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Facts
The assessee preferred appeals against orders of the CIT(A) arising from assessment orders passed under Section 153C r.w.s 153A of the Income Tax Act, 1961. The assessee alleged that the assumption of jurisdiction was bad due to a lack of valid approval under Section 153D.
Held
The Tribunal held that the consolidated approval granted for multiple assessment years under Section 153D was not sustainable in law, vitiating the assumption of jurisdiction. This applied to AYs 2015-16 and 2016-17, and for AY 2017-18, it was also found that the assessment should not have been under Section 153C.
Key Issues
Whether the consolidated prior approval granted under Section 153D of the Income Tax Act for multiple assessment years is valid, and consequently, whether the assumption of jurisdiction under Section 153C is vitiated.
Sections Cited
153C, 153A, 153D, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCHES : E : NEW DELHI
Before: SHRI M. BALAGANESH & SHRI ANUBHAV SHARMA
ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by the assessee against the orders dated 31.10.2019 of the Commissioner of Income-tax (Appeals)-23, New Delhi (hereinafter referred to as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeals No.38/2019-20, 39/2019-20 & 40/2019-20 arising out of the appeals before it against the orders dated 30.12.2018 passed u/s 153C r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the DCIT, Central Circle-03, New Delhi (hereinafter referred to as the Ld. AO).
ITAs No.241, 242 & 248/Del/2020
The appeals were heard together and we find that in regard to AYs 2015- 16 and 2016-17 amongst other grounds on merits, and questioning the assumption of jurisdiction u/s 153C of the Act, which assessee alleged to be on a satisfaction note not having relevant material to show the extent of undisclosed income for relevant years we find there is an additional ground raised by the assessee on the basis that the approval granted u/s 153D of the Act lacks a valid approval. Same is admitted being pure question of law on admitted facts.
The admitted facts are that a search and seizure operation was conducted in Shri Sudesh Kumar and Shri Arvind Manchanda, wherein allegedly documents pertaining to the assessee before us were found leading to initiation of assessment u/s 153C of the Act and passing the assessment orders.
In the case of this assessee, we find that in assessment orders it is mentioned that prior approval u/s 153D of the Act was given by Joint CIT, Central Range-1, New Delhi, vide his letter No. Jt. CIT/CR-I/Approval u/s 153D/2018-19/1461 dated 30.12.2018. Thus, where the competent authority was required to give approval for each assessment year, the consolidated approval granted is not sustainable.
Though the ld. DR has tried to defend the approval on the basis that there is constant interaction between the approving authority and the AO. However, 2
ITAs No.241, 242 & 248/Del/2020 the arguments cannot be sustained in the light of the decision rendered in the case of ACIT vs. Serajuddin & Co. (2023) 150 taxmann.com 146 (Orissa) wherein SLP of the Revenue was dismissed and various decisions of the coordinate Benches including the decision in the case of Shri Gurvinder Singh Duggal vs. ACIT, to 863/Del/2021, order dated 06.06.2024, wherein the coordinate Bench, in which one of us (ld. AM) was on the Bench, has held that the approval given in a consolidated manner for various assessment years does not go along with mandate of law. In the said decision the judgement of the Hon’ble jurisdictional High Court in the case of PCIT vs. Anuj Bansal, order dated 13.07.2023 has been relied.
In the light of the aforesaid, we are of the considered view that the approval granted in the case of the present assessee cannot be considered valid and, thus, the assumption of jurisdiction for passing the assessment u/s 153C of the Act was vitiated. The additional ground as raised is sustained in AYs 2015- 16 and 2016-17.
As with regard to appeal for AY 2017-18, the additional ground pertaining to wrongful assumption of jurisdiction is admitted and we find that admitted state of affairs is that satisfaction note for assumption of jurisdiction u/s 153C of the Act was prepared by ld. AO of assessee on 22.3.2018. Thus the assessment for this AY 2017-18 should not have been u/s 143(3) of the Act and u/s 153C of the Act. The issue is no more res integra and reliance can be placed 3
ITAs No.241, 242 & 248/Del/2020 on decision of Hon’ble Supreme Court in case of CIT V Jasjit Singh 155 taxmann.com 155. Thus the additional ground in AY 2017-18 is sustained.
All the appeals are allowed. The respective assessments are quashed.