Assessment under section 153A and validity of approval under section 153D restored to AO for re-adjudication

Assessment under section 153A challenged on validity of approval under section 153D; the note states approval is an administrative act subject to limited judicial scrutiny, so appellate bodies may examine existence but not the quality of the approving authoritys satisfaction, and thus mere absence of approval is a technical irregularity. Because the assessee failed to cooperate and was afforded substantial opportunities, the irregularity does not warrant quashing on merits; the matter is restored to the assessing officer for re-adjudication and the assessee is granted an opportunity to adduce evidence in the interest of natural justice.

---

---

Issues: Whether the assessment orders passed without demonstrable compliance with the requirement of prior approval under section 153D of the Income-tax Act, 1961 are vitiated and what the appropriate consequence should be.

Analysis: Section 153D requires prior approval of the Joint Commissioner for assessments under Chapter XIV-B by officers below the rank of Joint Commissioner. The Tribunal examined whether absence of documentary production of the approval before the Tribunal or omission in order-sheets compels annulment of the impugned assessments. The Tribunal treated the approval as an administrative act whose quality is not ordinarily subject to appellate re-examination unless a specific, record-supported allegation is made (e.g., by affidavit under applicable rules). The Tribunal contrasted precedents holding mechanical approvals void with other authorities treating the approval as administrative where breach of procedure leads to redo of proceedings rather than automatic annulment. Considering that substantial opportunities had been afforded to the assessee during assessment and that no affidavit under the ITAT Rules was filed alleging falsity of the approval, the Tribunal held that the appropriate remedy is to restore the issues to the file of the Assessing Officer to obtain or demonstrate proper approval and to allow the assessee an opportunity to be heard in the re-adjudication.

Conclusion: Issue decided in favour of the assessee; the matters are restored to the file of the Assessing Officer for re-adjudication after granting the assessee adequate opportunity of being heard; appeals are partly allowed for statistical purposes.

---