SOUMENDRA KUMAR MOHANTY,BHUBANESWAR vs. DCIT, CENTRAL CIRCLE-2, BHUBANESWAR, BHUBANESWAR

आदेश / O R D E R Per Bench : These are seven appeals filed by the assessee against the separate orders of the ld. CIT(A), Bhubaneswar-2, all dated 31.03.2025, for the assessment years 2011-2012 to 2016-2017.

2. The assessee has filed paper book containing large number of pages. The assessee has also filed written submissions which is placed at pages 1 to 35 in the paper book, which reads as under :- BEFORE THE HON’BLE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK In the matter of Sri Soumendra Kumar Mohanty, PAN- ABFPM9538D Plot No. 130, S.M. Tower, Mancheswar Industrial Estate, Bhubaneswar-751010 …………………………………….Appellant Vs. Deputy Commissioner of Income Tax, Central Circle-2 Bhubaneswar ………….….……………. Respondent And In the matter of Appeal proceeding for A.Y. 2011-12 Appeal No- ITA 284/CTK/2025 Written notes on arguments MOST RESPECTFULLY SHEWETH:

2. Ground no. 1 of the appeal memo is as follows: For that on the facts and the circumstances of the case the assessment order passed by ld. Assessing Officer [in short ‘AO’] and confirmed by ld. Commissioner of Income Tax (Appeals) [in short CIT(A)] is excessive, arbitrary and bad in law. The assessee has submitted all the documents relating to addition of Rs. 9,35,24,524/- as bogus liability especially when details of such liabilities, have been submitted earlier. Audited accounts were submitted to the Department resulting thereby no incriminating material was found for addition. The assessee has explained all seized materials on alleged unexplained cash. Genuineness of payment made to M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. (in short “AECS”) was proved through certificate of incorporation, government orders, EPF registration etc. Addition for payment to Namita Mohanty was deleted by Ld. CIT(A) in the case of Namita Mohanty. So, the order to confirm the additions by ld. CIT(A) is biased, unjustified and against rule of law. Ld. CIT(A), Bhubaneswar-2 relied only on the statements recorded to confirm the assessment order. However, he has not considered the submissions, explanations, documents, records and point of law on these issues resulting in the order becoming bad in law and arbitrary.

From the above provision of Section 153D of the Income Tax Act, 1961 it is crystal clear that for passing the order under section 153A of I.T. Act it is mandatory to take prior approval from Joint Commissioner of Income Tax. In this case ld. Joint Commissioner of Income Tax (in short “JCIT”) has not applied his mind while approving the draft order of ld. ACIT as given below although he has signed on the approval letter.

3.1 Ld. JCIT has approved the order of at least 14 cases on maximum one day i.e., on 24.12.2018 (part) and 26.12.2018 (part). And to accord such approval in such short time in a sound mind is humanly impossible for him as he was supposed to peruse the records, documents and draft orders of 14 cases in around one days & 58 cases in around two days. It is pertinent to mention that ld. JCIT has approved the orders under section 153D of I.T. Act from A.Y. 2011-12 to A.Y. 2016-17 (copies at pages 95 to 106 of paper book) on two part days i.e. on 24.12.2018 and 26.12.2018 i.e., maximum one full day in case of S.K Mohanty. Hence, the approval for assessment order under section 153D of the Act was granted without any independent application of mind and in a mechanical manner which is violation of law.

The following table ‘A’ explains that it is humanly impossible to read and take a view on the documents verified within a day (if part periods are covered).

Table ‘A’ Name of the Assessment Date of receipt Date of Full Remarks assessee Years/ Years of draft approval working assessment day (s) order availabl e Soumendra Kumar 2011-2012 to 24.12.2018 26.12.2018 Nil 25.12.2018 Mohanty 2017-18 (7) was holiday. Sandhya Mohanty 2011-2012 to 24.12.2018 27.12.2018 1 day 25.12.2018 2017-18 (7) was holiday. Modern Engineering 2011-2012 to 24.12.2018 27.12.2018 1 day 25.12.2018 and management 2017-18 (7) was holiday. Foundation Smt. Avinandita 2011-2012 to 21.12.2018 26.12.2018 1 day 22,12,2018, Mohanty 2017-18 (6) 23,12,2018 25.12.2018 were holidays. Debasish Mohanty 2011-12 to 24.12.2018 26.12.2018 Nil 25.12.2018 2017-18 was holiday. Namita Mohanty 2011-12 to 20.12.2018 26.12.2018 2 days 22,12,2018, 2017-18 23,12,2018 25.12.2018 were holidays. Abhaya Mohapatra 2016-17 20.12.2018 21.12.2018 Nil Abhaya Kumar Kar 2016-17 20.12.2018 21.12.2018 Nil Sangram Kumar 2016-17 20.12.2018 21.12.2018 Nil Das Himanshu Ku.Das 2016-17 20.12.2018 21.12.2018 Nil Dipak Kumar Rana 2016-17 20.12.2018 21.12.2018 Nil Kalyan Kumar 2016-17 20.12.2018 21.12.2018 Nil Chand Pramod Kumar 2016-17 20.12.2018 21.12.2018 Nil Karan Rajkamal Kar 2016-17 20.12.2018 21.12.2018 Nil Rashmi Kanta 2016-17 20.12.2018 21.12.2018 Nil Jatania Sanjeev Kumar Das 2016-17 20.12.2018 21.12.2018 Nil Pravas Kumar Das 2016-17 20.12.2018 21.12.2018 Nil Ch.Sapan Kumar 2016-17 20.12.2018 21.12.2018 Nil Mohapatra Rohit Gupta 2016-17 20.12.2018 21.12.2018 Nil Amithab Giri 2016-17 20.12.2018 21.12.2018 Nil Badal Chandra 2016-17 20.12.2018 21.12.2018 Nil Senapati Rajendra Kumar 2016-17 20.12.2018 21.12.2018 Nil Gupta The table ‘B’ below shows the possible pages to have been covered by ld. JCIT before approving the draft assessment order. It is impracticable and impossible to read such large number of pages (i.e., 28,545 pages as worked out) before approving the draft assessment order. Table ‘B’ Name A.Y A.Y. A.Y. A.Y. A.Y. A.Y. Seized/ Total 2012-13 2012-13 2013-14 2014-15 2015-16 2016-17 assess pages (draft (draft (draft (draft (draft (draft ment assessm assessm assessme assessm assessm assessm folder ent ent nt order) ent ent ent order) order) order) order) order) Soumendra Kumar Mohanty 15 9 14 11 11 9 16,300 16380 Sandhya 3 2 4 4 3 3 - 19 Mohanty Modern Engineering and 2 2 2 2 2 7 5,116 5133 management Foundation Smt. Avinandita 2 4 2 4 2 2 - 16 Mohanty Debasish 2 2 2 2 2 2 - 12 Mohanty Namita Mohanty 4 2 4 4 5 4 - 23 Himanshu - - - - - - 10 10 Ku.Das Amithab Giri - - - - - - 7 7 Abhaya - - - - - - 10 10 Mohapatra Abhaya Kumar - - - - - - 10 10 Kar Badal Chandra - - - - - - 10 10 Senapati Ch.Sapan Kumar - - - - - - Mohapatra 9 9 Dipak Kumar - - - - - - 8 8 Rana Pramod Kumar - - - - - - 10 10 Karan Rajendra Kumar - - - - - - 9 9 Gupta Rohit Gupta - - - - - - 9 9 Sangram Kumar - - - - - - 10 10 Das Sanjeev Kumar - - - - - - 8 8 Das Rashmi Kanta - - - - - - 9 9 Jatania Rajkamal Kar - - - - - - 9 9 Kalyan Kumar - - - - - - 10 10 Chand Pravas Kumar - - - - - - 10 10 Das Appraisal report 250 Documents in assessment 6,564 record (Annexure enclosed) Total 28,54 5 According to the decision of the Hon'ble Jurisdictional High Court in the case of Serajuddin and Co. reported in [2023] 150 taxmann.com 146 (Orissa), wherein the Hon'ble jurisdictional High Court in para 21 to 25 has held as follows:-

“It is seen that in the present case, the AO wrote the following letter seeking approval of the Additional CIT:

GOVERNMENT OF INDIA OFFICE OF THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), BHUBANESWAR No. ACIT/C-1(2)//Approval/2010-11/5293 Dated, Bhubaneswar, the 27/29th December, 2010 To The Addl. Commissioner of Income-tax, Range-1, Bhubaneswar.

Sub: Approval of draft orders under section 153D of the I.T. Act 1961 in the case of M's. Serajuddin & Co. 19A, British India Street, Kolkata (in Serajuddin Group of Cases)- matter regarding.

Sir, Enclosed herewith kindly find the draft orders under section 153A of the LT.Act, 1961 along with assessment records in the case of M/s Serajuddin & Co., 19A, British India Street, Kolkata for kind perusal and necessary approval under section. 153D.

No Name of the Assessee Section under which order passed Asst. Year 1 M/s Serajuddin & Co., 19A, us. 2003-04 153A/143(3)/144/145(3) Street, Kolkata Co., 19A, British India Street, Kolkata 2 -do- -do- 2004-05 3 -do- -do- 2005-06 4 -do- -do- 2006-07 5 -do- -do- 2007-08 6 -do- -do- 2008-09 7 -do- Under section 143(3)/ 144/ 2009-10 153B(B) /145(3) 3) The above cases will be barred by limitation on 31.12.2010. Enci: As above Yours faithfully, Sd/- Asst. Commissioner of Income-tax, Circle-1(2), Bhubaneswar of the Tribunal itself Government of India OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX, 3 Floor, Range-1, Bhubaneswar No. Addl. CIT/R-1/BBSR/SD/2010-11/5350 Dated, Bhubaneswar, the 30th December, 2010 To The Assistant Commissioner of Income Tax, Circle-1(2), Bhubaneswar. Sub: Approval under section 153D-in the case of M/s Serajuddin & Co., 19A, British India Street, Kolkata-Matter regarding. Ref: Draft Orders under section 153A/143(3)/144 for the A.Y. 2003- 04 to 2008-09 under section.143(3)/153B (b)/144 of the A.Y.2009-10 in the case of above mentioned assessee. Please refer to the above The draft orders under section 153A/143(3)/144 for the A.Y. 2003-04 to 2008-09 and under section. 143(3)/153B(b)/144 for the A.Y. 2009-10 submitted by you in the above case for the following assessment years are hereby approved: Assessment Year Income Determined 2003-04 11,66,22,771 2004-05 36,46,80,016 2005-06 65,70,12,805 2006-07 60,02,65,791 2007-08 130,03,13,307 2008-09 274,68.87,069 2009-10 301,17,05,952 You are requested to serve these orders expeditiously on the assessee, submit a copy of final order to this office for record. Sd/- Addl. Commissioner of Income Tax, Range-1, Bhubaneswar 22. As rightly pointed out by learned counsel for the Assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirernent of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like 'see' or 'approved' will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of Section 158BG of the Act, it would equally apply to Section 153D of the Act. There are three or four requirements that are mandated therein, (i) the AO should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind; (ii) the final approval must be in writing; (iii) The fact that approval has been obtained, should be mentioned in the body of the assessment order.

23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking his approval or of the Additional CIT having granted such approval. Interestingly, the assessment orders were passed on 30th December 2010 without mentioning the above fact. These two orders were therefore not in compliance with the requirement spelt out in para 9 of the Manual of Official Procedure.

24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under Section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. 2004 (165) E.L.T. 257 (S.C.) the Supreme Court observed as under: "Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: 2002 (143) ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under Section 37B of the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute.

(2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars."

25. For all of the aforementioned reasons, the Court finds that the ITAT has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of Section 153D of the Act and that such approval is not meant to be given mechanically. The Court also concurs with the finding of the ITAT that in the present cases such approval was granted mechanically without application of mind by the Additional CIT resulting in vitiating the assessment orders themselves.

In approval letter dated 26.12.2018 ld. JCIT had neither mentioned nor referred to any seized material or any other document on the basis of which he has approved the draft assessment order under section 153D of Income Tax Act, 1961. The matrix of facts of following case laws is similar to the facts of this case. Hence, it is clear that the approval of draft assessment order under section 153D has been given in a mechanical manner without application of mind which is contrary to the views in following case laws. Where approval under section 153D did not refer to any seized material/assessment records/satisfaction note or any other documents and was granted on same day on basis of letter by Assessing Officer for seeking approval, said approval was granted in a mechanical manner and without application of mind, it was to be treated as invalid- Maheshwari Coal Benefication & Infrastructure (P.) Ltd. v. Dy. Commissioner of Income-tax (Central) [2025] 171 taxmann. com 842 (Nagpur - Trib.) “17.2 Even the factual situation is much worse than the facts decided by the Tribunal in the case of Sanjay Duggal (supra). In that case, at least the assessment folders were sent whereas in the instant case, as appears from the letter of the Assessing Officer seeking approval, he has sent only the draft assessment order without any assessment records what to say about the search material. As mentioned earlier, there are infirmities in the figures of original return of income as well as total assessed income and the Addl. Commissioner of Income-tax while giving his approval has not applied his mind to the figures mentioned by the Assessing Officer. Therefore, approval given in the instant case by the Addl. Commissioner of Income-tax, in our opinion, is not valid in the eyes of law. We, therefore, hold that approval given under section 153D has been granted in a mechanical manner and without application of mind and thus it is invalid and bad in law and consequently vitiated the assessment order for want of valid approval under section 153D of the Act. The following case laws support the claim of the assessee. In view of the above discussion, we hold that the order passed under section 153A read with section 143(3) has to be quashed, thus ordered accordingly. The ground raised by the assessee is accordingly allowed." – Principal Commissioner of Income Tax vs. Anju Bansal [2024] 466 ITR 251 (Delhi) (Delhi High Court). 3.3 Again, the approval of assessment of assessment order under section 153A r.w.s 143(3) in case of search and seizure or requisition of the Act has to be granted for each assessment year under section 153D. Grant of approval under section 153D cannot be merely a ritualistic formality, it must be made and approved in an appropriate application of mind. In this case Id. JCIT has approved the draft assessment orders for all assessment years i.e. from A.Y. 2011-12 to A.Y. 2016-17 in a single approval instead of giving approval for each assessment year separately. This view was taken adversely by Delhi High Court as given below. Hence, the grant of approval has been a ritualistic formality and not sustainable under law. Income-Tax - search and seizure – survey - assessment in search cases - grant of approval by competent authority - approval to be granted for each assessment year-single approval under section 153D granted by competent authority for multiple assessment years- grant of approval cannot be merely ritualistic formality or rubber stamping by authority-Tribunal- not erroneous in setting aside assessment order-Income-Tax Act, 1961, ss. 132, 133A, 143(3), 153A, 153D. – Principal Commissioner of Income Tax vs. Shiv Kumar Nayyar [2024] 467 ITR 186 (Delhi) (Delhi High Court). 3.4 In the approval letter ld. JCIT has pointed out that “The points mentioned in the appraisal report but not considered in the assessment should be mentioned in the note ‘not for the assessee’ ”. From this it is transparent that ld. JCIT has not verified the appraisal report, consequently he could not identify the points available in the appraisal report but not finding a place in draft assessment orders. This fact is fortified from the letter of ld. ACIT wherein he has not mentioned of appraisal report and seized materials as being enclosed. It otherwise means that ld. JCIT has not applied his mind while granting approval under section 153D of I.T Act.

4. Ground no. 3 of the appeal memo is as follows: For that on the facts and the circumstances of the case the addition of Rs.9,35,24,524/- as bogus liabilities under section 68 by ld. AO and confirmed by ld. CIT(A) is arbitrary, unlawful and unjustified. The addition as made by ld. AO without having any material basis is highly unwarranted. 4.1 During the assessment proceedings the assessee has already submitted before ld. A.O. and ld. CIT(A), Bhubaneswar-2 that these expenses of Rs. 9,35,24,524/- are ‘Expenses payable to Staff and Others’ and for this the assessee has also submitted the party-wise details of of Rs. 9,35,24,524/-(enclosed at page 121 to 130 of paper book) for A.Y. 2011-12 (as per balance sheet) on this issue. But, ld. A.O. and ld. CIT(A), Bhubaneswar-2 have not considered the details for that assessment year submitted before them. And ld. CIT(A) confirmed the addition of the same on the basis of assessment order and statements recorded during search and seizure only. Also, he has bent his mind on A.O.’s order which is devoid of any adverse view or any remark regarding the details/ documents submitted before him for verification. Specific mistake is to be identified before addition is to be made which is not adhered to in this case, hence the order is illegal. 4.2 In the order under section 250 of the Income Tax Act, 1961 dated 31.03.2025 ld. Commissioner of Income Tax has given his views in the following manner:

4.4 The Assessing Officer observed that the ‘Expenses payable to Staff and Others’ increased from Rs. 2,91,63,297 in AY 2010-11 to Rs. 12,26,87,821 in AY 2011-12 by Rs. 9,35,24,524/-. He noted that this issue was confronted to the appellant as well as to the accountant of the firm during the course of search proceedings. During search proceedings, the statement of the accountant of M/s SM Consultants, Sh. Biswa Pratap Das was recorded under section 132(4) on 20.10.2016. He was asked to furnish the ledger copies of the expenses payable to staff and others of Rs. 12,56,45,860/- as per balance sheet on 31.03.2016. He replied that he was not aware of these entries and no such ledger exists. When he was further asked who could explain the impugned liability, he stated that the proprietor of the concern, Sh. S.K. Mohanty could explain and provide details about these entries. The relevant extract of the statement is reproduced below………: It was found in the search that bogus liabilities were created year on year by the appellant. The statement of the appellant, Sh. S.K. Mohanty was recorded on oath under section 132(4) of the Act on 20.10.2016. In his statement, the appellant admitted that these expenses payable were bogus, through which bogus liability was created. The relevant part of his statement is reproduced as under………: It is seen that the appellant was clearly asked in this statement to state the nature of the liabilities of Rs. 9,35,24,523/-, the head-wise amount outstanding at the year-end and the specific expense heads attributed to this liability. He was also requested to produce all the vouchers of expenditure out of which this liability had arisen. In reply, he clearly and categorically stated that the liability had arisen out of inflated expenses booked under different heads in the books of accounts. He also stated that as this was a case of expenditure which had not been actually incurred during the FY 2010-11, he was not in a position to specifically state the heads under which the expenditure was booked. He admitted that the expenditure was inflated and that he did not have any vouchers whatsoever in respect of such inflated expenditure and was also not in a position to explain the liability of Rs. 9,35,24,523/-. On this basis, he stated that he intended to offer this amount for taxation purpose for the FY 2010-11. When he was asked to inform the form in which such unaccounted income was lying, he stated that it was lying in the form of fixed deposits in different banks shown in balance sheet. 4.5 The intention to offer this amount for taxation for AY 2011-12 and similar amounts for different years which was expressed by the appellant achieved realization in the form of a letter of disclosure dated 21.10.2016 wherein he disclosed income for various years. This letter is being reproduced as under……….: 4.6 It is thus seen that the appellant stated on oath under section 132(4) during the course of search proceedings on 20.10.2016 that the impugned expenses payable were bogus. It is also seen that the appellant stated on oath under section 131 on 6.12.2016, 46 days after the day of search, that the impugned expenses payable were bogus. Therefore, it is difficult to understand the contention of the appellant that the admission that the impugned expenses payable were bogus was given under duress during search. If the appellant was under duress during search, why did he again declare the expenses payable as bogus 46 days after the day of search?

4.3.1 The assessee replies to the statements recorded in the following manner: It is pertinent to mention that it was already explained by the assessee that he is not aware of the inflated expenses head-wise. If so, how could he know that expenses have been inflated and under different heads. So, both the statements (given at page 38 to 55 of paper book) are not complementary to each other, rather, they are contradictory. The assessee does not have any voucher for alleged inflated expenses. The search party enquires for vouchers for the inflated expenditure and liabilities, but the assessee has given a statement that these inflated expenditure had not been incurred (if any as alleged). It will be misleading to co-relate this question and replies given. Ld. Assessing Officer could have verified the vouchers relating to all expenses to find out the missing vouchers during course of assessment when books of accounts have been submitted during course of assessment. Further he has not given any adverse remark on availability or not of any voucher/bill. 4.3.2 Regarding offer for taxation and statement on 06.12.2016 it will not be out of context to mention that then consultant advised him to do so. Since, the assessee could not remember each transaction in details and implications of the statements given he took the assistance of one consultants who turned to be hostile to the assessee. Under his guidance he has taken all these steps. 4.3.3 The assessee felt exhausted with the continuous pressure of search and seizure operations perpetuated day and night for 3 days. Also, the search party has recorded statement under section 132(4) of the I.T Act on 22.10.2016 (where as the search commenced on morning of 20.10.2016) at midnight. Hence without use of rational judgment and application of peaceful mind the assessee had to answer the queries on the backdrop to get rid of prolonged stress at that point. These statements are prepared and put on the mouth of the assessee systematically and against him. A rational person will never go against his own interest. So, the questions put to during search and answers given by the assessee along with comments are given under the above extraordinary and not so conducive environment. So, these statements cannot be considered at face value and should have been verified.

But, ld. Commissioner of Income Tax (Appeals) (in short “CIT(A)”), Bhubaneswar-2 did not consider the fact that the assessee was pressurized due to the search and seizure commenced during that time and the evidences which were submitted and produced before him are true and duly accounted for in books of accounts for that year. Further, the addition of Rs.9,35,24,524/- has been occurred from genuine expenses related to business. Since, audited financial statements and details of Rs.9,35,24,524/- have already been produced on dated 21.03.2014 and verified by ld. Assessing Officer (in short A.O.). He has no objection regarding the balances, debits and credit entries, hence the additions of Rs.9,35,24,524/- as bogus liability under section 68 of the Income Tax Act, 1961 made in the hands of the assessee should have been deleted. 4.3.4 It is most respectfully submitted that admission in statement under section 132(4) of I.T. Act is not evidence unless it is corroborated by authentic and proper documents. Further, law of land on the statements recorded is that admission is a very important piece of evidence, but not conclusive one unless it is explained. Further CBDT vide notification no. 286/2/2003/IT-(Inv.) dated March 10, 2003 has emphasized that statements should not be overemphasized unless corroborative evidences to support the statements are found out. The contents of the circular are given below. “Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders.” This view is fortified from the following judgments. The assessee supplied and distributed pharmaceutical products to Governments and other agencies. In order to obtain orders from the Governments and other agencies, the assessee engaged other agencies for doing liaisoning on its behalf. One of those was a company. The Assessing Officer made an addition purely on the basis of statement by a partner made during the course of survey under section 133A that the commission paid was not genuine in that no services were rendered. The statement was retracted but dismissed as an afterthought. The Tribunal in D.S. Agencies and Associates v. Addl. CIT [2015] 44 ITR (Trib) 46 (Mum) following the decision of the Supreme Court in Pullangode Rubber Producer Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC) held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive as it is open to person who made the admission to show that it is incorrect. Further, the Tribunal also relied upon a Board Circular F No. 286/2/20003/IT-(Inv.) dated March 10,2003, wherein it has been made clear that no attempt should be made to obtain confession as to the undisclosed income and the addition should be made only on the basis of materials gathered during the course of search and survey, it is sine qua non that there should be some other material to correlate undisclosed income admitted in a statement. It was further, pointed out, that the statement of a third party has been relied upon against the assessee without affording the assessee opportunity to cross-examine of that party despite the assessee specifically asking for it. It was pointed out that the presumption cannot take the shape of evidence, however, strong it may be and deleted the addition. Held, (i) that during the course of search and seizure, no incriminating material or undisclosed income or investments were found. The assessee was under mental pressure and tired. Therefore, to buy peace of mind, he accepted and declared Rs. 3 crores in his personal name. The statement recorded under section 132(4) of the Income-tax Act, 1961 has a better evidentiary value but the addition cannot be sustained merely on the basis of the statement. There had to be some material corroborating the contents of the statement. The Department could not point out what was the material before the Assessing Officer, which supported the contents of the statement. The assessee surrendered a sum of Rs. 69.59 lakhs and Rs. 75 lakhs in the assessment years 2008-09 and 2009- 10. The Assessing Officer failed to co-relate the disclosures made in the statement with the incriminating material gathered during the search. Therefore, the addition was deleted. – Asst. CIT v. Sudeep Maheswari [2019] 70 ITR (Trib) (S.N.) 38 (Indore). The Commissioner of Income-tax (Appeals)'s view that the statement under section 132(4) could not bind the assessee is, in the opinion of this court, correct. The text of section 132(4), clarifies that the presumption arises in the case of the searched party. In case the statements by the party whose premises are searched, or to be attributed to a third party - as in the case of the assessee, there has to be a connect or corroboration. Clearly, there was none in the present case. On this score, the addition made by the Assessing Officer was unsustainable; the Commissioner of Income-tax (Appeals) correctly directed the cancellation. — Pr. CIT v. Manoj Hora (Delhi) [2018] 402 ITR 175 (Delhi).

During a survey conducted in the premises of the assessee during the assessment proceedings for the assessment year 2009-10, certain discrepancies were noticed. On the basis thereof a sum of Rs. 75 lakhs was surrendered. The assessee retracted from the surrender by writing a letter to the Additional Commissioner. The Assessing Officer held that the statement recorded during the survey was in the nature of an admission and therefore valid. The assessee produced additional evidence before the Commissioner (Appeals) to prove that the surrender made in the statement recorded during the survey was wrong. The Commissioner (Appeals) refused to admit the additional evidence and held that the admission was proper evidence and a proper statement was recorded which could not be proved by the assessee to be wrong and affirmed the assessment. On appeal: Held, allowing the appeal, that the addition was made without proper evidence and merely on the basis of a statement recorded during the survey, which could not be sustained. No proper enquiry was conducted. Therefore, the addition made was to be deleted. – Sanjeev Kumar v. Income Tax officer [2014] 31 ITR (Trib) 680 (Chandigarh). A survey was conducted in the premises of the assessee-firm. One of the partners in his sworn statement offered an additional income of Rs. 20 lakhs for the assessment year 2001-02 and Rs. 30 lakhs for the assessment year 2002-03. However, the said statement was retracted by the assessee through its letter dated August 3, 2001, stating that the partner from whom a statement was recorded during the survey operation under section 133A, was new to the management and he could not answer the enquiries made and as such, he agreed to an ad hoc addition. The Assessing Officer based on the admissions made by the assessee, which were directly relatable to the defects noticed during the action under section 133A of the Act, recomputed the assessment. The order was set aside by the Commissioner of Income-tax (Appeals) and this order was upheld by the Tribunal. On appeal to the High Court: Held, dismissing the appeal, that in view of the scope and ambit of the materials collected during the course of survey action under section 133A shall not have any evidentiary value. It could not be said solely on the basis of the statement given by one of the partners of the assessee-firm that the disclosed income was assessable as lawful income of the assessee. –Commissioner of Income Tax v. S. Khader Khan [2008] 300ITR 157(Mad). The facts of the case are res ipsa loquitor to the extent that the assessee made statements which was recorded under section 131 during the course of survey under section 133A and retraction of the said statements as referred to above meaning thereby that the statements recorded made on November 28, 29, 2006 under section 131 stands withdrawn on the various allegation undue influence, coercion and pressure by the survey team. Now the issue before us for adjudication is whether a statement made during the survey proceedings can solely form the basis of assessment without any cogent and corroborative material being brought on record to strengthen the said statement. The assessee referred to various judicial rulings in support of its case by arguing that the statement made under section 131 has no evidentiary value and the consequent disallowance/addition is uncalled for. — D.S Agencies and associates v. Additional Commissioner of Income Tax [2015] 44 ITR (Trib) 46 (Mumbai). Further it was held in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC), that an admission is an extremely important piece of evidence but it cannot be said that it is a conclusive and it is open to person who made the admission to show that it is incorrect. Vide Central Board of Direct Taxes Circular F. No. 286/2/2003/IT-(Inv.) dated March 10, 2003 it has been made clear that no attempt should be made to obtain confession as to the undisclosed income and the addition should be made only on the basis of material gathered during the course of search and survey thereby issuing instruction to the Department that no addition can be made or sustained simply on the basis of statement recorded during survey/search. In other words, in order to make any addition on the basis of surrender during search or survey, it is sine qua non that there should be some other material to correlate undisclosed income with such statement. It is settled position of law that statements of the assessee are not to be considered unless there are co-related evidences to substantiate the statements made. In this case the Investigation Wing has not found any document that the expenses have been inflated that to head-wise amounts of such expenses. Under these circumstances to impose tax by trusting these statements under section 132(4) is unwarranted and non-judicious. Further, the appellant has retracted/clarified subsequently from the statements recorded which were taken when the appellant was under tremendous mental pressure and exhaustion. 5 Ground no. 4 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. CIT(A) erred on facts and in law in confirming addition of Rs. 9,35,24,524/- as bogus liabilities under section 68 of the I.T. Act in the absence of incriminating materials unearthed during the course of search and seizure. 5.1 The assessee has submitted tax audit report along with audited financial statements and return of income, hence the audited accounts have been verified. The ld. A.O. has acknowledged in para 2 in the assessment order under section 147 dated 21.03.2014 (copy at page 117 to 119 of paper book) that audited accounts have been verified. So, it is not a case of abatement of assessment. In this case assessments are not abated i.e., assessments are completed and not pending to be completed and due date of assessment has elapsed, hence there cannot be any addition to figures in original return unless incriminating materials are found in search operations. Additions made by ld. A.O. are purely based on the figures reflected in the balance sheet and statements recorded. So, no new material has been collected by the Investigation Wing which would have enabled ld. CIT(A), Bhubaneswar-2 to confirm addition of Rs. 9,35,24,523/-. So, no incriminating documents have been found and seized by investigation Wing during search under section 132 of the I.T. Act. It is unjustified to make addition of Rs. 9,35,24,523/- under section 153A as increase in liability for expenses. The following case laws support the views of the assessee especially the judgment given by Hon’ble Supreme Court in Abhisar Buildwell P. Ltd. recently which ultimately settles the dispute on additions in respect of non-incriminating materials. A number of judgments with proper justification as given below support the cause of the assessee. “In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961.”- Principal Commissioner of Income Tax vs. Abhisar Buildwell P. Ltd. (para 56 of order of Civil Appeal No.6580 of 2021) (SC). Assessment in search cases-Search and seizure-Block assessment- Estimation of undisclosed income-Scope of jurisdiction-Jurisdiction to assess total income for assessment years only if incriminating material unearthed during search related to relevant assessment year in block period-No addition permissible for such years in absence of incriminating material having been found during search- Materials seized during search conducted pertaining only to assessment year 2008-09 for which differential demand settled availing of benefit under Amnesty Scheme-No incriminating material pertaining to assessment years 2002-03 to 2007-08 discovered during search-Held, order of Tribunal confirming addition of estimated undisclosed income reversing order of Commissioner (Appeals) unsustainable- Income Tax Act, 1961 ss. 132, 153A, 158Bb - Sunny Jacob Jewellers Gold Hyper Market v. Commissioner of Income Tax [2025] 473 ITR 155 (Cal) Income-tax-search and seizure-assessment of third party- satisfaction note referring to material relating to one year only-action relating to other years not sustainable-assessee's contention that even for that one year no incriminating material was found rejected- supreme court-special leave petition dismissed-Income-Tax Аct, 1961, S. 153C – Dev Technofab Ltd. v. Deputy Commissioner of Income Tax and Another [2024] 471 ITR 430 (SC).

Search and seizure - Assessment in search cases - Absence of incriminating material found during course of search-Addition unsustainable - Income Tax Act, 1961, s. 153A. – Assistant Commissioner of Income Tax v. Versatile Polytech Pvt. Ltd. [2019] 71 ITR (Trib)(S.N.)4 (Delhi). Similar view point was expressed by the hon’ble Delhi High court in the case of Asst. CIT v. Kabul Chawla [2016] 380 ITR 573 (Delhi). The relevant observation of the hon’ble court could be seen in paragraphs 37 and 38 of the order, 37- On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under : i. Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search take place. ii. Assessment and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. iii. The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the ‘total income’ of the aforementioned six years in separate assessment years “in which both the disclosed and the undisclosed income would be brought to tax”. iv. Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously, assessment has to be made under this section only on basis of seized material.” v. In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word “assess” in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word “reassess” to completed assessment proceedings. vi. In so far as pending assessment are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. vii. Completed assessment can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of same incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. [Ref-Page 533 [2019] 69 ITR (Trib) 503 (Jaipur).] The Hon’ble Supreme Court has also taken a similar view in the case of CIT v. Sinhgad Technical Education Society [2017] 297 CTR 441 (SC). [Ref-Page 423 [2019] 70 ITR (Trib) 417 (Delhi).] Search and Seizure – Assessment in search cases – No assessment pending before assessing officer for relevant assessment year – No incriminating material found in course of second search – No addition or disallowance could be made for unabated assessment unless incriminating materials unearthed – Income-Tax Act, 1961, s. 153A.- Rashmi Metaliks Ltd. v. Deputy Commissioner of Income-Tax. [2019] 72 ITR (Trib) 226 (Kolkata). That the seized documents consisting of the assessee’s profit and loss account and balance sheet for the year ended on March 31, 2011 could not be considered as incriminating material. Those were final accounts of the assessee and were on record. The documents giving details of a flat were also not incriminating material since that information was part of the official record. The document showing various payments made by the assessee were duly recorded in the books of account and were supported by vouchers. Hence those documents could not be called incriminating material. The material brought by the Principal Commissioner in his order passed under section 263 of the Act was not incriminating material. Hence, no additions could be made based on those documents in the assessment. - Metalind Private Ltd. v. Deputy Commissioner of Income-Tax [2019] 72 ITR (Trib) 204 (Kolkata). Held, that the assessment for the year 2010-11 was completed on the date of search. No incriminating material, whatsoever, in relation to the share application money or global depository receipt was found. If no incriminating material was found during the search action, no addition could be made in the case of an assessment which had already been concluded while framing assessment under section 153A. – Sel Manufacturing Co. Ltd. v. Deputy Commissioner of Income-Tax [2019] 71 ITR (Trib) 343 (Chandigarh). Held, (i) that the addition made by the Assessing Officer under section 153A was not sustainable and liable to be deleted when the assessment for the assessment year 2010-11 had been completed and was not pending as on the date of the search. The Assessing Officer had not pointed out any discrepancy in the record to show that the assessee’s own money had been routed back as unsecured loans. Accordingly, the addition made by the Assessing Officer in respect of unsecured loan was deleted. - Jammu Metallic Oxides Pvt. Ltd. v. Deputy Commissioner of Income-Tax [2019] 72 ITR (Trib) 449 (Jaipur). Held, that when the seized documents did not belong to the assessee and no incriminating documents or materials had been seized from other persons, which were assessed under section 153C read with section 143(3) of the Income-Tax Act, 1961 no sustainable addition could be made in the hands of the assessee in such assessment year. –Unicon Marchants P. Ltd v. Joint Commissioner of Income-Tax/ Assistant Commissioner of Income-Tax [2019] 76 ITR (Trib) 381 (Cuttack). Held, that the additions made by the Assessing Officer were beyond the scope of section 153C because no incriminating material or evidence had been found during the course of search so as to doubt the transactions. In the entire assessment order, the Assessing Officer had not referred to any seized material or other material for the year 2009-10 having being found during the course of search in the case of the assessee. Therefore, the action of the Assessing Officer was based upon conjectures and surmises and the addition made was not sustainable in the eyes of law. - Deputy Commissioner of Income-Tax v. Madhyam Housing Pvt. Ltd. [2019] 76 ITR (Trib) 82 (Delhi). Held, that the sustainability of the addition made by the Assessing Officer was based on the material which was received by him subsequent to the search and seizure in case of the assessee but gathered during the search and seizure action on P. Since there was no incriminating material found or seized during search, the addition could not be made under section 68. The Assessing Officer could reassess the income of the assessee based on the information and evidence received from the Investigation Wing. - Assistant Commissioner of Income Tax V. Siyaram Exports India Pvt. Ltd. [2019]74 ITR (Trib) 109 (Jaipur). Where no incriminating material was found during search, since assessment for impugned assessment year did not abate on date of search and seizure operation, additions made by Assessing Officer under section 153A were to be deleted - Rajesh Mangla v. Deputy Commissioner of Income-tax [2024] 162 taxmann.com 324 (Delhi - Trib.) Condition precedent - Where no incriminating material was found during search, addition made by Assessing Officer on account of undisclosed income was to be deleted - Poonam Promoters and Developers (P.) Ltd. v. ACIT (Delhi) 534. 6 Ground no. 5 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. CIT(A) erred on facts and in law in confirming addition of Rs.9,35,24,524/- under section 68 of the I.T Act as unexplained cash credit when the amount is generated out of expenses only.

Section 68 of Income Tax Act provides that, “Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,- (a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory. Provided further that where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided also that nothing contained in the first proviso [or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.” Section 68 provides that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the (Assessing) Officer, Satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. Since, there is no cash transaction in the account of the assessee during the assessment year, the addition of Rs. 9,35,24,524/- as unexplained cash credit under section 68 of the Income Tax Act, 1961 is not applicable to the assessee.

The liability arises out of expenses debited to concerned head of accounts with credits to expenses payable to staff and others. These liabilities arose out of non-cash transactions. If bogus liability at all could not be proved question of disallowing of the increase in liability is unwarranted. As mentioned by ld. CIT(A) order Investigation Wing has mentioned that “He was also requested to produce all the vouchers of expenditure out of which this liability had arisen.” It means these are non-cash transactions. Hence, the term ‘cash’ is not whispered anywhere. Section 68 is misinterpreted and the statute was not expected to be interpreted in such matter. Section 68 is not at all related to liability arising out of expenses. Hence, ld. A.O. and ld. CIT(A) were not aware of the charging section. Hence, the addition needs to be deleted. 7 Ground no. 6 of the appeal memo is as follows: On the facts and circumstances of the case ld. CIT(A) erred on facts and in law in confirming addition of Rs.9,35,24,524/- under bogus liability in spite of the fact that for A.Y. 2011-12 while making order under section 147 dt 21.3.2014 ld DCIT, Balasore has accepted the details of expenses payable to staff and others without giving any adverse view. Ld. DCIT, Baleswar had asked for the documents/details/clarifications/evidences during assessment proceedings under section 147 of the Income Tax Act for A.Y. 2011- 12. The assessee submitted all the documents like details of business promotion, details of 26Q returns, details of salary & wages payable, details of sundry creditors, details of expenses payable to staff and others, list with address along with Hazira (copies at pages 120 to 130 of paper book) dated 06.02.2014 and 06.02.2015 which were verified by him under section 147. Further, he did d did not give any adverse remark on those documents. Hence, all the required documents to explain regarding this addition has already been submitted but ld. A.O. and ld. CIT(A) have not considered the views of the then ld. A.O. So, the expenses payable to staff and others have been explained with relevant documents, hence this addition is not called for. 8 Ground no. 7 of the appeal memo is as follows: For that on the facts and the circumstances of the case the addition of Rs. 3,11,00,000/- as unexplained cash as made by ld. AO and confirmed by ld. CIT(A) is arbitrary, unlawful and unjust. The addition as made by ld. AO is highly unwarranted. Ld. CIT(A), Bhubaneswar-2 has confirmed the addition of Rs. 3,11,00,000/- as unexplained cash made by ld. A.O. on the basis of assessment order and statement recorded during search period. The assessee submitted all the required documents including seized documents and submissions before him but he did not consider those documents and confirmed the addition which is bad in law. Further, the audited financial statements and books of accounts match with seized documents and the assessee has already explained the genuineness of the transactions. The confirmation of an addition without any specific adverse comment worthy of consideration is unjustified and unlawful. 9 Ground no. 8 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. CIT(A) erred on facts and in law in confirming the addition of Rs.3,11,00,000/- as unexplained cash for A.Y.2011-12 in the absence of incriminating material unearthed during course of search and seizure. From the books of accounts of Smt. Sandhya Mohanty and Sri. Soumendra Kumar Mohanty it is seen that there are cash transactions between these two persons. Also, the impact of these cash transactions has appeared in return of income and closing financial statements and the same has been found by the Investigation Wing. Further as already submitted before your honor the assessment has been completed u/s 147 on dated 21.03.2014 without any adverse remark although these cash transactions are available in regular books of accounts of M/s S.M Consultants. Further, during the course of assessment no new material to alter the return of income and remained unexplained was found by ld. A.O. It is not a case of abatement of assessment. In this case, assessments are not abated, i.e., assessments are completed, not pending to be completed, or the due date for assessments has elapsed, so there cannot be any addition to the figures in the original return as no incriminating materials are found in search operations. Here, no new material has been collected by the Investigation Wing, hence this addition should not have been confirmed by ld. CIT(A). This view has been supported by different judicial rulings, as given in para 5.1 of this submission. 10 Ground no. 9 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. AO has grossly erred in law and on facts in making addition of alleged unexplained cash of Rs.3,11,00,000/- without having any material basis and without adjudicating the source stated in the return of income & statement of affairs of investor Smt. Sandhya Mohanty, books of accounts of the appellant, seized documents and the appellant's statement recorded during the search and post-search enquiry. 10.1 In the assessment order under section 153A r.w.s. 143(3) of Income Tax Act dated 27.12.2018 ld. Assessing Officer (in short A.O.) on the addition of unexplained cash of Rs. 3,11,00,000/- in the case of Smt. Sandhya Mohanty has given his view in the following manner: “7.6 The submission of the assessee is perused and crossed checked with the record. The assessee has stated that Smt. Sandhya Mohanty introduces this cash out of her own capital available in the form of cash in her hands. To substantiate the matter a copy of Statement of Affairs of Smt. Sandhya Mohanty was enclosed.

7.7 The statement of affair of Smt Sandhya Mohanty was analysed with 360 degree profiling. It is found that Smt Sandhya Mohanty filed W.T. Return for A.Y.-2012-13 and 2013-14 where cash in hand was NIL. If cash was owned by Smt Sandhya Mohantyla then the amount should have come to the Wealth Tax Return. It was easily understood from above findings that the statement of affair of Smt. Sandhya Mohanty prepared is an afterthought and not verifiable with any authenticated record like W.T. return or No A.Y. 2011-12 and subsequent years, it could be easily ascertained that assessee and wife of assessee Smt Sandhya Mohanty manufactured such script as a desperate attempt to make the story believable. It is forgotten that she had filed W.T. Return for the A.Y.-2012-13 and 2013-14 and there she disclosed Cash in Hand as ‘NIL'. And assessee used to file return in ITR-2 where no Asset and Liability statement is required. No cash asset was disclosed by Smt Sandhya Mohanty. The story of such cash explanation is also a new one and afterthought, because during and after the search several depositions of statement was taken by the Investigation wing but never the matter was stated as above in any of the statement made by the assessee or by her family members. Actually this is a silly and childish effort to substantiate the cash found during the course of the search. During the search, the statement made by assessee and findings by the Investigation wing concluded that total cash found and seized during search operation is of M/s S.M. Consultants, And in the assessment proceedings the findings have not been rebutted by any evidentiary documents but mere statement On examination of the Balance Sheet of the assessee also, no entry regarding payment to Smt Sandhya Mohanty or amount receivable from Sandhya Mohanty for the alleged amount is found.No evidence was found either during search & seizure operation or subsequently that the said cash belonged to Sandhya Mohanty.” 10.2 In the order under section 250 of Income Tax Act, 1961 ld. CIT(A), Bhubaneswar-2 on the addition of unexplained cash of Rs. 3,11,00,000/- in the matter of Smt. Sandhya Mohanty has given his view in the following manner: “5.8 There are several loopholes in this argument. The amount siphoned out of books of accounts over the years as per documents found and seized during the course of search under section 132 of the Act is given as under: For the argument to hold, the appellant should have introduced cash withdrawn at the end of the year back into the bank accounts at the beginning of the year. However, the appellant himself could only find one such instance of that happening as he submitted that Smt. Sandhya Mohanty had introduced a sum of Rs. 1,19,80,000 for the period 1.04.2015 to 23.07.2015 in which regard he referred to seized document annexure SMCB-35, page 43 to 31. Further, it is seen that the period referred to by the appellant is subsequent to AY 2011-12, the year for which this appeal had been filed and is being decided, and the contention of the appellant is therefore, irrelevant. Had the cash withdrawn from his bank accounts every year been reintroduced in bank accounts year after year, the appellant could have easily shown such transactions in his bank accounts. However, since there is no such reintroduction of withdrawn cash, he has not been able to provide any evidence in this regard, apart from the aforementioned.” 10.3 Ld. CIT(A), Bhubaneswar-2 in order under section 250 has given his views/remarks in the following manner: “5.10 The appellant has further submitted copy of Statement of Affairs of Smt. Sandhya Mohanty, and has contended that she gave cash to the firm which was repaid to her when the firm became financially capable to repay. It is seen from ITR of Smt. Sandhya Mohanty for AY 2011-12 that she showed a total income of Rs. 19,03,999. It is seen from the Computation of Income submitted by the appellant that she showed salary received of Rs. 1,92,000 and income from other sources comprising of interest income of Rs. 17,88,916. Statement of Smt. Sandhya Mohanty was recorded on oath under section 132(4) during the course of search under section 132 on 20.10.2016. In answer to question no. 4, which asked her about her source of income, she stated that it was salary from M/s SM Consultants in the capacity of Director (Finance) of Rs. 40,000/month, a remuneration of Rs. 75,000/month as Chairman of M/s Modern Engineering College, and interest income from banks. In question no. 16, she was asked to state the source of the cash of Rs. 12,24,000 found at her residence. In reply, she stated that the cash belongs to M/s SM Consultants. When asked to explain the source of cash in Q. No. 17, she stated that her husband, i.e. the appellant, Sh. S. K. Mohanty, can explain this. Statement of Smt. Sandhya Mohanty was recorded on oath under section 132(4) during the course of search under section 132 on Locker No. B-11, Karur Vysya Bank, Bapuji Nagar, in the name of Smt. Namita Rani Das Mangaraj. When asked to state who the locker belonged to, Smt. Sandhya Mohanty stated that the locker belongs to her mother Smt. Namita Rani Das Mangraj, but is maintained by her. She stated that she accompanies her mother and operates the said locker herself. She stated that her mother only signs in the locker operation register as and when operated by her. On search, cash of Rs. 99,99,500 was found in the said locker. When asked if all the cash in the locker belongs to her, she stated that it belongs to M/s SM Consultants, the proprietorship of the appellant, and that the amount of Rs.99,99,500/- was taken out from the normal business transactions account of S.M. Consultants. On the basis of the above, it is seen that Smt. Sandhya Mohanty did not have the source of income to generate such huge cash of Rs. 3.10 crore parked in the lockers. It is further seen that even a locker in the name of her mother which she maintains, has cash of M/s SM Consultants. The contention of the appellant is thus, baseless.

5.12 The appellant has submitted an affidavit of Smt. Sandhya Mohanty dated 17.06.2020 wherein she stated that cash of Rs. 4,51,36,000 seized from different lockers belonged to her. She further furnished a table which shows circular transactions between her and M/s SM Consultants from AY 2011-12 to AY 2017-18. However, such an affidavit was not called for as a submission of evidence by this office. An affidavit is a declaration or a statement in writing, made under oath or affirmation. An affidavit is not considered evidence under the Indian Evidence Act. The Honourable Supreme Court in the judgment in Sudha Devi v. M.P. Narayanan ((1988) 3 SCC 366) held: "... affidavits are not included in the definition of 'evidence' in Section 3 of the Evidence Act and can be used as evidence only if for sufficient reason court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure…………" Therefore, even if an affidavit were to be admitted as evidence (which is not being done here), the assessee would still be required to prove the genuineness of the claims made in such affidavits. The affidavit filed is thus, not being considered evidence as per section 3 of the Indian Evidence Act. As the affidavit has not been filed with any express direction in this regard, it is being disregarded as having any evidentiary value, beyond a statement by Smt. Sandhya Mohanty.” 10.4 The assessee complies hereunder the observations of ld. CIT(A) in the following manner. The seized documents relating to cash balances are like this, (a) cash withdrawn from bank account of M/s S.M. Consultants for F.Y. 2010-11, F.Y. 2011-12, F.Y. 2012-13, F.Y. 2013-14, F.Y. 2014-15 which consists of 6 pages (pages 12 to 16 of SMCB 89) (copies at pages 181 to 186 of paper book). (b) cash paid to Smt. Sandhya Mohanty for Rs. 3,94,11,600/- for F.Y. 2015-16 (pages 64 to 67 of SMCB 35) worked out from ledger copies of Sandhya Mohanty in the books of accounts of M/s S.M. Consultants. (copies at pages 187 to 191 of paper book). The cash withdrawals made from M/s S.M. Consultants (as specified above) have been narrated as being payments made to Smt. Sandhya Mohanty in the seized documents. Hence, there should not be an iota of doubt regarding the payments made to her. The next phase of the issue lies on the fact that the amounts received from Sandhya Mohanty have been shown as loan given to S.M. Consultants and repaid in the books of accounts of M/s S.M. Consultants (ledger copy of Sandhya Mohanty given at pages 145 to 146 of paper book). It is pertinent to mention that books of accounts of M/s S.M. Consultants have been audited. Similarly, in the books of Sandhya Mohanty these cash payments made to M/s S.M. Consultants and repaid appear as loan given to it (ledger copy of M/s S.M. Consultants in the books of Sandhya Mohanty given at pages 147 to 148 of paper book). Consequently, no incriminating material was found by the Investigation Wing. 10.5 It is pertinent to mention that the assessee has already submitted in its written submissions before ld. CIT(A), Bhubaneswar-2 that M/s. S.M. Consultants is a civil engineering consultant firm doing its almost all works with the Govt. In the beginning of any financial year, it remains financially dry because of delay in the release of its dues from the government. To meet the huge expenses of that period, Smt. Sandhya Mohanty, who looks after the financial activities, gives cash to the firm. And towards the end of the year as and when the firm becomes financially capable of repaying, the amount introduced by her have been repaid. It is seen in the seized documents identified as SMCB-35 at page no. 43 to 31, being the part of the cash book, which reveals that Smt. Sandhya Mohanty has introduced a sum of Rs.1,19,80,000/- for the period from 01.04.2015 to 23.07.2015. Though in the identified seized documents amount of Rs.1,19,80,000/- is for the period from 01.04.2015 to 23.07.2015 such transactions occur between Soumendra Kumar Mohanty and Smt. Sandhya Mohanty happen on a regular basis from A.Y. 2011- 12 to A.Y. 2016-17. It is pertinent to mention that this amount has not been rebutted by ld. CIT(A). Also, these transactions are duly recorded in the books of accounts of M/S. S.M. Consultants and Smt. Sandhya Mohanty from the beginning of the assessment year. Smt. Sandhya Mohanty keeps these cash-repayments in the lockers and again advances to the firm on a rotation basis. The lending cycle goes on this way throughout the year. It is relevant to mention that most of lockers belonged either to Smt. Sandhya Mohanty independently or jointly with others. Since M/s S.M Consultants operate in 7 locations with around 400 employees it might need funds immediately, also it is difficult withdraw large amounts at one go from bank, hence Sandhy Mohanty has not kept them in bank accounts. 10.6 Smt. Sandhya Mohanty introduces this cash out of her own capital available in the form of cash in her hands. Copies of Statement of Affairs from A.Y. 2011-12 to A.Y. 2017-18 (at page 167 to 173 of paper book) of Smt. Sandhya Mohanty have already been submitted before ld. A.O. and ld. CIT(A) for verification which show that a sum of Rs. 3,11,00,000/- was available as on 31.3.2010 which was introduced in the beginning part of the F.Y. 2010-11 into M/s S.M. Consultants and was taken back by the end of that year by Smt. Sandhya Mohanty. To substantiate the genuineness of the transactions between Smt. Sandhya Mohanty, the assessee and claim of Smt. Sandhy Mohanty that these seized cash balances belonged to her, locker statement of Sandhya Mohanty (at page 272 to 273 of paper book), ledger copies of Smt. Sandhya Mohanty (at page 147 to 148 of paper book) in the books of M/s S.M. Consultants, ledger copies of M/s S.M. Consultants in the books of Sandhya Mohanty (at page 145 to 146 of paper book), Income Tax Returns (at page 165 of paper book), computation of total income (at page 166 of paper book), statement of affairs (at page 167 to 173 of paper book), funds flow statement (at page 174 to 180 of paper book) and affidavit from Sandhya Mohanty are enclosed herewith (at page 277 to 278 of paper book). Also, those documents have been submitted before ld. A.O. and ld. CIT(A) during respective proceedings. The assessee has submitted all the documents related to the transactions and Smt. Sandhya Mohanty has given her statement from the beginning of the assessment that the cash balances belonged to her. Hence, rejecting the affidavit of Smt. Sandhya Mohanty (on the basis that the affidavit is not covered under the Indian Evidence Act) and not considering all other documents submitted by the assessee positively which were also verified by ld. A.O. without any factual defect is not justifiable. The revenue authorities dismissed the same without any justifiable reason and on whims and surmises without pointing out any factual defect and discrepancy therein. Facts of this case are similar with the facts of the following case laws wherein additions have been deleted since department could not prove that documents submitted are not reliable. Cash credit – Unsecured loans – loans borrowing from directors of assessee – Directors furnishing their confirmation along with bank account as well as computation for relevant assessment years – Facts showing assessing officer making assessment in a hurried manner – No discussion with regard to evidence filed by assessee – Assessing Officer to consider all evidence produce by assessee in this regard – Income Tax Act, 1961, S.68 – Singhal Exim Pvt. Ltd. v. ITO [(2019) 71 ITR (Trib.) (S.N.) 49 (Delhi)] Search and seizure-assessment in search cases-no incriminating material found or seized during course of search and seizure except statement of partner of assessee-statement only regarding one transaction of loan could not be applied to all transactions of loan-all transactions duly recorded in books of account and loans repaid during financial year-transactions disclosed and known in course of original assessment-no addition could be made in absence of incriminating material-Income-Tax Act, 1961, s.153A. – Deputy Commissioner of Income-Tax v. A. M. Exports [2019] 69 ITR (Trib) 503 (Jaipur). Search and seizure-assessment in search cases-on-money transactions-seized document required to be proved in accordance with principles of evidence applicable to income-tax proceedings, either by primary evidence or secondary evidence-cheque mentioned in sale deed not recorded in seized material-department not establishing cash payment received by vendor from assessee- none of other entries linked with assessee or landed property-onus of proving belonging to assessee and is correct lies on department- onus not discharged-seized document not incriminating material within eyes of law and not be formed basis of making addition- Income-Tax Act, 1961, s. 153A. - Assistant Commissioner of Income-Tax v. Dr. Ranjan Pai [2019] 71 ITR (Trib) 435 (Bangalore).

Where Assessing Officer made addition under section 69A to income of assessee on account of cash deposit in her bank account on ground of unexplained source, since assessee had proved genuineness of transaction by filing all documentary evidences to effect that said cash deposit was sourced from withdrawals made from a company in South Africa where her spouse was a director, impugned addition was not sustainable – Rekha Sanjeev Bhatt v. ITO [2025] 170 taxmann.com 240 (Ahmedabad – Trib.) Where Assessing Officer treated closing balance of cash in hand as cash credit under section 68 however as per assessee cash in hand in books was only Rs. 4000 and rest was available in accounts since Assessing Officer made incorrect assumption that abovementioned cash in hand was not shown in ITR said addition was unjustified - Swapan Chandra Mandal v. Income-tax Officer [2024] 159 taxmann.com 1251 (Kolkata - Trib.) Where during survey, Assessing Officer found that assessee had deposited certain amount in her bank account and made addition under section 69A on basis of statement of assessee's husband recorded under section 133A, since assessee had been maintaining regular books of account which consisted of cash books which were subjected to tax audit and Assessing Officer had clearly certified that all entries in cash book were duly supported with bills and vouchers, addition made by Assessing Officer was not justified - ACIT v. Nisha Jain [2025] 170 taxmann.com 550 (Jaipur - Trib.) Where no evidence was brought on record that cash withdrawn by assessee was utilized elsewhere, merely because assessee had not given explanation as to why cash was withdrawn, such cash could not be added in hands of assessee as unexplained - Ajay Data v. ACIT [2025] 171 taxmann.com 308 (Jaipur-Trib.) A sheet of paper containing typed entries and in loose form, not shown to form part of books of account regularly maintained by assessee or his business entities, do not constitute material evidence for making additions under section 69A- Dy. Commissioner of Income-tax Central Circle-2(1) v. Metrocity Homes [2025] 171 taxmann.com 303 (Nagpur - Trib.) 10.7 On ld. A.O.’s observations that in ITR-2 returns filed cash balance is not shown for A.Y. 2011-12, the appellant intends to point out that this return is a derivative document but not primary one. Primary documents are statement of affairs, computation of total income where figures are put correctly. Further, in ITR-2 figures in balance Sheet are not mandatorily required as observed by ld. A.O. Similarly, on wealth tax returns the statement of affairs is the primary document which reflect correct figures whereas there was some error in writing there in wealth tax returns which is a derivative document. Further, in this case W.T. Returns relate to A.Y. 2012-13 and A.Y. 2013-14, but not this year.

10.8 Regarding retraction of statement of Sandhya Mohanty it is pertinent to mention that Sandhya Mohanty has submitted all documentary evidences in support of her claim that the cash belonged to her. If her compliance is not convincing it was up to ld. A.O. to take a course of action. But, definitely it cannot be added to the income of this assessee. Further, Investigation Wing, ld. A.O., ld. CIT(A) have not relied on any document to substantiate that the cash belonged to this assessee. As already mentioned at para 4.3.4 statements recorded have no evidential value unless corroborative evidences are found. As per CBDT circular and judicial pronouncements onus is on the department to find out evidences to support statements. The assessee, Sandhya Mohanty and Namita Mohanty have stated that the cash has been withdrawn from bank account of M/s S.M. Consultants but nobody has stated that it belonged to M/s S.M. Consultants thereafter. 10.9 As shown in para 10.3 ld. CIT(A) after verifying one year’s earnings of Smt. Sandhya Mohanty has taken a view that she did not have the source to generate such huge cash of Rs. 3.11 crores parked in the locker. It is pertinent to mention that accumulation of cash of different years (as against one year) are deposited in locker. So, he should have analyzed the cash flow statements instead of return of income of one year. For purpose of wealth figure accumulated of different years are to be considered. 11 Ground no. 10 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. AO has not rejected the books of accounts under section 145(3) resulting thereby no mistake or any incorrectness or incompleteness of the accounts so far as withdrawal and repayment to Smt. Sandhya Mohanty was detected but added the same as unexplained cash of Rs.3,11,00,000/-. Ld. Assessing Officer although had verified the cash transactions from books of accounts, funds flow statement, statement of affairs submitted by Smt. Sandhya Mohanty but he had given neither any acceptable adverse remark nor rejected the statements on withdrawal of cash and repayment to Smt. Sandhya Mohanty, cash given to M/s S.M Consultants, books of accounts of M/s S.M. Consultants under section 145(3) of I.T. Act. It is worthy to mention that the accounts are audited. Further these documents explained the source of cash balance of Rs. 3.11 crores. Under the circumstances ld. A.O. and ld. CIT(A), Bhuaneswar-2 are deemed to have accepted the views of the assessee that Rs. 3.11 crores belonged to Smt. Sandhya Mohanty. 12 Ground no. 11 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. CIT(A) erred on facts and in law in confirming the addition of unexplained cash without considering the consistent declaration of the appellant and Smt. Sandhya Mohanty that cash of Rs.3,11,00,000/- belonged to Smt. Sandhya Mohanty.

12.1.1 It is most respectfully submitted that affidavit of Sandhya Mohanty on cash deposit of Rs. 3,11,00,000/- from her funds along with petition for admission of additional evidence along with documents (at page 275 to 278 of paper book) per Rule 46A of Income Tax Act, 1961 have been submitted before ld. CIT(A). It was verified by ld. A.O. on remand report but gave a report (at page 268 to 271 of paper book) similar to the assessment order. Also, copy of letter of ld. CIT(A) is enclosed at page 267 of paper book. For whims and caprices of ld. A.O. and ld. CIT(A) the assessee should not suffer. It otherwise absolves the assessee from the ownership of this fund. Hence, Rs. 3,11,00,000/- does not belong to Shri Soumendra Kumar Mohanty. 12.1.2 Further, it is submitted herewith that ld. A.O. has admitted the statement recorded from Smt. Sandhya Mohanty that cash found from different lockers belonged to her and made addition of Rs.4,51,36,000/- as unexplained cash while framing the order under section 143(3) r.w.s 153B(1)(b) of I.T. Act, 1961 for the A.Y. 2017-18 (Copy of order passed by ld. A.O. is enclosed) in her name. Rs.4,51,36,000/- found on 20.10.2016. If tracked and correlated the cash balances with the sources from the beginning, and funds flow statements, statement of affairs it can be inferred that the cash balance of Rs. 3.11 crores found from locker of Smt. Sandhya Mohanty for A.Y. 2011-12 gets accumulated through funds flow statements to arrive ultimately at Rs.4.51crores on 20.10.2016. 13 Ground no. 12 of the appeal memo is as follows: For that on the facts and the circumstances of the case the addition as made by ld. AO and confirmed by ld. CIT(A) regarding Rs.22,00,000/- made as bogus payment to M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. [in short AECS Pvt. Ltd.] is arbitrary, unlawful and not justified. From the books of accounts, audited accounts (at page 194 to 202 of paper book) and return of income of M/s Architecture & Engineering Consultancy Services Pvt. Ltd. (in short “AECS”) (at page 192 to 193 of paper book) it is seen that all expenses are correctly booked in accounts. Also, the impact of these transactions has appeared in return of income and closing financial statements. It is pertinent to mention that, it is registered with Ministry of Corporate Affairs, Provident Fund Authorities, Excise Department and PAN has been obtained from Income Tax Authorities. Returns with all these Government authorities have been filed. Books of accounts have also been audited. Hence, ld. CIT(A) by confirming the addition made by ld. A.O. without considering the submissions and documents submitted by the assessee is unlawful and not justified. 14 Ground no. 13 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. AO has grossly erred on facts and in law in stating the wrong facts and disallowed the expenses of Rs.22,00,000/- and confirmed by ld. CIT(A) only on one hypothetical ground that the receiving company is not physically existing and without adjudicating the submissions /explanations of the appellant along with documents/ evidences regarding legal compliances & expenses. 14.1 Ld. CIT(A), Bhubaneswar-2 has given his views in the following manner: “6.5 During post-search investigation, an Inspector of Income Tax was deputed by the DDIT (Inv.), Unit 1(2), Bhubaneswar to conduct discreet enquiry in respect of M/s Architecture & Engineering Consultancy Services (P) Limited (AECSPL). The Inspector stated in the Inquiry Report that he conducted discreet enquiry on 12.12.2016, 20.12.2016 and 29.12.2016 at the premise of AECSPL at Plot No. 91, Bhoi Nagar, Bhubaneswar, the address of AECSPL as intimated by the appellant in his statement on oath recorded on 6.12.2016. The building was found to be under lock and key all the time. Only signboard in the name of M/s Architecture & Engineering Consultancy Services (P) Limited was found to be hanging on the premise. No work was found to be carried out there. The Inspector conducted another discreet enquiry at the registered address of the company at Plot No. 3443, Palasuni, Rasulgarh, Bhubaneswar. However, no such company was found to be existing in this premise. Instead, one +2 Science College in the name and style of Nano +2 Science College was running in this premise. He stated that he made extensive inquiry about the company M/s Architecture and Engineering Pvt. Ltd. from the local people but none of them were able to tell about the existence of such company at any point of time. The Inquiry Report is reproduced as under…..: 6.6 In the case of an assessee, only such expenses can be debited as are related to earning of income. The appellant has furnished some arguments in his submission, but he has provided no evidence which would establish the genuineness of the work done by the company. During appellate proceedings, he has furnished copy of telephone bill of AECSPL. However, a telephone bill merely provides evidence that a telephone is installed at a particular premise, that such a premise is possibly owned by or controlled by an assessee. It does not provide any evidence of any work being carried out at a particular premise or by a particular person. Therefore, the telephone bill fails to be a substantiating evidence for work being carried out by AECSPL. Since the company AECSPL has not performed any activity for the appellant, the expenditure incurred by the appellant in this regard cannot be allowed, and therefore, the Assessing Officer has rightly disallowed the expenses incurred of Rs. 22 lakh as bogus expenses.” 14.2.1 It is submitted before your honour that M/s Architecture & Engineering Consultancy Services Pvt. Ltd. is a genuine company having registered office at Plot no.- 91, Bhoi Nagar, Backside Sahid Nagar police station, Unit-9, Bhubaneswar, Khurda and executes works at Odisha, Andhra Pradesh, etc., for A.Y. 2011-12. It files returns with IT Department, ROC, Service Tax Department and PF Departments regularly without getting any adverse remark from the departments. The owners of the company are different from proprietor of M/s S.M. Consultant. It maintained books of accounts and claimed expenses as incurred to earn income. It is illogical and impractical to think that another independent concern bears the expenses of M/s Architecture & Engineering Consultancy Services Pvt. Ltd. when revenues of M/s Architecture & Engineering Consultancy Services Pvt. Ltd. are accepted by I.T. Department. Works assigned to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. by the assessee was relating to the Railways/RVNL, CPWD (work orders at page 226 to 228 of paper book) which have been executed by the company and bills have been raised by the assessee on the concerned departments. So, question of doubting genuineness of the company in this case does not arise. 14.2.2 The addition of Rs. 22,00,000/- has been made as bogus payments on the ground that the company is not genuine and physically does not exist. From the above explanations and submissions, it is clear that the assessee has submitted all the required documents which were genuine documents before ld. A.O. to prove the genuineness. But, ld. CIT(A), Bhubaneswar-2 did not consider the documents which are genuine to prove the genuineness of the company. The assessee herewith submits the documents like incorporation certificate (page 208 of paper book) of Architecture & Engineering Consultancy Services Pvt. Ltd., Income Tax Return (at page 192 of paper book), Service tax registration certificate (at page 212 to 213 of paper book), registration certificate from PF department (page 214 to 223 of paper book) to support the claim of the assessee. 15 Ground no. 14 of the appeal memo is as follows: For that on the facts and the circumstances of the case the ld. CIT(A) erred on facts and in law in confirming the addition of Rs.22,00,000/- as bogus payment when the payment has been made in banking channel and necessary tax has been deducted at source. The assessee has made the payment through banking channel. The transactions can be seen in 26AS also (enclosed at page 203 to 206 of paper book) of M/s S.M. Consultants for the orders assigned to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. (at page 227 of paper book). If there will be any case of bogus payment the assessee would not have paid the amount through banking channel instead he would do through cash payments. Since, M/s S.M. Consultants subcontracted works to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. and the company has done its work the assessee had to pay for the services provided by the company. It is the rule of business. Hence, no bogus payment has been made to Architecture & Engineering Consultancy Services Pvt. Ltd. The assessee has submitted work orders from S.M. Consultants to Architecture & Engineering Consultancy Services Pvt. Ltd. before ld. CIT(A), Bhubaneswar-2. But, he has not considered the work orders and confirmed the addition of Rs. 22,00,000/- which is uncalled for. 16 Ground no. 15 of the appeal memo is as follows: For that on the facts and circumstances of the case ld. CIT(A) erred on facts and in law in confirming addition of Rs.22,00,000/- as bogus liability under section 68 of income tax Act in A.Y.2011-12 in the absence of incriminating material unearthed during course of search and seizure. From the books of accounts, audited accounts and return of income of M/s Architecture & Engineering Consultancy Services Pvt. Ltd. it is seen that all expenses are correctly booked in accounts. Also, the impact of these transactions has appeared in return of income and closing audited financial statements for A.Y. 2011-12. The same has been found by the Investigation Wing. So, it is not a case of abatement of assessment. In this case assessment is not abated i.e., assessment is either completed or not pending to be completed or due date of assessment time has elapsed. There cannot be any addition to figures in original return unless incriminating materials are found in search operations. So, no new material has been collected by the Investigation Wing during search operations, hence no addition of Rs. 22,00,000/- can be made. This view has been based on the judicial rulings cited at para 5.1 of this paper book. 17 Ground no. 16 of the appeal memo is as follows: For that on the facts and circumstances of the case ld. CIT(A) erred on facts since this addition will raise substantially the income under this head resulting thereby the appellant has presumed to have incurred no/marginal expenses to execute this work which was sub- contracted to M/s AECS Pvt. Ltd. When S.M. Consultants has paid the amount to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. and it has booked it to expenses. If it will be deducted from expenses it leads the way to find a situation where no expenses are incurred by S.M. Consultants to earn the income which is absurd and impracticable. In this year the appellant has incurred expenses of Rs. 22,00,000/- (booked under the head Survey and mapmaking) which is paid to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. against revenue earned of Rs. 24,72,650/- (booked under the head Survey and mapmaking). When Rs. 22,00,000/- is deducted the expenditure becomes zero which is impracticable to earn income of Rs. 24,72,650/- in this business. Resultantly no expenditure is incurred to execute the assignment. So, the addition needs to be deleted. 17.1 View/Decision given by CIT(A), Bhubaneswar-2 in the order under section 250 of I.T Act regarding addition of Rs. 22,00,000/- as bogus payments made to Architecture & Engineering Consultancy Services Pvt. Ltd.:

“6.4 Sh. Ashok Kumar Rout, the Asst. Manager (Finance) of M/s S. M. Consultants, categorically stated that M/s Architecture & Engineering Consultancy Services (P) Limited did not perform any real business activity and letter heads were prepared in Hyderabad in its name for claiming certain expenditure towards consultancy fees. In other words, he stated that the expenditure towards consultancy fees paid to M/s Architecture & Engineering Consultancy Services (P) Limited (AECSPL) was bogus in nature. As per 26AS, the appellant had paid AECSPL Rs. 22,00,000 during the year. Therefore, as per the statement of Sh. Ashok Kumar Rout, this payment of Rs. 22,00,000 was bogus.” 17.2.1 M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. gets orders of its own. As stated by Mr. Rout letter heads are used for preparation of bills and it is usual process in a business concern. M/s. S.M. Consultant has never claimed for expenses against these assignments. M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. also gets orders of its own. As confirmed by Mr. Rout letter heads are used for preparation of bills and it is usual process in a business concern. So, it is not an adverse view. 17.2.2 The allegation is made that the company is formed to reduce the tax burden of M/s. S.M. Consultants by segregating some income & expenditure thereof. Such ploy has been adopted to inflate expenditure which has the impact of reduction of taxable income in the hands of M/s. S.M Consultants only. But, the alleged charge of reduction in taxable income in the hands of M/s. S.M Consultants is not possible. Then the expenses of M/s. S.M. Consultants were to be verified to get concrete result. Also, it pays tax at the same basic rate that of the company. So, shifting expenses from one assessee to another will have no tax implication. Secondly, regarding expenditure claimed by M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. it is submitted that the expenses are genuine and details of such expenses, vouchers and books of accounts have been produced before ld. A.O. for verification and payments are made in banking channel. Also, TDS provisions have been complied as per rule. Ledger copy of payments to Architecture & Engineering Consultancy Services Pvt. Ltd. through banking channel ledger A/c is enclosed herewith (at page 279 of paper book). Since payments made to M/s. Architecture & Engineering Consultancy Services Pvt. Ltd. are genuine and all the statutory requirements have been followed without causing any loss to revenue of the department, the addition of Rs. 22,00,000/- is not sustainable in the eyes of law. 18 Ground no. 17 of the appeal memo is as follows: For that on the facts and the circumstances of the case the addition of Rs.14,14,000/- as made by ld. AO and confirmed by ld. CIT(A) as unexplained payment is arbitrary, unlawful and unjustified.

From the books of accounts, audited accounts and return of income of Smt. Namita Mohanty and S.M. Consultants it is noticed that there are transactions between these parties with no closing balance. So, Investigation Wing has not found any transaction for A.Y. 2011-12. So, it is not a case of abatement of assessment. In this case assessment is not abated i.e., assessment is completed or not pending to be completed or due date of assessment time has elapsed. There cannot be any addition to figures in original return unless incriminating materials are found in search operations. So, no new material has been collected by the search and seizure department, hence no addition can be made for Rs. 14,14,000/-. This view has been supported by different judicial ruling as given in para 5.1 of this paper book. 19 Ground no. 18 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. CIT(A) erred on facts and in law in confirming the addition of Rs.14,14,000/- as ld. CIT(A) while passing the order for the same year in respect of Smt. Namita Mohanty has given a view that there is no basis to hold that the appellant had received Rs.14,14,000/- from SM Consultants. The Investigation Wing has not seized any document which can prove that Sri Soumendra Kumar Mohanty has paid any sum of Rs. 14,14,000/- to Smt. Namita Mohanty during assessment proceedings. On this matter ld. CIT(A) has also asked to ld. A.O. to submit the documents related to addition of Rs. 14,14,000/- and he failed to submit any document related to that. Since, no transaction between them has been done for that assessment year, there is no basis of confirming the addition only by relying on the statement recorded during search. Hence, addition of Rs. 14,14,00,000/- should be deleted. As explained earlier statements recorded have no evidential value unless they are corroborated with other materials. 20 Ground no. 19 of the appeal memo is as follows: For that on the facts and the circumstances of the case that no incriminating documents whatsoever has been found and seized by the search team during the search under section 132 of the I.T. Act, 1961 which is sine qua non for making the assessment / addition of unaccounted payment of Rs.14,14,000/- under section 153A. From the books of accounts, audited accounts and return of income of Smt. Namita Mohanty and S.M. Consultants it is noticed that there are no transactions between them. As explained in para 18 it is not case of abatement of assessment. There should not be any addition as no incriminating material is found. 20.1 Remark of CIT(A), Bhubaneswar-2 on the addition of Rs. 14,40,000 as unaccounted payments made to Smt. Namita Mohanty:

“8.7 An addition of Rs. 14,40,000 was made on the basis of payments made to Smt. Namita Mohanty as liasioning expenses. Search under section 132 was conducted in the case of Smt. Namita Mohanty. Her statement was recorded on oath under section 132(4) of the Act wherein she was confronted about the liasioning payment made to her. She denied having ever done any liasioning work for M/s SM Consultants, or having ever received any payments from M/s SM Consultants. This issue has been discussed in detail in para 7 above. Therefore, her statement during the course of search was able to establish the bogus nature of these payments, and thus, constituted incriminating material in terms of the Abhisar judgment (supra).” 20.2 It is most respectfully submitted that it is pertinent to mention that ld. A.O. has also assessed to tax for the same amount of Rs. 14,14,000/- in the hands of Smt. Namita Mohanty for the A.Y 2011-12. Ld. Commissioner of income tax (Appeals) vide order dated 20.06.2019 has even deleted the addition of Rs. 14,14,000/- made in the name of Smt. Namita Mohanty with the following remarks. “On the perusal of the above mentioned as found from correspondence between the Assessing Officer and ADIT, it is clear those pages 56 & 57 of SMCB- 35 do not pertain to the assessment year under consideration. It is also clear that neither the Assessing officer nor the ADIT has seized any material to hold that the payment of Rs. 14,14,000/- was made by S.M. Consultants to the appellant. In spite of specific request made by the appellant, no such seized material was handed over to her. Even in his statement, Shri Soumendra Kumar Mohanty did not admit that the alleged payment is disclosed income of the appellant. In written submission dated 07.12.2018 before ld. Assessing Officer has submitted that no such seized document of Rs. 14,14,000/- for A.Y. 2011-12 was found by either ADIT or by ld. ACIT.” The order of ld. Commissioner of income tax (Appeals) already proved that the Investigation Wing has not found any incriminating material relating to this year and no transaction between Smt. Namita Mohanty and Shri. Soumendra Kumar Mohanty has been made. Hence, making and confirming the same addition in the hands of the assessee is not on the right path of law since ld. Commissioner of income tax (Appeals) has himself passed the order and deleted the addition in the hands of Namita Mohanty. The order of Commissioner of income tax (Appeals) vide order dated 20.06.2019 is enclosed herewith (at page 236 to 247 of paper book). 21 Ground no. 20 of the appeal memo is as follows: For that on the facts and the circumstances of the case ld. AO has grossly erred on facts and in law in stating the wrong facts and disallowed the payment of Rs.14,14,000/- only on one hypothetical ground that the explanation and document was not satisfactory and without adjudicating the submissions/explanations of the appellant.

Ld. Assessing Officer has given following remarks on payment of Rs. 14,14,000/- to Smt. Namita Mohanty. “Assessee failed to substantiate his claim by any documentary evidence. The documentary evidence was also absent when the matter was confronted to the assessee during the statement made by the assessee on 06/12/2018 under section 131 of the Act. In absence of satisfactory explanation and documentation, statement of the assessee cannot be accepted. In such facts and circumstances Rs. 14,14,000/- is considered as unexplained payment in the hand of the assessee and added to the total income.” Since there are no transactions found in seized documents and books of accounts of M/s S.M Consultants there was nothing to explain. PRAYER With the above submissions and explanations, the appellant prays your honour to delete the additions of Rs. 9,35,24,524/- as bogus liability, Rs. 3,11,00,000/- as unexplained cash, Rs. 22,00,000/- as bogus payment made to M/s Architecture & Engineering Consultancy Services Pvt. Ltd. and Rs. 14,14,000/- as unexplained payment made to Smt. Namita Mohanty. And for which act of your kindness the appellant as in duty bound shall ever pray. For Appellant Sd/- Date: 07.07.2025 (K.C. JENA, FCA) Place: Bhubaneswar Authorized representative 3. It was the submission by the ld. AR that there was a search on the premises of the assessee on 20.10.2016. The assessment came to be completed u/s.153A r.w.s.143(3) of the Act. It was the submission that the approval of the JCIT which has been obtained by the AO is defective, insofar as the approval has been sent to the AO on 24.12.2018 and the same has been received back on 26.12.2018. It was the submission that 25.12.2018 was a holiday. The ld. AR placed before us the copy of the approval which is shown at page 95 of the paper book, which reads as under :-

23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking his approval or of the Additional CIT having granted such approval. Interestingly, the assessment orders were passed on 30th December 2010 without mentioning the above fact. These two orders were therefore not in compliance with the requirement spelt out in para 9 of the Manual of Official Procedure.

24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under Section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. 2004 (165) E.L.T. 257 (S.C.) the Supreme Court observed as under: "Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: 2002 (143) ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under Section 37B of the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars."

25. For all of the aforementioned reasons, the Court finds that the ITAT has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of Section 153D of the Act and that such approval is not meant to be given mechanically. The Court also concurs with the finding of the ITAT that in the present cases such approval was granted mechanically without application of mind by the Additional CIT resulting in vitiating the assessment orders themselves.

153-D. Prior approval necessary for assessment in cases or requisition.--No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of Section 153-A] or the assessment year referred to in clause (b) of sub-section (1) of Section 153-B, except with the prior approval of the Joint Commissioner : Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the [Principal Commissioner or Commissioner] under sub-section (12) of Section 144-BA.

11. A plain reading of the aforesaid provision evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for "each assessment year" referred to in clause (b) of sub-section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of PCIT v. Sapna Gupta [2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- "each assessment year" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under:- "13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply independent mind to the material on record for "each assessment year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power.

*** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A." [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately.

13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC OnLine Ori 992] to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under:- "22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having been perused by the Additional Commissioner of Income-tax. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the Assessing Officer should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." [Emphasis supplied] 14. During the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023.

15. A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind.

CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together."

13. This clearly shows that the ld. JCIT has found no suggestion to give the AO in regard to the assessment much less any discussion with the AO in regard to the draft assessment orders proposed. When this is considered in line with the decision of the Hon’ble Delhi High Court in the case of Shiv Kumar Nayyar (supra), which has been extracted above, it clearly shows that the ld. JCIT has given approval for multiple assessment years by a single approval letter. This is not permissible and consequently respectfully following the decision of the Hon’ble Delhi High Court in the case of Shiv Kumar Nayyar (supra), the approval granted by the ld. JCIT in the case of assessee u/s.153D is held to be invalid and the same stands quashed.

14. When the said approval is examined in the line of the decision of the Hon’ble Jurisdictional High Court in the case of Serajuddin & Co. (supra), it clearly shows that under similar circumstances, the Hon’ble Jurisdictional High Court has categorically held that the approval granted is invalid. In these circumstances, on the ground that there has been no application of mind by the ld. JCIT and the approval has been granted in a mechanical manner, respectfully following the decision of the Hon’ble Jurisdictional High Court in the case of M/s Serajuddin & Co. which has been affirmed by the Hon’ble Supreme Court by dismissing the SLP filed by the revenue, the approval granted by the ld. JCIT for the impugned assessment years in the case of the assessee stands quashed.

8. He also drew our attention to a similar approval granted in the other cases, which is as follows :-

9. It was submitted that there were total 16 cases in the case of assessee’s group itself and these two approvals are only for the assessment year 2016-2017. The approval in all the cases were sought vide letter dated 20.12.2020 and approval was granted on 21.12.2018. The assessment order clearly showed that the assessments have been done for the assessment years 2011-2012 to 2016-2017, being six years and consequently the total number of approvals granted within 24 hours by the JCIT in assessee’s own group itself comes to 84 approvals.

Sub: Approval u/s 153D-in the case of M/s Serajuddin & Co., 19A, British India Street, Kolkata-Matter regarding. Ref: Draft Orders u/s 153A/143(3)/144 for the A.Y. 2003- 04 to 2008-09 u/s.143(3)/153B (b)/144 of the A.Y.2009-10 in the case of above mentioned assessee. Please refer to the above The draft orders u/s 153A/143(3)/144 for the A.Y. 2003-04 to 2008-09 and u/s. 143(3)/153B(b)/144 for the A.Y. 2009-10 submitted by you in the above case for the following assessment years are hereby approved: Assessment Income Year Determined (Rs.) 2003-04 11,66,22,771 2004-05 36,46,80,016 2005-06 65,70,12,805 2006-07 60,02,65,791 2007-08 130,03,13,307 2008-09 274,68.87,069 2009-10 301,17,05,952 You are requested to serve these orders expeditiously on the assessee, submit a copy of final order to this office for record. Sd/- Addl. Commissioner of Income Tax, Range-1, Bhubaneswar 22. As rightly pointed out by learned counsel for the Assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like 'see' or 'approved' will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of Section 158BG of the Act, it would equally apply to Section 153D of the Act. There are three or four requirements that are mandated therein, (i) the AO should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind; (ii) the final approval must be in writing; (iii) The fact that approval has been obtained, should be mentioned in the body of the assessment order.

12. It was the submission that the decision of the Hon’ble Jurisdictional High Court has been approved by the Hon’ble Supreme Court as reported in [2024] 163 taxmann.com 118 (SC) by dismissing the SLP filed by the revenue. It was the submission that the approval granted in assessee’s case was similar to the approval granted in the case of Serajuddin & Co. and on this ground also the approval being vitiated consequently the assessment order is required to be annulled.

, other grounds taken on merits become academic and not adjudicated upon. Thus, the appeal of the assesee is allowed.

15. Since, we have already annulled the assessment framed by the AO in the case of Choudhury Swapan Kumar Mohapatra while dealing with the appeal in for A.Y.2016-2017, by holding the approval u/s.153D of the Act granted by the ld. JCIT as invalid, therefore, all the remaining eleven appeals filed by the eleven different assessees as mentioned in the cause title above, which also come under the invalid approval of the JCIT, are hereby allowed and the assessment framed in all the cases are hereby quashed.

16. This order of the Tribunal has not been challenged before the Hon’ble High Court also. In these circumstances, respectfully following the decision of the Hon’ble Delhi High Court, as referred to supra, the approval granted by the ld. JCIT in the case of the assessee for the impugned assessment years under consideration stands quashed on account of multiple approvals for multiple assessment years. Also respectfully following the decision of the Hon’ble Jurisdictional High Court in the case of M/s Serajuddin & Co., referred to supra, on account of non-application of mind and granting the approval in a mechanical manner, the approval granted by the ld. JCIT in the case of the assessee for the impugned assessment years under consideration stands quashed.

17. As we have quashed the approval granted by the ld. JCIT u/s.153D of the Act in the case of the assessee for the impugned assessment years under consideration, the consequential assessment years also stand quashed.

19. We have discussed the facts above in the case of assessee Soumendra Kumar Mohanty and search was also conducted in the case of assessee Modern Engineering & Management Foundation. The approval given by the ld. JCIT in this case also shows that non-application of mind. The said approval of the ld. JCIT in the case of Modern Engineering & Management Foundation reads as under :-