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The Tribunal held that the CIT(A) erred in dismissing the appeal as time-barred. It noted that the period of limitation was affected by the Covid-19 pandemic, and the delay should be condoned based on the principle of sufficient cause as interpreted liberally by higher courts.
The Tribunal dismissed the appeal as withdrawn. It clarified that the appeal could be revived under Section 254(2) of the Income Tax Act if the assessee failed to avail the full benefit of the 'Vivad Se Vishwas Scheme' due to technicalities.
The Tribunal found that the assessee provided sufficient evidence to explain the source of the cash deposits as proceeds from the sale of agricultural land. The lands sold were not capital assets under Section 2(14) and thus the sale proceeds were not taxable. The CIT(A) had correctly appreciated the facts and allowed the appeal.
The Tribunal held that the CIT(A) had dismissed the appeal for want of prosecution without adjudicating the appeal on merits and without following the procedure laid down in Section 250(6) of the Income Tax Act.
The Tribunal held that, as per the Insolvency and Bankruptcy Code and Supreme Court decisions, a moratorium prevents suits against the corporate debtor. Once a resolution plan is approved, all claims are frozen and binding, and unincluded claims are extinguished.
The Tribunal found that the assessee had sufficiently explained the source of Rs. 30,00,000/- and Rs. 8,00,000/- with evidence, deleting the addition of Rs. 38,00,000/-. However, for the remaining addition of Rs. 25,00,000/-, it was remanded back to the AO for fresh adjudication.
The Tribunal held that the assessee's business modus operandi was consistent with previous years, and the cash sales were supported by detailed documentation, including sale invoices and supplier accounts. The Tribunal found no justification for the addition made by the AO and sustained by the CIT(A).
The Tribunal held that an addition under Section 153A requires incriminating material found during the assessee's search. The document was not found from the assessee's premises, and its authenticity and relevance to the assessee were not proven. The AO failed to follow the procedure under Section 153C.
The Tribunal allowed the withdrawal of the appeal as the Assessing Officer did not object. The appeal was dismissed as withdrawn.
The Tribunal held that capital gain tax is not leviable in AY 2007-08 because the sale consideration was not fully received, and the Sale Deed itself stipulated cancellation in case of cheque bounces. The Tribunal relied on previous judgments where similar delayed receipt of sale consideration led to deferral of capital gains tax.
The Tribunal considered the assessee's prayer for withdrawal and dismissed the appeal as withdrawn. It was noted that the settlement under the 'Vivad Se Vishwas Scheme' rendered the appeal infructuous.
The tribunal accepted the assessee's prayer, supported by the Senior Departmental Representative's no-objection, and dismissed the appeal as withdrawn. The tribunal granted the assessee liberty to seek revival of the appeal should the resolution under the Vivad Se Vishwas Scheme fail.
The Tribunal accepted the assessee's prayer for withdrawal, dismissing the appeal as withdrawn. Liberty was granted to seek revival if the settlement failed.
The Tribunal held that the assessee's submissions were not considered by the Assessing Officer or the CIT(A). In the interest of natural justice, the matter was remanded back to the Assessing Officer to pass a fresh order after providing adequate opportunity of hearing.
The Tribunal held that the agricultural land sold was not a capital asset as per Section 2(14)(iii) of the Income Tax Act, 1961, as the relevant municipality was not specified in the notification. Therefore, the capital gains arising from its sale were exempt from tax.
The Tribunal held that the approval granted by the Additional Commissioner under Section 153D of the Act was a mere formality and lacked due application of mind. The approval memo did not reflect any process of deriving satisfaction by the approving authority. The Tribunal noted that the approval was granted on the same day the assessment order was placed, indicating a routine exercise. Citing precedents like Shrelekha Damani vs. DCIT and Sanjay Duggal & ors., the Tribunal concluded that such perfunctory approval has no legal sanctity. Consequently, the assessment orders, which lacked legitimacy due to this flawed approval process, were quashed. The Tribunal found considerable force in the assessee's plea that the approval under Section 153D was devoid of any application of mind, rendering it illegitimate. The assessments related to the search in the captioned appeals were therefore deemed a nullity and quashed.
The Tribunal noted that all appeals were filed against orders passed under Section 153A of the Act, following a search action on November 15, 2017. The Tribunal observed that the grounds raised in all appeals were identical and common. The judgment then proceeds to discuss specific issues. For instance, concerning the deemed dividend under Section 2(22)(e), the Tribunal found that the CIT(A) had correctly applied the provisions. Regarding the validity of Section 127 transfer orders, the Tribunal held that the same were not bad in law. The Tribunal also addressed the approval under Section 153D, finding it to be in order. The Tribunal further dealt with additions related to construction payments and valuation differences, remanding certain issues back to the Assessing Officer for fresh adjudication based on specific findings. The issue of unexplained investment in jewellery was also considered. The Tribunal did not expressly leave any issue undecided, but rather provided directions for further action or upheld the lower authorities' findings.
The Tribunal held that the approval granted under Section 153D was invalid. The reasoning was that the approving authority did not have enough time to analyze the issues arising from the draft order, indicating a lack of consideration of relevant issues. The Tribunal cited the Mumbai Tribunal's decision in Arch Pharmalabs Ltd., emphasizing that the approval under Section 153D is a mandatory requirement and not a mere formality. The approving authority must objectively evaluate the draft assessment order with due application of mind. In this case, the approval was granted without reference to assessment records or seized material, appearing generic, listless, and accorded in a blanket manner without reference to any specific issue for any assessment year. The approval was granted in a consolidated manner for multiple assessment years, suggesting a lack of application of mind and an illusory exercise to meet the legal requirement. The Tribunal noted that the validity of the approval goes to the root of the matter and could be raised at any time. The judgment also referred to the case of Scott Edil Advance Research Laboratories & Education Limited, where the Tribunal found the approval under Section 153D to be invalid as the Additional CIT recorded that he did not have enough time to analyze the issues. The Tribunal concluded that the approval was granted without consideration of relevant issues, making it invalid in the eye of the law. The operative direction for this specific issue is that the approval was invalid, implying that the consequent assessment orders are vitiated.
The Tribunal held that the approval granted under Section 153D of the Income Tax Act, 1961, was invalid. The approving authority, the Additional CIT, did not apply its mind to the assessment records or seized material before granting approval. The approval was found to be generic, listless, and granted in a blanket manner for all assessment years without specific consideration of issues. The absence of draft assessment orders on record and the perfunctory nature of the approval memo, which merely stated approval on the basis of draft orders without any discussion of seized materials or inquiries, led the Tribunal to conclude that the approval was an empty formality and not in compliance with the spirit and letter of the law. The Tribunal noted that the purpose of Section 153D is to ensure that a superior authority applies its mind to the materials forming the basis of assessment, which was clearly lacking. Consequently, the assessments requiring such approval were vitiated. The Tribunal did not explicitly decide on all other grounds raised, as the invalidity of the Section 153D approval rendered the assessments based on it unsustainable. The operative direction was to set aside the orders requiring such approval.
The Tribunal noted that all appeals were filed against orders passed under Section 153A pursuant to a search action. The Tribunal observed that the grounds raised by the assessees, including the challenge to the transfer order under Section 127 and the approval under Section 153D, were common across many appeals. The Tribunal specifically addressed the issue of deemed dividend under Section 2(22)(e), noting that the Ld. CIT(A) had deleted the additions in some cases, while in others, the issue was still pending. The Tribunal also considered additions related to construction of properties and unexplained investments. Crucially, the Tribunal found that the Ld. CIT(A) had deleted the additions made by the Assessing Officer in respect of deemed dividend under Section 2(22)(e) for the assessment years 2017-18 and 2018-19 in the case of Sanjeev Aggarwal and Vaishali Aggarwal, respectively. The Tribunal also noted that the Ld. CIT(A) had deleted additions made on account of payments by SEPL for construction of properties at Sector-9 and Sector-21, Chandigarh, for the assessment year 2018-19 in the case of Vaishali Aggarwal. The Tribunal further observed that the Ld. CIT(A) had deleted the addition on account of unexplained investment in jewellery for the assessment year 2018-19 in the case of Vaishali Aggarwal. The Tribunal upheld the deletion of these additions by the Ld. CIT(A). However, the Tribunal found that the Ld. CIT(A) had erred in deleting the addition made by the Assessing Officer on account of deemed dividend under Section 2(22)(e) for the assessment year 2017-18 in the case of Sanjeev Aggarwal, and consequently, restored this issue to the file of the Assessing Officer for fresh adjudication. The Tribunal also restored the issue of commission on sales and purchase transactions to the file of the Assessing Officer for fresh adjudication. The Tribunal also noted that the issue regarding approval under Section 153D was decided in favour of the assessee by the Ld. CIT(A) and upheld by the Tribunal. The Tribunal also found that the transfer order under Section 127 was upheld by the Ld. CIT(A) and upheld by the Tribunal. The Tribunal left undecided the issue of addition under Section 69C r.w.s. 115BBE on account of difference in valuation of H.NO 3100, Sector-21, Chandigarh, as it was not decided by the Ld. CIT(A).
The Tribunal held that the approval under Section 153D was not merely administrative and required proper application of mind. It noted that in the group search cases, over 50 assessment orders were passed, and the draft assessment orders were forwarded by the AO on December 29, 2019, with approval granted on December 30, 2019. The Tribunal found that the approval note did not indicate that the seized record was sent to the Additional CIT, and the limited time taken (less than 5 working hours for multiple approvals) suggested a mechanical process. Citing various judicial precedents, the Tribunal concluded that if the approval is demonstrated to be mechanical, without application of mind, and ritualistic, the approval under Section 153D and the consequential assessment order are liable to be quashed. The Tribunal found merit in the assessee's contention regarding the invalidity of the Section 153D approval and, consequently, the assessment orders. The operative direction was to quash the assessment orders based on this finding.
The Tribunal held that the approval granted by the Additional CIT under Section 153D was invalid. The approving authority failed to demonstrate application of mind by not considering the assessment records or seized material. The approval was generic, listless, and granted in a blanket manner without reference to specific issues or assessment years, appearing to be an empty formality. The Tribunal noted that draft assessment orders were not available on record, and the approval memo did not reflect any objective consideration of the material. The Tribunal also observed that the approval was granted on December 31, 2010, for assessments related to searches conducted in 2017, which appeared anomalous. The Tribunal found that the approval process did not meet the statutory requirement of prior approval with due application of mind as mandated by CBDT Circular No. 3 of 2008. Consequently, the assessments made under Section 153A, which required such valid approval, were vitiated. The Tribunal did not explicitly decide on the other grounds related to deemed dividends, construction payments, Section 69C additions, jewellery, or the Section 127 transfer order, as the primary issue of invalid approval under Section 153D rendered the entire assessment proceedings void. The operative direction was to quash the assessment orders due to the invalid approval.
The Tribunal held that the Assessing Officer (AO) was justified in bringing transactions under the ambit of Section 2(22)(e) as the conditions of beneficial shareholding, companies not being substantially interested in by the public, and accumulated profits were fulfilled. The Tribunal found that the ledger accounts in SEPL/SEARLE demonstrated routine, regular transactions in the nature of loans, not ordinary business expediency, and thus not covered by exceptions. However, the Tribunal agreed with the assessee's argument that deemed dividends should be computed on the basis of peak credit for each assessment year, considering payments made by the assessee to SEPL/SEARLE on earlier occasions. Reliance was placed on ITO vs. Sandeep Sabarwal. The Tribunal did not explicitly decide on all grounds raised across the various appeals, particularly those relating to Section 127, Section 153D, construction payments, Section 69C, jewellery, and the absence of incriminating material, as the provided text focuses primarily on the deemed dividend issue. The operative direction regarding deemed dividend was to recompute it on a peak credit basis for each assessment year.
The Tribunal held that the approval granted under Section 153D of the Income Tax Act, 1961, by the Additional Commissioner of Income-tax was invalid. The Tribunal relied on the decision of the Bombay High Court in *Shreelekha Damani* and the Mumbai Tribunal's ruling in *Arch Pharmalabs Ltd.*, which emphasized that the approving authority must objectively evaluate the draft assessment order with due application of mind. In this case, the approval was granted on the same day the draft order was submitted, with the approving authority noting a lack of time to analyze the issues on merit. This was considered a mechanical exercise, rendering the approval invalid and the subsequent assessment orders vitiated in law. The Tribunal found that the Additional CIT had not independently applied his mind to the draft assessment order, which is a mandatory requirement for approvals under Section 153D, especially for assessments conducted under Section 153A following a search. Consequently, the assessment orders passed based on this invalid approval were deemed a nullity. The Tribunal did not decide on other issues like deemed dividend, transfer order validity, additions under Section 69C, unexplained jewellery, or commission on off-book transactions, as the primary issue of the invalid approval went to the root of the matter and vitiated the entire assessment proceedings.
The Tribunal held that the approval granted by the Additional CIT under Section 153D of the Income Tax Act, 1961, was invalid. The Tribunal observed that the approval memo was generic and listless, lacking any reference to specific issues for any of the assessment years. It was granted in a blanket manner without any application of mind, and the draft assessment orders were not demonstrably scrutinized. The Tribunal noted that the approval was given on a 'dotted line' without reasonable time, suggesting a mechanical and formal exercise. The CBDT Circular No. 3 of 2008 mandates that superior authorities must apply their mind to the materials and circumstances before granting approval. The Tribunal found that the Additional CIT had abdicated their statutory duty by routinely approving the orders based solely on the draft assessment orders, without independently examining the seized materials or the merits of the proposed adjustments. Consequently, the assessment framed under Section 153A of the Act was quashed on this jurisdictional ground alone. As the assessment was quashed on a jurisdictional issue, the Tribunal did not adjudicate the grounds raised on merits by the assessees.
The Tribunal held that the approval granted under Section 153D of the Act was invalid. The reasoning was that the approving authority, the Additional CIT, had granted approval in a mechanical and generic manner without applying its mind to the seized material or the assessment records. The approval memo lacked any reference to the issues involved or the basis for satisfaction, indicating a non-application of mind and a mere formality to meet the statutory requirement. The Tribunal noted that the draft assessment orders were not placed on record, and the approval was given on a "dotted line" without adequate time or consideration. This failure to comply with the spirit and letter of Section 153D, which requires prior approval of a superior authority to ensure due application of mind on seized materials, rendered the assessments void. The Tribunal also noted that the transfer order under Section 127 and other additions were subject to further examination or were part of the overall invalidity stemming from the Section 153D issue. The Tribunal did not decide on all grounds explicitly but focused on the fundamental flaw in the approval process. The operative direction was to quash the assessments based on the invalid approval.
The Tribunal held that the addition made under Section 69A concerning jewellery was unsustainable and ordered its deletion. The Tribunal agreed with the assessee's submission that CBDT guidelines are not rigid yardsticks and are applicable to persons of average income and status. Considering the past average income, rank, and status of the assessees, the value of the jewellery was deemed not to be on the higher side and therefore not acquired from undisclosed sources. The Tribunal found the cited case laws squarely applicable, emphasizing that the family's status, customs, and practices should be considered when determining the reasonable value of jewellery. The judgment also lists numerous appeals concerning the issue of approval under Section 153D, but the specific findings and reasoning for this issue are not detailed in the provided excerpt. Similarly, the outcome for issues related to deemed dividend, property construction payments, and Section 69C additions are not elaborated in the provided text.
The Tribunal addressed multiple grounds across various appeals. On the issue of deemed dividend under Section 2(22)(e), the Tribunal noted that the assessee's contention was that credits exceeding remuneration/payments received from SEPL should not be treated as deemed dividend. The judgment does not explicitly state the Tribunal's finding on this specific issue or the reasoning behind it, nor does it mention any specific authorities or precedents relied upon for this point. Similarly, for the validity of the transfer order under Section 127, the assessee argued it was bad in law. The judgment does not record the Tribunal's decision or reasoning on this ground. The issue of whether orders deserved to be quashed in the absence of incriminating material was also raised by the assessee, but the outcome is not detailed. The Tribunal also considered additions related to construction payments and valuation differences, but the specific findings and reasoning are not provided in the excerpt. The approval under Section 153D and the opportunity of being heard were also grounds raised, with no explicit findings recorded. Therefore, the specific holdings and ratio decidendi for most issues are not discernible from the provided text.
The Tribunal held that the approval under Section 153D of the Income Tax Act, 1961, is not a mere administrative action but requires due application of mind. The Tribunal noted that in the case of *Inder International*, the draft assessment order was prepared on June 28 or 29, 2017, and sent to the Additional Commissioner on June 29, 2017, who accorded approval on the same day. This indicated a mechanical approval without proper application of mind, especially given the number of assessment orders passed. The Tribunal found that the approval was granted within a very short span of time, suggesting a lack of detailed examination. Therefore, the Tribunal held that such approval is not valid and the consequential assessment orders deserve to be quashed. The Tribunal did not decide on all the issues raised in the grounds of appeal, as the quashing of assessment orders due to invalid approval under Section 153D would render other issues moot. The operative direction was to quash the assessment orders where the approval under Section 153D was found to be invalid.
The Tribunal held that the assessment orders passed under Section 153A were unsustainable and quashed them on the ground that the approval granted by the Addl. CIT under Section 153D was without application of mind. The Tribunal noted that the Addl. CIT approved the assessment order on the same date it was placed before him, with a perfunctory statement: "Necessary statutory approval u/s 153D is given to pass the above assessment order as such. Assessment record in this case is returned herewith." This indicated a routine and mechanical exercise, failing to demonstrate due application of mind or consideration of seized material. The Tribunal relied on precedents like Shreelekha Damani vs. DCIT and Sanjay Duggal & ors, which held that such hollow approvals lack legal sanctity. Consequently, the assessment orders were deemed non est and a nullity. As the assessments were quashed on this jurisdictional issue, the Tribunal deemed it unnecessary to adjudicate the grounds raised on merits. The appeals of the assessees were allowed, and the appeals of the Revenue were dismissed.
The Tribunal held that the approval granted by the Additional CIT under Section 153D was invalid. Citing the Bombay High Court's decision in Shreelekha Damani and the Mumbai Tribunal's decision in Arch Pharmalabs Ltd., the Tribunal found that the approval was granted without sufficient time for analysis and was a mechanical exercise without independent application of mind. The Tribunal reasoned that the Additional CIT's recorded statement about not having enough time to analyze the draft order on merit clearly indicated a lack of consideration of the relevant issues. Consequently, the approval was considered invalid in the eyes of the law, and the assessment orders passed in consequence were vitiated. The Tribunal noted that the validity of the approval goes to the root of the matter. The judgment also mentions that the transfer order under Section 127 and issues related to deemed dividend under Section 2(22)(e) were raised, but the specific findings and reasoning for these issues are not fully detailed in the provided excerpt. The Tribunal expressly left undecided the specific findings on deemed dividend and transfer orders, focusing primarily on the invalidity of the Section 153D approval.
The Tribunal addressed the issue of deemed dividend under Section 2(22)(e) by noting that the provision applies to payments made by a company to a shareholder by way of advance or loan, where the shareholder is beneficially entitled to 10% or more of the voting power, and the company has accumulated profits. The Tribunal found that the payments made by SEPL for construction of properties were not in the nature of loans or advances to the assessees in their capacity as shareholders, but rather payments for construction of properties where the assessees had a beneficial interest. Therefore, the Tribunal held that these payments did not constitute deemed dividends under Section 2(22)(e). Regarding the payments made by SEPL for construction of properties, the Tribunal held that since these were payments made by SEPL for construction of properties in which the assessees had a beneficial interest, these amounts were to be considered as income in the hands of the assessees. The Tribunal also dealt with the issue of approval under Section 153D, noting that such approval is mandatory for making any assessment order in a search case. The Tribunal found that in certain cases, the approval was not obtained or was obtained from an incompetent authority, rendering the assessment order bad in law. The Tribunal also addressed the challenge to the Section 127 transfer order, finding it to be bad in law as it was passed without following the prescribed procedure. The Tribunal did not find any specific finding on the addition of unexplained jewellery or the quashing of orders in the absence of incriminating material in the provided text, and these points were not expressly decided.
The Tribunal held that the approval granted by the Additional CIT under Section 153D of the Income Tax Act, 1961, was invalid. The Tribunal observed that the approval memo did not indicate any application of mind by the approving authority. It merely stated that approval was granted to complete assessments under Section 143(3) read with Section 153A based on the draft assessment orders. The Tribunal found that the ACIT had routinely given approval based on the contents of the draft assessment order without examining the seized materials or conducting independent inquiries. The approving authority was found to have abdicated its statutory functions by relying on an implied undertaking from the AO. This approach rendered the approval a mere formality and not a valid approval in law. Consequently, the Tribunal quashed the assessments framed under Section 153A of the Act on this jurisdictional ground alone. As a result, the Tribunal stated that it was not necessary to adjudicate the grounds raised on merits by the assessees. All appeals filed by the assessees were treated as allowed, and all appeals filed by the revenue were treated as dismissed. The findings on factual aspects were rendered academic.
The Tribunal considered the rival contentions and noted that approximately 50 assessment orders were passed under Section 153A, requiring approval under Section 153D. It was a matter of record that the AO forwarded draft assessment orders on December 29, 2019, and approval was accorded on December 30, 2019. The Tribunal observed that the approval note for AY 2014-15 simply stated, "the approval u/s 153D of the Act, 1961, is accorded for the AY 2014-15." The assessee argued that this approval was mechanical and lacked application of mind, citing the limited time and absence of seized records. The Tribunal acknowledged the reliance placed by the assessee on various High Court and ITAT judgments where mechanical approvals under Section 153D led to the quashing of assessment orders. The Tribunal's reasoning suggests a strong inclination to follow these precedents if the facts demonstrate a lack of due application of mind. The operative direction would depend on the final finding regarding the validity of the approval, which is the core of the dispute.
The Tribunal held that the CIT(E) failed to follow the procedure laid down in Section 12AB(3) and did not provide sufficient opportunity to the assessee. The matter was remanded back to the CIT(E) for a fresh order.
The Tribunal held that the transactions between the assessee group company SEPL were in the nature of a current and running account, with mutual giving and taking of loans as per business needs. Relying on case law, it was held that such transactions for business purposes do not fall within the definition of deemed dividend under Section 2(22)(e).
The Tribunal held that the approval granted under Section 153D was invalid. The reasoning was that the approving authority recorded that the draft order was submitted late, leaving insufficient time to analyze the issues on merit. This indicated a mechanical exercise without independent application of mind. The Tribunal cited the Mumbai Tribunal's decision in Arch Pharmalabs Ltd., which emphasized that Section 153D bestows a supervisory jurisdiction requiring objective evaluation of the draft assessment order with due application of mind, not merely a formality. The Tribunal found that the approving authority did not examine the assessment records or seized material, rendering the approval a mere symbolic exercise. Consequently, the assessment orders passed in consequence of such non-est approval were vitiated in law and could not be cured. The Tribunal did not decide on other grounds raised, such as deemed dividends, construction payments, unexplained investments, transfer orders, or the opportunity of being heard, as the invalidity of the Section 153D approval rendered the entire assessment proceedings void ab initio. The operative direction was to quash the assessment orders.
The Tribunal held that the additions made by the AO on account of purchases were not sustainable. The assessee had provided complete details, including purchase invoices, stock register entries, transport documents, and bank payment proofs, which were properly accounted for and matched with sales. The purchases were subject to TDS and GST. The Tribunal found that merely because a small number of suppliers did not respond to notices under Section 133(6) was not sufficient to deem purchases from them as bogus, especially when the AO could not point out any defect in the details furnished by the affirmed suppliers. The Tribunal noted the huge turnover and extensive import/export business of the assessee, and that the suppliers were not listed as suspicious. No evidence of unrecorded purchases or cash payments was found during the search. Therefore, additions based on mere suspicion without corroborative material were deleted. Regarding the extended period of limitation for assessment under Section 153A, the Tribunal referred to its earlier finding that assessments were completed and not abated, rendering the issue academic in light of the Supreme Court's decision in Abhisar Buildwell Pvt. Ltd. The Tribunal did not adjudicate this issue at this stage. The judgment does not explicitly record findings on all other issues raised, such as deemed dividend, transfer orders, payments for construction, unexplained investment, approval under Section 153D, and opportunity of being heard, as the provided text focuses on the purchase additions and the limitation period. The operative direction for the purchase issue was deletion of additions.
The Tribunal held that transactions in a current account, reflecting ongoing business needs and mutual obligations, do not fall within the definition of 'deemed dividend' under Section 2(22)(e). The court cited case law where commercial transactions creating mutual benefits are excluded from this provision.
The Tribunal held that transactions conducted through a current account for business purposes, reflecting ongoing business transactions and mutual obligations, do not fall within the definition of 'deemed dividend' under Section 2(22)(e). The Tribunal also noted that the value of personal guarantees and properties provided by the assessee exceeded the amounts received, further supporting this view.
The Tribunal held that the approval granted under Section 153D of the Act was invalid. Citing the Bombay High Court's decision in Shreelekha Damani, the Tribunal found that the Additional CIT's approval was a mechanical exercise without independent application of mind, as indicated by the remark that there was not enough time to analyze the issues. This invalidity goes to the root of the assessment. Consequently, the assessment orders passed pursuant to this invalid approval were quashed. The Tribunal did not decide on the other grounds raised by the parties, as the primary issue of the invalid approval rendered further adjudication unnecessary. The operative direction was to quash the assessment orders.
The Tribunal held that additions made on the basis of the District Valuation Officer's (DVO) report are not sustainable in the absence of any incriminating material found during the search operations. Citing *Commissioner Of Income Tax Versus Abhinav Kumar Mittal* and other precedents, the Tribunal emphasized that the primary burden of proof lies with the Revenue to demonstrate understatement or concealment of income. If no such burden is discharged, reliance on the DVO's valuation is impermissible. The Tribunal found that the DVO's valuation was based on incomparable sales, which is not permissible in law. Consequently, the additions made under Section 69C read with Section 115BBE, and additions based on the DVO's report, were deleted. Similarly, additions on account of unexplained investment in jewellery and deemed dividend under Section 2(22)(e) were also addressed. The Tribunal upheld the CIT(A)'s deletion of additions made without incriminating material. The issue regarding the validity of transfer orders under Section 127 and approval under Section 153D was also considered, with the Tribunal likely following established legal principles. The judgment did not expressly leave any issue undecided, but the specific findings on deemed dividend and Section 153D approval are not fully detailed in the provided excerpt.
The Tribunal addressed multiple grounds raised by the assessees and the revenue. Regarding the deemed dividend under Section 2(22)(e), the Tribunal noted that the issue was common to many appeals and involved credits exceeding remuneration/payments. The judgment indicates that this issue, along with others such as the validity of transfer orders under Section 127 and the requirement for approval under Section 153D, were central to the appeals. The Tribunal also considered grounds related to payments made for property construction and unexplained investments. The operative part of the judgment is not fully detailed in the provided text, but it implies a consolidated decision on these common issues. The principle likely to be cited from this judgment would relate to the interpretation and application of Section 2(22)(e), Section 127, and Section 153D in the context of assessments conducted under Section 153A following a search.
The Tribunal decided the issues by first addressing the validity of the assessment proceedings initiated under Section 153A. It noted that the search action on November 15, 2017, was the basis for these assessments. Regarding the deemed dividend under Section 2(22)(e), the Tribunal examined the nature of credits and payments. For issues related to payments made by SEPL for construction and additions under Section 69C, the Tribunal analyzed the evidence presented. The validity of the Section 127 transfer orders and the Section 153D approvals were also scrutinized. The Tribunal's findings on each specific ground varied, leading to a mixed outcome for the appeals. The operative directions included upholding certain additions, deleting others, and potentially remanding some matters for further examination based on the specific facts and arguments presented for each assessee and assessment year.
The Tribunal held that the CIT(E) failed to follow the procedure laid down in Section 12AB(3) and did not provide sufficient opportunity to the assessee. The matter was remanded back to the CIT(E) for a fresh order.
The Tribunal held that the assessment orders passed under Section 153A were unsustainable and quashed them on the ground that the approval granted by the Addl. CIT under Section 153D was without application of mind. The Tribunal noted that the Addl. CIT approved the assessment order on the same date it was placed before him, with a perfunctory statement: "Necessary statutory approval u/s 153D is given to pass the above assessment order as such. Assessment record in this case is returned herewith." This indicated a routine and mechanical exercise, failing to demonstrate due application of mind or consideration of seized material. The Tribunal relied on precedents like Shreelekha Damani vs. DCIT and Sanjay Duggal & ors, which held that such hollow approvals lack legal sanctity. Consequently, the assessment orders were deemed non est and a nullity. As the assessments were quashed on this jurisdictional issue, the Tribunal deemed it unnecessary to adjudicate the grounds raised on merits. The appeals of the assessees were allowed, and the appeals of the Revenue were dismissed.
The Tribunal held that the deletion of additions on account of deemed dividend under Section 2(22)(e) by the CIT(A) was justified, as the conditions for deeming dividend were not met. The Tribunal found that the payments made by SEPL for construction of properties were not in the nature of loans or advances to shareholders, but rather for business purposes or as part of group transactions. Regarding the transfer orders under Section 127, the Tribunal found them to be without sanction of law and therefore bad in law, quashing the assessments based on these orders. The issue of quashing orders in the absence of incriminating material was also decided in favour of the assessees, as no specific incriminating material was brought on record to justify the additions. The Tribunal also found that the approval under Section 153D was not validly obtained in some cases. The issue of reasonable opportunity of being heard was also considered. The Tribunal allowed the appeals on these grounds, setting aside the CIT(A)'s orders where they upheld additions and remanding certain issues for fresh consideration.