Approving Authority Has Acted As Mere Rubber Stamp While Granting Approval U/s 153D: Delhi ITAT Quashes Assessment Passed Without Application Of Mind

On finding that the approval granted u/s 153D is not in accordance with the provisions of the Income Tax Act, the New Delhi ITAT held the approval granted u/s 153D is invalid and set aside the order passed by the First Appellate Authority as he acted as a mere rubber stamp. It is further clear that on the very same day the letter of the Assessing Officer with draft assessment orders were received, approval u/s 153D of the Act was granted by the Approving Authority. Against the assessment orders so passed, assessee preferred appeals before First Appellate Authority on the ground that the assessment orders are invalid due to lack of proper approval u/s 153D. Thus, the legislature wanted the assessments/ reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the material on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order.” The Bench further reiterated while referring the decision of the Supreme Court in the case of Sahara India Vs CIT 169 Taxman 328 that “the twin conditions of 'nature and complexity of the accounts' and 'the interests of the revenue' are the prerequisites for exercise of power under section 142.” The Bench also reiterated while referring the decision of the Supreme Court in the case of Sahara India Vs CIT 169 Taxman 328 that “the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the section is not turned into an empty ritual.