2024 (12) TMI 1107 - AT - Income Tax

Approval taken u/s 153D is mechanical - HELD THAT - As noted that in the present case, the assessee group has 110 assessments for which approval was placed before JCIT on the same date i.e., 29/12/2017 and total assessees were 19 different assessees. The approval is purely mechanical in nature and hence, the assessment is liable to be quashed and, is accordingly quashed.

Summary

Issues:
1. Jurisdictional issue of framing assessment under Section 153A when no incriminating material found during search.
2. Mechanical approval under Section 153D of the Income Tax Act, 1961.

Analysis:

Issue 1: Jurisdictional issue of framing assessment under Section 153A
The appeal arose from an order by the Commissioner of Income Tax (Appeals) regarding the assessment framed by the DCIT for the Assessment Year 2014-15 under Section 153A r.w. Section 143(3) of the Income Tax Act, 1961. The assessee initially raised an issue regarding the jurisdiction of framing the assessment under Section 153A when no incriminating material was found during the search. However, the assessee later decided not to press this issue, leading to its dismissal as not pressed.

Issue 2: Mechanical approval under Section 153D
The assessee raised an additional ground challenging the mechanical approval granted by the Joint Commissioner of Income Tax under Section 153D for 110 cases of different assesses. The contention was that the approval was not granted in accordance with the mandate of the Act, as it was mechanical and not separately granted for each assessment year. The Tribunal emphasized that the approval under Section 153D must be granted for each assessment year and each assessee separately, with an independent application of mind. The Tribunal referred to judicial pronouncements to support the requirement of proper approval under Section 153D. It was noted that the approval for 43 cases was granted on a single day, indicating a lack of individual consideration. The Tribunal cited precedents where similar issues were considered, leading to the quashing of assessments due to non-application of mind in granting approvals. Ultimately, the Tribunal found the approval to be purely mechanical and quashed the assessment.

Conclusion
The Tribunal dismissed the appeal regarding the jurisdictional issue of framing the assessment under Section 153A due to the assessee not pressing the issue. However, the Tribunal allowed the appeal concerning the mechanical approval under Section 153D, quashing the assessment as the approval was found to be purely mechanical in nature. The decision was based on the requirement of separate and independent approval for each assessment year and each assessee, as mandated by the Act and supported by judicial pronouncements.