Assessment under section 153A found invalid for lack of required approval and procedural defects, leading to restoration and limitation quash

Assessment under the specified assessment provision was invalidated due to failure to obtain the prescribed statutory approval before finalising the assessment; because the delegated officer lacked power to bypass the required approval, the matter is to be restored to the stage prior to passing the impugned assessment so that the necessary approval can be obtained. Separately, the assessments were held time-barred where evidence indicated ante-dating and absence of proper dispatch, and electronic system dates were deemed unreliable; those orders were quashed on limitation grounds, following relevant precedents, and the appeals were allowed partly for statistical purposes.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the assessments were vitiated for non-compliance with the statutory requirement of prior approval under section 153D, where the approval related to a draft order and the final assessed income differed from that draft without any fresh approval.

(ii) Whether the assessment orders were barred by limitation on the finding that they were not in fact made on the date they bear, but were passed subsequently and antedated, notwithstanding later hand service and the appellate authority's reliance on ITBA "uploading".

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity and effect of approval under section 153D

Legal framework (as discussed by the Court): The Court treated section 153D as mandating that an assessment order by an officer below the rank of Joint Commissioner must have prior approval of the supervisory authority (Addl./Jt. CIT), and characterized such approval as an administrative act prescribed for passing a statutory assessment order.

Interpretation and reasoning: The Court accepted that approval was granted on 27.03.2015 for a draft assessment order. However, the approving authority's direction that the Assessing Officer should conduct "further verification" and proceed to pass the final order "without awaiting any further approval" was held to be legally ineffective where the final assessed income varied from the income in the draft that had been approved. The Court reasoned that the approving authority had no power to override the statutory requirement of approval by permitting post-approval variations without obtaining a further approval for the final determination.

Conclusions: The Court held that the final assessment orders suffered from an irregularity because the final orders were passed without approval as required in respect of the changed income figures. The Court further held that such non-compliance did not render the orders void ab initio, and the proper course would have been to restore the matter to the stage prior to passing the impugned orders for obtaining requisite approval and proceeding according to law. (This relief was ultimately overtaken by the Court's final decision on limitation.)

Issue (ii): Limitation-whether the assessment orders were made within time or were antedated

Legal framework (as applied by the Court): The Court proceeded on the basis that the assessments had to be made within the statutory time limit applicable to the search assessments, and examined whether the orders bearing the date 31.03.2015 were in fact passed on that date or were passed later and antedated. The Court relied on the principle applied in decisions it treated as governing that where circumstances show the order could not have been made on the stated date, the assessment is liable to be quashed as time-barred.

Interpretation and reasoning: The Court found multiple circumstances indicating that passing the orders on 31.03.2015 was not credible: (a) a notice under section 142(1) was issued on 30.03.2015 and the assessee's response was admittedly furnished only on the evening of 31.03.2015; (b) the response was voluminous, and similar replies existed across multiple years/assessees, making completion of final orders on the same date practically impossible; (c) the assessment folder lacked a dispatch entry, which would ordinarily exist if the orders were completed and issued; and (d) instead of normal dispatch, the orders were hand-delivered to the authorised representative on 08.04.2015, supporting the inference that the orders were prepared later. The Court rejected the appellate authority's reliance on ITBA "uploading" on 31.03.2015, holding that the system relied on did not establish actual uploading on that date and in any event displayed only the order date.

Conclusions: The Court concluded that the assessment orders were not passed on 31.03.2015 but were passed subsequently and antedated, and therefore were barred by limitation. On this ground, the Court quashed the assessment orders for all relevant years and allowed the appeals. Other grounds were dismissed as not argued.

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