Approval under Section 153D invalid where approval letter lacks reasons or showed no application of mind, assessee relieved

ITAT DELHI - AT held that approval under s153D was invalid where the approval letter did not disclose reasons or show application of mind; the Tribunal refused to probe internal departmental communications to validate the approval. The decision affirmed that involvement of senior officers at various stages cannot cure an approval silent on reasons or omit mention of examined incriminating material. Relief was granted to the assessee and the revenue's challenge failed.

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Issues: Whether the approval granted under Section 153D of the Income-tax Act, 1961 was mechanical and lacking application of mind, thereby vitiating assessments framed pursuant to such approval.

Analysis: The Tribunal examined the contents of the approval letter under Section 153D and the surrounding record. The applicable legal framework requires that an approval under Section 153D disclose that the approving authority has applied its mind; mere reliance on internal communications or involvement of senior officers at other stages cannot substitute for a reasoned approval. Coordinate bench and higher court decisions establish that where the approval letter itself does not reflect consideration of facts or reasons, the Tribunal cannot go behind the approval to rely on undisclosed internal departmental communications to validate it. The Tribunal compared the approval in the present case with precedents where identical or similarly worded approvals were held to be mechanical and noted that absence of reasons in the approval precludes concluding independent application of mind by the approving authority.

Conclusion: The approval under Section 153D is vitiated as being mechanical and lacking application of mind; the issue is decided in favour of the assessee.

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