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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Principal Commissioner of Income Tax (central)-2 – Appellant
Versus
Anuj Bansal – Respondent
ITA 368 of 2023
Decided On : 13-07-2023
Delay Condonation - Income Tax - Section 153D of Income Tax Act, 1961 - The court discussed the lack of application of mind by the Additional Commissioner of Income Tax in granting approval under Section 153D of the Income Tax Act, which led to the invalidity of the assessment order. The court found that no substantial question of law arises for consideration based on the findings returned by the Tribunal.
Fact of the Case:
The appellant/revenue sought condonation of delay in re-filing the appeal. The appeal concerned the Assessment Year 2017-18 and sought to challenge the order passed by the Income Tax Appellate Tribunal, which set aside the additions made to the income of the respondent/asseessee.
Finding of the Court:
The court found that no substantial question of law arises for consideration based on the findings returned by the Tribunal, which highlighted the absence of application of mind by the Additional Commissioner of Income Tax in granting approval under Section 153D.
Issues: The issues revolved around the delay in re-filing the appeal, the additions made to the income of the respondent/asseessee, and the lack of application of mind by the Additional Commissioner of Income Tax in granting approval under Section 153D.
Ratio Decidendi: The court's decision was based on the finding that no substantial question of law arises for consideration, as the Tribunal's findings of fact indicated the absence of application of mind by the Additional Commissioner of Income Tax in granting approval under Section 153D.
Final Decision: The appeal was closed, and the parties were directed to act based on the digitally signed copy of the order.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM No.34969/2023 [Application filed on behalf of the appellant/revenue seeking condonation of delay of 180 days in re-filing the appeal]
1. This is an application moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal.
1.1. According to the appellant/revenue, there is a delay of 180 days in re-filing the appeal.
2. Counsel for the respondent/asseessee says that he does not oppose the prayer made in the application.
3. Accordingly, the prayer made in the application is allowed.
4. The application is disposed of, in the aforesaid terms.
ITA 368/2023
5. This appeal concerns Assessment Year (AY) 2017-18.
6. The appellant/revenue via this appeal seeks to assail the order dated 29.04.2022 passed by the Income Tax Appellate Tribunal [in short, `Tribunal'].
7. The Tribunal has via the impugned order set aside the additions made qua the income of the respondent/asseessee inter alia, on the ground that there was no application of mind by the Additional Commissioner of Income Tax [In short, "ACIT"] in granting approval under Section 153D of Income Tax Act, 1961, [in short, `the Act'].
8. To be noted, an assessment order was framed qua the respondent/asseessee under Section 153A, read with Section 143(3) of the Act.
8.1. This order was carried in appeal by the respondent/asseessee, right up till the Tribunal.
9. Insofar as the Assessing Officer (AO) was concerned, he made certain additions against the returned income.
9.1. The respondent had declared an income amounting to Rs.87,20,580/-. However, while making the additions, strangely, the AO noted that the returned income was Rs.11,00,460/-.
10. There were two additions made by the AO. The first addition was made qua cash deposited in the bank, amounting to Rs.15,04,35,000/-. The second addition was made with regard to cash introduced via an entry operator i.e., one, Mr Vipin Garg. The amount added qua this aspect was pegged at Rs.1,54,07,100/-.
11. Despite these additions, which would have taken the assessed income well beyond what was crystallised by the AO i.e., 1,65,07,560/-, the ACIT failed to notice the error.
12. This aspect was brought to the fore by the Tribunal in the impugned order. The Tribunal, thus, concluded there was a complete lack of application of mind, inasmuch as the ACIT, who granted approval, failed to notice the said error.
12.1. More particularly, the Tribunal notes that all that was looked at by the ACIT, was the draft assessment order.
13. In another words, it was emphasised that the approval was granted without examining the assessment record or the search material. The relevant observations made in this behalf by the Tribunal in the impugned order are extracted hereafter:
"17.1 However, in the present case, we have no hesitation in stating that there is complete non-application of mind by the Learned Addl. CIT before granting the approval. Had there been application of mind, he would not have approved the draft assessment order, where the returned income of Rs.87,20,580/-. Similarly, when the total assessed income as per the AO comes to Rs.16,69,42,560/-, the Addl. CIT could not have approved the assessed income at Rs.1,65,07,560/- had he applied his mind. The addition of Rs.15,04,35,000/- made by the AO in the instant case is completely out of the scene in the final assessed income shows volumes.
17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessment order without any assessment records what to say about the search material. As mentioned earlier, there are infirmities in the figures of original return of income as well as total assessed income and the Addl. CIT while giving his approval has not applied his mind to the fig
The central legal point established in the judgment is the requirement for the application of mind by the Additional Commissioner of Income Tax in granting approval under Section 153D of the Income T....
The court's decision was influenced by its previous ruling on a similar issue, indicating the importance of consistency in judicial decisions.
The court's decision was based on the lack of substantial question of law arising for consideration and the coverage of the issue by a previous court decision.
The court's decision was based on the absence of a substantial question of law for consideration in the appeal.
Penalty under Section 271(1)(c) of the Income-tax Act, 1961 cannot be levied if the assessee did not furnish inaccurate particulars or conceal income. No substantial question of law arises if the Tri....
The court's decision was influenced by the specific judgments covering the issue and the absence of substantial questions of law for consideration.
The principle of condonation of delay and the requirement for a substantial question of law to arise for consideration in an appeal.
The court has the discretion to condone delay in re-filing appeals and may rely on previous decisions to close appeals.
The incriminating material found during the search must concern the assessment year in issue for the proceedings to be valid.
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