Bulk Disposal Indicates Absence of Judicial Mind: ITAT Slams Income Tax Dept [Read Order]
ITAT quashed the assessment order noting that the addl.CIT approved multiple cases in a single day without application of mind.
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The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the bulk disposal of cases by the Income Tax Department amounts to a mechanical and non-judicious approach in granting approvals under Section 153D of the Income Tax Act, 1961. The case involved cross-appeals filed by the assessee, Minda Capital Pvt. Ltd., and the Revenue for Assessment Years (AYs) 2016-17...
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the bulk disposal of cases by the Income Tax Department amounts to a mechanical and non-judicious approach in granting approvals under Section 153D of the Income Tax Act, 1961.
The case involved cross-appeals filed by the assessee, Minda Capital Pvt. Ltd., and the Revenue for Assessment Years (AYs) 2016-17 to 2018-19. The assessee challenged the validity of the assessment orders, arguing that the approvals under Section 153D were granted arbitrarily and without proper scrutiny.
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The assessee’s counsel contended that the order passed by the assessing officer (AO) should be quashed as the approval granted under Section 153D of the Income Tax Act, 1961, was mechanical and arbitrary and without satisfying the statutory preconditions of the Act.
The revenue’s counsel relied on the impugned order and objected to the submissions of the assessee’s counsel.
The ITAT relied on the judgement of the Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar reported in 163 taxmann.com, in which it was held by the HC that “ that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind.”
The tribunal noted that the Addl. CIT had issued a common approval for multiple assessment years and multiple cases on the same day, 30-12-2019, without any independent analysis or reasoning. The approval letter merely stated that the draft assessment orders were approved as submitted, raising serious doubts about the authority's application of mind.
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The ITAT noted that the Addl. CIT had approved 43 cases in a single day, including 14 cases related to Minda Capital and another assessee, Smt Neetu Nayyar. This bulk disposal, the tribunal observed, made it humanly impossible for the authority to apply its mind independently to each case.
In conclusion, the ITAT quashed the proceedings initiated under Section 153C read with Section 153A of the Income Tax Act for AYs 2016-17 to 2018-19.
The tribunal comprising Rifaur Rahman (Accountant Member) and Anubav Sharma (Judicial Member) partly allowed the assessee's appeals and dismissed the Revenue's appeals, and the other grounds raised by the assessee were left open for future adjudication.
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