AFI Agro Private Limited Vs DCIT (ITAT Chandigarh)
No Mind, No Approval! 153D Rubber Stamp Kills Search Assessments- Approval Must Think, Not Copy-Paste – Assessments Quashed
Assessee is engaged in manufacturing of cattle feed & had filed its returns u/s 139(1) for AY 2017-18 & 2018-19 & u/s 139(4) for AY 2019-20. A search u/s 132 was conducted on 25.04.2018, followed by notice u/s 153A. Assessee filed returns reiterating the original income. AO framed assessments u/s 153A r.w.s 143(3) on 08.09.2021. CIT(A) partly allowed the appeals. Both Assessee & Revenue filed cross appeals.
A crucial legal ground was raised that approval granted by Addl. CIT u/s 153D was mechanical, ritualistic & without application of mind, thus invalidating the assessments. Tribunal examined the approval letter dated 03.09.2021 & found that one common approval was issued for 42 assessment orders of multiple assessees without discussing any specific facts, seized material or independent reasoning. The forwarding letter of AO did not even enclose appraisal report or investigation details, yet Addl. CIT claimed to have considered them. Tribunal noted that each assessment year & each assessee requires separate, independent, conscious approval, as mandated by multiple High Courts & Supreme Court.
Tribunal relied on landmark rulings including Abhisar Buildwell (SC) on scope of 153A, Serajuddin & Co. (SC), Anuj Bansal (SC & Delhi HC), MDLR Hotels (Delhi HC), Shiv Kumar Nayyar (Delhi HC), Sapna Gupta & Siddharth Gupta (Allahabad HC), & various ITAT decisions, where it was consistently held that approval u/s 153D is a statutory, quasi-judicial function & cannot be a mere formality or rubber stamp. Approval must reflect application of mind; otherwise, the assessment is void.
