Vivaan Prakash Vs DCIT (ITAT Delhi)
Delhi Tribunal quashed the 153C assessment, holding that the approval u/s 153D issued by Addl. CIT, Lucknow, was mechanical & non-application of mind since it was a single approval for two assessment years.
The Tribunal found the approval to be a pro forma sanction without reference to seized material or independent reasoning. Referring to PCIT v. Shiv Kumar Nayyar (Del HC), ACIT v. Serajuddin & Co. (Ori HC) & PCIT v. Sapna Gupta (All HC), it held that such ritualistic approval vitiates the assessment itself.
Accordingly, the 153C order was declared void ab initio, and the appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals), Lucknow-3 (‘Ld. CIT(A)’ for short), dated 17/03/2023 for the Assessment Year 2018-19.
2. Brief facts of the case are that, a search and seizure operation u/s 132 of the Act carried out at the premises of Sh. Vibhu Prakash Bansal, Sh. Vineet Prakash Bansal and M/s Ravi Prakash and sons Saraffa Bazar on 10/08/2018, wherein certain incriminating materials and unexplained cash was found. An assessment order came to be passed u/s 153C of the Income Tax Act, 1961 (‘Act’ for short) on 14/06/2021 by making an addition of 10,54,665/- treating the same as undisclosed income of the Assessee. Aggrieved by the said addition, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 17/03/2023, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A), the Assessee filed the present Appeal.
