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2020 (8) TMI 147 - AT - Income TaxValidity of assessment u/s 153A - non obtaining prior approval of the Joint Commissioner of Income Tax as required as required u/s 153D - HELD THAT - Wordings and language used in Section 153D of the Act and the heading Prior approval necessary for assessment in cases of search or requisition which has been provided under section 153D of the Act, do not leave an iota of doubt about the very intention of the legislature to make the compliance of section 153D, a mandatory. In other words, the compliance of section 153D is mandatory in nature. Therefore, assessment order passed by the Income Tax Officer, in the assessee s case, without taking prior approval from JCIT, is null in the eye of law. As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench in the case of Shri Swapan Kumar Paul 2019 (7) TMI 1659 - ITAT GUWAHATI . and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Coordinate Bench (supra). We find no reason to interfere in the said order of the Coordinate Bench (supra). In view of the decision of Coordinate Bench in the case of Shri Swapan Kumar Paul (Supra) and position of law provided u/s 153D of the Act, we hold that impugned assessment order framed in absence of obtaining prior approval of the Joint Commissioner of Income Tax (JCIT), for the assessment year under consideration is invalid and null in the eye of law, therefore we quash the assessment order - Decided against revenue.
Issues Involved:
1. Relief on undisclosed income of ?86,12,277/-. 2. Relief on undisclosed income of ?2,31,83,893/-. 3. Validity of the assessment order due to non-compliance with Section 153D of the Income Tax Act. 4. Validity of the assessment order due to the absence of a valid notice under Section 143(2) of the Income Tax Act. 5. Time-barred appeal. Detailed Analysis: 1. Relief on Undisclosed Income of ?86,12,277/-: The Revenue challenged the Commissioner of Income Tax (Appeal) [CIT(A)]'s decision to allow relief on the undisclosed income of ?86,12,277/-. The CIT(A) had deleted the arbitrarily made addition of this amount, which was considered surplus payment received from the Food Corporation of India (FCI) over liabilities. The Tribunal did not delve into the merits of this issue due to the resolution of the technical ground related to Section 153D. 2. Relief on Undisclosed Income of ?2,31,83,893/-: Similarly, the Revenue contested the CIT(A)'s decision to allow relief on the undisclosed income of ?2,31,83,893/-, which was based on accounts maintained in Tally software. The CIT(A) had deleted the arbitrarily made additions of ?1,64,58,199/- and ?67,25,694/-, aggregating to ?2,31,83,893/-. Again, the Tribunal did not address this issue on its merits due to the decision on the technical ground of Section 153D. 3. Validity of the Assessment Order Due to Non-Compliance with Section 153D: The assessee argued that the assessment order dated 29.03.2016 was invalid as the Assessing Officer (AO) did not obtain prior approval from the Joint Commissioner of Income Tax (JCIT) as required under Section 153D of the Income Tax Act. The Tribunal examined this issue first as it went to the root of the matter. The Tribunal noted that compliance with Section 153D is mandatory. The AO had framed the assessment without obtaining the necessary approval from the JCIT. The Tribunal cited its previous decision in the case of Shri Swapan Kumar Paul, where it was held that the absence of such approval renders the assessment order void. The Tribunal emphasized that the approval process under Section 153D is not a mere formality but requires the JCIT to apply their mind to ensure proper enquiry and investigation by the AO. The Tribunal found that in the present case, the JCIT's approval was mechanical and lacked proper application of mind. The JCIT had approved the assessment on the same day the draft order was received without reviewing the relevant records. Consequently, the Tribunal quashed the assessment order dated 29.03.2016 as invalid and 'null' in the eye of law. 4. Validity of the Assessment Order Due to Absence of a Valid Notice under Section 143(2): The assessee also contended that the assessment order was bad in law as no valid notice under Section 143(2) was served. However, the Tribunal did not adjudicate this issue separately as the assessment order was already quashed based on the non-compliance with Section 153D. 5. Time-Barred Appeal: The assessee raised the issue that the appeal was time-barred. However, this issue was not separately adjudicated by the Tribunal as the assessment order was quashed on the technical ground related to Section 153D. Conclusion: The Tribunal allowed the assessee's cross-objections on the technical ground of non-compliance with Section 153D, thereby quashing the assessment order dated 29.03.2016. As a result, the Tribunal did not adjudicate on the merits of the other issues raised by both the Revenue and the assessee. The appeal filed by the Revenue was dismissed as infructuous.
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