2020 (2) TMI 718 - AT - Income Tax

Validity of the assessment order u/s 153A for want of approval under section 153D - assessment under section 153A could be passed by the A.O. below the Rank of JCIT - HELD THAT - No order of assessment under section 153A could be passed by the A.O. below the Rank of JCIT except with the prior approval of the Joint Commissioner. In the present case, the assessment order have been passed by the DCIT, CC, Ghaziabad. Thus, the A.O. is below the Rank of JCIT, therefore, before passing the order under section 153A under appeal, the A.O. shall have to obtain prior approval of the JCIT. It is the condition precedent before passing the assessment order under section 153A. Assessee filed copy of the order sheet of the A.O. which does not mention if A.O. has sent any proposal to the JCIT/Addl. CIT for obtaining prior approval before passing the impugned assessment order. Assessee filed several letters obtained under RTI and others which clearly prove that the approval u/s 153D is not available to the A.O. or the Officer who has provided information under RTI Act. Even no such approval was found in the assessment record. The ITO, Ward-1(5), Ghaziabad, also intimated the Ld. CIT-D.R. that such approval of Addl. CIT Dated 28.03.2019 under section 153D could not be traced-out from the record of the assessee available presently with this Office and assessee has also intimated the same fact under RTI Act. CIT-D.R. during the course of arguments has also admitted that approval under section 153D of the I.T. Act Dated 28.03.2013 is not available for inspection of the Bench. These facts, clearly prove that no prior approval under section 153D by JCIT/Addl. CIT before passing the impugned assessment order have been obtained. A.O. was not competent to pass the assessment order under section 153A . The assumption of jurisdiction of the DCIT, CC, Ghaziabad to pass the impugned appellate order is thus vitiated. The entire assessment order under section 153A is null and void and is liable to be quashed. In view of the above discussion, we set aside and quash the entire impugned appellate orders. Resultantly, all the additions stand deleted. Additional ground of appeal of assessee is allowed.

Summary

Issues:
1. Approval under section 153D for assessment order under section 153A.

Analysis:
1. The appeal was against the Order of the Ld. CIT(A) for the A.Y. 2010-2011, where the assessee challenged additions made by the Assessing Officer related to unexplained cash withdrawals and commission income. The CIT(A) confirmed the additions, leading to the current appeal.
2. The additional ground raised by the assessee questioned the validity of the assessment order under section 153A due to the absence of prior approval under section 153D. The approval was claimed to be crucial for the legality of the assessment order.
3. The assessee presented evidence showing that the approval under section 153D was not available in the records, despite the A.O. mentioning it in the assessment order. The absence of this approval was considered a fundamental flaw in the assessment process.
4. The Tribunal referred to the provisions of section 153D, which mandate that no assessment order under section 153A can be passed without prior approval of the Joint Commissioner. Since the approval was not obtained in this case, the assessment order was deemed void ab initio.
5. The Tribunal concluded that the lack of approval under section 153D rendered the entire assessment order null and void. As a result, all the additions made by the A.O. were deleted, and the appeal of the assessee was allowed.
6. The Tribunal emphasized the importance of procedural compliance and jurisdictional requirements in tax assessments. The decision to quash the assessment order highlighted the significance of obtaining necessary approvals before passing such orders to ensure their validity.

This detailed analysis of the judgment showcases the significance of procedural compliance and the legal implications of lacking essential approvals in tax assessments, ultimately leading to the quashing of the assessment order in this case.