Section 158BG of the Income Tax Act
The decision most relied on for Section 158BG is PCIT v. Sapna Gupta (147 Taxmann.com 288), cited in 591 of the 135 judgments on BharatTax that turn on this section.
Leading authorities on Section 158BG
Approval under Section 153D for search assessments is not a mere formality; it requires the approving authority to apply its mind judiciously to the subject matter and ensure satisfaction of legal and procedural requirements for each assessment year.
The previous approval required for assessment orders under provisions like Section 158BG or Section 153D is an administrative power and an internal matter, not deciding the assessee's rights. A mere irregularity in granting such administrative approval does not vitiate the assessment order.
When an administrative order entails civil consequences, it must adhere to the principles of natural justice, including the right to be heard (audi alteram partem), as the distinction between judicial and administrative acts for this purpose has withered away. Civil consequences broadly encompass impacts on civil liberties, material deprivations, and non-pecuniary damages affecting a citizen's life.
A mere irregularity in obtaining the necessary approval under Section 158BG of the Income-tax Act, 1961, does not invalidate or render fatal the assessment order passed in relation to a search assessment.
Procedural irregularities, especially where initiation was valid but completion was flawed, are often curable and may not automatically invalidate an entire order. This principle, tied to natural justice, means minor defects in procedure can be remedied without voiding the proceedings.
The requirement of statutory approval for an assessment order mandates the approving authority to apply its mind through proper and thorough scrutiny. This process presupposes a diligent application of mind and adheres to principles of natural justice.
A mere irregularity in granting approval under Section 158BG of the Income-tax Act does not render the resulting assessment order invalid or fatal.
An appellate order is perverse and unsustainable if it deletes an addition made under Section 40A(3) of the Income-tax Act by admitting additional evidence without providing the Assessing Officer an opportunity to examine or rebut it, thereby violating principles of natural justice.
A mere irregularity in granting approval under Section 158BG of the Income-tax Act does not render the assessment order fatal or invalid.
Judgments on Section 158BG
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