Pack Plast India Pvt. Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi quashed assessments for AYs 2014-15, 2016-17 & 2017-18 framed u/s 153C, holding that the mandatory approval u/s 153D was granted in a mechanical, ritualistic manner without independent application of mind. Though separate approval letters were issued for each year, all were identically worded, same-dated and revealed that the approving authority did not personally examine the seized material, but merely relied on what was “perused by the AO and brought to notice”.
The Tribunal held that approval u/s 153D is not an empty formality. The approving authority must independently examine the draft assessment order, appraisal report and seized material for each AY and each assessee. Use of stock language like “approval is accorded” without any indication of thought process amounts to rubber-stamping, which goes to the root of jurisdiction and vitiates the assessment.
Strong reliance was placed on recent High Court rulings holding that:
– approval must show independent satisfaction,
– carbon-copy approvals across years/entities are invalid,
– non-compliance with s.153D is not a curable procedural lapse, and
– the fact of approval must even find mention in the assessment order.
Since the assessments failed on this jurisdictional defect alone, all other grounds on 153C satisfaction, incriminating material, evidentiary value of excel/tally data, additions u/s 68 & 69C, cross-examination, DIN violations, etc. were rendered academic.
Result:
All three assessments annulled solely due to mechanical approval u/s 153D; assessee’s appeals allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
