Quote for the Day:

Lord Krishna in Bhagvat Gita: 
"If you don't fight for what you want....then, 
don't cry for what you lost""

Important Case Law:

( Contribution by CA. A. K. Srivastava )

Take away from ITAT Allahabad Bench order on Section 153D of the Income-tax Act, 1961 in case of Jyoti Mediservices Pvt. Ltd. Vs. DCIT, Central Circle, Allahabad. Order dated 21.11.2025 - I.T.A. Nos. 113, 114, 115 & 129/Alld/2025 for assessment years 2011-12 to 2013-14.

The primary issue revolves around the validity of the approval granted under Section 153D of the Income Tax Act, which mandates prior approval from the Joint Commissioner before passing assessment or reassessment orders in cases of search or requisition. 

Key points:

1. Approval under Section 153D: The order discusses whether the approval granted by the Joint/Addl.  Commissioner of Income Tax (JCIT/Addl. CIT) under Section 153D was valid and whether it was granted after due application of mind.  The appellants argue that the approval was given mechanically without proper examination of the draft assessment orders and relevant materials. 
2. Legal Precedents: Multiple case laws and judgments from various High Courts and the Supreme Court, emphasizing that approval under Section 153D must not be a mechanical exercise were cited. Thrust of argument was that the approval must reflect the application of independent mind and due diligence by the approving authority.  Failure to meet these requirements renders the approval invalid. 
3. CBDT Guidelines: Guidelines issued by the Central Board of Direct Taxes (CBDT) in its Manual of Office Procedure, which outline the process for granting approval under Section 153D was referred to  and relied upon.  These guidelines stress the importance of submitting draft assessment orders well in advance, documenting the approval process, and ensuring the approving authority applies their mind to the materials and reasoning provided. 
4. Tribunal Observations: The Income Tax Appellate Tribunal (ITAT) has previously quashed assessment orders where approvals under Section 153D were found to be mechanical or lacking application of mind.  The Tribunal emphasized that the approving authority must independently verify the draft assessment orders and ensure compliance with legal and procedural requirements.
5. Court Decisions: Several High Court and Supreme Court judgments that support the principle that approval under Section 153D must be a thoughtful and non-mechanical process were relied upon.  These judgments highlight the importance of protecting taxpayers from arbitrary or unjust assessments. 
6. Case-Specific Details: Detailed account of the approval process in the specific cases under appeal, including communications between the Assessing Officer and the JCIT/Addl. CIT have been taken note of. The appellants argued that the approvals were granted in haste, without sufficient time for proper examination of the materials. 
7. Conclusion: The order concludes that approval under Section 153D must involve due application of mind and cannot be a mere formality.  If the approval is found to be mechanical or lacking proper consideration, it is invalid and can lead to the annulment of the assessment orders. 

For Judgment,  Please click here

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