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

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ITSSA 18/PUN/2021Status: DisposedITAT Pune24 September 2024AY 2012-1311 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 JCIT was conditional and common for multiple assessment years (2008-2009 to 2014-2015). The Tribunal, relying 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., concluded that Section 153D approval must be granted on a standalone basis for each assessment year after a thorough review of records, not as a mechanical exercise. Furthermore, a conditional approval is not sustainable in law. The Tribunal also cited ACIT vs. Serajuddin & Co. to support the view that assessments framed with invalid Section 153D approval must be quashed. Consequently, all the impugned Section 153A assessments, dated March 22, 2016, were found unsustainable and quashed. All other pleadings on merits were rendered academic.

What were the facts?

The appeals and cross-objections concern assessment years 2012-2013, 2013-2014, and 2014-2015. These arise from orders passed by the CIT(A), Pune-12, under Section 153A read with Section 143(3) of the Income Tax Act, 1961. The assessments were framed following a search action under Section 132 on September 27, 2013, involving the assessee and related parties. The primary contention raised by the assessee challenges the validity of the approval granted under Section 153D, arguing it goes to the root of the matter. The revenue's submissions included a conditional approval dated March 18, 2016, granted by the JCIT for multiple assessment years.

What were the issues?

1. Whether the Section 153D approval for the assessments under Section 153A was validly granted, considering it was conditional and common for multiple assessment years? (Question of law) Assessee's Contentions: - The Section 153D approval was conditional and not granted on a standalone basis for each assessment year after perusing the entire records. - A conditional approval is not sustainable in law, rendering the Section 153A assessments null and void. - Relied on: Pr. CIT vs. Sapna Gupta [2023] 147 taxmann.com 288 (All.); PCIT vs. Siddharth Gupta [2023] 450 ITR 534 (All.); PCIT vs. Shiv Kumar Nayyar [2024] 163 taxmann.com 9 (Del.); SMW Ispat (P.) Ltd., vs. ACIT [2014] 112 ITR (Trib.) 224 (Pune). - An assessment framed post-facto an invalid Section 153D approval deserves to be quashed. - Relied on: ACIT vs. Serajuddin & Co. [2023] 454 ITR 312 (Orissa). Revenue's Contentions: - The judgment records no specific arguments from the revenue rebutting the assessee's claim regarding the invalidity of the Section 153D approval.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 153D,Section 132,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: 24.09.2024

1 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE

BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER

I.T.(S.S).A.Nos.18, 19 & 20/PUN./2021 Assessment Years 2012-2013, 2013-2014 and 2014-2015

Shri Santosh Subhashappa Mukta, 1, Omerga Road, The Assistant Commissioner Ujani Corner, Ausa, LATUR. Vs of Income Tax, Central Maharashtra. PIN-413520. Circle-2, AURANGABAD. PAN AJRPM7166R (Appellant) (Respondent)

I.T.(S.S).A.Nos.33, 34 & 35/PUN./2022 AND C.O.Nos.43, 44 & 45/PUN./2022 Assessment Years 2012-2013, 2013-2014 and 2014-2015

Shri Santosh Subhashappa Mukta, 1, Omerga Road, The Assistant Commissioner Vs Ujani Corner, Ausa, LATUR. of Income Tax, Central Maharashtra. PIN-413520. Circle-2, AURANGABAD. PAN AJRPM7166R (Appellant/Respondent in C.O.) (Respondent/Cross Objector)

For Assessee : Shri Somnath Ghosh and Mrs. J.R. Chandekar For Revenue : Shri Ajay Kumar Keshari, CIT

Date of Hearing : 12.09.2024 Date of Pronouncement : 24.09.2024

ORDER PER BENCH :

These assessee’s and Revenue’s three appeals each,

i.e., I.T.(S.S).A.Nos.18,19 & 20/PUN./2021 and I.T.(S.S).A.

Nos.33, 34 & 35/PUN./2022 along with the former’s cross

objections C.O.Nos.43, 44 & 45/ PUN./2022 therein; for

2 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022 assessment years 2012-13 to 2014-15, arise against the order

of the learned CIT(A), Pune-12, Pune’s DIN & Order no.

ITBA/APL/S/250/ 2021-22/1037393710(1); 1037393716(1);

1037393719(1); all dated 30.11.2021, in proceedings

u/sec.153A r.w.s.143(3) of the Income Tax Act, 1961 (in short

"the Act"), respectively.

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 :

3 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022 “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.

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

issues 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.

4 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022 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 I.T. Act

promptly be forwarded to the Assessing Officer having

jurisdiction over such other person along with the

respective books of accounts, documents or assets

seized or requisitioned under intimation to this office.

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

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

5 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022 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

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.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022

7 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022

8 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022

9 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022

10 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/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.

To sum-up, these assessee’s three appeals I.T.(S.S)

A.Nos.18, 19 & 20/PUN./2021 and cross-objections

C.O.Nos.43, 44 & 45/PUN./2022 are allowed and the

department’s as many cross-appeals I.T.(S.S).A.Nos.33, 34 &

35/ PUN./2022 stand dismissed in above terms. A copy of this

common order be placed in the respective case files.

Order pronounced in the open Court on 24.09.2024.

Sd/- Sd/- (RAMA KANTA PANDA) (SATBEER SINGH GODARA) VICE PRESIDENT JUDICIAL MEMBER Pune, Dated 24th September, 2024 VBP/-

11 IT(SS)A.Nos.18 to 20/PUN./2021, IT(SS)A.Nos.33 to 35/PUN./2022 & C.O.Nos.43 to 45/PUN./2022

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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