLICATION OF MIND AS TO WHETHER SUCH APPROVAL IS TO BE GRANTED MUST CO-EXIST AND, THEREFORE, WHER E AN AUTHORITY GRANTS AN APPROVAL IT IS ALSO TO BE CONSTRUED THAT THERE WAS DUE APPLICATION OF MIND THAT THE SUBJECT MATTER APPROVED AND SATISFIES ALL THE LEGAL AND PROCEDURAL REQUIREMENTS.' 11.6. THEREFORE, IN THE CASES OF SEARCH, ASSESSMENT ORDERS WHETHER FRAMED UNDER SECTION 153A OR 153C, THE JOIN T COMMISSIONER [APPROVING AUTHORITY] IS REQUIRED TO S EE THAT WHETHER THE ADDITIONS HAVE BEEN MADE IN THE HA NDS OF ASSESSEE ARE BASED PROPERLY ON INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH, OBSERVATIONS/COMMENTS IN THE APPRAISAL REPORT, THE SEIZED DOCUMENTS AND FURTHER ENQUIRIES MADE BY THE A.O. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, NECESSARILY AT THE TIME OF GRANT OF APPROVAL OF THE ASSESSMENT MADE BY THE A.O, THE JOINT COMMISSIONER IS REQUIRED TO VERIFY THE ABOVE ISSUES, APPLY HIS MIND THAT WHETHER THEY HAVE BEEN PROPERLY APPRECIATED BY THE A.O. WHILE FRAMING THE ASSESSMENT ORDERS OR NOT. THE JCI T IS ALSO REQUIRED TO VERIFY WHETHER THE REQUIRED PROCED URE HAVE BEEN FOLLOWED BY THE A.O. OR NOT AT THE TIME O F I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 24 FRAMING OF THE ASSESSMENTS. THUS, THE APPROVAL CANN OT BE A MERE DISCRETION OR FORMALITY, BUT, IS MANDATORY B EING QUASI JUDICIAL FUNCTION AND IT SHOULD BE BASED ON REASONING. IN OUR VIEW, WHEN THE LEGISLATURE HAS EN ACTED SOME PROVISION TO BE EXERCISED BY THE HIGHER REVENU E AUTHORITY ENABLING THE A.O. TO PASS ASSESSMENT ORDE R OR REASSESSMENT ORDER IN SEARCH CASES, THEN, IT IS THE DUTY OF THE JCIT TO EXERCISE SUCH POWERS BY APPLYING HIS JU DICIOUS MIND. WE ARE OF THE VIEW THAT THE OBLIGATION OF THE APPROVAL OF THE APPROVING AUTHORITY IS OF TWO FOLDS ; ON ONE HAND, HE HAS TO APPLY HIS MIND TO SECURE IN BUI LD FOR THE DEPARTMENT AGAINST ANY OMISSION OR NEGLIGENCE B Y THE A.O. IN TAXING RIGHT INCOME IN THE HANDS OF RIGHT P ERSON AND IN RIGHT ASSESSMENT YEAR AND ON THE OTHER HAND, JCIT IS ALSO RESPONSIBLE AND DUTY BOUND TO DO JUSTICE WI TH THE TAX PAYER [ASSESSEE] BY GRANTING PROTECTION AGAINST ARBITRARY OR UNJUST OR UNSUSTAINABLE EXERCISE AND D ECISION BY THE A.O. CREATING BASELESS TAX LIABILITY ON THE ASSESSEE AND THUS, THE JCIT HAS TO DISCHARGE HIS DUTY AS PER LAW. THUS, GRANTING APPROVAL UNDER SECTION 153D OF THE I .T. ACT IS NOT A MERE FORMALITY, BUT, IT IS A SUPERVISORY A CT WHICH REQUIRES PROPER APPLICATION OF ADMINISTRATIVE AND J UDICIAL SKILL BY THE JCIT ON THE APPLICATION OF MIND AND TH IS EXERCISE SHOULD BE DISCERNABLE FROM THE ORDERS OF T HE APPROVAL UNDER SECTION 153D OF THE I.T. ACT. 9.7 FURTHER WE FIND THAT I.T.A.T. CUTTACK BENCH IN THE CASE OF GEETARANI PANDA VS. ACIT IN I.T.A. NO.01/CTK/2019 V IDE ORDER DATED 05/07/2018 HAS HELD AS UNDER: 24. IN OUR CONSIDERED VIEW, THE PROVISIONS CONTAIN ED IN SECTION 153D AS ENACTED BY THE PARLIAMENT CANNOT BE TREATED AS AN EMPTY FORMALITY. THE PROVISION HAS CE RTAIN PURPOSE. IT IS APPARENT THAT THE PURPOSE BEHIND THE ENACTMENT OF THE ABOVE PROVISION IN THE STATUTE BY THE PARLIAMENT ARE TWO FOLDS. FIRSTLY, THE APPROVAL OF THE SENIOR AUTHORITY WILL ENSURE THAT THE ASSESSEE IS N OT PREJUDICED BY THE UNDUE OR IRRELEVANT ADDITION OR ASSESSMENT. SECONDLY, THE APPROVAL BY SENIOR AUTHOR ITY WILL ALSO ENSURE THAT PROPER ENQUIRY OR INVESTIGATI ON ARE CARRIED OUT BY THE ASSESSING AUTHORITY. THUS, THE A BOVE PROVISION PROVIDES FOR MENTAL APPLICATION OF A SENI OR OFFICER OF THE DEPARTMENT, WHICH IN TURN, PROVIDES I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 25 SAFEGUARD TO BOTH I.E. REVENUE AS WELL AS THE ASSES SEE. THEREFORE, THIS IMPORTANT PROVISION LAID DOWN BY TH E LEGISLATURE CANNOT BE TREATED AS A MERE EMPTY FORMA LITY. THE SAME VIEW WAS EXPRESSED BY THE PUNE BENCHES OF THE TRIBUNAL IN THE CASE OF AKIL GULAMALI SOMJI VS ITO, IN IT APPEAL NOS.455 TO 458 (PUNE) OF 2010 ORDER DATED 30.3.2012, WHEREIN, IT WAS HELD THAT WHEN THE APPRO VAL WAS GRANTED WITHOUT PROPER APPLICATION OF MIND, THE ORDER OF ASSESSMENT WILL BE BAD IN LAW. THE HON'BLE BOMBA Y HIGH COURT IN THE CASE OF CIT-II VS SHRI AKIL GULAM ALI SOMJI, IN INCOME TAX APPEAL (L) NO.1416 OF 2012 ORD ER DATED 15.1.2013 CONCURRED WITH THE VIEW OF THE TRIB UNAL THAT NOT FOLLOWING OF THE PROVISIONS OF SECTION 153 D OF THE ACT WILL RENDER THE RELATED ORDER OF ASSESSMENT VOI D. 9.8 FURTHER WE FIND THAT I.T.A.T. MUMBAI BENCH IN T HE CASE OF SHREELEKHA DAMMANI VS. DCIT IN I.T.A. NO.4061/MUM/2 012 VIDE ORDER DATED 19/08/2015 HAS DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE BY HOLDING AS UNDER: 12. COMING TO THE FACTS OF THE CASE IN HAND IN THE LIGHT OF THE ANALYTICAL DISCUSSION HEREINABOVE AND AS MEN TIONED ELSEWHERE, THE ADDL. COMMISSIONER HAS SHOWED HIS INABILITY TO ANALYZE THE ISSUES OF DRAFT ORDER ON M ERIT CLEARLY STATING THAT NO MUCH TIME IS LEFT, INASMUCH AS THE DRAFT ORDER WAS PLACED BEFORE HIM ON 31.12.2010 AND THE APPROVAL WAS GRANTED ON THE VERY SAME DAY. CONSIDER ING THE FACTUAL MATRIX OF THE APPROVAL LETTER, WE HAVE NO HESITATION TO HOLD THAT THE APPROVAL GRANTED BY THE ADDL. COMMISSIONER IS DEVOID OF ANY APPLICATION OF MIND, IS MECHANICAL AND WITHOUT CONSIDERING THE MATERIALS ON RECORD. IN OUR CONSIDERED OPINION, THE POWER VESTED IN THE JOINT COMMISSIONER/ADDL COMMISSIONER TO GRANT OR NO T TO GRANT APPROVAL IS COUPLED WITH A DUTY. THE ADDL COMMISSIONER/JOINT COMMISSIONER IS REQUIRED TO APPL Y HIS MIND TO THE PROPOSALS PUT UP TO HIM FOR APPROVAL IN THE LIGHT OF THE MATERIAL RELIED UPON BY THE AO. THE SA ID POWER CANNOT BE EXERCISED CASUALLY AND IN A ROUTINE MANNER. WE ARE CONSTRAINED TO OBSERVE THAT IN THE PRESENT CASE, THERE HAS BEEN NO APPLICATION OF MIND BY THE ADDL. COMMISSIONER BEFORE GRANTING THE APPROVAL . THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE ASSESSMENT ORDER MADE U/S. 143(3) OF THE ACT R.W. S EC. I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 26 153 A OF THE ACT IS BAD IN LAW AND DESERVES TO BE ANNULLED. THE ADDITIONAL GROUND OF APPEAL IS ALLOWE D. 13. THE LD. DEPARTMENTAL REPRESENTATIVE HAS STRONG LY RELIED UPON THE DECISION OF THE TRIBUNAL MUMBAI BEN CH IN THE CASE OF RAFIQUE ABDUL HAMID KOKANI VS DCIT 113 TAXMAN 37, HON'BLE HIGH COURT OF KARNATAKA IN THE C ASE OF RISHABCHAND BHANSALI VS DCIT 136 TAXMAN 579 AND HON'BLE HIGH COURT OF MADRAS IN THE CASE OF SAKTHIV EL BANKERS VS ASSTT. COMMISSIONER 124 TAXMAN 227. 13.1. WE HAVE CAREFULLY PERUSED THE DECISIONS PLACE D ON RECORD BY THE LD. DR. WE FIND THAT ALL THE DECISION S RELIED UPON BY THE LD. DR ARE MISPLACED INASMUCH AS ALL TH ESE DECISIONS RELATE TO THE ISSUE WHETHER THE JOINT CIT /CIT HAS TO GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESS EE BEFORE GRANTING THE APPROVAL. THIS IS NOT THE ISSUE BEFORE US AS THE LD. COUNSEL HAS NEVER ARGUED THAT THE ASS ESSEE WAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD. THESE DECISIONS THEREFORE WOULD NOT DO ANY GOOD TO THE REVENUE. 14. SINCE WE HAVE ANNULLED THE ASSESSMENT ORDER, W E DO NOT FIND IT NECESSARY TO DECIDE THE ISSUES RAISE D ON MERITS OF THE CASE. 9.9 IN THIS CASE, THE ADDL. COMMISSIONER HAS SHOWED HIS INABILITY TO ANALYZE THE ISSUES OF DRAFT ORDER CLEA RLY STATING THAT NO MUCH TIME WAS LEFT AS THE DRAFT ORDER WAS PLACED BEFORE HIM ON 31/12/2010 AND APPROVAL WAS GRANTED ON THE SAME DAY. IN THE CASE BEFORE US THE ADDL. CIT HAS THOUGH NOT EXP RESSLY EXPRESSED HIS INABILITY TO ANALYZE THE ISSUES OF DR AFT ORDER BUT IT IS ABUNDANTLY CLEAR THAT HE HAD NOT ANALYZED THE IS SUES IN THE DRAFT ORDER AS IN THE PRESENT CASES THE APPROVAL HA S BEEN GIVEN IN 67 CASES ON THE SAME DATE WHICH IS HUMANLY IMPOS SIBLE. IF AN ACIT CANNOT EXPRESS HIS OPINION ON A SINGLE CASE IN ONE DAY HOW ANOTHER ACIT CAN EXPRESS HIS OPINION IN 67 CASES IN A SINGLE DAY. 9.10 THE HON'BLE BOMBAY HIGH COURT HAS DISMISSED TH E APPEAL OF THE DEPARTMENT FILED AGAINST THE ABOVE ORDER OF THE MUMBAI TRIBUNAL IN THE CASE OF SHREELEKHA DAMANI VIDE JUDG MENT DATED 27/11/2018. THE FINDINGS OF HON'BLE BOMBAY HIGH CO URT ARE REPRODUCED BELOW: I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 27 7. IN PLAIN TERMS, THE ADDITIONAL CIT RECORDED THA T THE DRAFT ORDER FOR APPROVAL UNDER SECTION 153D OF THE ACT WAS SUBMITTED ONLY ON 31 ST 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 ORD ER ON MERIT. THEREFORE, THE ORDER WAS APPROVED AS IT WAS SUBMITTED. CLEARLY, THEREFORE, THE ADDITIONAL CIT F OR WANT OF TIME COULD NOT EXAMINE THE ISSUES ARISING OUT OF THE DRAFT ORDER. HIS ACTION OF GRANTING THE APPROVAL WA S THUS, A MERE MECHANICAL EXERCISE ACCEPTING THE DRAFT ORDE R AS IT IS WITHOUT ANY INDEPENDENT APPLICATION OF MIND ON H IS PART. THE TRIBUNAL IS, THEREFORE, PERFECTLY JUSTIFI ED IN COMING TO THE CONCLUSION THAT THE APPROVAL WAS INVA LID IN EYE OF LAW. WE ARE CONSCIOUS THAT THE STATUTE DOES NOT PROVIDE FOR ANY FORMAT IN WHICH THE APPROVAL MUST B E GRANTED OR THE APPROVAL GRANTED MUST BE RECORDED. NEVERTHELESS, WHEN THE ADDITIONAL CIT WHILE GRANTIN G THE APPROVAL RECORDED THAT HE DID NOT HAVE ENOUGH TIME TO ANALYZE THE ISSUES ARISING OUT OF THE DRAFT ORDER, CLEARLY THIS WAS A CASE IN WHICH THE HIGHER AUTHORITY HAD G RANTED THE APPROVAL WITHOUT CONSIDERATION OF RELEVANT ISSU ES. QUESTION OF VALIDITY OF THE APPROVAL GOES TO THE RO OT OF THE MATTER AND COULD HAVE BEEN RAISED AT ANY TIME. IN T HE RESULT, NO QUESTION OF LAW ARISES. 9.11 SIMILAR ARE THE FINDINGS OF I.T.A.T. JODHPUR B ENCH IN THE CASE OF INDRA BANSAL & ORS. VS. ACIT IN I.T.A. NOS. 321 TO 324 IN WHICH THE TRIBUNAL HELD AS UNDER: 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PERUSED THE MATERIAL ON RECORD. THE MAIN CONTENTION OF LEARNED AUTHORISED REPRESENTATIVE IS THAT REASONABL E TIME WAS NOT AVAILABLE WITH THE JOINT COMMISSIONER FOR T HE GRANT OF NECESSARY APPROVAL AS ENVISAGED UNDER SECT ION 153D OF THE ACT. WE HAVE PERUSED THE FORWARDING LET TER DT. 30-3-2013 SEEKING APPROVAL OF THE DRAFT ASSESSM ENT ORDER. THE DATE OF RECEIPT OF THIS LETTER IN THE OF FICE OF JOINT COMMISSIONER IS INDISPUTABLY ON 31-3-2013 WHI CH IS APPARENT FROM THE DATE STAMPED ON IT BY THE OFFICE OF THE JOINT COMMISSIONER. THUS, THIS LEAVES NO DOUBT THAT THE LETTER REQUESTING GRANT OF APPROVAL AND THE GRANTIN G OF APPROVAL, BOTH, ARE WITHIN ONE DAY OF EACH OTHER. T HIS I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 28 LENDS CREDENCE TO THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE DRAFT ASSESSMENT ORDER WAS APPROVED WITHOUT MUCH DELIBERATION BY THE JOINT COMMISSIONER. FURTHER, THE TIME OF THE FAX GRANTING APPROVAL IS 6.56 A.M. ON 31-3-2013 WHICH IS PRIOR T O THE OFFICE HOURS AND, THUS, IT BRINGS OUT A REASONABLE DOUBT THAT THE APPROVAL WAS GRANTED EVEN BEFORE THE LETTE R REQUESTING THE APPROVAL WAS RECEIVED IN THE OFFICE OF THE JOINT COMMISSIONER. FURTHER, THE RESPONSE RECEIVED BY THE ASSESSEE IN RESPONSE TO HIS APPLICATION UNDER RIGHT TO INFORMATION ACT, 2005 ALSO ESTABLISHES THE CORRECTN ESS OF THE CLAIM OF THE ASSESSEE THAT THE ASSESSMENT RECOR DS WERE NOT BEFORE THE JOINT COMMISSIONER WHEN THE APPROVAL WAS GRANTED AS THE RECORDS WERE WITH THE R ANGE OFFICE IN JODHPUR WHEREAS THE APPROVAL WAS SENT BY FAX ON THE MORNING OF 31-3-2013 FROM UDAIPUR. THUS, IT IS OUR CONSIDERED OPINION THAT THE JOINT COMMISSIONER HAD GRANTED APPROVAL IN A MECHANICAL MANNER WITHOUT EXAMINING THE CASE RECORDS BECAUSE THE APPROVAL HAS BEEN GRANTED AT 6.56 A.M. ON 31-3-2013 FROM UDAIPUR WHEREIN IT HAS ALREADY BEEN MENTIONED THAT THE ASSESSMENT RECORDS WERE BEING RETURNED WHEREAS THE DRAFT ASSESSMENT ORDER ALONG WITH THE ASSESSMENT RE CORDS WERE HANDED OVER TO THE OFFICE OF THE JOINT COMMISS IONER ON 31-3-2013 AND AS SUCH IT WAS PHYSICALLY IMPOSSIB LE THAT ALL THE CASE RECORDS ALONG WITH THE DRAFT ASSESSMEN T ORDER WERE RECEIVED BY THE JOINT COMMISSIONER AT UDAIPUR. TRIBUNAL, MUMBAI BENCH IN THE CASE OF SMT. SHREELEK HA DAMANI V. DY. CIT (2015) 125 DTR (MUMBAI)(TRIB) 263 : (2015) 173 TTJ (MUMBAI) 332 HAS HELD THAT THE LEGIS LATIVE INTENT BEHIND THE INSERTION OF SECTION 153D OF THE ACT WAS THAT THE ASSESSMENTS IN SEARCH AND SEIZURE CASES SH OULD BE MADE WITH THE PRIOR APPROVAL OF SUPERIOR AUTHORI TY WHICH MEANS THAT THE SUPERIOR AUTHORITIES SHOULD AP PLY THEIR MIND TO THE MATERIAL ON THE BASIS OF WHICH TH E ASSESSING OFFICER IS MAKING THE ASSESSMENT. IN THIS CASE, THE ADDL. CIT HAD EXPRESSED HIS INABILITY TO ANALYZ E THE ISSUES OF THE DRAFT ORDER ON MERITS CLEARLY STATING THAT NOT MUCH TIME WAS LEFT AND GRANTED THE APPROVAL UNDER SECTION 153D OF THE ACT ON THE SAME DAY AND TRIBUNA L, MUMBAI BENCH HELD THAT THE APPROVAL GRANTED BY ADDL . CIT WAS MECHANICAL AND HAD BEEN PASSED WITHOUT I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 29 CONSIDERING THE MATERIAL ON RECORD AND WAS, THEREFO RE, DEVOID OF ANY APPLICATION OF MIND. THE IMPUGNED ASSESSMENT ORDER WAS ANNULLED. SIMILARLY, TRIBUNAL, ALLAHABAD BENCH IN VERMA ROADWAYS V. ASSTT. CIT (2001) 70 TTJ (ALL) 728; (20 00) 75ITD 183 (ALL) HELD THAT WHILE GRANTING APPROVAL, COMMISSIONER IS REQUIRED TO EXAMINE THE MATERIAL BE FORE APPROVING THE ASSESSMENT ORDER. IN THIS CASE, TRIBU NAL, ALLAHABAD BENCH WAS EXAMINING THE ISSUE OF APPROVAL UNDER SECTION 158BG OF THE ACT AND IT OPINED THAT T HE OBJECT FOR ENTRUSTING THE JOB OF APPROVAL TO A SUPE RIOR AND A VERY REASONABLE (SIC-RESPONSIBLE) OFFICER OF THE RANK OF COMMISSIONER IS THAT HE WITH HIS ABILITY, EXPERIENC E AND MATURITY OF UNDERSTANDING CAN SCRUTINIZE THE DOCUME NTS, CAN APPRECIATE ITS FACTUAL AND LEGAL ASPECTS AND CA N PROPERLY SUPERVISE THE ENTIRE PROGRESS OF ASSESSMEN T. TRIBUNAL, ALLAHABAD BENCH HELD THAT THE CONCERNED AUTHORITY WHILE GRANTING THE APPROVAL IS EXPECTED T O EXAMINE THE ENTIRE MATERIAL BEFORE APPROVING THE ASSESSMENT ORDER AND FURTHER THAT WHENEVER ANY STAT UTORY OBLIGATION IS CAST ON ANY AUTHORITY, SUCH AUTHORITY IS LEGALLY REQUIRED TO DISCHARGE THE OBLIGATION NOT MECHANICAL LY, NOR FORMALLY BUT BY APPLICATION OF MIND. SIMILARLY, THE HON'BLE APEX COURT IN THE CASE OF SAHARA INDIA (FIRM) V. CIT & ANR. (2008) 216 CTR (S C) 303 : (2008) 7 DTR (SC) 27: (2008) 300 ITR 403 (SC ), WHILE DISCUSSING THE REQUIREMENT OF PRIOR APPROVAL OF CHIEF COMMISSIONER OR COMMISSIONER IN TERMS OF PROVISION OF SECTION 142(2A) OF THE ACT, OPINED THAT THE REQUIRE MENT OF PREVIOUS APPROVAL OF THE CHIEF COMMISSIONER OR COMMISSIONER IN TERMS OF SAID PROVISION BEING AN IN BUILT PROTECTION AGAINST ARBITRARY OR UNJUST EXERCISE OF POWER BY THE ASSESSING OFFICER, CASTS A VERY HEAVY DUTY ON T HE SAID HIGH-RANKING AUTHORITY TO SEE IT THAT THE APPROVAL ENVISAGED IN THE SECTION IS NOT TURNED INTO AN EMPT Y RITUAL. THE HON'BLE APEX COURT HELD THAT THE APPROVAL MUST BE GRANTED ONLY ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND THE APPROVAL MUST REFLECT THE APPLICATION OF MI ND TO THE FACTS OF THE CASE. I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 30 COMING TO THE FACTS OF THE CASE, IT IS APPARENT FRO M THE DOCUMENTS ON RECORD THAT THE APPROVAL WAS GIVEN BY THE JOINT COMMISSIONER IN HASTY MANNER WITHOUT EVEN GOING THROUGH THE RECORDS AS THE RECORDS WERE IN JO DHPUR WHILE THE JOINT COMMISSIONER WAS CAMPING AT UDAIPUR . THE ENTIRE EXERCISE OF SEEKING AND GRANTING OF APPR OVAL IN ALL THE 2 CASES WAS COMPLETED IN ONE SINGLE DAY ITS ELF I.E., 31-3-2013. THUS, IT IS APPARENT THAT THE JOINT COMMISSIONER DID NOT HAVE ADEQUATE TIME TO APPLY HI S MIND TO THE MATERIAL ON THE BASIS OF WHICH THE ASSE SSING OFFICER HAD MADE THE DRAFT ASSESSMENT ORDERS. TRIBU NAL, MUMBAI BENCH AND TRIBUNAL, ALLAHABAD BENCH IN THEIR ORDERS, AS DISCUSSED IN THE PRECEDING PARAGRAPHS, H AVE LAID DOWN THAT THE POWER TO GRANT APPROVAL IS NOT T O BE EXERCISED CASUALLY AND IN ROUTINE MANNER AND FURTHE R THE CONCERNED AUTHORITY, WHILE GRANTING APPROVAL, IS EX PECTED TO EXAMINE THE ENTIRE MATERIAL BEFORE APPROVING THE ASSESSMENT ORDER. IT HAS ALSO BEEN LAID DOWN THAT WHENEVER ANY STATUTORY OBLIGATION IS CAST UPON ANY AUTHORITY, SUCH AUTHORITY IS LEGALLY REQUIRED TO DI SCHARGE THE OBLIGATION BY APPLICATION OF MIND. IN ALL THE C ASES BEFORE US, THE DEPARTMENT COULD NOT DEMONSTRATE, BY COGENT EVIDENCE, THAT THE JOINT COMMISSIONER HAD ADEQUATE TIME WITH HIM SO AS TO GRANT APPROVAL AFTE R DULY EXAMINING THE MATERIAL PRIOR TO APPROVING THE ASSES SMENT ORDER. THE CIRCUMSTANCES INDICATE THAT THIS EXERCIS E WAS CARRIED OUT BY THE JOINT COMMISSIONER IN A MECHANIC AL MANNER WITHOUT PROPER APPLICATION OF MIND. ACCORDIN GLY, RESPECTFULLY FOLLOWING THE RATIO OF THE CO-ORDINATE BENCHES OF MUMBAI AND ALLAHABAD AS AFORE-MENTIONED AND ALSO APPLYING THE RATIO OF THE JUDGMENT OF THE HON'BLE A PEX COURT IN THE CASE OF SAHARA INDIA (FIRM) V. CIT (SU PRA), WE HOLD THAT THE JOINT COMMISSIONER HAS FAILED TO G RANT APPROVAL IN TERMS OF SECTION 153D OF THE ACT I.E., AFTER APPLICATION OF MIND BUT HAS RATHER CARRIED OUT EXER CISE IN UTMOST HASTE AND IN A MECHANICAL MANNER AND, THEREF ORE, THE APPROVAL SO GRANTED BY HIM IS NOT AN APPROVAL W HICH CAN BE SUSTAINED. ACCORDINGLY, ASSESSMENTS IN THREE COS AND NINETEEN APPEALS OF THE ASSESSEE(S), ON IDENTIC AL FACTS, ARE LIABLE TO BE ANNULLED AS SUFFERING FROM THE INCURABLE DEFECT OF THE APPROVAL NOT BEING PROPER. ACCORDINGLY, WE ANNUL THE ASSESSMENT ORDERS IN CO N OS. 8 TO 10/JODH/2016 AND ITA NOS. 325 TO 331/JODH/2016. I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 31 THUS, ALL THE THREE COS AND THE NINETEEN APPEALS OF THE ASSESSEE, AS AFORESAID, ARE ALLOWED. 10. SIMILARLY WE FIND THAT HON'BLE SUPREME COURT IN THE CASE OF SAHARA INDIA VS. CIT & OTHERS [2008] 216 CTR 3 03 (S.C.) : [2008] 7 DTR (SC) 27: [2008] 300 ITR 403 (SC) WHILE DISCUSSING THE REQUIREMENT OF PRIOR APPROVAL OF CHIEF COMMISSI ONER OR COMMISSIONER IN TERMS OF PROVISION OF SECTION 142(2 A) OF THE ACT, OPINED THAT THE REQUIREMENT OF PREVIOUS APPROV AL OF THE CHIEF COMMISSIONER OR COMMISSIONER IN TERMS OF SAID PROVISION BEING AN INBUILT PROTECTION AGAINST ARBITRARY OR UN JUST EXERCISE OF POWER BY THE ASSESSING OFFICER, CASTS A VERY HEAVY DUTY ON THE SAID HIGH-RANKING AUTHORITY TO SEE IT THAT THE APPR OVAL ENVISAGED IN THE SECTION IS NOT TURNED INTO AN EMPTY RITUAL. THE HON'BLE APEX COURT HELD THAT THE APPROVAL MUST BE GRANTED O NLY ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND THE APPRO VAL MUST REFLECT THE APPLICATION OF MIND TO THE FACTS OF THE CASE. 11. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF JUDICIAL PRECEDENTS RELIED ON BY LEARNED A. R. GROU ND NO.5 IN APPEALS IS ALLOWED AND THE ASSESSMENTS ORDERS ARE A NNULLED. REST OF THE GROUNDS WERE NOT ARGUED BY LEARNED A. R . THEREFORE, REST OF THE GROUNDS ARE DISMISSED AS NOT PRESSED. 8. THE LUCKNOW BENCH OF THE TRIBUNAL HAS FURTHER FO LLOWED THIS ORDER IN THE CASE OF NARESH KUMAR JAIN IN I.T.(SS)A. NO.650/ LKW/2019 WHEREIN THE TRIBUNAL HAS QUASHED THE ASSESSMENT ORDER VIDE ORDE R DATED 20/09/2021. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE REPRODUCE D BELOW: 5. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT ALL THE ABOVE FACTS CLEARLY SHOW THAT THE ASSESSEE' S CASES ARE PREJUDICED DUE TO THE MECHANICAL APPROVAL UNDER SEC TION 153D OF THE INCOME TAX ACT, 1961 GRANTED BY THE JOI NT COMMISSIONER OF INCOME TAX (CENTRAL RANGE) KANPUR, THAT SUCH APPROVAL IS UNSUSTAINABLE IN LAW BEING MECHANI CAL AND THEREFORE, THE IMPUGNED ASSESSMENT ORDERS PASSED IN CONSEQUENCE THEREOF, ARE LIABLE TO BE QUASHED. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF THE ITAT, LU CKNOW BENCH IN THE CASE OF SHRI NAVIN JAIN VS. DY. CIT (SUPRA) IN IT(SS)A NOS.639 TO 641/LKW/2019, ETC., WHEREIN THE PROVISIONS OF SECTION 153D OF THE INCOME TAX ACT, 1 961 HAVE I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 32 BEEN EXPLAINED IN DETAIL AND THE TRIBUNAL HAS ALLOW ED THE APPEAL OF THE ASSESSEE, HOLDING AS UNDER IN PARAS 9 .9 TO 11 OF ITS ORDER:- 9.9 IN THIS CASE, THE ADDL. COMMISSIONER HAS SHOWED HIS INABILITY TO ANALYZE THE ISSUES OF DRAFT ORDER CLEARLY STATING THAT NO MUCH TIME WAS LEFT AS THE DRAFT ORDER WAS PLACED BEFORE HIM ON 31.12.2010 AND APPROVAL WAS GRANTED ON THE SAME DAY. IN THE CASE BEFORE US THE ADDL. CIT HAS THOUGH NOT EXPRESSLY EXPRESSED HIS INABILITY TO ANALYZE THE ISSUES OF DRAFT ORDER BUT IT IS ABUNDANTLY CLEAR TH AT HE HAD NOT ANALYZED THE ISSUES IN THE DRAFT ORDER A S IN THE PRESENT CASES THE APPROVAL HAS BEEN GIVEN IN 67 CASES ON THE SAME DATE WHICH IS HUMANLY IMPOSSIBLE IF AN ACIT CANNOT EXPRESS HIS OPINION ON A SINGLE CASE IN ONE DAY HOW ANOTHER ACIT CAN EXPRESS HIS OPINION IN 67 CASES IN A SINGLE DAY. 9.10 THE HON'BLE BOMBAY HIGH COURT HAS DISMISSED THE APPEAL OF THE DEPARTMENT FILED AGAINST THE ABOVE ORDER OF THE MUMBAI TRIBUNAL IN THE CASE OF SHREELEKHA DAMANI VIDE JUDGMENT DATED 27/11/2018. THE FINDINGS OF HON'BLE BOMBAY HIGH COURT ARE REPRODUCED BELOW: 10. SIMILARLY WE FIND THAT HON'BLE. SUPREME COURT IN THE CASE OF 'SAHARA INDIA VS. CIT & OTHERS ' [2008] 216 CTR 303 (S.C.): [2008] 7 DTR (SC) 27: [2008] 300 JTR 403 (SC) WHILE DISCUSSING THE REQUIREMENT OF PRIOR APPROVAL OF CHIEF COMMISSIONER OR COMMISSIONER IN TERMS OF PROVISION OF SECTION 142(2A) OF THE ACT, OPINED THAT THE REQUIREMENT OF PREVIOUS APPROVAL OF THE CHIEF COMMISSIONER OR COMMISSIONER IN TERMS OF SAID PROVISION BEING AN INBUILT PROTECTION AGAINST ARBITRARY OR UNJUST EXER CISE OF POWER BY THE ASSESSING OFFICER, CASTS A VERY HEAVY DUTY ON THE SAID HIGH-RANKING AUTHORITY TO SE E IT THAT THE APPROVAL ENVISAGED IN THE SECTION IS NO T TURNED INTO AN EMPTY RITUAL. THE HON'BLE APEX COURT HELD THAT THE APPROVAL MUST BE GRANTED ONLY ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND THE I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 33 APPROVAL MUST REFLECT THE APPLICATION OF MIND TO TH E FACTS OF THE CASE 11. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF JUDICIAL PRECEDENTS RELIED ON BY LEARNED AR GROUND NO. 5 IN APPEALS IS ALLOWED AND THE ASSESSMENTS ORDERS ARE ANNULLED......'. 11. WE FIND THAT AT PAGE 19 OF THE AFORESAID TRIBUNAL O RDER DATED 3.8.2021 IN THE CASE OF SHRI NAVIN JAIN VS. DY. CIT IN IT(SS)A NOS.639 TO 641/LKW/2019, WHEREIN THE APPROV AL DATED 30.12.2018 OF THE ACIT, CENTRAL, KANPUR HAS B EEN REPRODUCED, THE NAME OF THE ASSESSEE, I.E., NARESH KUMAR JAIN APPEARS AT SERIAL NUMBER 24. 12. THEREFORE, AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE FACTS OF THIS CASE ARE EXACTLY SIMILA R TO THE FACTS INVOLVED IN SHRI NAVIN JAIN VS. DY. CIT, IN IT(SS )A NOS.639 TO 641/LKW/2019, WHEREIN ALSO THE APPROVAL U/S 153D O F THE ACT WAS GIVEN THROUGH THE SAME LETTER F. NO. ADDL. CIT(CR)/KNP/APPROVAL U/S 153D/2018-19 BY THE ACIT, CENTRAL, KANPUR AND THE GROUND IN THIS REGARD RAISE D BY THE ASSESSEE WAS ALLOWED, AND THE ASSESSMENT ORDERS WER E ANNULLED BY THE TRIBUNAL. WHILE ALLOWING THE GROUN D RAISED BY THE ASSESSEE, THE TRIBUNAL HAD ALSO CONSIDERED VARI OUS CASES LAWS, INCLUDING THAT OF THE HON'BLE SUPREME COURT. 13. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE OR DER OF THE TRIBUNAL IN SHRI NAVIN JAIN VS. DY. CIT (SUPR A), THE GRIEVANCE OF THE ASSESSEE BY WAY OF GROUND NO.3, IS FOUND TO BE JUSTIFIED AND IS ACCEPTED AS SUCH. 14. NOTHING FURTHER SURVIVES FOR ADJUDICATION, NOR WAS ANY OTHER POINT ARGUED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED. 9. THUS, IN NAVIN JAIN & OTHERS (SUPRA) AND NARESH KUMAR JAIN & OTHERS (SUPRA), WHEREIN, NAVIN JAIN & OTHERS (SUPRA) HAS B EEN FOLLOWED, THE I.T.(SS)A. NOS.418, 420 & 421/LKW/2019 ASSTT YEARS:2013-14, 2015-16 & 2016-17 34 TRIBUNAL HAS HELD TO THE EFFECT THAT GRANTING OF A MECHANICAL APPROVAL U/S 153D OF THE ACT VITIATES THE ENTIRE PROCEEDINGS. I T IS ON THIS BASIS THAT THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE IN BOTH THESE CASES, UNDER FACTS AND CIRCUMSTANCES EXACTLY SIMILAR TO THOSE PRESENT HEREIN. 10. RESPECTFULLY FOLLOWING THE VIEW TAKEN IN THE AB OVE APPEALS, WE ALLOW ADDITIONAL GROUND OF APPEAL AND QUASH THE ASSESSMEN T ORDERS. AS THE ASSESSMENT ORDERS HAVE BEEN QUASHED, THE CONSEQUENT ORDERS OF LEARNED CIT(A) ARE ALSO QUASHED. REST OF THE GROUNDS DO NO T SURVIVE FOR ADJUDICATION. 11. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STAND ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/10/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:07/10/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW