GANESH SUBHASHAPPA MUKTA,,LATUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2,, AURANGABAD

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ITSSA 7/PUN/2022Status: DisposedITAT Pune25 September 2024AY 2012-1310 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Section 153D approval granted by the revenue was conditional and common for all the impugned assessment years (2008-09 to 2014-15). Citing *Pr. CIT vs. Sapna Gupta*, *PCIT vs. Siddharth Gupta*, *PCIT vs. Shiv Kumar Nayyar*, *SMW Ispat (P.) Ltd. vs. ACIT*, and *ACIT vs. Serajuddin & Co.*, the Tribunal found that Section 153D approval must be granted on a standalone basis after perusing the entire records for each assessment year, rather than as a mechanical exercise. A conditional approval is not sustainable in law. Consequently, the Section 153A assessments, all dated March 22, 2016, were deemed not sustainable and were quashed. The penalty proceedings under Section 271 were also quashed as they were consequential to the invalid quantum assessment. All other pleadings on merits were rendered academic. The appeals were allowed in terms.

What were the facts?

The appeals concern assessment years 2008-09 to 2014-15 for assessees Shri Subhashappa V. Mukta and Shri Ganesh Subhashappa Mukta. The assessments were framed under Section 153A of the Income Tax Act, 1961, following a search action under Section 132 on September 27, 2013. The orders under challenge are those of the CIT(A), Pune-12. The primary contention raised by the assessees is the invalidity of the Section 153D approval granted by the revenue for these assessments. The revenue's response is documented in its paper book. The appeals also include penalty proceedings under Section 271 of the Act.

What were the issues?

1. Whether the Section 153D approval granted by the revenue for the Section 153A assessments is valid in law, considering it was conditional and common for multiple assessment years? Assessee's Contention: The assessee argues that the approval granted under Section 153D was conditional and not standalone for each assessment year. They rely on judicial precedents, including *Pr. CIT vs. Sapna Gupta*, *PCIT vs. Siddharth Gupta*, *PCIT vs. Shiv Kumar Nayyar*, and a coordinate bench's decision in *SMW Ispat (P.) Ltd. vs. ACIT*, to assert that such a conditional approval is unsustainable and renders the subsequent assessments void. They also cite *ACIT vs. Serajuddin & Co.* to support the quashing of assessments made post-facto an invalid approval. Revenue's Contention: The revenue's arguments are not explicitly detailed in the provided text, beyond stating that their paper book was filed. However, the judgment notes that the revenue could 'hardly rebut' the assessee's factual position regarding the conditional approval.

Which sections of the Income-tax Act were involved?

Section 153A,Section 132,Section 153D,Section 271,Section 143(3),Section 271(1)(c),Section 271AAA,Section 234A,Section 234B,Section 234C,Section 269SS,Section 269T,Section 271D,Section 271E,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE

Before: SHRI RAMA KANTA PANDA & SHRI SATBEER SINGH GODARA

Hearing: 12.09.2024Pronounced: 25.09.2024

PER BENCH :

These twin assessee’s viz., Shri Subhashappa V.

Mukta and Shri Ganesh Subhashappa Mukta, seven appeals

2 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022 each, arise against the respective order(s) of the learned

CIT(A), Pune-12, Pune as tabulated in the above cause title

with all the relevant details.

Heard both the parties. Case files perused.

2.

Both the sides are indeed ad-idem during the course

of hearing that all these cases involve sec.153A assessment(s)

framed by the department in furtherance to it’s sec.132 search

action dated 27.09.2013 in assessee’s and related parties.

Learned counsel submits in this factual backdrop that the

assessee’s first and foremost plea challenges validity of

sec.153D approval(s) herein going to root of the matter and

therefore, the same is taken-up for adjudication being a

fundamental issue.

3.

Learned CIT-DR submits that the department has

filed it’s paper book/written submissions wherein we find at

page-62 that the learned JCIT, Central Range, herein had

granted only a conditional approval dated 18.03.2016 to the

Assessing Officer as under :

“Sub: Approval of draft orders in the case of Shri Santosh 5 Mukta, PAN AJRPM7166R for the Assessment Years 2008-09 to 2014-15-regarding

Ref: Your letter dated 17.02.16

--------

Please refer to the above.

3 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022

2.

Approval u/s 153D of the LT. Act, is granted subject

to the compliance of following –

a) The order sheet is to be completed properly.

b) All submissions made by the assessee are to be placed

in the respective folders for the respective assessment

years.

c) A detailed office note shall be written elaborating the

sues raised in the appraisal report, the additions

proposed in the appraisal report, the verifications

carried out on the issue and the final finding if the AO

has decided not to make additions on that issue.

d) If the A.O. has made references on any issue in

accordance with the instructions of the CBDT issued

from F.No.256/161/2006/IT Inv.II) dated 22.12.2006.

The replies received should be kept on record. A noting

on all such issues should be made in the office note.

e) All the office notes (not for assessee) along with the

copies of the final assessment orders issued be

forwarded to the office for records.

f) All references contemplated u/s.153C of the L. T. Act

promptly be forwarded to the Assessing Officer having

jurisdiction over such other person along with the

4 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022 respective books of accounts, documents or assets

seized or requisitioned under intimation to this office.

g) Wherever, penalty proceedings u/s.271(1)(c) ate

initiated, proper explanation below that section shall be

invoked. In case penalties initiated u/s.271AAA, the

same should be invoked under the respective issue

itself as well as at the bottom of the order.

h) The Computation interest u/s 234A, 234B, 234C will be

a part of the assessment order itself.

i) Wherever, the A.O. found the provisions of the section

269SS/269T are violated, separate proposal for

initiation of penalty proceedings u/s.271D/271E should

be submitted.

j) Wherever, necessary, A.O. should forward third party

information to the A.O. of such party.

3.

The orders along with the demand notice and

penalty notices may be served on the assessee before the

last date prescribed for completion of assessment and

acknowledgement to that effect shall be kept on record.”

4.

The Revenue could hardly rebut the clinching fact

that not only the above extracted approval is a “conditional”

one in nature u/sec.153D of the Act, but also it is found to be

a common one for all the impugned assessment years from

2008-2009 to 2014-2015 (supra). That being the clinching

5 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022 fact, we quote case law Pr. CIT vs. Sapna Gupta [2023] 147

taxmann.com 288 (All.); PCIT vs. Siddharth Gupta [2023] 450

ITR 534 (All.) and PCIT vs. Shiv Kumar Nayyar [2024] 163

taxmann.com 9 (Del.) that such a sec.153D approval has to be

granted on standalone basis after perusing the entire records

for each assessment year instead of treating it as a mere

mechanical exercise. This tribunal’s recent coordinate bench’s

order in SMW Ispat (P.) Ltd., vs. ACIT [2014] 112 ITR (Trib.)

224 (Pune) has rejected the Revenue’s arguments whilst

concluding that a conditional approval than an absolute one is

not sustainable in law and therefore, the corresponding

assessment(s) framed u/sec.153A of the Act is null and void as

under :

6 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022

7 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022

8 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022

9 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022 4.1. It lastly emerges that case law ACIT vs. Serajuddin

& Co. [2023] 454 ITR 312 (Orissa) has further settled the issue

in assessee’s favour and against the department that an

assessment framed post-facto sec.153D invalid approval

deserves to be quashed only. We accordingly hold in light of all

the foregoing facts as well as various judicial precedents that

all the impugned sec.153A assessments herein, all dated

22.03.2016, are not sustainable in law and therefore, the

same stand quashed in very terms since not framed after a

valid approval u/sec.153D of the Act. Ordered accordingly.

All other pleadings on merits stand rendered

academic in these cases.

5.

These instant twin assessee’s all cases; except

ITA.No.60/PUN./2021 are accepted in very terms. This

remaining appeal [ITA.No.60/PUN./2021] involving sec.271

penalty proceedings also follows the suit as this penal action

has no legs to stand to anymore as we have quashed the

quantum assessment itself. Ordered accordingly.

6.

To sum-up, these twin assessee’s seven appeals

each i.e., I.T.(S.S)A. Nos.21, 22, 23, 24, 25, 26/PUN./2021

and ITA.No.60/PUN./2022; I.T.(S.S.)A.Nos.03 to 09/PUN./2022

are allowed in above terms. A copy of this common order be

placed in the respective case files.

10 IT(SS)A.Nos.21 to 26/PUN./2021; ITA.No.60/PUN./2022 And IT(SS)A.Nos.03 to 09/PUN./2022 Order pronounced in the open Court on 25.09.2024.

Sd/- Sd/- (RAMA KANTA PANDA) (SATBEER SINGH GODARA) VICE PRESIDENT JUDICIAL MEMBER

Pune, Dated 25th September, 2024

VBP/-

Copy of the Order forwarded to :

1.

The Appellant. 2. The Respondent. 3 The Pr. CIT concerned. 4. DR, ITAT, “B” Bench, Pune. 5. Guard File.

BY ORDER,

// TRUE COPY //

Senior Private Secretary ITAT, Pune.

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