PCIT Vs Sapna Gupta (Allahabad High Court)
Allahabad High Court in PCIT vs. Sapna Gupta addressed the validity of an assessment order made under Section 153A/143(3) of the Income Tax Act, 1961, following a search operation. The case concerned the assessment year 2014–15, for which the assessee filed a return in response to a notice under Section 153A. The Income Tax Appellate Tribunal (ITAT), Lucknow Bench, had earlier quashed the assessment on grounds that the prior approval mandated under Section 153D of the Act was granted in a mechanical manner. The Tribunal observed that the Additional Commissioner had approved 85 draft assessment orders, including that of the assessee, on a single day—raising questions about the genuineness and depth of the review.
The Revenue challenged the ITAT’s decision, arguing that the approval under Section 153D was in place and fulfilled the legal requirement. Citing judicial interpretations of “approval” from various high courts and the Supreme Court, the Revenue maintained that the act of approval—being administrative—does not necessitate an elaborate explanation of reasons. However, the High Court upheld the ITAT’s order, emphasizing that Section 153D requires meaningful and independent application of mind by the Approving Authority. The Court reasoned that approving 85 assessment drafts in a day made it humanly impossible to review each in detail, thereby undermining the purpose of the statutory safeguard against arbitrary or unjustified tax assessments.
