M/s Kundan Castings Pvt. Ltd., Kanpur V. Deputy Commissioner of Income Tax-CC-II, Kanpur

ITSSA 632/LKW/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4312 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 07-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEELA CHOPRA
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Document seized; Deemed to accrue or arise in india; Question of law; Assessment record; Documents seized; Bogus
• Section: 68; 148; 69C; 143(3); 153A; 274; 142(2A); 158BC; 113; 48; 13; 153; 22; 153C; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER IT(SS)A No.632/LKW/2019 Assessment Year: 2016-17 M/s Kundan Casting Pvt. Ltd. 122/235, Plot 17, Fazalganj Kanpur v. The Dy. CIT Central Circle II Kanpur TAN/PAN:AAACK5601N (Appellant) (Respondent) IT(SS)A No.635 & 636/LKW/2019 Assessment Years: 2015-16 & 2017-18 M/s Shree Radhey Radhey Ispat (P) Ltd. 122/235, Plot 17, Fazalganj Kanpur v. The Dy. CIT Central Circle II Kanpur TAN/PAN:AACCR7807B (Appellant) (Respondent) Appellant by: Shri Swaran Singh, C.A and Smt. Jasleen Seth, C.A. Respondent by: Smt. Sheela Chopra, CIT (DR) Date of hearing: 08 03 2022 Date of pronouncement: 18 05 2022 O R D E R PER A.D. JAIN, V.P.: These are appeals preferred by two different assessees against the respective orders of the ld. CIT(A)-IV, Kanpur, dated 14.10.2019 for Assessment Year 2016-17 in the case of M/s Kundan Casting Pvt. Ltd. in ITA No.632/LKW/2019 and common order dated 14.10.2019 for Assessment Years 2015-16 and 2017- Page 2 of 38 18 in the case of M/s Shree Radhey Radhey Ispat (P) Ltd. in ITA Nos.635 & 636/LKW/2019. 2. Since the issue involved in all the three appeals are common, the facts are being taken from ITA No.636/LKW/2019 in the case of M/s Shree Radhey Radhey Ispat (P) Ltd. In this appeal, the assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur has erred in law and on facts in sustaining the addition of Rs.4,00,00,000/- made by the Ld. AO u/s 68 of the Income Tax Act,1961, on account of alleged share capital amounting to Rs.80,00,000/- and alleged share premium amounting to Rs.3,20,00,000/-, without appreciating that no incriminating material, document(s)/evidence was found from the premises of the appellant (searched person) during the course of search, therefore, firstly, the impugned assessment made u/s 153A of the Income Tax Act, 1961 and secondly the addition for alleged unexplained share capital are illegal, void-ab-initio, bad in law and liable to be quashed/deleted. 2. That the Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur has erred in law and on facts in sustaining the addition of Rs.10,00,000/- made by the Ld. AO u/s 69C of the Income Tax Act,1961 on account of alleged unexplained expenditure @ 2.5%, in respect of share capital and share premium, without appreciating that no incriminating material, document(s)/evidence was found from the premises of the appellant (searched person) during the course of search, therefore, firstly, the impugned assessment made u/s 153A of the Income Tax Act, 1961 and secondly the addition for alleged unexplained expenditure are illegal, void-ab- initio, bad in law and liable to be quashed/deleted. 3. That the Ld. Commissioner of Income Tax (Appeals)-4, Kanpur, has erred in law and on facts in sustaining the treatment of profit in wholesale trading in cloth amounting to Rs.10,67,37,470/-, as unexplained cash credit by the Ld. A.O., under section 68 r/w section 115BBE of the Income Tax Act, 1961, without Page 3 of 38 appreciating that no incriminating material, document(s)/evidence, was found from the premises of the appellant (searched person) during the course of search, therefore, firstly, the impugned assessment made u/s 153A of the Income Tax Act, 1961 and secondly the treatment of profit in wholesale trading in cloth, as unexplained cash credit by the Ld. A.O., are illegal, void-ab-initio, bad in law and liable to be quashed/deleted. 4. That the Ld. Commissioner of Income Tax (Appeals)-4, Kanpur, has erred in law and on facts in sustaining the arbitrary addition of Rs.21,34,759/- made by the A.O., being the alleged commission paid @ 2% on the gross profit from wholesale trading of cloth treated as unexplained expenditure under section 69C of the I.T. Act, 1961, merely on surmises and conjectures, without appreciating that no incriminating document(s)/ evidence was found in the course of search relating to the above addition in the assessment passed u/s 153A of the Income Tax Act,1961. 5. That the Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur has erred in law and on facts in rejecting the ground of appeal no. 9 raised by the appellant, challenging the validity of assumption of jurisdiction by the Ld. A.O. and validity of impugned assessment order pursuant to an illegal order passed u/s 127 of the Income Tax Act,1961, dated 18.11.2016. 6. That the Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur has erred in law and on facts in sustaining the impugned assessment order and without appreciating the fact that the approval granted by the Ld. Addl. CIT, Central, Kanpur u/s 153D of the Income Tax Act, 1961 is mechanical in nature, therefore the same is illegal and non-est and consequential assessment made on the basis thereof is also illegal and deserves to be annulled. 7. That the Ld. Commissioner of Income Tax(Appeals) has failed to appreciate that in the Show cause Notice dated 12.12.2018, the Ld. A.O. has prejudged and pre- decided the following issues : Page 4 of 38 i)Treatment of Gross Profit from the business of wholesale trading in cloth amounting to Rs.10,67,37,470/- as deemed income u/s 68 of the Income Tax Act,1961. ii)Addition of commission @ 2% on the Gross profit from the business of wholesale trading in cloth, amounting to Rs.21,34,759/-. iii)Addition on account of subscription to Share Capital amounting to Rs.80,00,000/- & share premium amounting to Rs.3,20,00,000/-. iv) Addition of commission @ 2.5% paid on the Share Capital amounting to Rs.80,00,000/- & share premium amounting to Rs.3,20,00,000/-, amounting to Rs.10,00,000/. Therefore, the said Show cause Notice is unsustainable in law and consequential treatment of Gross Profit as deemed income u/s 68 of the Income Tax Act,1961 and additions mentioned hereinabove are unsustainable in law. 8. That the Ld. CIT(A) -4, Kanpur has erred in law and on facts in sustaining the impugned additions made by the Ld. AO and ignoring the fact that the Ld. AO has neither confronted any incriminating material/ statement nor provided an opportunity to cross examine the persons of the Rich Group, whose statement(s)were relied upon by the Ld. AO, thus, the inferences drawn were arbitrary, unilateral and are also illegal &unsustainable in law and on facts. 9. That the Ld. Commissioner of Income Tax (Appeals)-4, Kanpur, has erred in law and on facts in treating the business of trading in cloth as bogus and sustaining the assessment of gross profit of Rs.10,67,37,470/- there from u/s 68 of the Income Tax Act,1961, without appreciating the fact that the business of trading in cloth was duly accepted in the original assessment(s) made under section 143(3)/143(1) of the I.T. Act, 1961, and thus the A.O. cannot review his own order passed earlier u/s 143(3) of the I.T. Act, 1961 in the Page 5 of 38 assessment made u/s 153A of the Income tax Act,1961, without any incriminating documents found during the course of search. 10. That Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur has erred in law and on facts in sustaining the arbitrary additions made by the Ld. A.O. in the income of the appellant which are contrary to the principles of natural justice and equity, unsustainable and deserve to be deleted. 3. The assessee has also raised the following additional grounds: 1. That assessment framed by the Learned Assessing Officer u/s 153A of the Income Tax Act, 1961 is bad in law and deserves to be quashed in as much as the same has been framed on the basis of alleged diary seized from the possession of a third party during the course of search u/s 132 in April 2015. 2. That any assessment on the basis of documents seized during the course of search at third party without resorting to mandatory procedure provided in Section 153C of the Income Tax Act, 1961 is bad in law and any assessment framed without following the procedure, deserves to be quashed. 4. At the outset, the ld. Counsel for the assessee has stated at Bar that he does not wish to press the Additional Grounds. Accordingly, the Additional Ground nos.1 & 2 are rejected. 5. Arguing Ground no.6 first, the ld. Counsel for the assessees has contended that a search & seizure operation under section 132 of the I.T. Act, 1961 took place at the business premise of the assessee-Company along with the Sigma Group of cases, from 23.8.2016 to 25.8.2016, and the assessees were required to file income tax returns under section 153A of the Act. Page 6 of 38 In response to the notices, the assessees filed returns under section 153A of the Act for the years other than the search year under section 153A and for the year of search, the regular returns were filed. 6. The assessments in these cases were completed under sections 153A/143(3) of the Act by the Dy. CIT, Central Circle-2, Kanpur vide order dated 30.12.2018 and various additions were made. It was submitted before us that as per the provisions of law, in search cases, the Assessing Officer, before passing assessment order framed under sections 153A, 153C and 143(3) is required to take the approval from the Jt. CIT under section 153D of the Act if the Assessing Officer is below the rank of Jt. CIT and in this respect our attention was invited to the provisions of section 153D of the Act. It was submitted that the Jt. CIT, that is, the approving authority, before granting approval, is required to see all search material including incriminating material, seized documents, appraisal report, enquiries made by the Investigation Wing, the various enquiries made by the Assessing Officer during the assessment proceedings and the replies submitted by the assessee, and, after due application of mind and after ascertaining that the Assessing Officer has appreciated the search material and other evidences in the proper perspective, has to give approval to the draft assessment order and it is only thereafter, the Assessing Officer can pass the assessment order. 7. The ld. Counsel for the assessee has submitted that in these cases, the Assessing Officer is below the rank of Jt. CIT and, therefore, approval under section 153D was a prerequisite before passing the final assessment order. It was submitted that Page 7 of 38 the Assessing Officer passed the draft assessment orders on 30.12.2018 and on the same day, approval under section 153D was granted and final assessment order was also passed by the Assessing Officer on the same day. In this respect, our attention was invited to copy of approval letter dated 30.12.2018 placed at pages 1 to 3 of the assessee’s Paper Book-2. The ld. Counsel for the assessee has submitted that as per this approval letter, the Addl. CIT granted approval under section 153D in the case of 67 assessees, which included the present assessees, listed at Sr. Nos. 42, 48 and 50; that it is humanly impossible to go through 67 draft assessment orders on a single day; and that the Panchnama prepared by the Revenue authorities consisted of 15,800 pages (our attention was invited to pages 997 to 1005, 1029 to 1041, 8 to 15, 1015 to 1021, 1006 to 1014 where the copies of Panchnama prepared at the time of search were placed) The ld. Counsel for the assessee also filed a chart reflecting the case-wise number of seized documents in the Group. It was stated that apart from the above seized material, there were around 2000 pages of reply filed by various assessees of the Group; that besides the above documents in the case of Sigma Group, there were seized documents belonging to other Groups also, the approval of which has also been given through the same approval letter; that it is humanly not possible to examine more than 17,800 loose papers and many more papers of various assessees in one single day; that whenever a superior authority grants approval to an order of a subordinate authority, the superior authority must apply his mind to all the material on record, and the basis of the order made by the subordinate authority, and the superior authority must ensure that the subordinate authority has followed due process of law and has Page 8 of 38 not taken arbitrary decisions; and that the obligation of the approving authority is of two fold, i.e., on the one hand, he has to apply his mind to ensure the interest of the Revenue being watched against any omission or negligence by the Assessing Officer in taxing the right income in the hands of the right person, and in right Assessment Year and, on the other hand, the superior authority is also responsible and duty-bound to do justice with the tax payer by granting protection against arbitrariness or creation of baseless tax liability on the assessee. Inviting our attention to the meaning of the word ‘approval’ as defined in Black Law Dictionary, the ld. Counsel for the assessee has submitted that the word ‘approval’ means an act of confirming, rectifying, sanctioning or consenting to some act or thing done by another. 8. The ld. Counsel for the assessee has further invited our attention to the judgment of the Supreme Court South Carolina in State vs. Duckett’, 133 S.C. 85 (S.C. 1925) 130.S.E. 340 (copy filed), where the word ‘approval’ has been held to be having knowledge and then exercise of discretion after knowledge. The ld. Counsel for the assessee has also invited our attention to the judgment of the Hon'ble Supreme Court in the case of ‘Vijayadevi Naval Kishore Bharatia vs. Land Acquisition Officer’, [2003] 5 SCC 83 (copy filed), where, again, the word ‘approval’ has been defined as, “In the context of an administrative act, the word approval does not mean anything more than either confirming, rectifying, assenting, sanctioning or consenting. This is only an administrative power which limits the jurisdiction of the authority to apply its mind to see whether the proposed award is acceptable to the Government or not.” Page 9 of 38 9. The ld. Counsel for the assessee has further invited our attention to the judgment of the Hon'ble Gauhati High Court in the case of ‘Dharampal Satyapal Ltd. vs. Union of India’, [2019] 365 ELT 253 (Gau) (copy filed), wherein, in para 28, it has been held that when an Authority is required to give 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. 10. It was argued that in the case of search, qua assessment orders, whether framed under section 153A or section 153C of the Act, the Joint Commissioner, i.e., the approving authority, is required to see that whether the additions which have been made in the hands of assessee are based properly on incriminating material found during the course of search, observations/comments in the appraisal report and further enquiries made by the Assessing Officer during the course of assessment proceedings; and that the Joint Commissioner is also required to verify whether the required procedure has been followed by the Assessing Officer or not, at the time of framing the assessment. 11. It was argued that the approval cannot be a mere discretion or formality, but is mandatory, being a quasi-judicial function, and that the Act requires that it should be based on due application of mind and proper reasoning. The ld. Counsel for the assessee, in this respect, has invited our attention to the provisions of section 153D of the Act, wherein, it has been specifically mentioned that the Assessing Officer cannot pass an order under section 153A or under clause (b) of sub-section (1) of Page 10 of 38 section 153B of the I.T. Act, except with the prior approval of the Jt. CIT. The ld. Counsel for the assessee has submitted that it is trite law that for granting approval under section 153D of the Act, the approving authority has to apply his independent mind to the material on record for each assessment year in respect of each assessee separately. 12. It was submitted that the rationale of the word ‘each’, as specifically referred to in section 153D and section 153A of the I.T. Act deserves to be given effective/proper meaning so that the underlying legislative intent as per the scheme of assessment under sections 153A to 153D of the I.T. Act is fulfilled. It was submitted that the Addl. CIT, in the cases at hand granted approval for all the assessees for all the assessment years through a single approval letter, which is against the intent of law and therefore also, the approval given by the Addl. CIT is non-est and the consequential assessment made on the basis of such approval is illegal and deserves to be annulled. The ld. Counsel for the assessee, in this regard, relied on the judgment of the Hon'ble Allahabad High Court in the case of ‘Mohd. Ayub vs. Income Tax Officer’, 346 ITR 30 (Alld.) (copy filed), where non- issue of separate notice under section 148 of the I.T. Act for each year was held to be invalid. The ld. Counsel for the assessee has submitted that granting of approval under section 153D of the I.T. Act is an enormous task which involves the verification by the approving authority as to which year is unabated and which year is abated, and the relevance vis-à-vis the seized material. The ld. Counsel for the assessee further invited our attention to the CBDT Manual of Office Procedure Volume-II (Technical) placed at APB-2, pages 4 & 5 of the Assessee’s Paper Book-2, Page 11 of 38 wherein the CBDT has directed that the Assessing Officer should submit the draft assessment order for approval from the approving authority well in time. Such manual says that the Assessing Officer should seek approval from the approving authority at least one month before the time barring date. While going through the CBDT Manual placed at paper book pages 4 & 5, it was observed that this Manual was printed in February, 2003 and therefore, the ld. Counsel for the assessee was asked as to how it is applicable to the provisions of section 153D of the Act which came into existence w.e.f. 1.6.2007. The ld. Counsel for the assessee, in this regard, has submitted that this Manual is applicable to the provisions of section 158BG of the Act, which are in pari materia to the provisions of section 153D of the Act. It was further submitted that the Mumbai Bench of the Tribunal in the case of ‘Smt. Shreelekha Damani vs. DCIT(OSD-1), Mumbai’, vide order dated 19.8.2015 (copy filed), while deciding a similar issue under section 153D of the I.T. Act, has relied on the case laws relied on for deciding the issue of approval under section 158BG of the Act and, therefore, this Manual is applicable to the provisions of Section 153D also. The ld. Counsel for the assessee has further placed reliance on Circular No. 3 of 2008 dated 12.3.2008, issued by the CBDT, whereby, the CBDT has issued instructions regarding mandatory approval under section 153D of the I.T. Act, where the order is to be passed by the Assessing Officer below the rank of the Jt. CIT. It was submitted that the present cases were going to get time barred on 31.12.2018 and draft assessment orders have been made on 30.12.2018 and approval has also been taken on 30.12.2018 and on the very same day, final assessment orders have been passed and, therefore, clearly, the CBDT instructions Page 12 of 38 have been violated. It was submitted that in view of these facts and circumstances, the approval has been given in a most mechanical manner without any application of mind and without any independent examination of the seized material and other material on record; that there is no mention about any incriminating material having been forwarded to the Jt. CIT, and there is no mention of the statements recorded at the time of search. It was submitted that the approval is granted in a hurried manner without looking into the serious lapses committed by the Assessing Officer and therefore, the approval under section 153D of the I.T. Act is invalid and bad in law and the consequent assessment orders need to be quashed. Reliance in this respect was placed on the order of the Delhi Bench of the Tribunal in the case of ‘Sanjay Duggal and Others vs. ACIT’, in I.T.A. No.1813/Del/2019 (copy filed), wherein, vide order dated 19.1.2021, the entire law relating to section 153D of the I.T. Act has been discussed and after relying on a number of case laws, the Tribunal has allowed the appeals of the assessees and has quashed the assessment orders. It was submitted that in that case also, through a single letter, the approval was granted in a number of cases. Further, reliance was placed on the order of the Ranchi Bench of the Tribunal in the case of ‘Rajat Minerals Pvt. Ltd. vs. DCIT’ (copy filed), wherein, sanction under section 153D of the I.T. Act was granted in 28 cases and the Tribunal allowed the appeals of the assessees by quashing the assessment orders. Further, reliance was also placed on the order of the Mumbai Bench of the Tribunal in the case of ‘DCIT vs. Shreelekha Damani’ (supra), wherein, the provisions of section 158BG of the I.T. Act have been discussed and it was held by the Tribunal that the approval granted under section 153D of the Act was de-void Page 13 of 38 of application of mind and without considering the material on record. The Tribunal annulled the assessment. It was submitted by the ld. Counsel for the assessee, that the Hon'ble Bombay High Court has also dismissed the appeal of the Department filed against the above order of the Tribunal, vide order dated 27.11.2018 (copy filed). Further, reliance was placed on the order of the Mumbai Bench of the Tribunal in I.T.A. No.4916 in the case of ‘Sumer Associates’ (copy filed), wherein, under similar circumstances, vide order dated 26.12.2018, the issue was decided in favour of the assessee. Reliance was also placed on the order of the Jodhpur Bench of the Tribunal in the case of ‘Indra Bansal’ in I.T.A. Nos.321 to 324, passed on 23.2.2018 (copy filed). Reliance was also placed on the order of the Cuttack Bench of the Tribunal in I.T.A. Nos.01 and 02, in the case of ‘Geeta Rani Panda and Manjusmita Dash’ (copy filed), wherein, vide order dated 5.7.2018, a similar issue has been decided in favour of the assessee. 13. It was argued that in view of these facts and circumstances and judicial precedents, the assessment orders passed in these cases are illegal and need to be quashed. 14. The ld. CIT, D.R., on the other hand, has argued that proper approval, as required under the provisions of section 153D of the I.T. Act, has been obtained by the Assessing Officers. It was submitted that the approval was taken well within the time before limitation and the higher authority has fully applied his mind while granting the approval. It was submitted that though the Jt. CIT has not written in so many words about his satisfaction for granting approval, the fact remains that he has granted approval to the draft assessment order and only after Page 14 of 38 that, the Assessing Officer has passed the final assessment order and therefore, ground No. 6 of the appeals be dismissed and appeals be heard on merits. 15. We have heard the rival parties and have gone through the material placed on record. We find that in these cases, in view of a search carried out on the Sigma Group, the 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. The search was started on 23.8.2016 and it continued upto 25.8.2016, and therefore, the assessment year 2017-18 became the search year and the years preceding the search year became the subject matter of reopening under section 153A of the Act. The issue raised by the ld. Counsel for the assessee is that the approval granted by the Addl. CIT is bad in law, as it is humanly impossible to go through documents exceeding 17,800 in a single day and then to grant approval qua 67 assessment orders on the same day. Since the controversy involved herein is with regard to the approval under section 153D of the Act, it would be appropriate to first visit the provisions of section 153D of the Act, which, for the sake of completeness are reproduced below: Prior approval necessary for assessment in cases of search or requisition. 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. Page 15 of 38 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 Principal Commissioner or Commissioner under sub-section (12) of section 144BA. 16. The above provisions of section 153D of the Act were inserted by the Finance Act, 2007 with effect from 1.6.2007. In our humble understanding of the said provisions, we are of the considered opinion that the Legislature wanted that the assessment/re-assessment of the search cases should be made and the order should be passed with the prior approval of the superior authority. The word ‘approval’ has not been defined in the Income Tax Act. Black’s Law Dictionary, defines the word ‘approval’ as under: "The Act of confirming, rectifying, sanctioning, or consenting to some act or thing done by another. “Approve” means to be satisfied with; to confirm, to rectify, sanction, or consent to some act or thing done by another. To sanction officially; to rectify, to confirm, to pronounce good; think or judge well of; admit the propriety or excellence of; be pleased with." 17. The Hon'ble Supreme Court, in the case of ‘Vijayadevi Naval Kishore Bharatia vs. Land Acquisition Officer’, [2003] 5 SCC 83, has held as under: "What is provided under the proviso to Section 11(1) is that the proposed award made by the Collector must have the approval of the appropriate Government or such officer as the appropriate Government may authorise in that behalf. In our opinion, this power of granting or not granting previous approval cannot be equated with an appellate power. Black's Law Dictionary, 6th Edition, defines 'approval' to mean an act of confirming, ratifying, assenting, sanctioning or consenting to some act or thing done by another. In the Page 16 of 38 context of an administrative act, the word 'approval' in our opinion, does not mean anything more than either confirming, ratifying, assenting, sanctioning or consenting. It will be doing violence to the Scheme of the Act if we have to construe and accept the argument of learned counsel for the respondents that the word approval found in the proviso to Section 11(1) of the Act under the Scheme of the Act amounts to an appellate power.” 18. The Supreme Court of South Carolina in ‘State vs. Duckett’, 133 S.C. 85 [S.C. 1925], 130 S.E. 340, decided on 5.11.1925, held that approval implies knowledge and, the exercise or discretion after knowledge. 19. Further, the Hon'ble Gauhati High Court, in the case of ‘Dharampal Satyapal Ltd., vs., Union of India’, [2019] 366 ELT 253 (Gau.), in para-28, has held 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 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 satisfies all the legal and procedural requirements." 20. Therefore, according to the definition of approval as per the above authorities, its meaning with respect to the approval under section 153D of the I.T. Act means, that the superior authority should apply his mind to the material on the basis of which the Assessing Officer is making or passing the assessment order, and it is only after due application of mind to the material in the hands of the Department and after going through the explanation by the assessee and also the documentary evidence Page 17 of 38 and other relevant material, that the superior authority has to grant approval under section 153D of the I.T. Act for passing assessment/ re-assessment order in search cases. The approval under section 153D of the Act cannot be treated as a mere formality only. The purpose of inserting this provision is twofold, i.e., one, that before grant of approval, the senior authority will ensure that the assessee should be protected against undue and irrelevant additions and disallowances and the approving authority will also ensure that proper enquiries or investigations are carried out by the Assessing Officer on the relevant materials, including the material in the hands of the Department. Secondly, the Assessing Officer has also to keep in mind the interest of the Revenue against any omission or negligence by the Assessing Officer in taxing the correct income in the hands of the right person, and in the correct Assessment Year. Therefore, the said provision provides for application of mind by the approving authority of the Department. Hence, the provisions of section 153D of the Act cannot be treated as a mere formality and the legislative mandate contained therein is required to be followed in letter and spirit by the approving authority, in a judicious manner by due application of mind in a manner required of a quasi-judicial authority. We are conscious of the fact that reasons for granting approval may not be a subject matter of challenge or may not be required to be mentioned in the order of approval. However, the manner of grant of approval and the material, on the basis of which approval has been granted, can be challenged by the assessee. The scope and issue agitated by the assessee by way of the legal ground in the present cases is not that of granting of approval. Rather, the main grievance of the assessee is that the approving authority has granted approval Page 18 of 38 in a mechanical manner, without application of mind and without looking into the seized material. We are inclined to hold that if an approval has been granted by the approving authority in a mechanical manner without application of mind, then the very purpose of obtaining approval under section 153D of the Act and the mandate of the enactment by the Legislature will be defeated. It is trite law that for granting approval under section 153D of the Act, the approving authority shall have to apply his independent mind to the material on record for each assessment year in respect of each assessee separately. The rationale of word "each" as specifically referred to in Section 153D and Section 153A, deserves to be given effective/proper meaning to, so that the underlying legislative intent as per the scheme of assessment, as contained in Section 153A to 153D is fulfilled. The meaning of ‘approval’, as contemplated under section 153D of the Act, is that the Jt. CIT is required to verify the issues mentioned by the Assessing Officer in the draft assessment order and to apply his mind and ascertain as to whether the entire facts have been properly appreciated by the Assessing Officer. The Jt. CIT is also required to verify whether the required procedure has been followed by the Assessing Officer in framing the assessment. Thus, the grant of approval cannot be a mere discretion or formality, but a quasi-judicial function based on reasoning. In our view, when the legislature has enacted the power to be exercised by the higher authority to approve the passing of assessment orders in search cases, then it is the bounden duty of such higher authority (the Jt. CIT) to exercise such power by applying his judicious mind. The provisions of sections 153A to 153D contain features by which the assessee is to be given a separate notice for assessment for each year as specified under Page 19 of 38 section 153A of the Act. Secondly, the assessee has to file a separate ITR for each year, as specified in section 153A of the Act. Thirdly, separate assessment orders are to be passed for each year as specified in section 153A of the Act. There is an important concept enshrined in section 153A of the Act, that is of abated and un-abated assessments, which is peculiar to the scheme of section 153A. If section 153D considered juxtaposed with the above basic fundamental features of Section 153A, it is seen that a very important phrase has been employed in text of Section 153D, and that is "each assessment year”. The word "each" has been used extensively and this word needs to be given due weightage and meaning. As such, for each year, separate approval is mandatorily required to be given under section 153D of the I.T. Act. This is stated lacking in the present cases, vitiating the grant of approval. There are many other provisions where statutory approval is required from higher authorities. Two of them are Sections 151 and 274, which deal with the approvals on reopening cases and penalty cases. When Section 153D of the I.T. Act is juxtaposed with Section 151 and Section 274, the most important difference, which is peculiar to Section 153D is the word "each". The word ‘each’ is not used in either Section 151 or Section 274 and the word "each" is specially and consciously used in Section 153D, so that assessee-wise and year-wise application of mind on the part of the approving authority is ensured, which is in accordance with the overall scheme of assessment under sections 153A to 153D of the I.T. Act. The Hon'ble Allahabad High Court, in the case of ‘Shri Mohd. Ayub vs. ITO’, [2012] 346 ITR 30 (Alld), dealt with non-issuance of separate notices under section 148 of the I.T. Act and held such non-issuance to be illegal, because each assessment year was to Page 20 of 38 be taken as an independent unit of assessment. Now, in the context of Section 153D of the I.T. Act (where the word “each” is expressly used and which is a year-centric special scheme of assessment with the concept of abated/un-abated assessments), there is, without the shadow of a doubt, absolute necessity of separate approval for each year and for each assessee. In the present cases, the Jt. CIT has given joint approval under section 153D of the Act for all the years involved in search and the approving authority has granted the approval in a mechanical manner and a mere idle formality. In one line, the approving authority has given a blank go ahead, a carte blanche, to pass the order under section 153A of the I.T. Act without even taking note of the year-wise income as computed. The legislative intent behind the enactment of Section 153D can be discerned/gathered from the CBDT Circular No.3/2008 dated 12.03.2008, in which it is highlighted that the approval of the approving authority is mandatory. For the sake of completeness, the contents of Circular No. 3/2008 are reproduced below: “50. Assessment of search cases Orders of assessment and reassessment to be approved by the Joint Commissioner. 50.1 The existing provisions of making assessment and reassessment in cases where search has been conducted under section 132 or requisition is made under section 132A does not provide for any approval for such assessment. 50.2 A new section 153D has been inserted to provide that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the previous approval of the 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 under section 132 or requisition is made Page 21 of 38 under section 132A. The provision has also been made applicable to orders of assessment passed under clause (b) of section 153B in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A. 50.3 Applicability-These amendments will take effect from the 1st day of June, 2007." 21. It is evident from the CBDT Circular that the Legislature in its wisdom, made it compulsory that the assessments of search cases should be made with the prior approval of the superior authority, so that the superior authority could apply his mind on the materials and other circumstances, on the basis of which the officer is making the assessment, and only after due application of mind and on the basis of the seized materials, the superior authority has to approve the assessment order. The object of entrusting the duty of approval of assessment to a higher authority, in search cases, is that the Jt. CIT, with his experience and understanding, can scrutinize the seized documents and any other material forming the foundation of the assessment. It is an elementary law that whenever any statutory obligation is cast upon any statutory authority, such authority is required to discharge its obligation not mechanically, not even formally, but after due application of mind. The approval granted under section 153D of the Act should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. 22. In the above background of law and in the light of the order dated 30.12.2018 passed under section 153D of the Act, which gives legality to the impugned assessment orders, the question which arises for our consideration is whether the approval granted by the Additional CIT, Central, Kanpur vide his Page 22 of 38 order dated 30.12.2018 can be held to be granted after due application of mind and can be held to be valid in the eye of law. The ld. Counsel for the assessee, during the proceedings before us, had filed a chart showing a number of documents seized during search, belonging to the Group, totaling 17,800 pages. Beside the above documents, the replies filed by assessees belonging to the Group consisted of about 2000 pages and in fact there were documents belonging to other Groups also, the approval of which has also been granted along with assessees on the same day, through the same approval letter. Therefore, keeping in view the huge number of documents involved, indeed it is humanely impossible for a person to apply his mind on all cases individually and that too in a single day. For the sake of completeness, the said approval dated 30.12.2018 has been made part of this order and is reproduced below: Page 23 of 38 Page 24 of 38 23. The contents of the approval speak for itself loud and clear. The following inferences are inevitable from a bare reading of the said order. The draft assessment orders were placed before the Additional CIT, Central, Range- Kanpur on 30.12.2018 for the first time and on the same day approval was granted. As clearly mentioned in the approval under challenge, prior to this date, the case was never discussed with the authority granting the approval. The Additional CIT, without considering the merits in respect of the issues on which addition was made, granted the approval. Such approval is simply an idle formality and such a mechanically granted approval is no approval in the eye of law. The entire law, as contemplated under section 153D of the Act, has been considered by the Delhi Bench of the Tribunal in a bunch of 52 appeals, in I.T.A. No.1813/Del/2019 etc. in the case of ‘Sanjay Duggal and Others’, wherein, the Tribunal, vide order Page 25 of 38 dated 19.1.2021 has quashed the assessment orders by holding that the approval granted under section 153D of the Act was granted in a mechanical manner and thus it could not be held to be an approval as required under section 153D of the Act. The relevant findings of the Tribunal are contained in para 11 onwards, which, for the sake of completeness and ready reference, are reproduced below: “11. We have considered the rival submissions and perused the written submissions filed by the parties and considered the material on record. It is an admitted fact that search and seizure action were carried-out in the cases of the assessees on 29.12.2015. Section 153A has 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 assessment of search cases. Thus, the provisions of Section 153A to 153D are applicable in the case of assessees. According to Section 153A of the I.T. Act, there should be a search initiated under section 132 of the I.T. Act and panchanama drawn, the A.O. shall have to issue notice to the assessee requiring him to furnish the return of income within the specified time in respect of each assessment year falling within six assessment years. The A.O. shall assess or re-assess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Provided that the A.O. shall assess or re- assess the total income in respect of each assessment year falling within such six assessment years. It is 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 section 132 or making of requisition under section 132A as the case may be, shall abated. Thus, when provisions of Section 153A are applicable in a case of assessee, A.O. shall have to give separate notice of each assessment year and assessee shall Page 26 of 38 have to be directed to file return of 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 earlier provisions for block assessments. The Hon'ble Delhi High Court in the case of CIT vs., Kabul Chawla [2016] 380 ITR 573 (Del.) considered the issue of abated and non-abated assessments and with regard to completed assessments 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 the course of search which was not produced or not already disclosed or made known in the course of original assessment. It is also held in the same Judgment that in so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall have to be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on record by the A.O. Therefore, these were the mandatory provisions contained in Section 153A which shall have to be satisfied by the A.O. before proceeding to frame assessment in 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 prior 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 Page 27 of 38 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 approval of the JCIT in respect of each assessment year referred to under section 153A or 153B shall have to be obtained. Thus, no order of assessment or re-assessment shall be passed by the A.O. in the present cases in respect of each assessment years under section 153A/153B of the I.T. Act, 1961, except with the prior approval of the Joint Commissioner. Learned Counsel for the Assessee has argued that the approval under section 153D have been granted by the JCIT without going through the seized material, appraisal report and other material on record. 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 such all assessments under section 153A got vitiated and as such A.O. was not having jurisdiction to pass the assessment orders under section 153A of the I.T. Act, 1961. 11.2. The meaning of the word "Approval" as defined 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 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." Page 28 of 38 11.4. The Hon'ble Supreme Court in the case of Vijayadevi Naval Kishore Bharatia vs., Land Acquisition Officer [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 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 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 held 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 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." 11.6. Therefore, in the cases of search, assessment orders whether framed under section 153A or 153C, the Joint Commissioner [Approving Authority] is required to see that whether the additions have been made in the hands of assessee are based properly on incriminating material found Page 29 of 38 during the course of search, observations/comments in the appraisal report, the seized documents and further enquiries made by the A.O. during 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 JCIT is also required to verify whether the required procedure have been followed by the A.O. or not at the time of framing of the assessments. Thus, the approval cannot be a mere discretion or formality, but, is mandatory being Quasi Judicial function and it should be based on reasoning. In our view, when the legislature has enacted some provision to be exercised by the higher Revenue Authority enabling the A.O. to pass assessment order or re¬assessment order in search cases, then, it is the duty of the JCIT to exercise such powers by applying his judicious 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 build for the Department against any omission or negligence by the A.O. in taxing right income in the hands of right person and in right assessment year and on the other hand, JCIT is also responsible and duty bound to do justice with the tax payer [Assessee] by granting protection against arbitrary or unjust or unsustainable exercise and decision 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 act which requires proper application of administrative and judicial skill by the JCIT on the application of mind and this exercise should be discernable from the Orders of the approval under section 153D of the I.T. Act.” 24. Further, we find that the I.T.A.T., Cuttack Bench, in the case of ‘Geetarani Panda vs. ACIT’ in I.T.A. No.01/CTK/2019, vide order dated 5.7.2018 (copy filed), has held as under: Page 30 of 38 “24. In our considered view, the provisions contained in Section 153D as enacted by the Parliament cannot be treated as an empty formality. The provision has certain 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 not prejudiced by the undue or irrelevant addition or assessment. Secondly, the approval by Senior Authority will also ensure that proper enquiry or investigation are carried out by the Assessing Authority. Thus, the above provision provides for mental application of a Senior Officer of the Department, which in turn, provides safeguard to both i.e. Revenue as well as the assessee. Therefore, this important provision laid down by the legislature cannot be treated as a mere empty formality. 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 approval was granted without proper application of mind, the order of assessment will be bad in law. The Hon'ble Bombay High Court in the case of CIT-II Vs Shri Akil Gulamali Somji, in Income Tax Appeal (L) No.1416 of 2012 order dated 15.1.2013 concurred with the view of the Tribunal that not following of the provisions of section 153D of the Act will render the related order of assessment void.” 25. Further, we find that the I.T.A.T., Mumbai Bench, in the case of ‘Shreelekha Dammani vs. DCIT’ in I.T.A. No.4061/Mum/2012, vide order dated 19.8.2015 (copy filed), has decided the issue in favour 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 mentioned elsewhere, the Addl. Commissioner has showed his inability to analyze the issues of draft order on merit clearly stating that no much time is left, inasmuch as the draft order was Page 31 of 38 placed before him on 31.12.2010 and the approval was granted on the very same day. Considering 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 not to grant approval is coupled with a duty. The Addl Commissioner/Joint Commissioner is required to apply his mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said 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. Sec. 153 A of the Act is bad in law and deserves to be annulled. The additional ground of appeal is allowed. 13. The ld. Departmental Representative has strongly relied upon the decision of the Tribunal Mumbai Bench in the case of Rafique Abdul Hamid Kokani Vs DCIT 113 Taxman 37, Hon'ble High Court of Karnataka in the case of Rishabchand Bhansali Vs DCIT 136 Taxman 579 and Hon'ble High Court of Madras in the case of Sakthivel Bankers Vs Asstt. Commissioner 124 Taxman 227. 13.1. We have carefully perused the decisions placed on record by the Ld. DR. We find that all the decisions relied upon by the Ld. DR are misplaced inasmuch as all these decisions relate to the issue whether the Joint CIT/CIT has to give an opportunity of being heard to the assessee before granting the approval. This is not the issue before us as the Ld. Counsel has never argued that the assessee 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, we do not find it necessary to decide the issues raised on merits of the case.” Page 32 of 38 26. In that case, the Addl. Commissioner had 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 the approval was granted on the same day. In the case before us, through the Addl. CIT has not expressly stated his inability to analyze the issues of the draft order, it is abundantly clear that he had not analyzed the issues in the draft order, as in the present cases, the approval has been given in 67 cases on the same date, which is humanly impossible. 27. 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 (copy filed). The findings of the Hon'ble Bombay High Court are reproduced below: “7. In plain terms, the Additional CIT recorded that the draft order for approval under Section 153D of the Act was submitted only on 31st 3 of 4 Uday S. Jagtap 668-16-ITXA- 15=.doc December, 2010. Hence, there was not enough time left to analyze the issues of draft order on merit. Therefore, the order was approved as it was submitted. Clearly, therefore, the Additional CIT for want of time could not examine the issues arising out of the draft order. His action of granting the approval was thus, a mere mechanical exercise accepting the draft order as it is without any independent application of mind on his part. The Tribunal is, therefore, perfectly justified in coming to the conclusion that the approval was invalid in eye of law. We are conscious that the statute does not provide for any format in which the approval must be granted or the approval granted must be recorded. Nevertheless, when the Additional CIT while granting the approval recorded that he did not have enough time to analyze the issues arising out of the draft order, clearly this was a case in which the higher Authority had granted the approval without consideration of relevant Page 33 of 38 issues. Question of validity of the approval goes to the root of the matter and could have been raised at any time. In the result, no question of law arises.” 28. Similar are the findings of the I.T.A.T., Jodhpur Bench in the case of ‘Indra Bansal & Ors. vs. ACIT’ in I.T.A. Nos. 321 to 324, vide order dated 3.8.2021in 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 reasonable time was not available with the Joint Commissioner for the grant of necessary approval as envisaged under section 153D of the Act. We have perused the forwarding letter dt. 30-3-2013 seeking approval of the draft assessment order. The date of receipt of this letter in the office of Joint Commissioner is indisputably on 31-3-2013 which 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 granting of approval, both, are within one day of each other. This 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 to the office hours and, thus, it brings out a reasonable doubt that the approval was granted even before the letter 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 correctness of the claim of the assessee that the assessment records were not before the Joint Commissioner when the approval was granted as the records were with the Range 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 Page 34 of 38 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 records were handed over to the office of the Joint Commissioner on 31-3-2013 and as such it was physically impossible that all the case records along with the draft assessment order were received by the Joint Commissioner at Udaipur. Tribunal, Mumbai Bench in the case of Smt. Shreelekha Damani v. Dy. CIT (2015) 125 DTR (Mumbai)(Trib) 263 : (2015) 173 TTJ (Mumbai) 332 has held that the legislative intent behind the insertion of section 153D of the Act was that the assessments in search and seizure cases should be made with the prior approval of superior authority which means that the superior authorities should apply their mind to the material on the basis of which the assessing officer is making the assessment. In this case, the Addl. CIT had expressed his inability to analyze 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 Tribunal, Mumbai Bench held that the approval granted by Addl. CIT was mechanical and had been passed without considering the material on record and was, therefore, 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; (2000) 75ITD 183 (All) held that while granting approval, Commissioner is required to examine the material before approving the assessment order. In this case, Tribunal, Allahabad Bench was examining the issue of approval under section 158BG of the Act and it opined that the object for entrusting the job of approval to a superior and a very reasonable (sic-responsible) officer of the rank of Commissioner is that he with his ability, experience and maturity of understanding can scrutinize the documents, can appreciate its factual and legal aspects and can properly supervise the entire progress of assessment. Tribunal, Page 35 of 38 Allahabad Bench held that the concerned authority while granting the approval is expected to examine the entire material before approving the assessment order and further that whenever any statutory obligation is cast on any authority, such authority is legally required to discharge the obligation not mechanically, 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 (SC) 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 requirement of previous approval of the Chief Commissioner or Commissioner in terms of said provision being an inbuilt protection against arbitrary or unjust exercise of power by the assessing officer, casts a very heavy duty on the said high-ranking authority to see it that the approval envisaged in the section is not 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 approval must reflect the application of mind to the facts of the case. Coming to the facts of the case, it is apparent from 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 Jodhpur while the Joint Commissioner was camping at Udaipur. The entire exercise of seeking and granting of approval in all the 2 cases was completed in one single day itself i.e., 31-3-2013. Thus, it is apparent that the Joint Commissioner did not have adequate time to apply his mind to the material on the basis of which the assessing officer had made the draft assessment orders. Tribunal, Mumbai Bench and Tribunal, Allahabad Bench in their orders, as discussed in the preceding paragraphs, have laid down that the power to grant approval is not to be exercised casually and in routine manner and further the concerned authority, while granting approval, is expected to examine the entire material before Page 36 of 38 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 discharge the obligation by application of mind. In all the cases before us, the Department could not demonstrate, by cogent evidence, that the Joint Commissioner had adequate time with him so as to grant approval after duly examining the material prior to approving the assessment order. The circumstances indicate that this exercise was carried out by the Joint Commissioner in a mechanical manner without proper application of mind. Accordingly, 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 Apex Court in the case of Sahara India (Firm) v. CIT (supra), we hold that the Joint Commissioner has failed to grant approval in terms of section 153D of the Act i.e., after application of mind but has rather carried out exercise in utmost haste and in a mechanical manner and, therefore, the approval so granted by him is not an approval which can be sustained. Accordingly, assessments in three COs and nineteen appeals of the assessee(s), on identical 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 Nos. 8 to 10/Jodh/2016 and ITA Nos. 325 to 331/Jodh/2016. Thus, all the three COs and the nineteen appeals of the assessee, as aforesaid, are allowed.” 29. Likewise, we find that the Hon'ble Supreme Court in the case of ‘Sahara India vs. CIT & Others’, [2008] 300 ITR 403 (SC), while discussing the requirement of prior approval of Chief Commissioner or Commissioner in terms of the provisions of section 142(2A) of the Act, opined that the requirement of previous approval of the Chief Commissioner or Commissioner in terms of the said provision being an inbuilt protection against arbitrary or unjust exercise of power by the Assessing Officer, Page 37 of 38 casts a very heavy duty on the said high-ranking authority to see it that the approval envisaged in the section is not 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 approval must reflect the application of mind to the facts of the case. 30. A similar view has been taken by this Bench of the Tribunal in a group of cases of Shri Navin Jain and others in I.T.(SS)A. Nos.639 to 641/Lkw/2019, etc., vide order dated 3.8.2021, for Assessment Years 2015-16 to 2017-18, wherein also, the approval under section 153D of the Act was given through the same letter dated 30.12.2018 by the ACIT, Central, Kanpur and the Ground raised in this regard by the assessee was allowed, and the assessment orders were annulled by us. While allowing the Ground raised by the assessee, the Tribunal had also considered various cases laws, including that of the Hon'ble Supreme Court. 31. In view of these facts and circumstances and in view of the unrebutted judicial precedents relied on by the ld. Counsel for the assessee, the grievance of the assessee by way of Ground no.6 is allowed and the assessment order is annulled. 32. The facts in IT(SS)A No.632/LKW/2019 and IT(SS)A No.635/LKW/2019, filed by the assessees for Assessment Years 2015-16 and 2016-17, are, as stated in para No.2 above, mutatis mutandis, exactly similar to those attending IT(SS)A No.636/LKW/2019 (supra). Therefore, our above observations and findings with regard to IT(SS)A No.636/LKW/2019 shall apply equally to IT(SS)A Nos.632 & 635/LKW/2019. Accordingly, the grievance of the assessees by way of Ground no.6 in IT(SS)A Page 38 of 38 Nos.632 & 635/LKW/2019 is allowed and the assessment orders are annulled. 33. Nothing further survives for adjudication, nor was any other point argued. 34. In the result, the appeals of the assessees stand partly allowed, as indicated. Order pronounced in the open Court on 18/05/2022. Sd/- Sd/- [T. S. KAPOOR] [A. D. JAIN] ACCOUNTANT MEMBER VICE PRESIDENT DATED:18/05/2022 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order Assistant Registrar