Mechanical Section 153D approval can vitiate assessment where sanction lacks independent application of mind

Prior approval under Section 153D must reflect independent application of mind to the draft order and relevant material; a mechanical or rubber-stamp sanction does not satisfy the statutory safeguard and can vitiate assessments framed under Section 153C read with Section 143(3). The commentary notes that, on the facts discussed, the approval was treated as mechanical, resulting in invalidation of the assessments and quashing of the proceedings in favour of the assessee.

---

---

Issues: Whether the assessments were vitiated because the approval granted under Section 153D was mechanical and without independent application of mind, and whether the consequent proceedings could be quashed.

Analysis: The appeals concerned assessments framed under Section 153C read with Section 143(3), where the assessee challenged the validity of the prior approval granted under Section 153D. The approval was examined against the statutory requirement that the assessing authority obtain a meaningful prior sanction before completing the assessment. Following the cited coordinate bench and jurisdictional High Court decisions, it was found that approval cannot be a routine or rubber-stamp exercise and must reflect consideration of the material and application of mind. As the approval in the present case was found to be mechanical and not independently reasoned, the statutory safeguard under Section 153D was held to have been breached.

Conclusion: The approval under Section 153D was invalid, the assessments were vitiated, and the proceedings were quashed in favour of the assessee.

Ratio Decidendi: An assessment made pursuant to approval under Section 153D is unsustainable if the sanctioning authority grants approval mechanically without independent application of mind to the draft order and relevant material.

---