Court Upholds ITAT Decision: Revenue's Appeal Dismissed Due to Inadequate Approval Under Income Tax Act Section 153 D.

The Court dismissed the revenue's appeal against the ITAT order, affirming that the Joint Commissioner's approval under section 153 D of the Income Tax Act lacked proper application of mind. The Court referenced the judgment in ACIT vs. M/s. Serajuddin and Co. Kolkata, underscoring the necessity for the approving authority to thoroughly examine draft orders and comply with procedural requirements. The Court concluded that the issues raised were sufficiently addressed in the referenced judgment, thus upholding the ITAT's decision to set aside the assessments.

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Issues involved: Appeal against order of Income Tax Appellate Tribunal (ITAT) based on approval under section 153 D of Income Tax Act, 1961, lack of application of mind in granting approval by Joint Commissioner, applicability of judgment in ACIT vs. M/s. Serajuddin and Co. Kolkata.

Issue 1: Approval under section 153 D of Income Tax Act

The appellant's counsel, Mr. Chimanka, representing the revenue, sought admission of appeal against the ITAT order dated 29th November, 2019. He highlighted that due approval was granted under section 153 D of the Income Tax Act, 1961, by the Joint Commissioner on 23rd November, 2017, after the Assessing Officer's request on 17th November, 2017. Mr. Chimanka argued that the Tribunal erroneously set aside the assessments despite the approval, emphasizing the need for proper application of mind in granting such approvals. He pointed out the specific approval date and referenced a judgment of the First Division Bench of the Court to distinguish the current case from the cited precedent.

Issue 2: Lack of application of mind in approval process

The respondent's counsel, Mr. Parida, representing the assessee, countered the appellant's argument by asserting that the contention raised by the revenue was covered by the judgment in ACIT vs. M/s. Serajuddin and Co. Kolkata. He specifically referred to paragraphs 22 to 25 of the judgment to highlight the lack of application of mind by the Joint Commissioner in granting approval for 27 cases, out of which the department intended to appeal against 15. Mr. Parida emphasized the importance of the approving authority examining the draft orders and ensuring compliance with legal requirements, as outlined in the Technical Manual of Office Procedure.

Separate Judgment:

In a separate judgment, the Court noted the similarities between the facts of the case at hand and those in the Serajuddin and Co. Kolkata case. The Court highlighted the necessity for the approving authority to demonstrate a thoughtful consideration of the draft orders, rather than merely granting approval without proper scrutiny. Citing the Technical Manual of Office Procedure, the Court emphasized the importance of timely submission of draft orders, written final approvals, and explicit mention of approval in the assessment order. Ultimately, the Court dismissed the appeal, concluding that the issue raised was adequately addressed in the Serajuddin and Co. Kolkata judgment.

This summary provides a detailed breakdown of the issues involved in the legal judgment, highlighting the arguments presented by both parties and the Court's decision based on the application of relevant legal principles and precedents.

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