Assessments Concluded U/s 153A Without Mandatory Approval U/s 153D Would Be Void: Delhi ITAT

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.

The Division Bench comprising G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member) observed that “prior approval of competent authority u/s 153D of the Act is mandatory and same is required to pass rigor of the law, to show that the approval was granted after due consideration of the assessment record and it was not a mechanical approval”. (Para 7)

Facts of the case:

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

Observations of Tribunal:

The Bench found that there is no evidence of substantial approval produced by AO u/s 153D, despite repeated opportunities.

The Bench explained that Section 153D approval must be demonstrated as non-mechanical and considered after review of due assessment record.

Hence, the Bench opined that absence of evidence of existence of the requisite approval u/s 153D can lead to a presumption that there was no approval at all, rendering the assessments as invalid.

The Tribunal therefore allowed assessee's appeal while cautioning that, in case the AO is able to lay hand on any evidence showing existence and content of approval, application may be filed for re-calling the order.

Counsel for Assessee: Salil Kapoor, Tarun Chanana and Ananya Kapoor

Counsel for Revenue: T. James Singson and Ankit Mishra

Case Title: Emaar MGF Land Limited Vs ACIT

Case Number: ITA No. 825/Del/2018

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