IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI BENCH
The Income Tax Appellate Tribunal (ITAT) in New Delhi, comprising of Saktijit Dey (Vice President) and Naveen Chandra (Accountant Member), recently set aside an order passed by the First Appellate Authority, holding the approval granted under Section 153D of the Income Tax Act as invalid. This decision came as a result of the ITAT’s observation that the approving authority had not examined the assessment records or the seized materials before granting approval, acting as a mere rubber stamp. According to Section 153D of the Income Tax Act, no order of assessment or reassessment can be passed without the prior approval of the Joint Commissioner or a higher-ranking officer.
The facts of the case involved a search and seizure operation under section 132, which led to proceedings under section 153A against the assessee, engaged in chartered services and ground handling of international aircraft. The Assessing Officer referred the case for Special Audit under Section 142(2A), and the subsequent assessment orders were passed under section 153A r.w.s. 143(3) r.w.s. 144. The initial assessment orders were set aside by the Commissioner of Income Tax (CIT) with directions for de novo completion, which the Assessing Officer ultimately failed to adhere to by repeating the additions made in the original assessment orders.
Upon considering the case, the ITAT found that the approval granted under Section 153D did not meet the statutory requirements, as it was evident that the approving authority did not apply their mind before granting approval. The ITAT referred to relevant precedents and emphasized the importance of prior approval in search-related cases, highlighting the obligation for the superior authorities to carefully consider the material before granting approval. The ITAT concluded that the grounds raised on merits had become purely academic and allowed the assessee’s appeal against the assessment orders.
This ruling by the ITAT underscores the significance of diligent scrutiny and compliance with statutory provisions, particularly concerning the prior approval required under Section 153D of the Income Tax Act.