2024 (4) TMI 1142 - HC - Income Tax

Assessment made pursuant to a scrutiny - Valid approval u/s 153D - approval of Joint Commissioner has been taken or not? - HELD THAT - The order of the AO of approval would reflect that Joint Commissioner was satisfied on the basis of the documents on record that such approval was justified. In a given case, it can not be presumed on the mere say of the assessee that no application of mind was there while granting the approval. It is the subjective satisfaction and the language of the (Annexure - 4) would show that on the basis of the document produced before the Joint Commissioner, he was convinced of the fact that such approval would be necessary as the statute mandate. We cannot presume that there was no application of mind as the approval need not be a detailed assessment order. The presumption under Section 114 of the Evidence Act would follow when such official Act has been done in accordance with official procedure and will lead to presumption that due diligence was followed. Even otherwise, the order of the ITAT would reflect that the case of appellant was remanded back to the AO for fresh adjudication of the issue. Further the liberty was given to the assessee to raise all such issues before the Revenue Authorities and furnish necessary information/evidences in support of his contention. When such right has already been reserved in favour of the assessee, to raise grounds, we do not find that any prejudice has been caused and in fact the ITAT has principally accepted the contention of the appellant and in furtherance to advance the rules of natural justice, opportunity is given to appellant assessee. No substantial question of law arises for consideration.

Summary

Issues:
Challenge to assessment order under Section 153(D) of the Income Tax Act 1961.

Analysis:
The appellant contested the assessment made pursuant to a scrutiny, arguing that under Section 153(D) of the Income Tax Act, no assessment or re-assessment order can be passed without the prior approval of the Joint Commissioner. The appellant claimed that the approval granted in this case lacked proper application of mind, citing a case from the High Court of Orissa which emphasized the need for the Approving Authority to indicate the thought process involved in granting approval. However, upon examination of the ITAT order and the approval letter, it was found that the approval of the Joint Commissioner had been obtained, thereby complying with the mandate of Section 153(D).

The order of the Assessing Officer reflected that the Joint Commissioner was satisfied based on the documents on record, justifying the approval. It was noted that the approval need not be a detailed assessment order, and the presumption of regularity under Section 114 of the Evidence Act would apply when an official act is done in accordance with official procedure. Additionally, the ITAT had remanded the case back to the Assessing Officer for fresh adjudication, granting the assessee the liberty to raise all issues and provide necessary information and evidence. This approach was seen as upholding the rules of natural justice and providing the appellant with an opportunity to be heard.

Ultimately, the Court found that no substantial question of law arose for consideration, leading to the disposal of the appeal without any observation on the merits of the case. The decision was based on the compliance with Section 153(D), the satisfaction of the Joint Commissioner, and the opportunity granted to the appellant to present their case before the Revenue Authorities.