The Tax Publishers2019 TaxPub(DT) 6540 (Agra-Trib)

INCOME TAX ACT, 1961

Section 153D

Where approval under section 153D granted by Addl. CIT it was clearly mentioned that he had not applied its mind and he has not even look into draft assessment order and he solely relied upon undertaking of AO who had completed assessment proceedings. he had also not gone into record of investigation and seized material and had granted the approval without any meaningful discussion and going through the record. As approval was granted without application of mind which was discernible from the record, the said approval lost its character to be approval in the eyes of law and consequent assessment order passed by AO was void and not sustainable and an 2nd inning for rectifying or removing the defects as pleaded for by revenue could not be granted.

Search and seizure - Assessment under section 153A - Mechanical approval granted by Addl. CIT under section 153D without application of mind - Revenue pleading approval to be mere administrative formality

Assessee challenged validity of assessment Order, passed under section 153A. on the ground that approval was granted by Addl. CIT , Central Range, Kanpur under section 153D without application of mind and such a mechanically granted approval rendered assessment order void ab initio. Revenues case was that order passed under section 153D was merely an administrative order and no civil or penalty consequences would flow against assessee on account of approval granted by addl. CIT. Further, there was no requirement of law for granting hearing to assessee by Addl. CIT/JCIT prior to giving of approval under section 153d for assessment or reassessment under section 153A.Held: Though assessee was not entitled to have personal hearing from Addl. CIT before granting of approval under section 153D, as assessee had already been heard during assessment/reassessment proceedings by AO and approval granted by Addl. CIT was in the nature of administrative approval, however, approval as envisaged under section 153D was not empty formality and civil and penal consequences would flow from completion of assessment. In the approval granted by Addl. CIT it was clearly mentioned that he had not applied its mind and he has not even look into draft assessment order and he solely relied upon undertaking of AO who had completed assessment proceedings. he had also not gone into record of investigation and seized material and had granted the approval without any meaningful discussion and going through the record. As approval was granted without application of mind which was discernible from the record, the said approval lost its character to be approval in the eyes of law and consequent assessment order passed by AO was void and not sustainable and an 2nd inning for rectifying or removing the defects as pleaded for by revenue could not be granted.

Relied:Tata Celular v. UOI (1994) 6 SCC 651 (Paragraph 77) West Bengal Central School Service Commission v. Abdul Halim (2019) SCC online (SC) 902, Sahara India (Firm) v. CIT (2008) 169 Taxman 329 (SC) : (2008) 300 ITR 403 (SC) : 2008 TaxPub(DT) 1907 (SC), Verma Roadwasy v. Asstt. CIT (2000) 75 ITD 183 (Ahd-Trib) : 2000 TaxPub(DT) 840 (Ahd-Trib) and Shreelekha Damani (2015) 88 Taxmann.com 383 (Mum) : (2015) 173 TTJ 332 (Mum-Trib) : 2015 TaxPub(DT) 3650 (Mum-Trib).

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