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2025 Supreme(Online)(ITAT) 21733
INCOME TAX APPELLATE TRIBUNAL (RANCHI BENCH)
George Mathan, JM, Ratnesh Nandan Sahay, AM
Kumbh Nath Singh – Appellant
Versus
DCIT – Respondent
ITA Nos.90 to 94/RAN/2024|ITA Nos.268 & 269/RAN/2024|ITA Nos.95 to 99/RAN/2024|ITA Nos.100 to 106/RAN/2024|ITA Nos.265 to 267/RAN/2024
For the Appellants/Petitioners: Devesh Poddar, Sanjay Chatterjee
For the Respondents: None
Approval under Section 153D of the Income Tax Act requires an independent, judicious application of mind by the approving authority for each assessment year and each assessee. Mechanical approval granted without demonstrating consideration or sufficient time for review violates the mandatory statutory requirement, invalidating the resulting assessment orders.
Headnote:(A) Income Tax Act, 1961 - Section 153D - Assessment proceedings - Search and seizure - Approval of draft assessment orders - Requirements - Approval by the superior authority needs to be an independent exercise of mind and cannot be mechanical, ritualistic, or a 'rubber stamping' of the officer's proposal - Approval must be granted for each assessment year for each assessee separately - Non-compliance with the requirement of proving perusal of draft orders vitiates the assessment order. (Paras 11, 12, 13, 15, 22, 23)
(B) Income Tax Act, 1961 - Section 153D - Administrative Law - Requirement of time - Approving authority must be provided sufficient time to examine voluminous records; granting approval for multiple cases on a single day without evidence of perusal indicates non-application of mind. (Paras 22, 24)
Facts of the case:
The assessing authority sent draft assessment orders for numerous cases to the approving authority on the same date the final assessment orders were subsequently issued. The assessees challenged the validity of the assessment orders, arguing that the approval under Section 153D was granted in a mechanical, hasty manner without independent application of mind, and further raised issues regarding the limitation period for services and compliance with circulars regarding digital identification numbers.
Findings of Court:
The court observed that the logistics of transferring voluminous case records and draft orders between locations in a short timeframe, combined with the lack of recorded thought processes or evidence of perusal, demonstrated that the approving authority did not apply their mind. The granting of approvals for multiple cases in a single day was deemed humanly impossible to perform with due diligence.
Issues: Whether the approval granted under Section 153D was valid given the mechanical nature of the process, and whether the consequential assessment orders should be quashed due to procedural lapses and lack of independent application of mind by the approving authority.
Ratio Decidendi: Prior approval under Section 153D is a mandatory statutory requirement, not an empty formality. When it is evident from the facts—such as the timeframe, the number of cases, and the absence of any indication of perusal—that the approving authority acted mechanically and without independent application of mind, the approval is invalid, thereby rendering the subsequent assessment orders void.
Result: Appeals of the assessees allowed and appeals of the revenue dismissed.
| Table of Content |
|---|
| 1. assessment order validity regarding limitation periods and mandatory din requirements. (Para 21) |
| 2. requirement of non-mechanical, independent application of mind for section 153d approvals. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28) |
आदेश / O R D E R
Per Bench :
These are the appeals filed by the three different assessees against the separate orders passed by the ld.CIT(A), Patna-3, all dated 22.03.2024 for the assessment years 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011, 2011-2012 & 2012-2013, respectively. The revenue has also filed appeals for A.Y.2011-2012 & 2012-2013 in the case of assessee-Kumbh Nath Singh and for A.Y.s 2010-2011, 2011-2012 & 2012-2013 in the case of assessee-Lal Bahadur Singh.
At the outset, Shri Rajib Jain, ld. CIT-DR, who was available in the court, had sought adjournment stating that the impugned orders in case of all the three assesses have been passed by him as CIT(A) and his stands be precluded from defending the said orders as he has given relief to the assessee and it would not be appropriate for him to argue against his own orders. However, looking to the facts of the case, the adjournment application stands rejected.
Since the issues involved in the present appeals are identical, as also the matter is practically covered, therefore, these appeals are being heard and disposed off on merits by this consolidated order.
The three assessees have filed additional grounds in all their respective appeals. The additional ground being similar in all the cases, therefore, the additional grounds raised in the case of the assessee-Shri Kumbh Nath Singh for A.Y.2008-2009 in ITA No.90/Ran/2024 is taken for consideration wherein the assessee has raised as follows :-
PRAYER FOR ADDITIONAL GROUND
In view of the prayer for raising of addition of grounds raised in the original appeal memorandum filed as above, it is humbly requested that the following additional ground may kindly be considered in the interest of justice
Additional Ground No. 1: For that the order of assessment dated 24/11/2023 passed u/s 153A/143(3)/245D(4)/260/262 is unenforceable, illegal and void since the approval granted by the Additional Commissioner of Income Tax, Central Range-2, Ranchi u/s 153D to the assessment order passed after search and seizure by the Assistant Commissioner of Income Tax, Central Circle, Dhanbad had been granted in a mechanical manner and without application of mind rendering it to be un statutory and hence bad in law.
PRAYER
We humbly pray that the above ground may kindly be admitted as fresh legal ground since the same goes to the very root of the validity of the assessment proceedings and no fresh document or evidence is required to be called for to adjudicate this ground in the light of decision of Hon'ble Apex Court in case of NTPC vs Commissioner of Income Tax reported in 229 ITR 383 (SC) and many other case decisions which we crave leave to cite in the course of hearing.
It was submitted by the ld. AR that the assessees are challenging the assessments orders in all the cases on the following three grounds :-
i) that the approval u/s.153D of the Act in respect of the assessment orders passed are invalid;
ii) that the manual assessment orders in all the cases is said to have been passed on 24.11.2023 but the same was communicated to the assessee after the date of limitation being 24.11.2023 and, therefore, liable to be quashed; and
iii) that there is clear violation of Circular issued by the CBDT in Circular No.19/2019 in F.No.225/95/2019-ITA.II, dated 14-8-2019.
The ld. AR has filed written submissions as follows :-
In the matter of Sri Kumbh Nath Singh & Others
Dumka
Before,
Hon'ble Income Tax Appellant Tribunal
Ranchi Bench
Ranchi
ITA No. 90-106/Ran/2024
Written Synopsis/ Points in Dispute:-
1) That this is a batch of appeals related to 3 brothers namely - Sri Kumbh Nath Sing, Sri Bharat Singh & Sri Lal Bahadur Singh. In all these appeals of the assessee we have raised 1 common objection vid
