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AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the assessment orders framed in search proceedings were vitiated for want of a valid, reasoned and application-of-mind approval under section 153D of the Income-tax Act, 1961, and whether the later amendment concerning section 292BC could be applied to approvals granted before its stated effective date.
Analysis: The approval note did not show any examination of the assessment records, seized material, issues involved, or reasons for the conclusion reached, and reflected only a mechanical grant of approval. The approval under section 153D is a mandatory safeguard in search assessments and requires independent, judicious application of mind by the approving authority. The later amendment relied upon by the Revenue was held not to govern approvals already granted prior to 01.04.2021, even though the appeal was heard later. The request to release the matter for constitution of a special bench was also declined because the issue was treated as covered by binding judicial precedent.
Conclusion: The approval under section 153D was invalid, the assessment orders were vitiated, and the assessee succeeded.
Final Conclusion: The search assessments were quashed for want of lawful approval, and the appeals were allowed.
Ratio Decidendi: A search assessment order is liable to be quashed where the mandatory approval under section 153D is granted mechanically without independent application of mind, and a subsequent amendment cannot validate approvals already granted before its effective date.
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