Tribunal quashes assessment orders due to invalid approval under section 153D

The Tribunal allowed the cross objections, quashing the assessment orders passed under section 153A read with section 143(3) due to the invalid approval granted by the JCIT under section 153D. The appeals filed by the Revenue were dismissed as infructuous.

---

---

Issues Involved:
1. Legality of the approval granted by the Joint Commissioner of Income Tax (JCIT) under section 153D.
2. Validity of the assessment orders passed under section 153A read with section 143(3).

Summary:

Issue 1: Legality of the approval granted by JCIT under section 153D

The assessee contended that the approval granted by the JCIT was devoid of application of mind and was done in a mechanical manner. The approval did not indicate what material and facts were perused before granting the approval. It was argued that the approval was granted within 24 hours, making it humanly impossible to review the assessment records and draft orders objectively. The approval was conditional and based on presumptions, thus making it invalid.

The Tribunal noted that the JCIT's approval was a mere mechanical exercise without independent application of mind. The approval letter did not show that the JCIT had reviewed the assessment records or the seized material. The Tribunal referred to multiple judicial precedents, emphasizing that the approval under section 153D is not a mere formality but requires a thorough review and application of mind by the approving authority.

Issue 2: Validity of the assessment orders passed under section 153A read with section 143(3)

The Tribunal found that the assessment orders were invalid as they were based on an invalid approval under section 153D. The JCIT's approval was granted without proper application of mind, making the subsequent assessment orders unsustainable. The Tribunal quashed the assessment orders on this ground.

Conclusion:

The Tribunal allowed the cross objections filed by the assessee, quashing the assessment orders passed under section 153A read with section 143(3) due to the invalid approval granted by the JCIT under section 153D. Consequently, the appeals filed by the Revenue were dismissed as infructuous.

---