Mysore Finlease Pvt Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that statutory approval given by a quasi judicial authority (here, JCIT) without due application of mind as contemplated in section 153D of the Income Tax Act would be fatal to the entire search assessment proceedings.
Facts-
A search and seizure operation u/s 132 of the Act was carried out on various group companies. According to the investigation wing, these groups were found to be interconnected with each other and with some group of entry operators providing accommodation entries to beneficiaries in the form of share capital, share premium, unsecured loans , purchase and sale bills etc. Various incriminating documents were found and seized during the course of search and seizure operation in the group cases. Accordingly, the case of the assessee was also centralized to ACIT , Central Circle 13, New Delhi vide order passed u/s 127 of the Act . Notice u/s 153A of the Act was issued to various assessees.
It is mainly contested that the statutory approval granted by the ld. JCIT u/s 153D of the Act enabling the ld. AO to complete the search assessment, was a mere mechanical approval without due application of mind on the part of the ld. JCIT.
Conclusion-
Hon’ble Jurisdictional High Court in the case of PCIT vs. Anju Bansal has held that statutory approval given by a quasi judicial authority without due application of mind as contemplated in section 153D of the Act would be fatal to the entire search assessment proceedings.
Held that the approval u/s 153D of the Act has been granted by the ld. JCIT in the instant case before us in a mechanical manner without due application of mind, thereby making the approval proceedings by a high ranking authority, an empty ritual.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The above 39 appeals filed by the respective assessees arise from common order passed by the Learned Commissioner of Income Tax (Appeals) -23, New Delhi [hereinafter referred to as the ld. CIT(A)] on 31.8.2019. One cross appeal has been filed by the revenue in the case of Brij Kishore in ITA No. 8788/Del/2019 for Asst Year 2010-11.
2. Issues involved are identical in nature in all the appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.
3. Each of the respective assessees had filed identical additional grounds also before us on 7.10.2021 stating that the search assessment was framed pursuant to the approval granted under section [u/s in short] 153D of the Income Tax Act, 1961 [hereinafter referred to as the „Act‟] by the Learned Joint Commissioner of Income Tax, Central Range-4 Delhi [hereinafter referred to as the „ JCIT‟] in a mechanical manner and accordingly, the entire search assessments deserve to be quashed.
4. We have heard the rival submissions and perused the materials available on At the outset, the additional grounds raised by the assessee go to the root of the matter and those being legal issues and facts relevant for their adjudication are already on record, we are inclined to admit those additional grounds and take up the same for adjudication first. A search and seizure operation u/s 132 of the Act was carried out on 23.7.2015 and on subsequent dates in different business and residential premises of Shri Deepak Agarwal and Shri Mukesh Kumar and other cases of Mukesh Kumar Group and Deepak Agarwal Group based at Delhi. According to the investigation wing, these groups were found to be interconnected with each other and with some group of entry operators providing accommodation entries to beneficiaries in the form of share capital, share premium, unsecured loans , purchase and sale bills etc. Various incriminating documents were found and seized during the course of search and seizure operation in the group cases. Accordingly, the case of the assessee was also centralized to ACIT , Central Circle 13, New Delhi vide order passed u/s 127 of the Act . Notice u/s 153A of the Act was issued to various assessees and the returns filed by the respective parties for various Asst Years are tabulated hereunder:-
