DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - AGARTALA , AGARTALA vs. SHRI SUBHAJIT PAUL, AGARTALA

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI ‘E’COURT, AT KOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.116/Gau/2018 (�नधा�रणवष� / Assessment Year:2014-15)

DCIT, Circle, Agartala Vs. Shri Subhajit Paul

B.K. Road, Banamalipur, Agartala, Tripura – 799 001. �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AZNPP 5539 K (Appellant) .. (Respondent) C.O. No. 16/Gau/2018 (Arising out of ITA No.116/Gau/2018 (�नधा�रणवष� / Assessment Year: 2014-15)

Shri Subhajit Paul Vs. DCIT, Circle, Agartala

B.K. Road, Banamalipur, Agartala, Tripura – 799 001. �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AZNPP 5539 K (Cross-objector) .. (Respondent)

Assessee by :Shri Rockein Saikia, JCIT, Sr. DR Revenue by :Shri Sanjay Modi, FCA सुनवाईक�तार�ख/ Date of Hearing : 10/06/2020 घोषणाक�तार�ख/Date of Pronouncement : 31/07/2020 आदेश / O R D E R Per Dr. A. L. Saini: The captioned appeal filed by the Revenue and the cross objection filed by the assessee, pertaining to assessment year 2014-15, are directed against the order passed by the Commissioner of Income Tax (Appeal), Shillong, in Appeal No.

Shri Subhajit Paul ITA No.116/Gau/2018 & C.O. No. 16/Gau/2018 Assessment Year:2014-15 CIT(A)/Shg/10062/2016-17 dated 22.03.2018,which in turn arise out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the ‘Act’) dated 29.03.2016.

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Shri Subhajit Paul ITA No.116/Gau/2018 & C.O. No. 16/Gau/2018 Assessment Year:2014-15 hence not sustainable in the eye of law. This technical ground raised by the assessee goes to the root of the matter, therefore, first we adjudicate the same.

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premises arise from Commissioner of Income Tax (Appeals)-Shillong’s separate orders dated 26.03.2018 and 23.03.2018 (assessee-wise); respectively involving proceedings u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’.

Name of the PAN A/Yr. Assessed Remarks assessee` income (in Rs) Swapan Kumar AEYPP1792J 08- 21,04,770 1. Don’t quote section Paul 09 68 in case of addition under voluntary disclosure / undisclosed income.

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14 ….do... …do…. 14- 6,19,675 ….do…. 15 Rajarshi AACCR8033P 08- 2,23,94,991 ….do…. Motors Pvt Ltd. 09 ….do... …do…. 09- 7,54,48,735 ….do…. 10 ….do... …do…. 10- 12,49,68,760 ….do…. 11 ….do... …do…. 11- 21,25,81,959 ….do…. 12 ….do... …do…. 12- 33,70,10,742 ….do…. 13 ….do... …do…. 13- 27,25,50,393 ….do…. 14 ….do... …do…. 14- 20,70,87,907 ….do…. 15 Subhajit Paul AZNPP5539K 08- 1,53,950 …do… 09 ….do... …do…. 00- 5,25,320 ….do…. 10 ….do... …do…. 10- 17,26,930 ….do…. 11 ….do... …do…. 11- 19,23,600 ….do…. 12 ….do... …do…. 12- 1,15,65,396 ….do…. 13 ….do... …do…. 13- 1,74,58,030 ….do…. 14 ….do... …do…. 14- 1,44,89,296 ….do…. 15 Abhijit Paul APDPP3896B 08- 6,06,070 ….do…. 09 ….do... …do…. 09- 7,20,050 ….do…. 10 ….do... …do…. 10- 23,50,980 ….do…. 11 ….do... …do…. 11- 7,97,79,562 ….do…. 12 ….do... …do…. 12- 5,20,31,013 ….do…. 13 ….do... …do…. 13- 16,89,25,162 ….do…. 14 ….do... …do…. 14- 12,98,56,202 ….do…. 15

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assessment(s) in these two searched taxpayers cash. He quotes this tribunal’s co- ordinate bench’s decision in (2012) 137 ITD 94 (Pune) in AkilGulamaliSomji vs. ITO Ward-4(5), Pune that such an assessment without following the prescribed mandatory procedure in not valid. Learned co-ordinate bench’s order to this effect reads as under:-

“11. We have considered the above submissions and have gone through the decisions relied upon by the parties in view of orders of the authorities below and material available on record. The relevant facts are that during the course of search and seizure action on 29.7.2003 at the business and residential premises of Mr. Shriram Soni, certain documents belonging to the assessee were found and seized. Notice u/s. 153C was issued to the assessee and assessment u/s. 153C r.w.s. 144 have been framed for all the 4 A.Ys. under consideration. Before the Ld CIT(A), the assessment orders were questioned both on legal issue and on merits. On legal issue, the validity of assessment orders in absence of approval obtained u/s. 153 D of the Act of Joint Commissioner of Income Tax has been questioned. On merits additions made by the A.O were impugned. Since the assessee could not succeed in its appeal, the present appeals have been preferred in questioning the first appellate orders.

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clear that compliance of Sec. 153D requirement is mandatory. No universal rule can be laid down as to whether mandatory enactment shall be considered directory or AkilGulamaliSomji A.Y. 2001-02 to 2004-05 Page of 14 obligatory with an implied nullification for disobedience. As per the decision of Hon'ble Supreme Court in the cases of BanwarilalAgarwalla Vs. State of Bihar, AIR 1961 SC 849 (853); RazasBulland Sugar Co.Ltd., Vs. Municipal Board, AIR 1965 (SC) 895 (899) & Others if object of the enactment will be benefited by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory, serious general inconvenience will be created to nascent persons without very much further object of enactment, the same will be construed as directory. But all these does not mean that language used is to be ignored, only that the prima facie inference of the intention of the legislature arising from the words used may be displaced by considering the nature of the enactment, its designed consequences flowing from alternative constructions. The wordings and language used in Sec. 153D of the Act and the heading "prior approval necessary for assessment in cases of search or requisition" under which, Sec. 153D has been provided do not leave an iota of doubt about the very intention of the legislature to make the compliance u/s. 153D a mandatory. There is no dispute that if a provision is mandatory, an act done in breach thereof will be invalid, but, if it is directory, the act will be valid although non-compliance may give rise to some other penalty if provided by the Statute. The general rule that non- compliance of mandatory requirements results in nullification of the Act is subject at least to one exception. If contain requirements or conditions are provided by a statute in the interest of a particular person, the requirements, or conditions although mandatory may be waived him if no public interest are involved and in such case, the act done still be valid even if the requirement or condition has not been performed. Here, before us, is not a case where consent of assessee will waive the condition of obtaining prior approval u/s. 153D of the Joint Commissioner of Income Tax by the A.O for framing AkilGulamaliSomji A.Y. 2001-02 to 2004-05 Page of 14 assessment u/s. 153C/ 153A of the Act. Condition of prior approval of JCIT u/s. 153D has been put in public interest and not in the interest of a particular person. Thus it cannot be waived by particular person. The use of word "shall" raises a presumption that a particular provision is imperative but this prima facie inference may be reverted by other consideration such as object and scope of the enactment and consequence flowing from such construction. The revenue has not been able to rebut the above inference by pointing out other consideration like object and scope of the enactment and the consequence flowing from such construction before us. Clause 9 of Manual of Office Procedure, Volume II (Technical) February 2003 issued by Directorate of Income Tax on behalf of Central Board of Direct Taxes, Department of Revenue, Government of India, reads as under:

"9. Approval for assessment: An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT. (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.) The Assessing Officer should submit the draft assessment order for such approval well in time. The submission of the draft order must be docketed in the order-sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records

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folder. Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet. The assessment order can be passed only after the receipt of such approval. The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself."

Chapter XIVB also deals with assessment of search cases. Sections 153A, 153B & 153C have been introduced to Chapter XIV "procedure for AkilGulamaliSomji A.Y. 2001-02 to 2004-05 Page of 14 assessment" w.e.f. 1.6.2003 by the Finance Act 2003 whereas Sec. 153 D has been inserted to the Chapter w.e.f. 1.6.2007 by the Finance Act 2007. These provisions thus also deal with the assessment in case of search or requisition and when the assessment orders in the present case were passed the provisions laid down u/s. 153D were very much in operation. In the present case, assessments in question have been framed on 27.12.2007.

"In view of the above discussion, we are of the clear opinion that in cases falling under section 144B of the Act, the quasi-judicial function of the Income-tax Officer as an assessing authority comes to an end the moment the assessee files objections to the draft order. The power to determine the income of the assessee thereafter gets vested in the Inspecting Assistant Commissioner to whom the Income-tax Officer is required to forward the draft order together with objections. The only thing that remained to be done by the Income-tax Officer is to pass a final order in accordance with the directions given by the Inspecting Assistant Commissioner. The function of the income-tax Officer to make the final assessment under section 144B(5) of the Act is more in the nature of a ministerial function because he can pass the order only in accordance with the directions of the Inspecting Assistant Commissioner. He cannot vary ordepart from the directions given by the Inspecting Assistant Commissioner. Moreover, the requirements of section 144B of the Act re mandatory. The Income-tax Officer has no option but to follow the same. He cannot make the final order on the basis of the draft order without forwarding the same to the Inspecting Assistant Commissioner along with the objections and without obtaining the directions of the Inspecting Assistant Commissioner. An assessment made by the Income-tax Officer in violation of the provisions of section 144B of the Act would be an assessment without jurisdiction. In the instant case, the admitted position is that on receipt of the draft AkilGulamaliSomji A.Y. 2001-02 to 2004-05 Page of 14 order of assessment, the assessee did file objections and the Income-tax Officer completed the assessment himself on the basis of the draft order without forwarding the draft order and the objections to the

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Inspecting Assistant Commissioner and obtaining directions from him. Such an order, on the face of it, is beyond the powers of the Income-tax Officer under section 143read with section 144B of the Act and, hence, without jurisdiction. The Tribunal, in our opinion, was, therefore, justified in its conclusion that the assessment was liable to be annulled. It was right in holding that the assessment order passed by the Income-tax Officer the instant case without reference to the Inspecting Assistant Commissioner had rightly been annulled by the Commissioner of Income-tax (Appeals). In view of the above, we answer the question referred to us accordingly in favour of the assessee and against the Revenue. This reference is disposed of accordingly with no order as to costs."

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pleased to hold that it is not hit by provisions of Sec. 275 of the Act. In Prabu DayalAmichand Vs. CIT (Supra), the Hon'ble High Court of Madhya Pradesh with reference to Sec. 271(1)(c) of the Act was pleased to hold that a procedural irregularity not involving the question of jurisdiction AkilGulamaliSomji A.Y. 2001-02 to 2004-05 Page of 14 can be cured. It is not helpful to the revenue in the present case because in the present case, the A.O was having no jurisdiction to frame assessment order without prior approval of JCIT as necessary requirement to comply with u/s. 153D of the Act. In the case of CIT Vs.DamodharMuralilal (Supra), the Hon'ble High Court did not approve the view of the Tribunal in holding that in view of Clause (b) of Sec. 251(1) of the Act, the first appellate authority had no power of remand and therefore, the procedural illegality would not be corrected by recourse to remanding the case to the ITO. Here in the present case, as we have already discussed, and also cited the recent decision of Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. Ratnabai N.K. Dubhash (Mrs.) (Supra) and of Hon'ble Delhi High Court in the case of CIT Vs. SPL's Siddharth Ltd. (Supra) that requirement u/s. 153D for obtaining approval of JCIT is not procedural only but a mandatory requirement, hence the cited decision by the Ld. D.R is not applicable in the case of present assessee. Under above circumstances, the issue raised regarding the validity of assessment orders in question without obtaining prior approval u/s. 153D of the Act is decided in favour of the assessee. The assessment orders in question are thus quashed as null and void.” 4. We afforded ample opportunity to the department to clear the air as to whether JCIT had applied his mind whilst according approval to ACIT ‘s draft assessment(s) in these two assessees’ case or not. Mr. Bhardwaj stated that the relevant provision enshrined in sec. 153D of the Act nowhere prescribes a particular mode of approval. It is sufficient if the Assessing Officer seeking approval places the entire facts/issue(s) before the JCIT for the purpose of seeking approval. He invites our attention to the JCIT’s remarks in last column extracted hereinabove to buttress the point that the said prescribed authority had duly applied its mind as required u/s 153D of the Act. 5. We have given our thoughtful consideration to rival contentions. Suffice to say, there is hardly any dispute that the Assessing Officer herein had in fact asked for the JCIT’s approval u/s. 153D of the Act before framing all the impugned assessment(s). The sole question our apt adjudications whether the said approval dated 28.03.2016 satisfies the relevant parameters settled by various judicial precedents or not. Mr. Mody at this stage invites our attention to clause 9 of Manual of Office Procedure, Volume-II (Technical), February 2003 issued by the Directorate of Income Tax on behalf of Central Board of Direct Taxes, Department of Revenue, Government of India dealing with the instant issue of approval to be finalized in a particular manner (supra). He emphasizes that the ACIT as well as the JCIT’s action under challenge does not comply the prescribed procedure therein. We find no merit in the instant argument since such a Manual of Office Procedure is for mere internal circulation which not pertaking the character of CBDT’s instructions prescribed u/s 119 of the Act. Nor is there any material to suggest that this manual confirms all necessary conditions in the

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clinching statutory provision u/s 119 of the Act. The as’s instant argument is rejected therefore. 6. We now advert to the equally important aspect of correctness of JCIT’s approval whose contents stand extracted in preceding paragraphs. We wish to reiterate here that the assessing authority had admittedly sent its letter seeking approval on 28.03.2016 which stood replied by way of alleged approval on the very date with certain remarks at the JCIT’s behest (supra). This approval makes it clear that the Assessing Officer had not even sent the relevant records for the approving authority’s appraisal of all the necessary facts. Tribunal’s yet another decision in IT(SS)A No.01/CTK/2017Geetarani Panda vs. ACIT decided on 05.07.2018 explains the ambit and scope of the instant mandatory requirement of sec. 153D approval as under:-

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documents submitted by the assessee, then he had to apply his judicious mind to all the relevant records and then only the orders can be approved. In the instant case the last notices u/s 142(1) was issued on 30.03.2015 to which the submissions were made on 31.03.2015 and as mentioned in the assessment order the orders were approved on 27.03.2015. So, it is not known on 27.03.2015, how the Ld. Addl. CIT has applied his mind to the notices issued on 30.03.2015 and the submission made by the appellant on 31.03.2015. As a matter of fact no assessment order was approved by the Ld. Addl. CIT, therefore the assessment order passed by the Ld. Assessing Officer is illegal and liable to be quashed. c. Further it is submitted that, the Hon'ble ITAT of Mumbai in the case of "Smt. Shreelekha Dam ani Vs. Dy. CIT, (2015) 173 TTJ 332 (Mumbai)" it was held that, 'legislative intent is clear inasmuch as prior to the insertion of Sec.l53D, there was no provision for taking approval in cases of assessment and reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the materials on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order". In the instant case, the ld Addl. CIT (As Claimed by the Ld. AO) has approved the order prior to the completion of the assessment from which it can be well concluded that, the Ld. Addl. CIT had not applied his mind to the materials on record and therefore, the assessment order is bad in law and liable to be quashed. On the above ground it is prayed before your honour to quash the assessment order. Decision:- The submission of the Ld. A.R. was referred to the A.O. u/s.250(4) of the Act on 23.09.2016. In reply, the A.O. has given the following reply in letter dt.17.10.2016:- "The contention of the assessee that the assessment orders were passed without the prior approval of the Addl. CIT is not correct. Assessment orders have been passed with the in principle approval of the Addl. C.I.T. after obtaining the same as required u/s.l53D of the I.T. Act, 1961. The imminent additions/disallowances which the Assessing Officer was going to make in its assessment orders to be passed u/s.l53A(b) of the Act were there in the proposed draft assessment orders. So the averments of the assessee that assessment orders were passed without obtaining the approval of the Addl. CIT is altogether misplaced and incorrect and not borne by the material available on record. Hence deserve to be dismissed." The A.O. has furnished copy of the approval letter of the Addl.CIT, Range- 1, Bhubaneswar dt.27.03.2015. The copy of the letter has been placed record. On perusal of the approval letter, it is clearly evident that the Addl. C7 asked the A.O. to verify opening balance

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with evidence failing which the opening balance may be added to the total income. Therefore, the A.O. issued the alleged notice u/s. 142(1) asking the appellant to prove the same with evidence. The counsel of the appellant appeared in response to the notice, but produced no evidence and hence, the alleged addition to the total income was made. In view of the above, it is held that there is no strength in the argument of the Ld. A.R. alleging violation of provisions of sec. 153 D of the Act and hence, the ground of appeal is rejected. “ 6. At the time of hearing, ld A.R. of the assessee argued that search was conducted in the premises of the assessee on 13.12.2012. The assessment order under section 153A(b) of the Act was passed on 31.3.2015. The approval was obtained from the Addl. Commissioner of Income Tax, Range-1, Bhubaneswar on 27.3.2015 and filed copy of the same. Notice u/s.142(1) of the Act was issued on 30.3.2015 and referred to pages 15 & 16 of paper book, where copy of the same is placed. On the above stated facts, ld A.R. of the assessee submitted that according to the provisions of section 153D of the Act, no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner of Income Tax in respect of each assessment year referred to in clause (b) of sub-section(1) of 153A except with the prior approval of the Joint Commissioner of Income tax. He submitted that it will be observed from the assessment order dated 31.3.2015 passed u/s.153A(b) in the case of Geetarani Panda, the Assessing Officer assessed the income of the assessee at Rs.24,67,700/-, whereas as per the approval letter of the Addl. Commissioner of Income Tax, Range-1, Bhubaneswar dated 27.3.2015, the income assessed at Rs.1,31,960/- in the assessment year 2007-2008 and in order dated 31.3.2015 in the case of Smt. Manjusmta Dash, the Assessing Officer assessed the income of the assessee at Rs.3,44,785/-, whereas as per the approval letter of the Addl. CIT, Range-1, Bhubaneswar dated 27.3.2015, the income assessed at Rs.1,31,000/- and, therefore, the assessment orders passed by the Assessing Officer were without the prior approval of the Additional CIT and hence, bad in law and liable to be annulled. He relied on the decision of Mumbai Bench of the Tribunal in the case of Smt. ShreelekhaDamani vs DCIT, 173 TTJ (Mumbai) 332, wherein, it was held as under: “11.3 The Legislative intent is clear inasmuch as prior to the insertion of Sec.153D, there was no provision for taking approval in cases of assessment and reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the materials on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order. 11.4 The question before us is “has this been done in the present case”. The language of the approval letter says “no”. Let us now consider some analogous provision in the Act. Sec. 142(2A):

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“142(2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the Chief Commissioner or Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the Commissioner in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the Assessing Officer may require.” In this section also the AO may direct the assessee to get the accounts audited by an Accountant with the previous approval of the Principal Chief Commissioner or Chief Commissioner. This provision has been elaborately considered by the Hon’ble Supreme Court in the case of Sahara India Vs CIT 169 Taxman 328 wherein at para-6, the Hon’ble Supreme Court observed as under: “A bare perusal of the provisions of sub-section (2A) of the Act would show that the opinion of the Assessing Officer that it is necessary to get the accounts of assessee audited by an Accountant has to be formed only by having regard to: (i) the nature and complexity of the accounts of the assessee; and (ii) the interests of the revenue. The word "and" signifies conjunction and not disjunction. In other words, the twin conditions of "nature and complexity of the accounts" and "the interests of the revenue" are the prerequisites for exercise of power under section 142(2A) of the Act. Undoubtedly, the object behind enacting the said provision is to assist the Assessing Officer in framing a correct and proper assessment based on the accounts maintained by the assessee and when he finds the accounts of the assessee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometimes, what appears to be complex on the face of it, may not be really so if one tries to understand it carefully." Thus, before dubbing the accounts to be complex or difficult to understand, there has to be a genuine and honest attempt on the part of the Assessing Officer to understand accounts maintained by the assessee; appreciate the entries made therein

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and in the event of any doubt, seek explanation from the assessee. But opinion required to be formed by the Assessing Officer for exercise of power under the said provision must be based on objective criteria and not on the basis of subjective satisfaction. There is no gainsaying that recourse to the said provision cannot be had by the Assessing Officer merely to shift his responsibility of scrutinizing the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the section is not turned into an empty ritual. Needless to emphasise that before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him the material on the basis whereof an opinion in this behalf has been formed by the Assessing Officer. The approval must reflect the application of mind to the facts of the case.” 11.5 Thus, even the Hon’ble Supreme Court has clearly laid down that the approval must reflect the application of mind to the facts of the case. 11.6 Similarly, the Hon’ble High Court of Calcutta in the case of Peerless General Finance & Investment Co. Ltd. Vs DCIT 236 ITR 671 has made the following observations which are pertinent to the facts of the case in hand before us. “The factual matrix of the matter clearly shows that a proposal was made on March 10, 1998, and no prior approval therefore was granted by the Chief Commissioner of Income-tax but merely one G. P. Agarwal was nominated. An argument has been advanced to the effect that by making such a nomination, approval will be deemed to have been granted. The answer to the said contention must be rendered in the negative. The Chief Commissioner of Income-tax before granting such approval must have before him the materials on the basis whereof an opinion had been formed. A prior approval can be granted only when the materials for appointment of the extraordinary procedure is required to be taken by the Assessing Officer. The Assessing Officer, therefore, was required to place all materials before the Commissioner of Income-tax or the Chief Commissioner of Income- tax, as the case may be, to show that he intends to take recourse to the said provision having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue. No such materials had been placed before the Chief Commissioner of Income-tax. It further appears that even no previous approval was sought for but merely a proposal was placed for perusal of the Chief Commissioner of Income-tax and for appointment of a special auditor. The Chief Commissioner of Income-tax, therefore, did not apply his mind at all as regards the prerequisite for grant of previous approval and

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mechanically appointed Sri G. P. Agarwal, as a special auditor. The said order depicts a total non-application of mind on the part of the Assessing Officer as also the Chief Commissioner of Income-tax.” 11.7. Another section relevant to the facts in issue is Sec. 158BG which read as under: “The order of assessment for the block period shall be passed by an Assessing Officer not below the rank of an Assistant Commissioner or Deputy Commissioner or an Assistant Director or Deputy Director, as the case may be: Provided that no such order shall be passed without the previous approval of— (a) the Commissioner or the Director, as the case may be, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after the 30th day of June, 1995, but before the 1st day of January, 1997; (b) the Joint Commissioner or the Joint Director, as the case may be, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of January, 1997.” 11.8. In this section also it is provided that the order cannot be passed without the previous approval. This section was thoroughly scrutinized by the Tribunal Madras Bench in the case of Kirtilal Kalidas & Co. Vs DCIT 67 ITD 573, at para-41 of its order the observations of the Tribunal are as under: “In these cases, the Commissioner has passed an order granting approval under section 158BG of the Act through a single order passed on 31-3- 1997 without giving any reason whatsoever. As we have recorded elsewhere above, the draft assessment orders of the block period in all these cases were made on 31-3-1997 and on the very same day, i.e., on 31- 3-1997 the Commissioner grants approval and that too without giving or recording any reasons whatsoever. The approval order does not disclose the points which were considered by the Commissioner and the reasons for accepting them. In our view, this is totally an unsatisfactory method of granting approval in exercise of judicial power vested in the Commissioner. 11.9. This decision of the Tribunal was considered by Allahabad Bench of the Tribunal in the case of Verma Roadways Vs ACIT 75 ITD 183 wherein also the assessee- appellant has challenged the validity of approval to the assessment order accorded by the CIT Kanpur. The Tribunal at Para-47 has held as under: “Coming to the aspect of the application of mind, while granting approval, we are of the view that requirement of approval presupposes a proper and thorough scrutiny and application of mind. In the case of Kirtilal Kalidas & Co. (supra), the I.T.A.T Madras Bench ‘A’ has observed that the function to be performed by the Commissioner in granting previous approval requires an enquiry and judicial approach on the entire facts, materials and evidence. It has been further observed that

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in law where any act or function requires application of mind and judicial discretion or approach by any authority, it partakes and assumes the character and status of a judicial or at least quasi-judicial act, particularly because their Act, function, is likely to affect the rights of affected persons.” 11.10. Similarly, u/s. 151 of the Act it is provided that no notice shall be issued u/s. 148 unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied that it is a fit case for the issue of such notice. The sanction under this section was considered by the Tribunal, Mumbai Bench in the case of Shri Amarlal Bajaj in ITA No. 611/M/2004 wherein at para-8, the Tribunal has considered the decision of the Hon’ble High Court of Delhi Bench in the case of United Electrical Co. 258 ITR 317 which read as under: “Hon’ble Delhi High Court in the case of United Electrical Co. Pvt. Ltd. Vs CIT 258 ITR 317 has held that “the proviso to sub-section (1) of section151of the Act provides that after the expiry of four years from the end of the relevant assessment year, notice under section 148 shall not be issued unless the Chief Commissioner or the Commissioner, as the case may be, is satisfied, on the reasons recorded by the Assessing Officer concerned, that it is a fit case for the issue of such notice. These are some in-builts safeguards to prevent arbitrary exercise of power by an Assessing Officer to fiddle with the completed assessment”. The Hon’ble High Court further observed that “what disturbs us more is that even the Additional Commissioner has accorded his approval for action under section 147 mechanically. We feel that if the Additional Commissioner had cared to go through the statement of the said parties, perhaps he would not have granted his approval, which was mandatory in terms of the proviso to sub-section (1) of section 151 of the Act as the action under section 147 was being initiated after the expiry of four years from the end of the relevant assessment year. The power vested in the Commissioner to grant or not to grant approval is coupled with a duty. The Commissioner is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer. 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 Additional Commissioner before granting the approval”. 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 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

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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. 153A 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.” 7. Further, he relied on the decision of Jodhpur Bench of the Tribunal in the case of Smt. Indra Bansal &Ors vs ACIT, (2018) 192 TTJ (Jd) 968, wherein, it was held as under: “6.4 Coming to the facts of the case, it is apparent from the documents on record that the approval was given by the Jt. CIT in hasty manner without even going through the records as the records were in Jodhpur while the Jt CIT was camping at Udaipur. The entire exercise of seeking and granting of approval in all the 22 cases was completed in one single day itself i.e. 31st March, 2013. Thus, it is apparent that the JCIT did not have adequate time to apply his mind to the material on the basis of which the AO 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 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 Jt. CIT 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 Jt. CIT in a mechanical manner without proper application of mind. Accordingly, respectfully following the ratio of the Co-ordinate Benches of Mumbai and Allahabad as aforementioned and also applying the ratio of the judgment of the Hon'ble apex Court in the case of Sahara India (Firm) vs. CIT (supra), we hold that the Jt. CIT has failed to grant approval in terms of s. 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

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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.” 8. On the other hand, ld D.R. argued and submitted that on perusal of letter of Addl. Commissioner of Income tax dated 27.3.2015 in para 7, he has observed as under: “Smt. Geetarani Panda A.Y. 2007-08:- Broadly speaking, like the case of Smt. Manjusmita Dash, this also appears to be the case of capital building where the assessee has declared income of Rs. 87,200/- as misc. income, which is not verifiable and the entire receipts alongwith opening capital have been shown as cash in hand. A perusal of the balance sheet of the assessee shows an opening capital of Rs.23,35,735/-, most of which is in cash. The capital as on 31st March, 2007 has been shown at Rs. 24,22,099/-, out which Rs. 16,35,201.65 has been shown as cash in hand with Rs. 28,897.35 as cash at bank. Besides, investment of Rs. 4 Lacs in fixed deposits and Rs. 3 Lacs in MIS in Post Office has been shown. This appears quite unusual as the assessee was maintaining bank account with Punjab National Bank. No prudent person would keep such a big cash amount in his hand despite having a bank account. Further you should examine the opening cash in hand and ask the assessee to furnish evidence in support of it failing which this opening cash in hand may be added to the total income of the assessee.” 9. Ld D.R. submitted that the Addl. CIT, Range-1, Bhubaneswar has gone through the seized materials and after that has given approval to the order of the Assessing Officer and while doing so, he has directed the Assessing Officer to examine the opening cash in hand before determining the total income of the assessee. The Assessing Officer after examining the same as per the direction of the Addl. CIT has passed the assessment order. Hence, it is wrong to say that the order of the Assessing Officer is not approved by the Additional CIT in view of the provisions of section 153D of the Act. 10. He further argued and submitted that the case laws relied upon by ld A.R. of the assessee are not applicable to the facts of the case of the assessee as in those cases, the approval was granted by the Jt. CIT on the very day of receipt of the draft order from the Assessing Officer, which is not the case at hand, wherein, the draft orders were received by the Jt. CIT four days prior to the grant of approval. 11. In the rejoinder, ld A.R. of the assessee submitted that a reading of the first, second and third paras of the Addl. CIT of his letter dated 27.3.2015 read as under: "Despite a reminder given on 19th March, 2015 to submit the time barring draft assessment orders for approval u/s. 153D on or before 23.03.2015,

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the draft orders in M/s. Neelachal Carbo Metalicks Pvt. Ltd. Group of cases has been received in this office only on till 26th March, 2015 in the afternoon. The draft orders having being submitted only 5 days before final orders are getting barred by limitation,, I have no other option but to accord the approval to the same as the approval is statutorily required u/s. 153D, even though there is no time left for undersigned to ensure that all the points raised in the appraisal report, the appellate proceedings, audit inspection etc. are duly taken into account, and the enquiries and investigations that are required to be made are actually made before finalization of the assessment orders. It would have been much better and in the interest of Revenue, if you had submitted the draft orders atleast one month earlier so as to allow the undersigned sometime to go through and analyse the same vis-a-vis the appraisal report and seized records. It also goes without saying that you never cared even to discuss these cases with the undersigned for guidance and line of investigation to be taken. However, despite all this, I have gone through the material available on records and some of the observations, in respect of the following cases are given in subsequent paras.” 12. Ld A.R. submitted that the reading of the same will show that there was no application of mind due to shortage of time by the Additional CIT granting approval to the draft assessment order by the Assessing Officer. 13. In reply to the same, ld D.R. submitted that the reading of para 7 of the order will show that the Addl. CIT has applied his mind and granted necessary approval to examine the cash in hand before passing the assessment order. He argued that the said details show that though there was shortage of time, the Addl. CIT has applied his mind before granting approval to the assessment order by burning the midnight order. 14. The common Ground No.4 in both the appeals reads as under: “That the assessment order passed u/s.153A(a) are barred by limitation and liable to be quashed.” 15. The CIT(A) has disposed of this issue by observing as under: “That, the assessment order passed u/s 153A(a) is barred : limitation and liable to be quashed. The ground of appeal is contested as follows:- a. That, in the instant case as it is pointed out in the assessment order, it had been passed on 31.03.2015. For this proposition is it to bring to your kind notice that, the notice u/s 142(1) was issued and served on the appellant on 30.03.2015 to which the hearing was fixed on 31.03.2015. On 31.03.2015, the A/R of the appellant appeared and filed the required documents, explanations and necessary written submission. As per the provisions of the Act after getting of the documents, submissions etc the ld Assessing Officer applied his judicious mind and then prepare the draft order which were sent to the Ld. Addl. CIT who had gone through the

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seized materials/documents, notices issued by the Ld. Assessing Officer, documents and submissions submitted by the appellant and after being satisfied with all these, he had given the approval of the orders and only thereafter the final order came out and uploaded by the Ld. 'Assessing Officer. Humanly all these activities are not possible within one day. Moreover from the system, it can be verified that, the assessment order passed by the Ld. Assessing Officer were not uploaded which again prove that, the assessment orders were not passed within the due date, otherwise what prevented him to upload the assessment orders. So it is clear that the order were never been passed on 31.03.2015, rather it had been passed after the expiry of the due date and back dated. Therefore the assessment orders are barred by limitation and liable to be quashed. b. Further it is submitted that, as per the provisions of the Act, once the assessment orders are passed they should be immediately sent to the dispatch section for dispatch of the orders. In the instant case instead of sending the orders to the dispatch section the Ld. Assessing prefer to call the A/R and handed over the orders on 08.04.2015. Again question arises if the orders were passed on 31.03.2015 why the orders were not sent to dispatch section or handed over to the appellant on the same day or in the immediate next day. But as a matter of fact the orders were never passed within the due date, they are back dated. Hence the assessment orders are barred by limitation and liable to be quashed. c. Further it is. submitted that, as claimed/dated (purported) the assessment order was passed on 31st march 2015, but it has not been dispatched/ sent for service within the limitation, a legal presumption arises that the order was not passed within the limitation and therefore, to rebut the legal presumption, and it is so because, the law in this respect is that the order should not look only to have been made within limitation, it should be out of reach of the authority making the assessment order within the limitation. For this finding the reliance may be placed on B.J.Shelat Vs. State of Gujrat; AIR 1978 SC1109. In this case the Hon'ble Supreme Court has held as follows:- "The order of any authority 'cannot be said to be passed unless it is in some way pronounced or published or the party affected has a means of knowing it. It is not enough if the order is made, signed and kept in the file, because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking, or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. This should be done within the prescribed period, though the actual service of the order may be beyond that period." d. Further it is submitted that, the Hon'ble jurisdictional ITAT respectfully following the aforesaid decision in the case of ACIT, Circle-2(2) Vs.

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Orissa Stevedores Ltd. Vide ITA No.409-411/2011 & CO no.30- 32/CTK/2011, it was held the communication is condition precedent to an order of assessment becoming effective. e. Recently the Hon'ble Karnataka High Court in the case of "Commissioner of Income Tax and Others Vs. B J N Hotels Ltd. (2016), 382 ITR 110 (Kar)" it was held that, to make an order effective the revenue has to dispatch the order within the due date, i.e. in the instant case it should be dispatched on or before 31.03.2015 which had not been done. Therefore the orders are barred by limitation. f. Further, it is submitted that, the assessment order was served on the appellant by hand on 8th of April, 2015 which also proves that the order was never dispatched or 'sent by any other specified mode. Therefore the assessment order is barred by limitation and liable to be quashed. Similar view was also expressed in the following ratios: SHANTI LAL GOD AW AT & ORS Vs. ASSISTANT COMMISSIONER OF INCOME TAX, (2009) 126 TTJ (Jd) 135 COMMISSIONER OF INCOME TAX Vs. PURSHOTTAMDAS T. PATEL, (1994) 120 CTR (Cuj) 332 : (1994) 209 ITR 52 (Guj) JIFFIR AND KAREEM Vs. AGRICULTURAL INCOME TAX OFFICER & ANR., (1999) 240 ITR 587 (Ker) On the above ground it is submitted that, the assessment order passed by the Ld AO is barred by limitation and liable to be quashed.” Decision:- Submission made by the Ld. A.R. was considered carefully with reference to material available on record and the observation/findings made are enumerated hereunder:- (i) The submission of the Ld. A.R. was referred to the A.O. u/s.25 Act on 23.09.2016. In reply, the A.O. has given the following reply dt.17.10.2016:- "The Authorized Representative (A.R.) after being appointed by the assess- , act so are not only to plead or argue the case before the A.O. In order to act on behalf, the assessee A.R. a power of attorney (PoA) has been submitted at the out set of the case. That PoA authorizes the A.R. to take copies of the assessment orders. That PoA also authorizes the A.O. to get the assessment order(s) served on the assessee through his/her A.R. Being it a group case all assessment orders after the scrutiny proceedings being completed, have been served on the assessee through her A.R. on 08.04.2015and the receipt of the orders has been duly acknowledged by the A.R. also. The, scrutiny proceedings were completed by 31.03.20,15 and assessment orders have been served on 08.04.2015. No inordinate delay has happened. When the A.R. is ready to act in every respects [including applying for refund and receiving the refund vouchers] on

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behalf of the assessee through the PoA and as stated above the A.R. also did not object at the - instant to receive the assessment order serving of assessment order (s) which resulted in demand by hand did not violate any rule. " (ii). It is nowhere mentioned in the statute that the assessment order would have to be served on the assessee. Ail that is required is that the notice of demand specifying the sum payable should be served on the assessee in the prescribed form and would be accompanied by an assessment as held in the case of CIT Vs. Kailasho Devi Burman (1978) 115 ITR 732 (Cal.,) SivalingamChettiar (VS) Vs. CIT (1966) 62 ITR 678 (Mad.), Kalyankumar Ray Vs. CIT (1991) 191 ITR 634 (SC), Arrah Sasaram Light Railway Co. Ltd. Vs. CIT (1993) 204 ITR 807 (Cal), Shahdara (Delhi) Saharanpur Light Railway Co. Ltd. Vs. CIT (1994) 208 ITR 882 (Cal), etc. The limitation period prescribed in section 153 is the period within which the AO has to complete one stage of the proceedings, that is, the assessment of the income and the determination of the tax payable. It is not necessary that the terms of the order of assessment should, also be communicated to the assessee within that period [Relied on RM.P.R. Viswanathan Chettiar Vs. CIT (1954) 25 ITR 79 (Mad.) approved in CIT Vs. Balkrishna Malhotra (1972) 81 ITR 759 (SC), EsthuriAswathiah Vs. CIT (1963) 50 ITR 764 (Mys.), Badri Prasad Bajoria Vs. CIT (1967) 64 ITR 362 (Cal.) etc.] or that the notice of the demand should also be served on the assessee within that period. [Also relied on Sushil Chandra Ghose Vs. ITO (1959) 35 ITR 379 (Cal.) CAgIT Vs. Kappumalai Estate (1998) 234 ITR 187, 188 (Ker.) etc.]. What is required for completion of the assessment is the determination of the tax liability and issue of demand notice, but certainly not the -service of the same on the assessee. [India Ferro Alloy Industry Pvt. Ltd. Vs. CIT (1993) 202 ITR 671, 677 (Cal.), N. Subha Rao 48 ITR 808 (Mys.)]. In the case of EsthuriAswathiah Vs. CIT (1963) 50 ITR 764 (Mys.), the order under section 143(3) dated 29-02-1961 was served to the assessee on 04-04-1961. The Hon'ble High Court Mysore treated the order as valid. In the case of Ramanand Agrawal Vs. CIT 151 ITR 216 (Gua.), the order u/s 143(3) dated 16-03-1968 was served on 13- 04-1968 and the Hon'ble Guahati High Court held the order as valid. Order sheet entry passed by the A.O. states that assessment order was completed on 31.03.2015 and hence, the assessment order served on 08.04.2015 is valid and not time barred as held in the case of SewduttroyRambullay& Sons Vrs. CIT (Cal) 204 ITR 580, CIT Vrs. T.O. Abraham & Co.) (Ker) 333 ITR 182. In similar facts and circumstances of the case, the Hon'ble Jurisdictional Tribunal rejected the appeal of the assessee in case of CIT Vrs. Sophia Study Circle in ITA No.286/CTK/2012 for A.Y.2008-09 and the relevant portion of the order is reproduced, verbatim, hereunder:- We have considered the rival submissions. At the outset, a perusal of the provisions of section 153 of the Act shows that the word used in the said section 'make'. Similarly, a perusal of the proviso to section 147 of the Act

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Shri Subhajit Paul ITA No.116/Gau/2018 & C.O. No. 16/Gau/2018 Assessment Year:2014-15 shows that the word used as 'no action shall be taken'. Similarly, in the provisions of section 148 of the Act, the words used are 'shall serve on the assessee'. Similarly, in the provisions of section 149 of the Act, the words used are Issue to the assessee'. Thus, each word used in each section has a different purpose and different meaning. 'Made' cannot be treated on the same footing as served. The fact that the word used is 'made' in section 153 shows that the assessment order should be made on or before the said date. It does not mean that it should be served. On this ground itself as we find that the decision of the Coordinate Bench has erroneously laid down the law on this issue if the word 'made' is given the meaning served then the section itself would become unworkable and it would make all assessment orders made on the last day illegal. In the circumstances, respectfully following the principles and the ratio laid down by the Hon'ble Madras High Court in the case of CIT Vrs. Hi-Tech Aral Ltd. (20- 10) 321 ITR 477, we differ from the decision taken by the Coordinate Bench in the case of Durga Condev Pvt. Ltd. (Supra) as also decision of Shanti Lai Godawat&Ors. Vrs. ACIT (2009) 126 TTJ(Jodh) 135. Here, we may specifically mention that in the case of Durga Condev Pvt. Ltd. (Supra), though one of us is co signatory in that order still we differ from the said order as there is no bravery. perpetuating an error in law. The fact that the assessment order is dt.31.12.2010 an there is no evidence available to show that this order was not passed on 31.12.201t makes this order sustainable in law as under the provisions of the Genera/ Clauses Act government document cannot be questioned unless and until substantial evidence has been produced to dislodge the veracity of the same. Under these circumstances, s it is noticed that the assessment order is dt. 31.12.2010 and as no evidence has been produced to show or to prove the allegation that the order was back dated, the technical ground raise by the assessee stands rejected.” In view of the facts and circumstances of the case discussed above, it is found that there is no inordinate delay in service of the order and therefore, the ground of appeal filed by the appellant is not acceptable and hence, it is rejected.”

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being completed, have been served on the assessee through her A.R. on 08.04.2015 and the receipt of the orders has been duly acknowledged by the A.R. also. The scrutiny proceedings were completed by 31.03.2015 and assessment orders have been served on 08,04.2015. No inordinate delay has happened. When the A.R. is ready to act in every respects [including applying for refund and receiving the refund vouchers] on behalf of the assessee through the PoA and as stated above the A.R. also did not object at the instant to receive the assessment order serving of assessment order (s) which resulted in demand by hand did not violate any rule." 17. On the above stated facts, his argument was that as the assessment order was passed on 31.3.2015 and the same was delivered by hand to the assessee on 8.4.2015, the same was barred by limitation and, therefore, liable to be annulled. 18. Ld D.R. on the other hand submitted that Section 153A requires the order to be made within the time limit and does not requires the same to be served on the assessee and they can be served later on. He agreed with the facts as stated in the order of the CIT(A) that although the assessment order was passed on 31.3.2015, it was served on the ld A.R. of the assessee by hand on 8.4.2015. He relied on the decision of Hon’ble Calcutta High Court in the case of Binani Industries Ltd vs. CIT (2015) 59 taxmann. Com 389 and submitted that the Hon’ble High Court has upheld the order in absence of any material to show that the Assessing Officer revisited the orders after 31.12.2016. 19. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the assessee has raised two legal issues. Firstly, the order of assessment being issued after the statutorily permitted time is barred by limitation. Secondly, no requisite approval as envisaged under the provisions of Section 153D of the Act was obtained and, therefore, the impugned order of assessment is barred in law. 20. We find force in both the above legal issues raised by the assessee for the reason discussed hereunder. 21. In the instant case, it is not in dispute that though the impugned order of assessment is dated 31.3.2015 was issued and served manually only on 8.4.2015 on the Authorised Representative of the assessee. This Bench of the Tribunal in the case of M/s. Nidan vs ACIT, (2018) 53 CCH 0046 (Cuttack Tribunal) has held as under: “4. In all the above seven appeals, the assessee raised a legal ground which is that the orders of assessment passed by the Assessing Officer are barred by limitation. 5. The facts relating to this issue are that a search and seizure operation was conducted in the case of the assessee on 28.5.2014. In pursuance to the said search, order u/s.153A r.w.s 144 of the Act was passed for the assessment years 2009-2010 to 2014-15 and assessment for the assessment year 2015-16 was made u/s.144 of the Act. The said orders of

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assessment were served upon the assessee on 9.1.2017 though all the orders were dated 30.12.2016. 6. Before the CIT(A), the assessee contended that the aforesaid orders being dispatched on 7.1.2017 are barred by limitation. The CIT(A) observed that as the orders were dated 30.12.2016 and in absence of any material to show that the Assessing Officer revisited these orders after 30.12.2016 upheld the orders and drawn support from the decision of Hon’ble Calcutta High Court in the case of CIT vs. Binani Industries ltd., (2015) 59 taxmann.com 389 (Cal). 7. Before us, the assessee produced copy of envelope by which the orders of assessment were sent to the assessee by the Assessing Officer and copy of track record of Speed Post to show that the impugned orders of assessment were, in fact, dispatched by the Assessing Officer on 7.1.2017, though the orders were dated 30.12.2016. The assessee contended that as the orders were dispatched after 30.12.2016, therefore, the orders of assessment were barred by limitation. He placed reliance on the decision of Hon’ble Karnataka High Court in the case of CIT vs. B J N Hotels Ld., (2017) 79 taxmann.com 336(Kar). 8. On the other hand, ld D.R. placed reliance on the orders of the CIT(A). 9. Ld D.R. could not explain when the orders were prepared on 30.12.2016 why it could not be dispatched on or before 31.12.2016.

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Shri Subhajit Paul ITA No.116/Gau/2018 & C.O. No. 16/Gau/2018 Assessment Year:2014-15 the assessee it becomes “order of assessment”. Thus, in our considered opinion, to become a legal valid order of assessment, its communication must be within a period of limitation prescribed by the law though the communication may end after the prescribed period of limitation. Our above view derives support from the decision of Hon’ble Karnakata High Court in the case of B J N Hotels Ltd (supra), wherein, it has been held as under: “ That the revenue is neither able to point out from the records that the assessment orders were dispatched on 27.4.2007 nor produced the dispatch register to establish that the orders were complete and effective i.e. it was issued, so as to be beyond the control of the authority concerned within the period of limitation i.e. 29.4.2007. Admittedly, the assessment orders were served on the assessee on 30.4.2007. hence, the assessment orders passed were barred by limitation.” In the above decision, Hon’ble High Court follows its one earlier decision and has stated as under: “An identical issue was before this Court in ITA No.832/2008 (D.D. 14.10.2014 in the case of Maharaja Shopping Complex vs DCIT. This court following the judgment of Kerala High Court in the case of Government Wood works vs State of Kerala (1988) 69 STC 62 has held that in the absence of dispatch date made available to the Court from the records, to prove that the order is issued within the prescribed period, order passed by AO is barred by limitation. The said judgment squarely applies to the facts of the present case.” 13. To the same effect are the decisions of Hon’ble Kerala High Court, which are in the case of (i) K. Joseph Jacob vs Agricultural Income Tax Officer & another (1991) 190 ITR 464 (Ker) and (ii) Commissioner of Agricultural Income Tax Officer vs. Kappumalai Estate, 234 ITR 187 (Ker). 14. The Jodhpur Bench of this Tribunal also held similarly in the case of Shanti Lal Godawat and Others vs. ACIT, reported in 126 TTJ (Jd) 135. 15. In view of above plethora of judicial precedents, in our considered opinion, the decision of Hon’ble Calcutta High Court relied upon by the CIT(A) in the case of Binani Industries Ltd., (supra) will not deter us as it is a settled position of law that when two divergent views are expressed by two different Hon’ble High Courts, none of which are Hon’ble Jurisdictional High Court, then the view favourable to the assessee should be followed. For this, we derive support from the decision of Hon’ble Supreme Court in the case of CIT vs. Vegetable Products Ltd., 88 ITR 192 (SC). 16. Coming to the facts of the instant case, it is not in dispute that the last authorisation u/s.132 of the Act was executed on 28.5.2014. Twenty- one months from the end of the financial year 2014-2015 expires on 31.12.2016. Therefore, the orders of assessment in pursuance to the said search for the assessment years 2009-2010 to 2015-2016 were to be made on or before 31.12.2016.

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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 AkilGulamaliSomji 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 AkilGulamaliSomji, 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. In the instant case, we find that the Supervisory Authority has himself admitted that because of reasons stated by him, could not apply his mind and has accorded the approval mechanically to meet the requirements of law as the requirement was merely a formality. The said Supervisory Authority had a duty towards both the assessee as well as the Revenue which was failed to be performed in the instant case. 26. Further, we find that the approving authority has required the assessing authority to conduct further enquiry in respect of opening cash in hand. The Assessing Authority thereafter has never communicated his findings of the further enquiry to the Supervisory Authority and not taken the approval of justification of his findings. Thus, in our considered opinion, alleged approval letter dated 27.3.2015 of the Addl. CIT, Range1, Bhubaneswar does not constitute the approval which is envisaged by the provisions of section 153D of the Act. Thus, following the decision of the Hon’ble Bombay High Court in the case of AkilGulamaliSomji (supra), we hold that the impugned order of assessment is void and bad in law. Therefore, the impugned order of assessment is hereby cancelled and Ground No.2 and Ground No.4 of appeal in case of both the assessees are allowed.” 7. Learned co-ordinate bench has taken into consideration the settled legal position on the very issue of sec. 153D approval in light of earlier provision sec. 158BG vis-a-vis sec. 153D (supra) to conclude that the JCIT is not to accord a mere mechanical approval but he has to apply his mind in order to ensure that the assessing authority conducts appropriate enquiry and investigation. And also that there is no undue or irrelevant addition made in the assessment in issue. We also find that the tribunal’s leading decision in case of PCIT vs. ShreelekhaDamani stands affirmed in hon'ble Bombay high court in Tax Appeal No.668 of 2016 decided on 27.11.2018. We conclude in these facts and circumstances that the department has not proceeded to finalise the impugned assessment(s) in true light of the relevant mandatory provision sec. 153D of the Act mainly for the reason neither the Assessing Officer had sent anything more than the draft assessment order(s) nor the JCIT had an occasion to apply his mind to ensure the twin purpose of his statutory exercise (supra). We further make it clear that since the entire exercise was carried out from both the authorities’ end on the same date i.e. 28.03.2016 itself in absence all the corresponding records, the impugned approval does not satisfy the relevant parameters of law as settled in preceding case law. We therefore quash all the impugned assessment(s) framed u/s. 153A r.w.s. 143(3) for this precise reason alone. All these Revenue’s appeal(s) are declined whereas the assessees’ appeal(s) / cross objections are allowed in foregoing terms. Ordered accordingly.

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As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench in the case of Shri Swapan Kumar Paul (Supra) and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Coordinate Bench (supra). We find no reason to interfere in the said order of the Coordinate Bench (supra). In view of the decision of Coordinate Bench in the case of Shri Swapan Kumar Paul (Supra) and position of law provided u/s 153D of the Act, we hold that impugned assessment order framed in absence of obtaining prior approval of the Joint Commissioner of Income Tax (JCIT), for the assessment year under consideration is invalid and ‘null’ in the eye of law, therefore we quash the assessment order dated 29.03.2016.

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Shri Subhajit Paul ITA No.116/Gau/2018 & C.O. No. 16/Gau/2018 Assessment Year:2014-15 therefore appeal filed by the Revenue becomes infructuous and hence does not require adjudication.

Order pronounced in the Court on 31.07.2020

Sd/- Sd/- (A.T. VARKEY) (A. L. SAINI) �या�यकसद�य / JUDICIAL MEMBER लेखासद�य / ACCOUNTANT MEMBER �दनांक/ Date: 31/07/2020 (Biswajit, Sr.PS) Copy of the order forwarded to: 1. DCIT, Circle-Agartala 2. Shri Subhajit Paul 3. C.I.T(A)- 4. C.I.T.- Guwahati 5. CIT(DR), Gauhati Bench, Guwahati. 6. Guard File.