INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Validity - Invalid approval obtained under section 153D

Notices under section 142(1)/143(2) were issued to assessee. AO found that the assessee received a loan, which he claimed to have been received from 'A'. Assessee submitted that the substantial amount of the loan was paid by him. Further, AO found that the 'A' had no creditworthiness to lend such loan to the assessee. Further, the AO found that neither the assessee proved the identity and creditworthiness of his creditor nor produced the genuineness of the transaction. Consequently, the AO made addition under section 68 along with certain various additions while framing assessment under section 153A/143(3). However, CIT (A) deleted the impugned additions on the ground of invalid approval obtained under section 153D. Held: On perusal of approval given by the Addl. CIT showed that the approval to the draft assessment order under section 153D was granted, without perusing such draft assessment order. Because when assessment proceedings were going on 27-12-2010 before the AO then it was beyond comprehension that as to how the draft assessment order was placed before the Addl. CIT before that date and the approval was given on 24-12-2010. It proved that the approval was given contrary to the provisions of section 153D. So, when mandatory approval under section 153D was not there, entire assessment made by the AO under section 153A/143(3) would not be sustainable on ground of invalid/no approval obtained under section 153D.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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