Assessee's Appeals Allowed - Assessments Deemed Null & Void under Section 153D

The Tribunal allowed the assessee's appeals, quashing the orders passed by the DCIT and CIT(A) as the assessments were deemed null and void due to invalid approval under Section 153D. The Tribunal held that the conditional approval by the JCIT was not in compliance with statutory requirements, rendering the assessments invalid. Consequently, other issues were not adjudicated as they became academic.

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Issues Involved:
1. Validity of the addition of Rs. 150 lacs as unaccounted income.
2. Legality of the assessment framed under Section 153A/143(3) based on invalid approval under Section 153D.

Issue-wise Detailed Analysis:

1. Validity of the Addition of Rs. 150 Lacs as Unaccounted Income:
The assessee contested the addition of Rs. 150 lacs to their income, arguing that the share capital was incorrectly treated as unaccounted money. The contention was that no incriminating documents were found during the search operations under Section 132, and the assessment had already been completed before the search. Despite these arguments, the CIT (Appeals) upheld the addition, leading to the assessee's appeal.

2. Legality of the Assessment Framed Under Section 153A/143(3) Based on Invalid Approval Under Section 153D:
The assessee introduced an additional ground challenging the validity of the assessment framed under Section 153A/143(3) for AY 2012-13, claiming it was void ab initio due to invalid approval under Section 153D by the JCIT, Central Range, Meerut. The approval was argued to be incomplete and inchoate, as it lacked finality and was conditional upon further verification by the DCIT.

The Tribunal admitted this additional ground, recognizing it as a purely legal issue. The Tribunal relied on the Supreme Court judgment in NTPC v. CIT, which allowed raising new legal questions if relevant facts were on record.

Arguments and Findings:
The assessee's representative cited various case laws to support the claim of invalid approval, emphasizing that the JCIT's approval was merely technical and conditional, which is not the statutory requirement under Section 153D. The revenue's representative argued that the JCIT had duly approved the assessment orders and that the format of approval was not fixed.

The Tribunal examined the approval letter dated 30.12.2016, noting that it was termed a "technical approval" and directed the DCIT to ensure the incorporation of seized documents and appraisal report findings in the final assessment order. This conditional nature of the approval rendered it invalid, as the Act requires a final and unqualified approval before passing the assessment order.

The Tribunal referenced the Bombay High Court judgment in Pr CIT vs. Smt. Shreelekha Damani, which emphasized that approval under Section 153D must involve application of mind and should not be a mere formality.

Conclusion:
The Tribunal concluded that the JCIT's approval was invalid as it was conditional and not the final approval mandated by the Act. Consequently, the assessments completed by the DCIT were deemed null and void. Given this conclusion, the Tribunal refrained from adjudicating other issues, as they became academic in nature.

Judgment:
The appeals of the assessee were allowed, and the orders passed by the DCIT and CIT(A) were quashed. The assessments were treated as null and void due to the invalid approval under Section 153D. The judgment was pronounced in the Open Court on 04/07/2019.

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