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2019 (12) TMI 1446 - AT - Income TaxValidity of assessment u/s 153A - Non taking the approval of the competent authority u/s 153D - HELD THAT - The supervisory power mandated under s.153D of the Act in case of search assessment could not be bypassed. The co-ordinate bench in D. S. India Jewelmart P Ltd. 2019 (9) TMI 866 - ITAT AGRA taken note of various judicial decisions and arrived at conclusion that lack of approval under s.153D of the Act could invalidate the assessment order. The non-compliance of Section 153D of the Act is a substantive defect and thus not curable. Such absence of approval has rendered the assessment order passed under s.153A of the Act as bad in law at the threshold. Action of the CIT(A) is reversed and the main ground of the assessee is allowed. Levy of interest under s.234A and 234B with reference to assessed income instead of returned income - HELD THAT - As relying on M/s. Anand Vihar Construction Pvt. Ltd 2018 (11) TMI 1738 - ITAT RANCHI Interest under s.234A 234B of the Act is chargeable with reference to returned income only, we are inclined to adjudicate the legal objection raised by way of additional ground in favour of the assessee.
Issues Involved:
Interconnected appeals challenging assessment orders for different assessment years without required approval under section 153D of the Income Tax Act, 1961. Additional ground raised regarding interest levied under sections 234 and 234B on assessed income instead of returned income. Analysis: Issue 1: Lack of Approval under Section 153D of the Act - The appeals were heard together as they involved common issues. The lead case for adjudication was IT(SS)A No. 70/Ran/2019 for AY 2005-06. - The appellant challenged the assessment order passed without approval under section 153D of the Act, contending it was non-est in the eyes of the law. - The CIT(A) did not find merit in the legal objection regarding the absence of approval under section 153D. The CIT(A) explained the procedural requirements under sections 153A to 153D for search assessments. - The ITAT reversed the CIT(A)'s decision, emphasizing that the approval under section 153D is crucial for search assessments and cannot be bypassed, as it is a substantive defect and not curable. - The ITAT referred to a previous case where lack of approval under section 153D was held to invalidate the assessment order, supporting the reversal of the CIT(A)'s decision. Issue 2: Interest under Sections 234 and 234B - The appellant raised an additional ground regarding interest levied under sections 234 and 234B on assessed income instead of returned income, citing a full bench judgment of the Patna High Court. - The ITAT, following the decision of a co-ordinate bench and the jurisdictional High Court, directed that interest under sections 234A and 234B should be charged based on the total income declared in the return filed, not on the income assessed by the AO. - Consequently, the ITAT allowed the additional ground raised by the appellant, ruling in favor of charging interest based on the returned income. - The ITAT allowed the appeal and all other connected appeals, emphasizing the importance of following procedural requirements and legal precedents in tax assessments. This detailed analysis of the judgment highlights the key issues of lack of approval under section 153D and the correct method of charging interest under sections 234 and 234B, providing a comprehensive understanding of the legal reasoning and decisions made by the ITAT in this case.
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