Akil Gulamali Somji vs. ITO (ITAT Pune)

Failure To Obtain JCIT’s Approval Renders s. 153C Assessment Order Void

Pursuant to search & seizure action u/s 132 on the premises of Mr. Shriram Soni, certain documents belonging to the assessee were found and seized pursuant to which a notice u/s 153C was issued to the assessee and assessment u/s 153C r.w.s. 144 were framed. In passing the assessment orders, the AO (ITO) omitted to obtain the consent of the JCIT as mandated by s. 153D. Before the Tribunal, the assessee argued that the failure to obtain the JCIT’s consent rendered the assessment a nullity. HELD by the Tribunal upholding the plea:

S. 153C authorises the AO to exercise jurisdiction over any person in whose case incriminating material has been found during the course of search conducted on another person. S. 153D provides that no order of assessment shall be passed by an AO below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner. The fact that the heading to s. 153D refers to a “prior approval” and that it uses negative wording and the word “shall” makes the intention of the Legislature clear that compliance of s. 153D is mandatory. As the provision is mandatory, an act done in breach thereof will be invalid. Also, as the condition has been imposed in public interest, it cannot be waived by the assessee. Clause 9 of the Manual of Office Procedure also makes it clear that an assessment order under Chapter XIV-B can be passed only with the previous approval of the JCIT and that the approval must be in writing and stated to have been obtained in the body of the assessment order. Accordingly, in the absence of the JCIT’s approval, the AO had no jurisdiction to pass the s. 153C order and it was null and void (Ratnabai Dubhash 230 ITR 495 (Bom) & SPL’s Siddharth followed)