The assessment order passed is not Legal as Approval u/s 153D was Given Mechanically: Delhi HC [Read Order]

The Delhi High Court in a recent ruling held that the assessment order passed is not legal as approval under section 153D of the Income Tax Act, 1961 was given mechanically.

 The appellant/revenue challenged the order passed by the Income Tax Appellate Tribunal [Tribunal]. The Tribunal has via the impugned order set aside the additions made qua the income of the respondent/assessee, Anuj Bansal on the ground that there was no application of mind by the Additional Commissioner of Income Tax [“ACIT”] in approving Section 153D of Income Tax Act, 1961.

An assessment order was framed by the respondent/assessee under Section 153A, read with Section 143(3) of the Act. The order was carried in appeal by the respondent/assessee, right up till the Tribunal. The Assessing Officer (AO) additions against the returned income.

The respondent had declared an income amounting to Rs. 87,20,580/-. However, while making the additions, strangely, the AO noted that the returned income was Rs. 11,00,460/-. 

There were two additions made by the AO. The first addition was made qua cash deposited in the bank, amounting to Rs. 15,04,35,000/-. The second addition was made about cash introduced via an entry operator i.e., one, Mr Vipin Garg. The amount added qua this aspect was pegged at Rs. 1,54,07,100/-.

Despite these additions, which would have taken the assessed income well beyond what was crystallised by the AO i.e., 1,65,07,560/-, the ACIT failed to notice the error.

The Tribunal concluded that there was a complete lack of application of mind, since the ACIT, who approved, failed to notice the said error. 

It was evident that the approval was granted without examining the assessment record or the search material.

A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia upheld the order of the Tribunal and held that there was the absence of application of mind by the ACIT in approving under Section 153D of the Income Tax Act, 1961.

To Read the full text of the Order CLICK HERE

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