Case Number: ITA 1484/DEL/2021
Appellant: ACIT Central Circle-14 Delhi, Delhi
Respondent: Anuj Bansal, Delhi
Assessment Year: 2015-2016
Case Filed On: 2021-10-21
Order Type: Final Tribunal Order
Date of Order: 2023-04-12
Pronounced On: 2023-04-12
The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘A’, presided over by Shri Shamim Yahya, Accountant Member, and Ms. Astha Chandra, Judicial Member, delivered a judgment on April 12, 2023, in the case of ACIT, Central Circle-14, Delhi vs. Anuj Bansal. The case, involving the assessment year 2015-16, revolved around the validity of approval under Section 153D of the Income Tax Act, 1961, which was crucial in determining the legality of the assessment order passed under Section 153A/143(3) of the Act.
The Revenue appealed against the deletion of an addition of Rs. 5,40,25,000 made under Section 69A of the Income Tax Act, alleging that the amount was unexplained money. The assessee, Anuj Bansal, cross-objected, challenging the validity of the assessment order on several jurisdictional grounds, including the validity of the mandatory statutory approval under Section 153D.
The primary issue in this case was the validity of the statutory approval under Section 153D. The assessee’s counsel argued that the approval was mechanical and without proper application of mind, as evident from the errors in the assessment order regarding returned income and total assessed income.
The ITAT, in its analysis, referred to the consolidated approval for multiple assessment years and found that the approval was given without proper examination of the assessment records. The Tribunal noted that the approval letter did not indicate any detailed review or application of mind by the Additional CIT, making the approval process fundamentally flawed.
The ITAT concluded that the approval under Section 153D was invalid due to non-application of mind by the Additional CIT. The Tribunal emphasized that the approval process required a judicial approach, involving a thorough review of facts and evidence, which was missing in this case.
As a result, the ITAT quashed the assessment order for AY 2015-16, deeming it void due to the invalid approval under Section 153D. Consequently, the Revenue’s appeal on merits was dismissed as infructuous.
This case highlights the critical importance of proper approval processes under Section 153D of the Income Tax Act. The judgment underscores that approvals must be granted with due diligence and a thorough review of the assessment records to ensure legality and fairness in the assessment process.
The Tribunal’s decision serves as a reminder to tax authorities to adhere strictly to procedural requirements, as any lapse in this regard can vitiate the entire assessment process, leading to quashing of assessment orders.
Order pronounced in the open court on April 12, 2023.
Shamim Yahya, Accountant Member
Astha Chandra, Judicial Member
Invalid Approval Under Section 153D Leads to Quashing of Assessment Order: ACIT vs. Anuj Bansal
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