Assessment order quashed due to invalid approval lacking DIN, mechanical approval without examination, and unauthorized alterations under section 153A

The ITAT Pune quashed an assessment order u/s 153A r.w.s. 144 dated 30-09-2021 on three grounds. First, the approval u/s 153D lacked a Document Identification Number (DIN) as mandated by CBDT Circular No. 19/2019, rendering it invalid. Second, the Addl. CIT granted approval mechanically on the same day without examining 8300 pages and multiple storage devices, demonstrating non-application of mind. Third, the AO altered the draft assessment order by incorporating tax rate u/s 115BBE in the final order without fresh approval from the approving authority, constituting an impermissible deviation. The assessee's appeal was allowed.

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Issues Involved:
1. Delay in filing appeals.
2. Validity of assessment orders due to non-generation of Document Identification Number (DIN) on approval under Section 153D.
3. Non-application of mind by the approving authority while granting approval under Section 153D.
4. Alteration of draft assessment orders without fresh approval.

Summary:

1. Delay in Filing Appeals:
The Tribunal condoned a delay of three days in filing the appeals, finding the reasons provided by the assessee, including travel evidence, to be bona fide.

2. Validity of Assessment Orders Due to Non-generation of DIN:
The Tribunal found that the approval granted under Section 153D of the Income Tax Act did not contain a DIN, which is mandatory as per CBDT Circular No. 19/2019. The absence of DIN rendered the approval invalid, leading to the quashing of the final assessment orders. The Tribunal relied on various High Court decisions, including those of the Chhattisgarh and Bombay High Courts, which held that communications without DIN are invalid and deemed never to have been issued.

3. Non-application of Mind by the Approving Authority:
The Tribunal observed that the approval under Section 153D was granted on the same day the draft assessment orders were submitted, indicating a mechanical approval without proper examination of the voluminous seized materials. The Tribunal cited decisions from the High Courts of Orissa and Allahabad, emphasizing that such approvals must involve an independent application of mind to ensure justice and prevent arbitrary actions.

4. Alteration of Draft Assessment Orders Without Fresh Approval:
The Tribunal noted discrepancies between the draft and final assessment orders, including the addition of tax rates under Section 115BBE in the final orders, which were not present in the drafts. This alteration without fresh approval from the Additional CIT rendered the final assessment orders invalid. The Tribunal referred to the Bombay High Court's decision in Mrs. Ratnabai N.K. Dubhash, which held that the assessing officer cannot vary from the directions given in the approved draft orders.

Conclusion:
The Tribunal quashed the final assessment orders for all the assessment years in question due to the invalidity of the approval under Section 153D for non-generation of DIN and non-application of mind, as well as the unauthorized alterations in the final assessment orders. Consequently, the appeals of the assessee were allowed, and the appeal of the Revenue was dismissed.

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