Sanjay Duggal Vs ACIT (ITAT Delhi)
ITAT observed that In some of the cases the approval was granted on the date the request was made for approval by the A.O. In all those cases merely draft assessment order and the assessment folders were available with the A.O. For example in the case of Shri Sanjay Duggal family, in the case of Ms. Kritika Talwar on the same date the approval was granted and that too merely on the basis of the assessment records and draft assessment order and in most of the cases approval has been granted either on the same day or on the next day. Further, there is no reference that seized material as well as appraisal report have been verified by the JCIT. It is not clarified whether assessment record is also seen by the JCIT. It may also be noted that even in some of the Talwar group of cases approval is granted prior to 30.12.2017 but in main cases of Shri Sanjay Duggal and Rajnish Talwar the approval is granted on 30.12.2017. Therefore, without granting approval in the main cases how the JCIT satisfied himself with the assessment orders in group cases which is also not explained. Therefore, the approval granted by the JCIT in all the cases are merely technical approval just to complete the formality and without application of mind as neither there was an examination of the seized documents and the relevance of various observations made by the Investigation Wing in appraisal report. Thus, we hold the approval under section 153D have been granted without application of mind and is invalid, bad in Law and is liable to be quashed. Since we have held that approval under section 153D is invalid and bad in law, therefore, A.O. cannot pass the assessment orders under section 153A of the I.T Act against all the assessees. Therefore, all assessment orders are vitiated for want of valid approval under section 153D of the I.T. Act and as such no addition could be made against all the assessees. In view of the above, we set aside the Orders of the authorities below and quash the assessment orders passed under section 153A of the I.T. Act as well as the impugned appellate Order.
FULL TEXT OF THE ITAT JUDGEMENT
All the appeals by different Assessees are directed against the common Order of the Ld. CIT(A)-23, New Delhi, Dated 30.12.2018, for the above assessment years.
2. We have heard the Learned Representatives of all the parties through videoconferencing and perused the material on record. All parties have also filed written submissions which are also taken into consideration.
3. This Order shall dispose of all the Group 52 Appeals pertaining to Talwar and Duggal Group of Cases in which identical issues have arisen.
4. Learned Counsel for the Assessee mainly argued in ITA.No.1813/Del./2019 in respect of Shri Sanjay Duggal as a lead case and references also made to all the remaining appeals as well.
5. Ld. CIT(A) recorded the facts of the case in detail under the Head “Background of the Case” in the impugned order which refers to the factual position in respect of all the above Assessees. The background of the facts are as under :
5.1. A search and seizure operation was conducted on 29.12.2015 against Shri Rajnish Talwar [who was Ex-General Manager (Sales) ] of M/s. Jagatjit Industries Ltd., [M/s. JIL]. Shri Sanjay Duggal [who was Ex.DGM (Sales) of JIL], their family Members and MAPSKO Group. The basic issue of search and seizure was deposit of huge money in the bank accounts of M/s. Alfa India which is proprietary concern of Shri Arun Duggal brother of Shri Sanjay Duggal and transfer of huge amounts from bank accounts of M/s. Alfa India to various bank accounts maintained by Shri Rajnish Talwar and his family Members and Shri Sanjay Duggal and his family Members.
5.2. These accounts were maintained in various branches of South India Bank. As per the submissions made by the Assessee before the Ld. CIT(A) in the case of Shri Sanjay Duggal for the A.Y. 2010-2011, bank accounts in the name of M/s. Alfa India proprietary concern of Shri Arun Duggal, real brother of Shri Sanjay Duggal were used as conduit just to route the unaccounted money generated through the game of “rebates and discounts”. The Assessees claimed that M/s. Alfa India was never a beneficiary, and all the funds in the accounts either transferred by Shri Sanjay Duggal’s Family or Shri Rajnish Talwar’s Family.
5.3. The Search and Seizure operation was conducted because the Income Tax Department came to know that Shri Rajnish Talwar was maintaining the Savings Bank Account No.358.53.3614 with South India Bank Ltd., Chittaranjan Park, New Delhi Branch on 01.10.2008. Similarly, Shri Sanjay Duggal was maintaining a S.B. Account No.555.53.204 with South India Bank Ltd., Faridabad Branch. On going through the transactions in the abovementioned Bank Accounts of Shri Rajnish Talwar and Shri Sanjay Duggal, it was noticed that large value fund transfers were coming in these bank accounts from a Current Account No.358.73.2431 which was in the name of M/s. Alfa India maintained with same bank [Chittaranjan Park, New Delhi Branch]. Credits in the bank account of M/s. Alfa India were received by way of proceeds of large value cheques tendered for collection in the account and this money was found transferred (from the bank account of M/s. Alfa India) to the bank accounts of Sh. Rajnish Talwar (and his family members) and Shri Sanjay Duggal (and his family members). Sh. Rajnish Talwar and Sh. Sanjay Duggal used to withdraw the funds from their (and family members) bank accounts, in cash, generally.
5.4. Further, it was found that the above mentioned process was followed in various other connected bank accounts as well. The bank accounts showing similar pattern of transaction as discussed above are detailed as below :
