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2024 (6) TMI 1293 - AT - Income TaxIssues Involved: 1. Validity of initiation of assessment proceedings and issuance/service of notices. 2. Addition of Rs. 12,35,18,351/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961. 3. Confirmation of the addition by the CIT(A). 4. Alleged erroneous adverse inferences drawn by the assessing officer/CIT(A). 5. Validity of the assessment order in light of Section 153D approval process. Issue-wise Detailed Analysis: 1. Validity of Initiation of Assessment Proceedings and Issuance/Service of Notices: The assessee contended that the initiation of assessment proceedings and the issuance/service of notices were not in accordance with the provisions of law, rendering the assessment order liable to be quashed. However, the tribunal did not specifically address this issue in detail, as the decision was primarily based on the Section 153D approval process. 2. Addition of Rs. 12,35,18,351/- as Unexplained Cash Credit under Section 68: The assessee challenged the addition made by the assessing officer on account of alleged unexplained cash credit under Section 68 of the Income Tax Act, 1961. The tribunal did not delve into the merits of this issue separately, as the primary focus was on the procedural validity under Section 153D. 3. Confirmation of the Addition by the CIT(A): The assessee contested the CIT(A)'s decision to confirm the addition made by the assessing officer. However, the tribunal's decision was influenced by the procedural lapses in the Section 153D approval process, which overshadowed the substantive issues regarding the addition. 4. Alleged Erroneous Adverse Inferences Drawn by the Assessing Officer/CIT(A): The assessee argued that the adverse inferences drawn by the assessing officer and CIT(A) were erroneous and not sustainable in law. This issue was not separately adjudicated by the tribunal, as the decision hinged on the procedural irregularities in the approval process under Section 153D. 5. Validity of the Assessment Order in Light of Section 153D Approval Process: The primary issue raised by the assessee was the validity of the assessment order due to alleged non-compliance with the Section 153D approval process. The tribunal observed that the JCIT granted approval without proper examination of the facts and evidences, as indicated by the JCIT's own remarks about the lack of time for proper examination. The tribunal cited several precedents, including decisions from the Allahabad High Court and other ITAT benches, which emphasized that the approval under Section 153D must involve due application of mind and cannot be a mere technical formality. The tribunal concluded that the approval granted was invalid, rendering the assessment order null and void. Conclusion: The tribunal allowed the assessee's appeal on the grounds of procedural lapses in the Section 153D approval process, which overshadowed the substantive issues raised. The assessment orders for the relevant assessment years were quashed due to the invalid approval process. The appeals for the subsequent assessment years were also allowed based on the same reasoning. The tribunal's decision primarily focused on the procedural validity under Section 153D, rather than the substantive merits of the additions made by the assessing officer.
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