Manasvi Chheda

Brief facts of the case:

The Appeals were filed against assessment orders passed under section 143(3) r.w.s. 153A, pursuant to search conducted u/s 132, of Income tax Act, 1961 for 4 years (AY 2007-08 to AY 2011-12) out of block of 7 years comprising of AY 2005-06 to AY 2011-12. Addition was made on account of bogus purchases. During the appeal before ITAT, Additional ground was raised for quashing the order for not availing the approval u/s 153D, which is mandatory before passing the order. Assessee had filed an RTI application before Addl. CIT to get the copy of approval granted to AO u/s 153D, however in the RTI order Addl. CIT had stated that the copy of approval is not available on record, however those for other group cases are available. Thus, Approval u/s 153D was absent in the case of the assesse was confirmed by way of RTI Application. Various decisions in this regard were relied upon.

Hon’ Tribunal has dismissed the additional ground raised by assessee on following counts:

a) By questioning the conduct of the assesse, since the additional ground was raised for the first time before Hon’ Tribunal and not before lower authorities.

b) Further, reliance was placed on the affidavits, being secondary evidence by the then officers (AO and Addl. CIT) in charge that the approval was granted and obtained and the statutory procedures were duly complied with.

c) It has been stated that approval u/s 153D is an administrative procedure and the administration action of the department is not very much relevant for the assesse to justify its case on merits.

d) Further, even though copy of approval is not there, but AO had mentioned in the assessment order that he had sought approval from Addl. CIT. is sufficient compliance.

e) Also, since the approval was available for other group cases, it was deemed that approval was there in case of assesse.

f) Further, when assesse opts for contending the issue on legal grounds instead of merit, intentions are not good.

Thus, as can be seen from the above, when in an RTI Order it was clearly stated that approval was not there and after granting various opportunities to Departmental representative for bringing the copy of approval which he could not, reliance was placed on the affidavits of the officers and it was considered as sufficient evidence for adjudicating the ground. Now, the question remains whether a self-serving document of AO who is himself in appeal, can be taken as an evidence, in the absence of copy of approval, which could not be produced and merely stage of raising the legal ground by assesse can be reason for suspecting or doubting the assesse.

Even as regards the merits of the case, assesse pleaded to consider the GP of the past years as the basis for restriction of addition by placing reliance on various judicial precedents. However, Hon’ Tribunal has confirmed 100% addition of Bogus purchases.

Source- Pratibha Pipes & Structurals Ltd Vs DCIT (ITAT Mumbai), Appeal Number : ITA No.3874/Mum/2015, Date of Judgement/Order : 10/04/2019

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June 2021