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ORDER Per Bench: The instant batch of fourteen appeals pertains to the single assessee herein namely, Himanshu Verma. All other relevant details thereof stand tabulated as under:
Respondent Order passed Proceedings No. against u/s 1-2 2012-13 1236/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. 1351/Del/2022 ACIT Himanshu 10406/2019-20 Verma Dated 28.03.2022 3-4 2013-14 1237/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. 1352/Del/2022 ACIT Himanshu Verma 10409/2019-20 Dated 31.03.2022 5-6 2014-15 1238/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. 1353/Del/2022 ACIT Himanshu Verma 10411/2019-20 Dated 31.03.2022 7-8 2015-16 1239/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. 1354/Del/2022 ACIT Himanshu Verma 10420/2019-20 Dated 31.03.2022 9-10 2016-17 1240/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. ACIT Himanshu 1355/Del/2022 Verma 10425/2019-20 Dated 31.03.2022 11-12 2017-18 1241/Del/2022 Himanshu ACIT CIT(A)-30, New 153A Verma Delhi Appeal No. DCIT Himanshu 1356/Del/2022 Verma 10432/2019-20 Dated 28.03.2022 13-14 2018-19 1596/Del/2022 Himanshu ACIT CIT(A)-30, New 143(3) Verma Delhi Appeal No. 1956/Del/2022 DCIT Himanshu Verma 10436/2019-20 Dated 09.06.2022
2. Heard both the parties at length. Case files perused.
It emerges at the outset that there arises the first and foremost issue of validity of all the impugned assessments to 1241, 1351 to 1356, 1596 & 1956/Del/2022 Himanshu Verma framed u/s 143(3) r.w.s. 153A of the Act; dated 23.12.2019, by the Assessing Officer, in furtherance to search in question herein dated 29.03.2012 for want of a valid section 153D approval. This is for the precise reason that learned counsel representing the assessee has filed before us a copy of the learned Assessing Officer proposal to the prescribed authority followed by the latter’s approval dated 23.12.2019, right from assessment years 2012-13 to 2018-19, as the case may be. This being the clinching fact, we note that the tribunal’s recent co-ordinate bench order dated 24.02.2025 in DCIT Vs. Empire Realtech Pvt. Ltd., as held such an assessment itself has not sustainable in law for want of valid section 153D approval as under:
“5. It is in this factual backdrop that the learned CIT- DR could hardly dispute the clinching fact that the assessee’s cross objection raises the foregoing legal issue of validity of the impugned assessment framed by the Assessing Officer dated 18.02.2015 itself; for want of a valid section 153D approval in furtherance to the search in question carried out by the departmental authorities on 23.11.2012. We make it clear that the learned Assessing Officer’s section 153D approval sought dated 12.02.2015 forms part of the records before us which is found to be a common one for assessment years 2009-10, 2010-11 and 2012-13, which stood granted on 16.02.2015.
6. Faced with this situation, we invited Revenue’s attention to various recent decisions that such an assessment based on a common section 153D approval is not sustainable in law in light of learned co-ordinate bench’s order in Aditya Sharma Vs. ACIT, to 3621/Del/2019 vide order dated 15.01.2025 holding as under:
“3. We next note that there arises the first and foremost issue of validity of all the impugned assessments framed u/s 143(3) r.w.s. 153A of the Act; dated 02.03.2017, in consequence to the search action herein dated 15.02.2014, on the ground that the learned prescribed authority had not accorded a valid approval thereto u/s 153D of the Act. The Revenue could hardly dispute that the instant legal ground sought to be raised at the assessee’s behest goes to the root of the matter and therefore, we quote National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC); as considered in Allcargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 287 (SB) (Mum), that such an additional ground could very well be allowed to be raised in section 254(1) proceedings, in order to determine the correct tax liability of an assessee provided all the relevant facts form part of the records.
It is in this factual backdrop that we admit the assessee’s instant legal ground and note with the able assistance coming from both the parties that the learned Assessing Officer had sought the prescribed authority’s approval on 27.02.2017 which stood granted on 02.03.2017. The clinching fact which from page 10 in the assessee’s paper book is that the learned Assessing Officer herein had infact sought a common approval for all these assessment years from 2008-09 to 2013-14 which stood granted, and therefore, we quote PCIT Vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Del.), PCIT Vs. MDLR Hotels (P) Ltd. (2024) 166 taxmann.com 327 (Del.) and ACIT vs. Serajuddin and Co. (2024) 163 taxmann.com 118 (SC), to conclude that such a combined section 153D approval indeed vitiates the entire assessment itself. We draw strong therefrom to quash all the impugned assessments framed herein in assessee’s case in assessment years 2008-09 to 2013-14 in very terms.”
7. Learned CIT-DR has filed a copy of Revenue’s written submissions as under: “Sub: Written Submission in the above case on the legal ground of validity of Section 153D approval granted by the JCIT/Addl. CIT- reg. In the above case, it is humbly submitted that in addition to the oral arguments submitted by the undersigned, the following legal issues/legal submissions, relevant to section 153D approval and two vital Judgments of the Hon. Supreme Court, on the legality and legal requirements of the Administrative Orders of government or executive authorities, may kindly be considered:-
1. 1. The word/phrase - “written approval” is not mentioned in the section 153D of the Income tax Act, 1961. The only phrase used is “the prior approval”. Therefore, the contents of the written order of the JCIT/Addl. CIT are legally not required to be examined or considered, for meeting the legal or factual requirements of the approval under section 153D.
2. The order by the Addl. CIT/JCIT under section 153D is an Administrative Order, by the higher authority i.e. JCIT/Addl. CIT to the lower authority, i.e. AO. Such an order is not a quasi-judicial or judicial order. Therefore, the legal requirements and benchmarks regarding the principles of “the application of mind" and “the speaking order” are not as strict or high, as they are in the case of quasi- judicial or judicial order.
3. In respect of the legal requirements and the benchmarks regarding the administrative orders, the Hon. Supreme Court has given many comprehensive judgements, which are enclosed and the relevant portions/parts are quoted as under:- (i) Decision of Hon’ble Supreme Court in the case of Municipal Council Neemuch vs Mahadeo Real Estate, dated 17 September, 2019, AIR 2019 SC 4517, 2019 (10) SCC 738. “.....
14. In the present case, the learned Judges of the Division Bench have arrived at a finding that such a sanction was, in fact, granted. We will examine the correctness of the said finding of fact at a subsequent stage. However, before doing that, we propose to examine the scope of the powers of the High Court of judicial review of an administrative action. Though, there are a catena of judgments of this Court on the said issue, the law laid down by this Court in the case of Tata Cellular Vs. Union of India reported in (1994) 6 SCC 651 lays down the basic principles which still hold the field. Paragraph 77 of the said judgment reads thus: “77. The duty of the court is to confine itself to the question of legality. Its concern should be:- 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:- (i) Illegality: This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, unreasonableness. (iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. V. Secretary of State for the Home Department, ex Brind, (1991) 1 AC 696, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, ‘consider whether something has gone wrong of a nature and degree which requires its intervention”.
It could thus be seen that the scope of judicial review of an administrative action is very limited. Unless the Court comes to a conclusion, that the decision maker has not understood the law correctly that regulates his decision-making power or when it is found that the decision of the decision maker is vitiated by irrationality and that too on the principle of “Wednesbury Unreasonableness” or unless it is found that there has been a procedural impropriety in the decision-making process, it would not be permissible for the High Court to interfere in the decision making process. It is also equally well settled, that it is not permissible for the Court to examine the validity of the decision but this Court can examine only the correctness of the decision making process.
This Court recently in the case of West Bengal Central School Service Commission Vs. Abdul Halim reported in 2019 SCC OnLine SC 902 had again an occasion to consider the scope of interference under Article 226 in an administrative action.
In exercise of its power of judicial review, the Court is to see whether the decision impugned is vitiated by an apparent error of law. The test to determine whether a decision is vitiated by error apparent on the face of the record is whether the error is self-evident on the face of the record or whether the error requires examination or argument to establish it. If an error has to be established by a process of reasoning, on points where there may reasonably be two opinions, it cannot be said to be an error on the face of the record, as held by this Court in Satyanarayan v. Mallikarjuna reported in AIR 1960 SC 137. If the provision of a statutory rule is reasonably capable of two or more constructions and one construction has been adopted, the decision would not be open to interference by the writ Court. It is only an obvious misinterpretation of a relevant statutory provision, or ignorance or disregard thereof, or a decision founded on reasons which are clearly wrong in law, which can be corrected by the writ Court by issuance of writ of Certiorari.
32. The sweep of power under Article 226 may be wide enough to quash unreasonable orders. If a decision is so arbitrary and capricious that no reasonable person could have ever arrived at it, the same is liable to be struck down by a writ Court. If the decision cannot rationally be supported by the materials on record, the same may be regarded as perverse. Municipal Council Neemuch vs Mahadeo Real Estate on 17 September, 2019 Indian Kanoon - http://indiankanoon.org/doc/83894917/ 6.
However, the power of the Court to examine the reasonableness of an order of the authorities does not enable the Court to look into the sufficiency of the grounds in support of a decision to examine the merits of the decision, sitting as if in appeal over the decision. The test is not what the Court considers reasonable or unreasonable but a decision which the Court thinks that no reasonable person could have taken, which has led to manifest injustice. The writ Court does not Interfere, because a decision is not perfect.
It could thus be seen that an interference by the High Court would be warranted only when the decision impugned is vitiated by an apparent error of law, i.e., when the error is apparent on the face of the record and is self evident. The High Court would be empowered to exercise the powers when it finds that the decision impugned is so arbitrary and capricious that no reasonable person would have ever arrived at. It has been reiterated that the test is not what the court considers reasonable or unreasonable but a decision which the court thinks that no reasonable person could have taken. Not only this but such a decision must have led to manifest injustice ....................................................................
In the present case, we find that the Commissioner had acted rightly as a custodian of the public property by pointing out the anomalies in the proposal of the Municipal Council to the State Government and the State Government has also responded in the right perspective by authorizing the Commissioner to take an appropriate decision. We are of the considered view that, both, the Commissioner as well as the State Government, have acted in the larger public interest, We are unable to appreciate as to how the High Court, in the present matter, could have come to a conclusion that it was empowered to exercise the power of judicial review to prevent arbitrariness or favoritism on the part of the State authorities, as has been observed by it in paragraph 13. We are also unable to appreciate the finding of the High Court in para 17 wherein it has observed that the impugned decision of the authorities are found not to be in the public interest. We ask the question to us, as to whether directing re-tendering by inviting fresh tenders after giving wide publicity at the National level so as to obtain the best price for the public property, would be in the public interest or as to whether awarding contract to a bidder in the tender process where it is found that there was no adequate interest or as to whether publicity and also a possibility of there being a cartel of bidders, would be In the public interest. We are of the considered view that the decision of the Commissioner which is set aside by the High Court is undoubtedly in larger public Interest, which would ensure that the Municipal Council earns a higher revenue by enlarging the scope of the competition. By no stretch of imagination, the decision of the State Government or the Commissioner could be termed as illegal, improper, unreasonable or irrational, which parameters only could have permitted the High Court to interfere. Interference by the High Court when none of such parameters exist, in our view, was totally improper. On the contrary, we find that it is the High Court, which has failed to take into consideration relevant material.
In the result, the impugned Orders are not sustainable in law. The appeals are, accordingly, allowed and the Impugned orders dated 31.08.2017 and 05.07.2018 are quashed and set aside. The petition of respondent No. 1 stands dismissed………..” (ii) Decision of Hon’ble Supreme Court in the case of West Bengal Central School Service ... vs Abdul Halim dated 24 July, 2019, AIR 2019 SC 4504, AIRONLINE 2019 SC 2188 AIR 2020 SC (CIV) 82. “………………..31. The sweep of power under Article 226 may be wide enough to quash unreasonable orders. If a decision is so arbitrary and capricious that no reasonable person could have ever arrived at it, the same is liable to be struck down by a writ Court. If the decision cannot rationally be supported by the materials on record, the same may be regarded as perverse.
However, the power of the Court to examine the reasonableness of an order of the authorities does not enable the Court to look into the sufficiency of the grounds in support of a decision to examine the merits of the decision, sitting as if in appeal over the decision. The test is not what the Court considers reasonable or unreasonable but a decision which the Court thinks that no reasonable person could have taken, which has led to manifest injustice. The writ Court does not interfere, because a decision is not perfect.
33. In entertaining and allowing the writ petition, the High Court has lost sight of the limits of its extraordinary power of judicial review and has in fact sat in appeal over the decision of the respondent No. 2…………….”
8. We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s vehement contentions as well as it’s written submission. We find no reason to uphold the validity of the impugned assessment as it has come on record that the same has been framed in furtherance to a common section 153D approval already held as not sustainable in law. We order accordingly.”
4. The learned CIT-DR at this stage seeks to distinguish the above proposal in light of the tribunal’s yet another learned co- ordinate bench order dated 23.01.2025 in Usha Satish Salvi Vs. ACIT, deciding the very issue in the department’s favour as follows: 4. Firstly, we take up the appeal for AY 2012-13. The grounds raised in appeal are reproduced as under: On the facts and in Fact and in circumstances The Ld. CIT(A) erred in confirming Rs. 6,45,572/- as unexplained casti expenses. U/s 69C of the Income Tax Act, 1961 and the reasons assigned by him, for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961 and rules made there under. 4.1 Before us, the assessee also raised following additional grounds: On the Facts and in the circumstances of the case and in law the arrival in the On the Facts and in the circumstances of the case and in law the approval granted under section 153D of The Act is no arrival in the eyes of law as the same has been accorded on presumption and without application of mind and consequently the assessment order u/s 153C of the Act is null and Void as approval granted under section 153D is mechanical in nature and without application of Mind. 4.2 Identical grounds and additional grounds have been raised in the remaining two appeals except change of amount grounds and additional grounds have been raised in except change of amount. 4.3 We have heard rival submission of the parties on the issue of admissibility of the additional e have heard rival submission of the parties on the issue of grounds raised
are e have heard rival submission of the parties on the issue of additional grounds. As the grounds raised legal in nature and not requiring investigation of fresh facts, same are admitted for adjudication in view of the settled principle in the legal in nature and not requiring investigation of fresh facts, same are admitted for adjudication in view of the settled principle in the NTPC Ltd. 229 ITR 283 (SC).
5. Before us, the learned counsel for the assessee filed a paper book containing pages 1 to 46.
6. In the additional ground, the assessee has challenged the validity of the assessment under section 153C of the validity of the assessment under section 153C of the to the assessee the approval granted by the competent authority to the assessee the approval granted by the competent authority under section 153D of the without application of the validity of the assessment under section 153C of the Act. According to the assessee the approval granted by the competent authority as been accorded on presumption, mechanical in nature, consequently the assessment order under section 153C is null and under section 153D of the Act has been accorded on presumption, without application of the mind, which is mechanical in nature, consequently the assessment order under section 153C is null and consequently the assessment order under section 153C is null and void. 6.1 The submissions in support of the additional ground made by the learned counsel for the assessee are summarized as under: (i) The letter seeking approval was submitted to the A The letter seeking Commissioner of Income 26/12/2017, approval was submitted to the Additional tax i.e. the approving authority on which is at the fag end of the expiry of limitation of the assessment. The Ld Additional Commissioner has approved the assessment on same date i.e. 26/12/2017, which shows that the approval has been without going through records. (ii) Only the draft assessment order, without assessment record and seized material or appraisal report was sent to the approving authority with the letter for obtaining the approval. Therefore, the approving authority has granted approval without examining either the assessment record or the seized material. (iii) A common and consolidated approval has been granted for AY 2010-11 to 2015-16 and 2016 and there is no year was reasoning in the said approval. The approval has to be granted separately for each assessment year. (iv) The approval granted was not absolute. (v) The approval is generic and listless and accorded in a blanket manner without any reference to any issue in respect of any of the assessment year. (vi) The approval was granted in a mechanical and hurried manner without mentioning the reasons and without application of mind. The approving authority anything in the approval memo toward the process of deriving satisfaction so as to exhibit his application of mind. The approving authority has not objectively evaluated the draft assessment order with due application of the mind on the issue contained in such order so as to derive its conclusive satisfaction that the proposed action of the Assessing Officer is in conformity with the subsisting law.
6.2 In support of above contentions the learned counsel relied on various decisions of the coordinate benches of the Tribunal and Hon'ble High Court's as follows: (i) Decision dated 06/06/2024 of Delhi bench of the Tribunal in the case of Shri Guvinder Singh Duggal in to 863/Del/2021 for AY 2012-13 to 2018-19. (ii) Decision dated 29/04/2024 of Delhi Bench of Tribunal in the case of MDLR Airline (P) Ltd in & 1421/Del/2023 for AY 2007-08 and 2008-09. (iii) Decision of Hon'ble Allahabad High Court in the case of PClT vs Sapna Gupta in ITA No. 88 of 2022. (iv) Decision of Hon'ble Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar in ITA 285/2024 & CM Appeal 28994/2024 (v) Decision of Mumbai Bench of Tribunal in the case of Arch Phamalabs Ltd in ITA No. 6656/Mum/2017 for AY 2011-12 and other appeals. (vi) Decision of Hon 'ble Delhi High Court in the case of PCIT Vs M/s MDLR Hoteles P Ltd in ITA 593/2023 (vii) Decision dated 24/04/2024 of Delhi Bench of Tribunal in the case of Veena Singh in ITA No. 294 & 295/Del/2022 for AY 2016-17 and 2017-18 7. On the contrary, the Ld. DR submitted that all the additional grounds have been raised merely on the basis of the presumptions and suspicion that the learned Additional Commissioner of Income-tax i.e. approving authority had not gone through the seized material and assessment records leading to allegation of non- application of the mind by the approving authority. The learned DR submitted that after collecting all the material from the search premises, each and every material is being analysed from the angle of possible tax evasion and an 'appraisal report' is prepared by the Income-tax authority who conducts the search action. The learned DR further submitted that as per the procedure prescribed, a copy of the said appraisal report is sent to the concerned Assessing Officer, concerned Additional Commissioner of Income-tax (i.e. the approving authority) and the concerned Commissioner or Principal Commissioner of Income-tax. Accordingly, he submitted that appraisal report of the case containing analysis of entire seized material related to case was already available with the approving authority. The learned DR filed affidavits from the approving authority as well as from the Assessing Officer who passed the assessment orders, in support of the contention that assessment orders were approved after due application of mind. The Assessing officer has deposed that in the instant case, discussion on various Issues between him and approving authority happened regularly based on the appraisal reports and seized/impounded materials. For ready reference, content of the affidavit filed by the then Assessing Officer is reproduced as under: "I, Pawan Bhatti, Jt. Commissioner of Income Tax, (AU) - 1 (3), Thane stationed at Kalyan and office address at Mohan Plaza, 2nd floor, Way ale Nagar, Khadakkpada, Kalyan (W)-421301, do hereby solemnly affirm and stated in the case of Usha S. Salvi for A. Y. 2012-13 (ITA 4239M2023), A. Y.2013-14 (ITA 42372023), A. Y. 2014-15 (ITA 42382023) as under: It has been more than almost 7 years since these orders were passed after due discussion and guidance from time to time with the approval of Range Head as per the Law. Generally, the appraisal reports of such search/ survey cases are forwarded to the central charge hierarchy including the AD and Range head and in such type of cases, as per Law, approval for passing the assessment orders are to be given by the range head and so Range head has to apply his/her mind and has to give sufficient time. Since in such type of cases, regular discussion between the range head and AO happened regularly whenever needed. Appraisal report or other communication with the investigation wing of the department and seized/impounded materials explored and discussed from time to time and thereafter assessment order finalised after approval from the range head. In this case also, such type of discussion happened regularly based on the appraisal reports and seized/impounded materials as per the Law. Since the offices of the range head and the assessing officer (AO) were at the same floor i.e. 19th floor in the Air India Building the discussion or meetings were called by the range head or sought by the AO to discuss such cases. The AO had to discuss the assessment records, reply from the assessee etc. across the table with the range head on the one to one discussion basis as such type of search/ survey cases are sensitive in nature. Furthermore, approvals are granted for more than single assessment years in combined manner to save the resources of the government and to protect the interest of revenue as deliberations on such cases have already been done to conclude the assessment proceedings in holistic and logical conclusion. In the instant case, such practice was followed. Hence, proper and regular discussions, analysis of appraisal report and seized/ impounded materials have been taken place to reach the logical conclusion to finalise the assessment orders and in this way, thorough application of mind was there to conclude the assessment proceedings in the present case along with other such cases where approval is sought. The report has been prepared by recollecting the memories, all the facts and events happened at that time. I, solemnly state that the contents of this affidavit are true to the best of my knowledge and belief and that it conceals nothing and that no part of it is false." 7.1 Similarly, the approving authority also deposed that all issues involved in the assessments were regularly discussed since the stage of issuing notice for query latter to the stage of making draft assessment order. The content of the affidavit filed by the then learned Additional Commissioner of Income-tax i.e. the arriving authority is reproduced as under: "Affidavit in case of Usha S. Salvi for A.Y.2012-13 (ITA 4239M2023) A. Y.2013-14 (ITA 4237M2023), A. Y.2014-15 (ITA 4238M2023) I, Anu Krishna Aggarwal, Commissioner of Income Tax, Appeals (AU)-4, Delhi, having Office address at Room No. 108, Drum Shaped Building, IP Estate, Delhi- 110002, do hereby solemnly affirm. and state in the case of Usha S. Salvi for A.Y.2012-13(ITA 42392023), A.Y.2013-14 (ITA 4237M2023), A. Y.2014-15 (ITA 4238M2023) as under: (1) In search case, the search material and relevant record is in the possession of the Assessing Officer and the approval of the Assessment order is not a one-day affair, it is done after a series of discussions with the Assessing Officer. The Assessing Officer and the Addl. CTT both examine the records on regular basis. Therefore, the approval to the assessment order is given after a number of meetings are held and the whole case is understood. I have seen the records before giving approval of the case. The record is with the Assessing Officer. He comes with the records for discussion and after understanding the content of the record, approval is given. It is not a case where approval is given in just one day. (2) The approval was given on the same day as the letter for approval was received, does not mean that the case has been seen only on that day. The Addl.CIT and the Assessing officer both are involved in the case since the issue of the notices and before sending the questionnaire to the assessee, the record is examined by the Assessing Officer and the Addl.CIT both on a regular basis. It may not be brought on the record because generally, the practice of the department is that we don't write order sheet of the meeting with the Assessing Officer. The reason for the same is that the Assessing Officer and the Addl.CIT meet a number of times every day. Therefore, it is not a practice to write each and every meeting with the Assessing Officer in Income Tax Department. (3) In this case the offices of the range head and the assessing officer were at the same floor i. e. 19th floor in the Air India Building, sometimes the discussion or meetings were called for by the range head and sometimes meetings were sought by the AO to discuss the group case. The meeting between the Assessing Officer and the Addl. CIT were held on a regular basis as I have already said in the above point, Assessing Officer and the Addl.CIT meet very often. (4) The modifications or amendments are suggested on regular basis. The monitoring is done on regular basis and at every stage of the investigation and the examination of the records, the suggestion is being given. Therefore, it is not possible to submit all the suggestions given and no order sheet is being maintained for discussion and meeting with the Assessing Officer. Actually the Addl.CIT is involved in the process from the start of the assessment process. Therefore, the changes in the assessment order, if any, is a continuous process. Therefore, there is no need to change the draft assessment order as the draft assessment order is being prepared after a due deliberation and discussion with the Assessing Officer. (5) I, the Addl. CIT in the case at that time is confirming that due application of mind was done in the case when the order was approved u/ s. 153D and I was involved in the case from the day when the case was assigned to the charge. I, solemnly state that the contents of this affidavit are true to the best of my knowledge and belief and that it conceals nothing and that no part of it is false. 7.2 The learned DR submitted that no evidences have been filed by the assessee supporting his contention- of non application of mind by the approving authority and in view of the affidavits filed by the AO and approving authority deposing proper application of mind, the contentions of ld counsel of the assessee are liable to be rejected. In this regard, contents of written submission filed by the ld DR is reproduced as under: “……….
With regard to the ground raised
by the assesse regarding non application of mind while granting approval us 153D of the Act it is submitted that the Ld JCIT had duly applied her mind. It was only after applying her mind that she had suggested some changes and gave approval. As informed by the AD, the draft order is not available in records but it is humbly submitted that if a senior officer has confirmed that she had suggested some changes then the same would have been done by AD. Affidavits have also been filed by both officers i.e. the AO, as well as the Range head, wherein they have confirmed that due process was followed, various meetings were held on regular basis and only after the Range head was satisfied the approval was granted. This shows that the JCIT had applied her mind before granting approval u/ s 153D.
3. In this regard it is pertinent to mention that in the present case the seized material consists of only 3 Annexures. Thus this is not a case where huge seized material is there requiring extensive discussions.
4. Regarding assessee's claim that JCIT should have applied her mind injudicious manner and then drawn conclusions it is submitted that the JCIT in her affidavit has clearly admitted that due application was done. The dictionary meaning of judicious says 'showing good judgement'. It is submitted that if the assessment order is correct in every way, seized material is just a few documents and already discussion has been held many times in person, as per the practice in central range, considering the sensitive nature of cases, a simple order with no complications can be called judicious. In fact, in this case, some corrections were suggested by the Range head before passing the order. It is also submitted that, in a situation where no addition or deletion or any correction to the order is required or suggested and the Range head agrees with AO, a simple approval can also be said to suffice.
Regarding assessee's contention that there is single approval for all years it is submitted that different approval has been granted as all the A Yrs are clearly mentioned. It is only an approval on a single page. In this regard it is submitted that in case different pages had been used for each A Y, even then the sum and substance would have been same.
Reliance is placed on Hon'ble ITAT MUMBAI BENCH "C", MUMBAI decision in the case of Pratibha Pipes & Structurals Ltd, Dcrr, Cent. Cir. 17 & 28, Mumbai dated 10 -04-2019 (copy enclosed). In that case even the copy of approval was not available but still the decision was given in favour of revenue after considering the facts and circumstances. In that case also affidavit of the Range head was filed wherein it was categorically stated in his affidavit that he had issued necessary approval u/ s 153D.
We have considered the rival submission of the parties on the additional grounds raised by the assessee i.e. assailing impugned assessment order passed on the ground that approval granted by the approving authority IS mechanical manner and without application of the mind. For ready reference, a copy of the said approval granted by the approving authority is reproduced as under: "To, DCIT-CC-4(4) Mumbai. Approval U/ s 153D of the I T Act for assessment in the case of Smt Usha Satish Salvi (PAN-AQSPS6935J) for A. Ys. 2010-11 to 2015-16 & 2016-1 7 - reg. ------ Please refer to the above. Draft: assessment orders in the abovementioned case u/ s 143(3) r.w.s. 153C of the I T Act, 1961 for A. Ys. 2010-11 to 2015-16 and u/ s 143(3) of the I T Act for A. Y. 2016-1 7 are hereby approved u/ s 153D of the I T Act, 1961 subject to the corrections made therein.
After passing the order, a copy of the same may be submitted to this office." 8.1 The learned counsel for the assessee has mainly contended that except draft assessment orders, no material was available with the approving authority. He has further alleged that approval was granted on the same date of seeking such approval in a combined manner for all the assessment year involved. The approving authority has merely directed for certain modification in the final order but not specified said modification in the approval order. But we find that except such allegation in support of the additional ground, no documentary evidence to support the allegations of non application of mind by the approving authority have been filed by the assessee. Whereas, on the other hand, the learned departmental representative has filed affidavits from the then Assessing Officer and the approving authority, wherein they have denied the allegations raised by the assessee but no counter affidavit has been filed by the assessee to controvert the deposition made by the Assessing Officer and the additional Commissioner of income-tax in their respective affidavits. In the decisions relied upon by the assessee the main ratio is that approval granted in mechanical manner without application of mind is not sustainable in law. In the decisions relied upon of coordinate benches main allegation that the Assessing Officer only forwarded letter seeking approval without enclosing assessment records or appraisal report on seized material. In the affidavits filed before us, it has been unequivocally stated by the Assessing Officer as well as the Additional Commissioner of Income-tax that all the issues involved in the assessments were discussed on regular basis from time to time between the two authorities as both the authorities were sitting on same floor of office building. The ld DR submitted that the approving authority after considering the queries raised by the Assessing Officer and the reply of the assessee in the light of appraisal report and seized record, had examined each issue dealt in the draft assessment order properly and thereafter only approval was granted. In the cases cited by the learned counsel for the assessee the fact of discussion on various issues of assessment between the two authorities from time to time has not been brought on record and therefore in those decisions this aspect has not been considered. We further note that certain modifications were suggested to the Assessing Officer in the draft assessment order, which have been carried out by the Assessing Officer in the assessment order passed, which also shows that the approving authority approved the draft order not in mechanical manner, but after due application of mind. The fact of modification suggested in the order itself shows that the approving authority has gone through drat assessment order and analyed the issue involved therein. In the cases relied upon by the assessee the fact of modification suggested by approving authority is not born out, which distinguish the case of the assessee with the cases relied upon by the assessee. In similar circumstances after considering affidavits filed by the Assessing Officer and the approving authority, the coordinate bench of the Tribunal in the case of Pratibha Pipes & Structural Ltd in to 3876/Mum/2015 and in AY 2007-08 to 2009-10 and 2011-12, upheld validity of approval granted under section 153D of the act of observing as under: "16. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. There is no doubt with regard to the fact that as per provisions of section 153D, the AO needs to take prior approval from the Addl. Commissioner of the range in charge before passing any assessment order u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961. It is also not in dispute that the AO, in his assessment order at para 7 had categorically stated that the mandatory requirement of approval u/ s 153D of the Income-tax Act, 1961 has been taken from the Addl. CIT, Central Range- 4, Mumbai vide letter No.Addl.CIT/CR-4/Approvl- 153D/2012-13 dated 25-03-2013. It is also not in dispute that the assessee has not raised any objection, whatsoever, with regard to the issue of approval u/ s 153D either before the AO or before the first appellate authority. The assessee has taken the legal ground for the first time before the Tribunal by filing additional ground of appeal
. Therefore, the whole issue needs to be apprised in the light of above facts and also the conduct of the assessee. Admittedly, the department, in reply to RTI application clarified that neither copy of approval request letter filed by the AO to the Addl. Commissioner, nor copy of approval granted u/ s 153D of the Act, was found in the assessment order folder. However, it was further stated that in the 153D approval folder maintained in the office of Addl. CIT, Range-4, the approval granted in other group cases were traced. The assessee claims that mere mentioning of having been taken approval u/ s 153D in the assessment order is not sufficient and what is required to be seen is whether the department is able to provide copy of approval letter granted by the Addl.CIT, or not. Since the department has categorically stated that approval granted u/ s 153D of the Act is not available in the assessment folder, obviously, benefit of doubt goes in favour of the assessee that no such approval has been taken by the AO u/ s 153D before passing order u/ s 143(3) r. w.s. 153A of the 1. T. Act, 1961.
17. In the above factual background, if we examine the claim of the assessee by way of additional ground, we find that there is a serious suspicion raises about the conduct of the assessee in taking additional ground challenging the issue of approval u/ s 153D of the 1. T. Act, 1961, for the first time, before the Tribunal. The assessee never disputed this issue before the lower authorities. The assessee has taken this issue for the first time before the Tribunal after ascertaining the fact in connection with its RTI application that no such approval was available in the assessment folder. When the assessee has not raised the issue before the CIT(A), then there is a serious doubt arise in the mind about the intend of the assessee to take a legal ground before the Tribunal. In this factual background, if we examine the contents of the approval mentioned by the AO in the assessment order coupled with affidavits filed by two senior most officers, who were in charge of the assessment proceedings, we find that both officers have stated in their affidavits about requirement of law under the provisions of section 153D of the Income-tax Act, 1961. The then AO, Shri Milind Rajguru, Joint Commissioner of Income-tax (Retd) had filed an affidavit and stated that mandatory requirement of approval u/ s 153D had been obtained. Further, Shri Abhijit Pathankar, the CIT(DR), has also filed an affidavit and stated that he had granted approval required to be given u/ s 153D vide his letter No.Addl. CIT / CR-4/ Approval- 153D/ 2012-13 dated 25-03- 2013. Although, affidavit is not primary evidence which cannot be accepted in absence of circumstantial evidences, but in this case, the circumstantial evidence available in the assessment record supports the contents of affidavits filed by both officers. Therefore, the affidavits filed by the officers cannot be ignored, as not having any evidentiary value. The contents of affidavits filed by the officers coupled with circumstantial evidences available in the assessment folders clearly establish the fact of obtaining necessary approval u/ s 153D of the 1. T. Act. Though, copy of approval letter is not available in the assessment record, but the contents of approval letter issued by the competent authority has been reproduced in verbatim in the assessment order at para 7. Further, the approval granted in other group cases is very much available in the assessment folder. Therefore, it cannot be said that no approval had been taken. Further, the approval u/ s 153D is an administrative procedure which requires to be complied with by the officers, who is discharging the assessment functions. The administration action of the department is not very much relevant for the assessee to justify its case, on merits. Therefore, when assessee goes to question the administrative procedure, rather contending its case on merits, that too, after a lapse of 4 to 5 years, then obviously, a doubt arises about intend of the assessee in taking this ground and such an attempt is derail the issue on merits and to escape on technical ground. Therefore, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed by the AO u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961. Although, the assessee has relied upon certain judicial precedents, we find that those case laws were rendered under different set of facts, where the assessee had taken the ground challenging validity of the assessment before the CIT(A) and also fact that there was no specific observation in the assessment order for taking approval required to be taken u/ s 153D of the Income-tax Act, 1961. In this case, the AO has categorically recorded at para 7 of his assessment order in respect of approval taken u/ s 153D and such reference has been further strengthened by the affidavits of two officer, who were part of assessment proceedings. Therefore, the case laws relied upon by the assessee cannot be considered as applicable to the facts of assessee case.
18. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed u/ s 143(3) r.w.s. 153A of the 1. T. Act, 1961 in light of provisions of section 153D of the I.T.ACT, 1961. Hence, we reject additional ground taken by the assessee." 8.2 In view of the aforesaid discussion and verification of records available, we are of the opinion that approval was granted by the additional Commissioner of income- tax after due application of mind. The objections of the assessee raised in an additional ground are accordingly rejected. The additional ground is accordingly is dismissed.” to 1241, 1351 to 1356, 1596 & 1956/Del/2022 Himanshu Verma 5. Learned CIT-DR’s vehement contentions therefore is that he is very much ready to call for the concerned filed authorities’ respective affidavits to buttress the point that not only they had applied their due mind but also section 153D approval(s) stand granted after considering all the relevant legal proposition and facts on record.
6. We see no merit in the learned CIT-DR foregoing arguments. This is for the precise reason that there is no such procedure of getting the field authorities affidavit in support of their respective orders under the provisions of the Act that stated in the case records. Case law Hindustan Lever Ltd. Vs. R.B. Wadkar (2004) 268 ITR 332 (Bom.) has already settled the issue; in section 148/147 jurisprudence, that even reasons recorded by the assessing authority could not be allowed to be improved of any latter stage which have to be read as standalone basis. The very legal proposition is applicable in administrative law as well as in hon’ble apex court’s landmark decision in Mohinder Singh Gill & Anr. Vs. CEC (1978) 1 SCC 405 (SC) wherein their held as under:
The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds latter brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji. to 1241, 1351 to 1356, 1596 & 1956/Del/2022 Himanshu Verma “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the office making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.
Orders are not like old wine becoming better as they grow older”.
We thus conclude in this factual backdrop that given the fact that the impugned section 153D approval dated 23.12.2019 is a common one in all these assessment years, these consequential assessments dated 23.12.2019, are not sustainable in the eyes of law. The same are hereby quashed in very terms. Ordered accordingly.
8. All other pleadings on merits stand rendered academic.
These assessee’s appeals to 1241 & 1596/Del/2022 are allowed and the Revenue’s cross appeals to 1356 & 1956/Del/2022 are dismissed in above terms. A copy of this common order be placed in the respective case files.