Shri Navin Jain Vs DCIT (ITAT Lucknow)
The case of Shri Navin Jain vs. DCIT before ITAT Lucknow involved six appeals by four assessees for assessment years 2015-16, 2016-17, and 2017-18. These appeals challenged the assessments completed under Section 153A/143(3) of the Income Tax Act, following a search and seizure operation conducted on the Sigma Group. The main argument in the appeal was that the approval granted under Section 153D was mechanical and lacked application of mind, making the assessments legally unsustainable. The assessees contended that the Additional CIT granted approval for 67 assessments in a single day, making it impossible to thoroughly examine all records, including 17,800 loose papers, seized documents, and other materials. This, they argued, violated the principle that an approving authority must independently evaluate the draft orders before granting approval.
The tribunal, referring to past rulings, including Sanjay Duggal & Others, emphasized that approval under Section 153D is a safeguard against arbitrary assessments and must involve due diligence. It was noted that the Additional CIT granted approvals on the same day the draft orders were placed before him, without prior discussions, indicating a lack of substantive review. The tribunal ruled that such mechanical approval does not meet the legal requirement under Section 153D. Citing precedents from the Delhi High Court and the Supreme Court, it reaffirmed that an approval process must demonstrate proper scrutiny and cannot be a mere formality. Consequently, the assessments were quashed, establishing that the lack of independent application of mind by the approving authority rendered them void.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
