s.153D approval and alleged bogus purchases: assessment upheld after finding valid approval and 100% disallowance u/s69C.

A legal ground challenging the validity of the assessment for alleged non-compliance with mandatory approval under s.153D was admitted as a pure question of law, but rejected on merits because the assessment order reproduced the approval in verbatim and approval materials existed in connected cases, showing approval was in fact obtained; s.153D compliance was treated as an internal administrative requirement not shown to vitiate the assessment here, and the assessment under s.143(3) r/w s.153A was upheld. On additions under s.69C for alleged bogus purchases, the Tribunal held that survey findings, corroborative statements under s.131, and AO's independent enquiries established accommodation bills and non-genuine purchases, warranting 100% disallowance; the appeal was dismissed.

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Issues Involved:
1. Validity of assessment orders under section 143(3) read with section 153A in the absence of valid prior approval under section 153D.
2. Addition towards bogus purchases from certain parties.
3. Alleged violation of principles of natural justice.

Issue-wise Detailed Analysis:

1. Validity of Assessment Orders under Section 143(3) Read with Section 153A in the Absence of Valid Prior Approval under Section 153D:
The assessee challenged the validity of the assessment orders arguing that the Assessing Officer (AO) passed the assessment orders without obtaining the necessary prior approval from the Additional Commissioner of Income Tax (Addl. CIT) as required under section 153D of the Income Tax Act, 1961. The assessee contended that the absence of such approval renders the assessment orders void ab initio. The Revenue, however, argued that the AO had indeed obtained the necessary approval, as evidenced by the affidavits of the officers involved and the mention of the approval in the assessment order.

The Tribunal noted that the AO had recorded in the assessment order that approval was obtained from the Addl. CIT. Furthermore, affidavits from the officers confirmed the issuance of the approval. Although the approval letter was not found in the assessment folder, the Tribunal considered the circumstantial evidence and the affidavits sufficient to establish that the approval was indeed obtained. Consequently, the Tribunal rejected the additional ground raised by the assessee, holding that the assessment orders were valid.

2. Addition Towards Bogus Purchases from Certain Parties:
The AO made additions towards bogus purchases based on a survey conducted under section 133A and information from the Sales Tax Department, which indicated that the assessee had obtained accommodation bills from hawala dealers. The AO observed discrepancies in the standard operating procedures (SOPs) followed by the assessee for these purchases and noted the absence of key documentation. The assessee failed to produce confirmations from the parties or produce the parties for verification.

The Tribunal upheld the AO's addition, noting that the AO had conducted thorough inquiries and the assessee could not substantiate the purchases with necessary evidence. The Tribunal referred to the Supreme Court's decision in the case of N.K. Proteins Ltd., which held that 100% of bogus purchases could be added to income. The Tribunal found that the AO's conclusion that the purchases were bogus was well-supported by the evidence and upheld the addition.

3. Alleged Violation of Principles of Natural Justice:
The assessee argued that the CIT(A) had violated the principles of natural justice by not providing a reasonable opportunity to present its case. However, during the hearing, the assessee's representative chose not to press this ground. Consequently, the Tribunal dismissed this ground as not pressed.

Conclusion:
The Tribunal dismissed all the appeals filed by the assessee and upheld the validity of the assessment orders and the additions made towards bogus purchases. The cross objections filed by the Revenue were also dismissed as infructuous. The order was pronounced in the open court on 10-04-2019.

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