ACIT Vs Deepa Talwar (ITAT Delhi)
No Independent Mind, No Valid Assessment: ITAT Strikes Down 153A Order for Mechanical Sanction
When Husband Paid, Wife Can’t Be Taxed – ITAT Deletes Property Addition
A search took place in the case of the assessee and her husband, and assessment was framed u/s 153A. The assessee challenged the validity of the assessment in her cross objection. She argued that the assessment was time-barred u/s 153B because the extension taken on the basis of an FT&TR reference was invalid, as she held no foreign assets. More importantly, she demonstrated that the mandatory approval u/s 153D was granted in a mechanical, common and same-day manner, without application of mind. Relying on Delhi High Court decisions in MDLR Hotels and Shiv Kumar Nayyar, and ITAT decision in Millennium Vinimay, the Tribunal held that such mechanical approval vitiates the entire assessment. Hence, the 153A assessment was quashed as invalid and the cross objection was allowed.
Even on merits, the Tribunal noted that the property investment belonged entirely to the husband, who had already accepted and explained the source, and the assessee was only a co-owner on paper. Therefore, there was no basis to make addition in her hands, and the CIT(A)’s deletion was correct. Accordingly, the Revenue’s appeal was dismissed.
Result: Assessment quashed due to invalid 153D approval; cross objection allowed; Revenue’s appeal dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal preferred by the Revenue is directed against the order of the ld. Commissioner of Income-tax (Appeals)-31, New Delhi [for short ‘ld. CIT (A)] dated 03.09.2024 for Assessment Year 2014-15. The assessee also filed cross objections against the aforesaid impugned order of ld. CIT (A) dated 03.09.2024.
