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2025 (3) TMI 1374 - AT - Income TaxInvalid approval granted u/s 153D - HELD THAT - In the present case the approval dated 29/12/2016 of the JCIT has been received by the ACIT only on 30/12/2016 and the Assessment Orders have been passed on 29/12/2016. Thus as on date of passing of the Assessment Order the approval u/s 153D of the Act has not been received by the A.O. therefore the assessment order has been passed by the A.O. in the absence of receipt of the approval u/s 153D of the Act. While granting the Approval the Ld. JCIT only mentioned that the Draft Assessment Order has been approved which doesn t prove the applications of mind by the Ld. JCIT. JCIT accorded the consolidated single approval u/s 153D of the Act for several Assessment Years. Therefore the ratio laid down by the Hon ble High Court of Delhi in the case of Shiv Kumar Nayyar 2024 (6) TMI 29 - DELHI HIGH COURT is squarely applicable to the captioned Appeals. Thus the impugned assessment orders deserves to be set aside. We allow the Additional Ground of Appeal challenging the assessment order which was framed based on an invalid approval accorded u/s 153D. Decided in favour of assessee.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents: Section 153D of the Income Tax Act mandates that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner without the prior approval of the Joint Commissioner. The provision requires that approval be granted for "each assessment year" separately. The judgment references several precedents, including the decision in Principal Commissioner of Income Tax Vs. Shiv Kumar Nayyar, which emphasizes that the approval under Section 153D must not be a mechanical exercise but should involve an independent application of mind for each assessment year. Court's Interpretation and Reasoning: The Tribunal found that the JCIT issued a consolidated approval for seven Assessment Years, which does not satisfy the requirement of granting approval for "each assessment year" separately. The Tribunal noted that the approval was received by the Assessing Officer (A.O.) after the assessment orders were passed, indicating a procedural lapse. Key Evidence and Findings: The Tribunal observed that the approval dated 29/12/2016 was received by the A.O. on 30/12/2016, but the assessment orders were passed on 29/12/2016. This discrepancy highlighted that the A.O. did not have the requisite approval at the time of passing the assessment orders. Application of Law to Facts: The Tribunal applied the legal requirement that each assessment year must receive separate approval, and found that the JCIT's consolidated approval did not meet this requirement. The Tribunal also emphasized the need for the JCIT to apply independent judgment, which was not evident in this case. Treatment of Competing Arguments: The Assessee argued that the approval was invalid due to its mechanical nature and lack of timely receipt by the A.O. The Revenue contended that the JCIT had sufficient time to review the documents and that the approval process was not rushed. However, the Tribunal sided with the Assessee, finding that the approval process lacked the necessary independent application of mind. Conclusions: The Tribunal concluded that the assessment orders were invalid due to the lack of proper approval under Section 153D, as the JCIT's approval did not meet the statutory requirements. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: The Tribunal quoted the High Court's interpretation that "the approval under Section 153D of the Act has to be granted for 'each assessment year' referred to in clause (b) of sub-section (1) of Section 153A of the Act." Core Principles Established:
Final Determinations on Each Issue:
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