Mechanical approval under search assessment scrutiny invalidates the assessment where real application of mind is absent.

Search assessment approvals under section 153D must show real application of mind to the draft order and the material relied upon. Where the approval is granted almost immediately on receipt of the proposal, without any indication that the approving authority considered the issues or incriminating documents, the approval is treated as mechanical and invalid. On that basis, the assessment order framed pursuant to such defective approval was quashed as lacking valid sanction.

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Issues: Whether the assessment order framed in consequence of search proceedings was liable to be quashed for want of valid approval under section 153D on the ground that the approval was granted mechanically without application of mind.

Analysis: The assessment arose from search proceedings and the draft assessment order was forwarded for approval under section 153D. The approval letter showed that it was issued almost immediately after receipt of the proposal, and it did not indicate any consideration of the material, issues, or incriminating documents relied upon for completing the search assessment. In such circumstances, the approving authority was held not to have applied its mind to the draft assessment order before granting approval. Relying on the settled requirement that approval under section 153D must reflect real consideration, the challenge to the assessment was accepted.

Conclusion: The assessment order was invalid for want of proper approval under section 153D and was quashed, in favour of the assessee.

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