| The Tax Publishers2021 TaxPub(DT) 2082 (Mum-Trib) INCOME TAX ACT, 1961
Section 153A Section 153D
Approval granted by superior authority in mechanical manner solely relying upon the implied undertaking obtained from AO in the form of draft assessment order, defeated the very purpose of obtaining approval under section 153D and consequently, impugned assessment relatable to search was non est and a nullity and was, therefore, quashed.
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Search and seizure - Assessment under section 153A - Validity - Mechanical approval granted under section 153D
Assessee challenged validity of search assessment framed under section 153A on the ground of mechanical approval granted under section 153D. Held: Approving Authority did not mention anything in the approval memo towards his/her process of deriving satisfaction so as to exhibit his/her due application of mind. Approval letter merely said that 'Approval is hereby accorded under section 153D to complete assessments under section 143(3) read with section 153A of the Income Tax Act in the following case on the basis of draft assessment orders...' which clearly proved that Additional Commissioner had routinely given approval to AO to pass the order only on the basis of contents mentioned in draft assessment order without any application of mind and seized materials were not looked at and/or other enquiry and examination was never carried out. From the said approval, it could be easily inferred that the said order was approved, solely relying upon the implied undertaking obtained from AO in the form of draft assessment order that AO had taken due care while framing respective draft assessment orders and that all the observations made in the appraisal report relating to examination/investigation of seized material and issues unearthed during search were statedly considered by AO seeking approval. Thus, sanctioning authority had, in effect, abdicated his/her statutory functions and delightfully relegated his/her statutory duty to the subordinate AO, whose action the Addl. CIT, was supposed to supervise. Accordingly, approval granted by superior authority in mechanical manner defeated the very purpose of obtaining approval under section 153D and consequently, impugned assessment relatable to search was non est and a nullity and was, therefore, quashed.
Followed:Sanjay Duggal & Ors. [ITA 1813/Del/2019 & Ors] : Order, dated 19-1-2021 : 2021 TaxPub(DT) 526 (Del-Trib) and Shreelekha Damani v. Dy. CIT (2015) 73 TTJ 332 (Mum-Trib) : 2015 TaxPubDT) 3650 (Mum-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2004-05, 2005-06 & 2011-12
INCOME TAX ACT, 1961
Section 69C
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