2024 (11) TMI 83 - AT - Income Tax

Validity of assessment u/s 153A - non-est approval being a mechanical and perfunctory granted by the superior authority u/s 153D - HELD THAT - The non-application of mind is glaringly demonstrable having regard to the peculiar facts of the case. Admittedly, combined and consolidated approval has been granted to large number of cases involving different Assessment Years and that too before the end of the next day of the requisition from AO seeking approval. A bare glance at the approval so accorded makes it evident that such approval is generic, listless and accorded in a blanket manner without reference to any issue in respect of any of the Assessment years involved in the case of any of the assessee covered in the consolidated approval. Apparently, the approval has been granted on a dotted line without any availability of reasonable time which firms up the belief towards non-application of mind. Besides, the Addl. CIT has failed to note that the AO has not even cared to determine the assessed income. The whole sequence of action towards approval u/s 153D appears to be illusory to merely meet the requirement of law as empty formality. Identical dispute emanating from the same approval memo in question came up for adjudication in the case of Mysore Bhaskara Pankaja 2024 (7) TMI 1134 - ITAT DELHI wherein as discredited the validity of the approval granted u/s 153D of the Act in identical circumstances. It was held therein that the approval so granted suffers from vice of non-application of mind and consequently non-est in law. Thus, we hold that approval granted u/s 153D of the Act under challenge do not meet the requirement of law contemplated u/s 153D - Assessment Orders passed in consequence of mechanical approval thus, are rendered non-est and invalid. Decided in favour of assessee.

Summary

Issues:
Challenge to the validity of approval granted under Section 153D of the Income Tax Act for Assessment Years 2016-17, 2017-18, and 2018-19.

Analysis:

The appeals were filed against orders passed by the Commissioner of Income Tax (Appeals) concerning Assessment Years 2016-17, 2017-18, and 2018-19 under Section 153A of the Income Tax Act. The assessee contested the additions made by the Assessing Officer and questioned the validity of the approval granted under Section 153D of the Act. The approval was granted by the Addl. CIT, Central Range-4, New Delhi, in a consolidated manner to 58 cases, including the ones under appeal, without individual assessment. The assessee argued that the approval lacked proper application of mind and was a mere formality. The Revenue defended the approval, claiming that statutory requirements were met.

Upon reviewing the submissions and case laws, the Tribunal examined the legality of the approval under Section 153D. It was observed that the approval was granted hastily and generically without considering individual assessments. The approval memo indicated a lack of detailed evaluation, raising concerns about non-application of mind. The Tribunal noted that the Assessing Officer had not quantified the assessed income, further highlighting the deficiency in the approval process.

The Tribunal agreed with the assessee's contentions and found the approval under Section 153D to be inadequate, similar to a previous case where such approval was deemed invalid. Consequently, the Assessment Orders based on the flawed approval were declared null and void. The Tribunal emphasized that the non-est approval rendered the Assessment Orders invalid in the eyes of the law, leading to the quashing of the additions/disallowances made in those orders. As a result, all appeals by the assessee were allowed.