ACIT Vs Serajuddin And Co. (Supreme Court of India)
The matter arose from search and seizure proceedings conducted under Section 132 of the Income Tax Act, 1961 on 28 May 2008 against the assessee and related persons. Pursuant to the search, notices under Sections 153A and 142(1) were issued, and on 30 December 2010 the Assessing Officer (AO) passed assessment orders under Sections 143(3)/144/153A making various additions and disallowances. The assessee challenged the assessments before the Commissioner of Income Tax (Appeals) [CIT(A)], contending, among other grounds, that Section 153D had not been complied with. The Revenue maintained that the AO had obtained the Additional Commissioner of Income Tax’s prior approval before passing the assessment orders. The CIT(A), while partly allowing the appeals, rejected this objection, observing that it was unnecessary for the assessment orders to mention the approval and noting that a consolidated approval dated 30 December 2010 existed for the relevant assessment years.
The assessee appealed to the Income Tax Appellate Tribunal (ITAT), contending that the CBDT Circular dated 12 March 2008 had not been followed and that the approval under Section 153D had been granted mechanically without application of mind. Reliance was placed on the AO’s letter seeking approval and the Additional CIT’s approval letter. The ITAT examined these documents, referred to judicial precedents, and concluded that the approving authority had not applied its mind to the assessment records or draft assessment orders before granting approval under Section 153D. The ITAT accordingly set aside the assessment orders, rendering the Revenue’s cross-appeals infructuous.
