ITAT Annuls Assessment: Approval under Section 153D IT Act Found Invalid:

ITAT Annuls Assessment: Approval under Section 153D IT Act Found Invalid The assessee, M/s. Jyoti Mediservices Private Ltd., lodged appeals before the Income Tax Appellate Tribunal (ITAT) challenging the validity of assessment orders passed for the Assessment Years 2011-12 to 2013-14. These assessments were framed in connection with search and seizure operations carried out against the assessee. The core contention raised by the assessee was that the mandatory procedure required for concluding a search assessment had been fundamentally compromised. The assessee challenged that the necessary approval obtained from the Principal Commissioner or the Commissioner of Income Tax, as required under Section 153D of the Income Tax Act, 1961, suffered from "multiple infirmities." This foundational defect, the assessee contended, was fatal to the entire assessment process, regardless of the merits of the actual additions made. Main Issue: Whether the assessment orders passed under the search provisions of the Income Tax Act are liable to be cancelled if the mandatory approval obtained under Section 153D of the IT Act is found to be erroneous, making the approval invalid in the eyes of the law. Tribunal Decided: The Income Tax Appellate Tribunal (ITAT) ruled in favour of the assessee and allowed the appeals. The Tribunal, relying on Minto Developers Pvt. Ltd. confirmed the assessee’s position, finding that the mandatory approval given under Section 153D of the IT Act suffered from "multiple infirmities." This finding established that the requisite statutory approval, a prerequisite for the assessment, was legally invalid. Therefore, the ITAT held that the assessment orders could not legally stand and proceeded to annul the assessment orders for all relevant assessment years. Because the orders were annulled on this jurisdictional ground, the Tribunal did not find it necessary to address the other grounds of appeal concerning the merits of the additions, declaring them to be infructuous and academic.  The Revenue’s connected appeal was, therefore, dismissed for statistical reasons. To Read Full Judgment, Download PDF Given Below