Assessments concluded u/s 153A without Mandatory Approval is Invalid: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal( ITAT ) has held that assessments concluded under section  153A  of the Income Tax Act, 1961 without mandatory approval are invalid.

The Section 153D of the Income Tax Act mandates that no order of assessment or reassessment shall be passed by an AO below the rank of Joint Commissioner without the prior approval of the Joint Commissioner or a higher-ranking officer.

Emaar MGF Land Limited, the assessee company challenged the assessment as well as the additions made under section 153A r.w.s 143(3) to be void ab initio and without jurisdiction, contending that the approval under section 153D for the said assessment was granted mechanically and without any application of mind.

It was found that there is no evidence of substantial approval produced by the Assessing Officer ( AO ) under section 153D, despite repeated opportunities. The Bench explained that Section 153D approval must be demonstrated as non-mechanical and considered after a review of the due assessment record. Hence, the Bench opined that the absence of evidence of the existence of the requisite approval under section 153D can lead to a presumption that there was no approval at all, rendering the assessments invalid.

The two-member Bench comprising G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member) observed that prior approval of competent authority under section 153D of the Act is mandatory and same is required to pass rigour of the law, to show that the approval was granted after due consideration of the assessment record and it was not a mechanical approval.

While allowing the appeal, the Tribunal held that, in case the AO can lay hand on any evidence showing the existence and content of approval, the application may be filed for re-calling the order.

To Read the full text of the Order CLICK HERE

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