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of <h1>Assessee wins as search assessment quashed for lack of valid prior approval under Section 153D</h1> <h3>Rita Khanna Versus DCIT (Central), Moradabad And JCIT (OSD), Moradabad, Versus Rita Khanna</h3> ITAT Delhi allowed assessee's appeal and dismissed Revenue's cross-appeal in search assessment case for AY 2019-20. The Tribunal quashed the assessment ... Validity of assessment order passed without valid approval u/s 153D - HELD THAT:- AO had sought the prescribed authority’s approval on 26.03.2021 which stood granted on 07.04.2021. The clinching fact emanating is that the AO herein had in fact sought a common approval for seven assessment years from 2013-14 to 2019-20 which stood granted, and therefore, we quote Shiv Kumar Nayyar [2024 (6) TMI 29 - DELHI HIGH COURT], MDLR Hotels (P) Ltd.[2024 (8) TMI 1138 - DELHI HIGH COURT] and Serajuddin and Co. [2023 (11) TMI 1254 - SC ORDER] to conclude that such a combined section 153D approval indeed vitiates the entire assessment itself. We draw strong there from to quash the impugned assessment framed herein in assessee’s case in assessment year 2019-20 in very terms. The Appellate Tribunal (ITAT Delhi) in ITA No. 928/Del/2024 (assessee's appeal) and ITA No. 976/Del/2024 (Revenue's appeal) for AY 2019-20 examined the validity of the assessment order dated 13.04.2021 passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, following a search dated 17.01.2019. The key legal issue was whether the assessment was valid without prior approval u/s 153D of the Act.The assessee contended that the assessment was 'void ab initio and jurisdictionally flawed' due to lack of valid approval u/s 153D. The Tribunal, relying on precedents including National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC) and Allcargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 287 (SB), allowed the additional ground under section 254(1), as it went to the root of the matter.Factually, the Assessing Officer sought approval on 26.03.2021, which was granted only on 07.04.2021-after the assessment order dated 13.04.2021. Moreover, the approval was a combined sanction for seven assessment years (2013-14 to 2019-20). The Tribunal relied on recent decisions including PCIT Vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Del.) and ACIT vs. Serajuddin and Co. (2024) 163 taxmann.com 118 (SC) to hold that such combined post-facto approval vitiates the entire assessment.Accordingly, the Tribunal quashed the impugned assessment order for AY 2019-20 as invalid for want of valid approval u/s 153D. The assessee's appeal was allowed, and the Revenue's cross-appeal was dismissed. All other merits were rendered academic.In sum, the Tribunal held: the assessment order passed without valid prior approval u/s 153D is 'void ab initio,' warranting quashing of the assessment.
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