CIT approval u/s 153D in bulk draft assessment orders on a single day held to be mechanical approval vitiating entire proceedings.
ABCAUS Case Law Citation
ABCAUS 3555 (2021) (10) ITAT
Important case law relied referred:
Shri Navin Jain vs. DCIT
In the instant case the assessee had taken an additional ground that the approval given by the JCIT u/s 153D of the Income Tax Act, 1961 (the Act) to the order passed u/s 153A was without application of mind and in a mechanical manner, without appreciating the facts and not following the provisions/mandate of the section, which makes the order passed u/s 153A non est, void ab initio bad in law.
A search & seizure operation u/s 132 was conducted on a business group of cases and assessee was required to file income tax return u/s 153A of the Act.
As per the provisions of the Act, the Assessing Officer, before passing assessment order framed u/s 153A, 153C and 143(3), is required to take the approval from Joint CIT u/s 153D of the Act if the Assessing Officer is below the rank of Jt. CIT.
The Jt. CIT is required to see all search material including incriminating material, seized documents, appraisal report, enquiries made by the investigation wing and various enquiries made by the Assessing Officer during the assessment proceedings and the replies submitted by the assessee and after due application of mind and after ascertaining that the Assessing Officer has appreciated the search material and other evidences in proper perspective has to give approval to the draft assessment order and only after that Assessing Officer can pass the assessment order.
Before the Tribunal, the case of the assessee was that the Assessing Officer passed the draft assessment orders on the same day when approval u/s 153D was granted and final assessment order was also passed by the Assessing Officer on the same day.
It was contended that as per this approval letter the Addl. CIT granted approval u/s 153D in bulk cases and it was humanly impossible to go through all draft assessment orders on a single day.
The assessee submitted that in another case, under similar facts and circumstances, the Tribunal had decided the issue in favour of the assessee and therefore, it was prayed that the additional ground of appeal may be allowed and assessment order be quashed.
The Tribunal noted that under similar facts and circumstances, the Tribunal on two occasions had held that granting of a mechanical approval u/s 153D of the Act vitiated the entire proceedings and the issue was decided in favour of the assessee.
Following the view taken by the ITAT, the additional ground of appeal was allowed in favour of the assessee and the assessment order was quashed.
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