ACIT Vs Vipin Kapur (ITAT Delhi)
ITAT Delhi held that assessment order u/s. 144 of the Income Tax Act is in violation of mandatory provisions of section 153D since mechanical approval is granted without application of mind. Accordingly, order is set aside.
Facts- The present appeal has been preferred by the assessee against order passed under section 144 of the Income Tax Act. It is mainly contested that assessment order passed u/s. 144 of the Act is in violation of mandatory provisions of section 153D of the Act and as such the same is bad in the eyes of law. It is also contested that the purported approval u/s. 153D of the Act is mechanical and without application of mind and hence the same is illegal and bad in law.
Conclusion- High Court of Judicature at Allahabad in the case of Pr. CIT v. Sapna Gupta has held that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply independent mind to the material on record for “each assessment year” in respect of “each assessee” separately. The words ‘each assessment year’ used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the “approval” as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power.
