ACIT Vs Serajuddin & Co. Kolkata (Orissa High Court)
The case of ACIT vs. Serajuddin & Co. Kolkata, heard by the Orissa High Court, revolves around a dispute regarding the approval process under Section 153D of the Income Tax Act, 1961. The case stems from appeals filed by both the Assessee and the Revenue against separate orders of the Commissioner of Income Tax (Appeals) for multiple assessment years.
The essence of the dispute lies in whether the approving authority, in this case, the Additional Commissioner of Income Tax (Additional CIT), had adequately applied their mind before granting approval under Section 153D. Section 153D mandates that no assessment or reassessment order can be passed by an Assessing Officer below the rank of Joint Commissioner without the previous approval of the Joint Commissioner.
The Assessee contended that the approval granted by the Additional CIT was mechanical and lacked proper application of mind. They cited Circular No.3 of 2008 issued by the Central Board of Direct Taxes (CBDT), which outlines guidelines for such approvals. Additionally, they referenced a previous decision by the Income Tax Appellate Tribunal (ITAT) that deemed these guidelines mandatory and binding.
The ITAT, in its ruling, referred to precedents and held that the approving authority had not sufficiently applied their mind before granting approval. Consequently, the assessment orders were set aside, rendering the cross appeals of the Revenue moot.
