2021 (12) TMI 1433 - AT - Income Tax

Assessment u/s 153A - Valid approval accorded u/s. 153D or not? - HELD THAT - The Co-ordinate Bench in the case of Sh. Madan Lal. 2021 (8) TMI 1336 - ITAT AMRITSAR as held that approval which is granted in a mechanical, stereotype manner, without assigning any reasons and without considering the draft assessment order is not sustainable in the eyes of law. Thus where approval u/s.153D has been given in a mechanical manner and without application of mind in such cases assessment proceedings are to be vitiated. Appeals of the Assessee are allowed.

Summary

Issues:
Challenge to the approval granted under section 153D of the Income Tax Act.

Analysis:

Issue 1: Approval under Section 153D
The appellant challenged the approval granted under section 153D, arguing that the Additional Commissioner of Income Tax did not apply his mind and gave approval in a mechanical manner. The relevant provision of section 153D was cited, which requires prior approval of the Joint Commissioner for passing an assessment or reassessment order. The appellant relied on precedents where approvals granted mechanically were deemed unsustainable in law. The Tribunal referred to cases such as Sh. Madan Lal Vs. DCIT and Inder International vs. ACIT, where mechanical approvals were held to vitiate assessment proceedings. The respondent objected to admitting the additional ground, stating that discussions had taken place between the Assessing Officer and the Additional Commissioner. However, the Tribunal, in line with previous decisions, allowed the appeal on the legal ground, emphasizing that assessment proceedings could be vitiated by mechanical approvals under section 153D.

In conclusion, the Tribunal allowed all the appeals of the Assessee based on the challenge to the approval granted under section 153D of the Income Tax Act. The decision was made in accordance with precedents highlighting the importance of proper application of mind in granting such approvals. The Tribunal refrained from commenting on the merits of the case due to the absence of arguments presented on that aspect.