Final Assessment order passed without a valid approval under Section 153D renders Assessment invalid: ITAT Raipur.




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Final Assessment order passed without a valid approval under Section 153D renders Assessment invalid: ITAT Raipur.

ITAT Raipur recently has held that if the final assessment order is passed without a valid approval under Section 153D then the assessment is invalid.

Let us have a Short Overview of the case:

Raipur Tribunal – NR TMT (India) Pvt. Ltd.:
Background:
The cross-appeals are directed against the order passed by the CIT(A)-3, Bhopal, dated 03.12.2020, arising from the order passed by the AO under Section 143(3) of the Act.

The issues in the appeals are interlinked and are disposed of by a consolidated order.
The assessee challenged the addition of INR 1,77,86,577 on account of excess stock of ‘Sponge Iron’ computed by the AO based on a valuation report by the Departmental Valuation Officer (DVO) using a sampling method.
The assessee argued that the stock was not actually weighed by the search team and that the books of account were not rejected.

The assessee also raised objections regarding the validity of the search assessment under Section 143(3) read with Section 153A, citing improper approval under Section 153D. The assessee raised objections regarding the combined approval under Section 153D for multiple AYs and assessees, arguing that separate approvals were required.

The Revenue challenged the deletion of part of the addition on account of excess stock by the CIT(A), who relied on the valuation report of a valuer appointed by the assessee.
The Revenue also argued that Section 115BBE of the Act should apply to the assessee’s income as determined by the AO, including income referred to in Section 69.

Tribunal’s ruling:
The Tribunal observed that the additions made by the AO on account of excess stock of ‘Pig Iron’ and ‘MS Billets’ were vacated by the CIT(A), and thus, the preliminary objections on these grounds were dismissed.
The Tribunal noted that the CIT(A) had sustained the addition of INR 1,77,86,577 on account of excess stock of ‘Sponge Iron’ based on the valuation report of the assessee’s valuer, which was based on actual weighment.
The Tribunal found that the AO had continued with the assessment proceedings after forwarding the draft assessment order to the Joint Commissioner for approval under Section 153D, leading to a final assessment order that was different from the draft assessment order.

The Tribunal concluded that the final assessment order was passed without a valid approval under Section 153D, rendering the assessment invalid.

The Tribunal quashed the assessment framed by the AO, for want of valid assumption of jurisdiction in the absence of a valid approval under Section 153D.

The copy of the order is as under:

1737421896862




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