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Income Tax Appellate Tribunal, DELHI BENCHES : E : NEW DELHI
Before: SHRI M. BALAGANESH & SHRI ANUBHAV SHARMA
ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by the assessee against the orders dated 19.11.2019 and 31.10.2019 of the Commissioner of Income-tax (Appeals)-23, New Delhi (hereinafter referred to as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeals No.43/2019-20 & 44/2019-20 arising out of the appeals before it against the orders dated 26.12.2018 passed u/s 153C r.w.s. 153A and u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’),
ITAs No.239 & 240/Del/2020 respectively, by the DCIT, Central Circle-03, New Delhi (hereinafter referred to as the Ld. AO).
Both the appeals were heard together and we find that amongst other grounds on merits, and questioning the assumption of jurisdiction u/s 153C of the Act, which assessee alleged to be on a satisfaction note not having relevant material to show the extent of undisclosed income for relevant years we find there is an additional ground raised by the assessee on the basis that the approval granted u/s 153D of the Act lacks a valid approval.
The admitted facts are that a search and seizure operation was conducted in Shri Sudesh Kumar and Shri Arvind Manchanda, wherein allegedly documents pertaining to the assessee before us were found leading to initiation of assessment u/s 153C of the Act and passing the assessment order.
In the case of this assessee, we find that in assessment orders it is mentioned that prior approval u/s 153D of the Act was given by Joint CIT, Central Range-1, New Delhi, vide his letter No. Jt. CIT/CR-I/Approval u/s 153D/2018-19/1391 dated 26.12.2018. Thus, where the competent authority was required to give approval for each assessment year, the consolidated approval as granted is not as per law.
Though the ld. DR has tried to defend the approval on the basis that there is consequent interaction between the approving authority and the AO. 2
ITAs No.239 & 240/Del/2020 However, the arguments cannot be sustained in the light of the decision rendered by Hon’ble Orissa High Court in the case of ACIT vs. Serajuddin & Co. (2023) 150 taxmann.com 146 (Orissa) wherein SLP of the Revenue was dismissed and various decisions of the coordinate Benches including the decision in the case of Shri Gurvinder Singh Duggal vs. ACIT, to 863/Del/2021, order dated 06.06.2024, wherein the coordinate Bench, in which one of us (ld. AM) was on the Bench, has held that the approval given in a consolidated manner for various assessment years does not go along with mandate of law. In the said decision the judgement of the Hon’ble jurisdictional High Court in the case of PCIT vs. Anuj Bansal, order dated 13.07.2023 has been relied.
In the light of the aforesaid, we are of the considered view that the approval granted in the case of the present assessee cannot be considered valid and, thus, the assumption of jurisdiction for passing the assessment u/s 153C of the Act was vitiated. The respective additional grounds as raised are sustained.
As far as assessment year 2017-18 is concerned, we find that the satisfaction note in the case of searched person was recorded on 23.02.2018. Hence, obviously, this satisfaction note for the assessee herein being a third party u/s 153C of the Act could have been recorded only after 22.03.2018. Hence, based on this, the assessment for Assessment Year 2017-18 should have been framed only u/s 153C of the Act, whereas assessment has been framed u/s 3
ITAs No.239 & 240/Del/2020