PCIT Vs Tirupati Buildings & Offices Pvt Ltd (Delhi High Court)
The Delhi High Court considered an appeal filed by the Revenue challenging an order of the Income Tax Appellate Tribunal (ITAT). The Tribunal had annulled an assessment framed under Section 153A of the Income Tax Act, 1961 on the ground that the statutory approval required under Section 153D had been granted without application of mind.
Upon hearing the Revenue’s counsel and examining the order of the Tribunal, the High Court held that the appeal did not raise any substantial question of law. The Court observed that the Tribunal had annulled the assessment under Section 153A after finding that the approval granted under Section 153D suffered from evident non-application of mind.
The Court referred to its earlier decision dealing with an identical issue concerning the manner in which approval under Section 153D should be granted. Section 153D mandates that no order of assessment or reassessment under Section 153A can be passed by an Assessing Officer below the rank of Joint Commissioner unless prior approval of the Joint Commissioner is obtained.
The Court explained that the provision requires such approval to be granted for each assessment year before the assessment order is passed. The approving authority must verify the issues raised by the Assessing Officer in the draft assessment order and examine whether the required procedure has been followed. The approval therefore requires an independent application of mind to the material on record.
