DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- AGARTALA , AGARTALA vs. RAJARSHI MOTORS PVT. LTD., AGARTALA

Facts

A search and seizure operation was conducted on Rajarshi Motors Pvt. Ltd. (assessee) revealing discrepancies between seized Tally data and audited accounts. The Managing Director disclosed Rs. 19.55 Crores as undisclosed income, including Rs. 95 lakhs for the assessee, which was not reflected in the return filed under Section 153A. The Assessing Officer made additions for undisclosed income, fund diversion, and investment, but the CIT(A) provided partial relief, leading to cross appeals by both the Revenue and the assessee.

Held

The Tribunal admitted the legal issue of approval under Section 153D of the Act, noting that a consolidated approval for multiple assessment years appeared mechanical. Both the legal issue (validity of approval under Section 153D) and the merits of the additions were remanded back to the CIT(A). The CIT(A) is directed to obtain comments from the AO regarding the approval process and re-evaluate the issues after affording the assessee due opportunity.

Key Issues

Whether assessment orders are invalid due to alleged non-compliance with approval requirements under Section 153D of the Income Tax Act, and the validity of additions made by the AO for undisclosed income, fund diversion, and investment.