Max City Developers Private Limited Vs DCIT (ITAT Delhi)
The Delhi Income Tax Appellate Tribunal (ITAT) allowed the appeals filed by the assessee against the common order of the Commissioner of Income-tax (Appeals) relating to Assessment Years 2011-12 and 2014-15. The dispute arose from assessment orders passed under Section 153C read with Section 143(3) of the Income Tax Act, 1961. During the hearing, the assessee pressed Ground No. 1, contending that the approval granted under Section 153D was not in accordance with law.
The Department opposed the challenge by arguing that Section 292BC, introduced through a recent amendment, characterises approval as a supervisory and administrative function and provides that deficiencies in reasons would not invalidate such approval. It was contended that the amendment applied retrospectively and should govern the case because the appeal was being heard after the amendment had come into effect.
The Tribunal examined the approval dated 30 December 2016 and noted that the approving authority had expressly described it as a “technical approval.” The approval authorised passing of assessment orders based on draft orders and directed the Assessing Officer to ensure that seized documents, papers, and comments contained in the appraisal report were taken into account. It further instructed the Assessing Officer to incorporate the fact of initiation of penalty proceedings in the assessment orders and to invoke the appropriate penalty provisions under Sections 271(1)(c) or 271AAB, depending on the facts of the case.
