Prior approval in search cases void if granted mechanically; such approvals vitiate assessments and lead to quashing.

Approval under Section 153D for search/requisition assessments must reflect independent application of mind by the competent authority; approvals granted as routine, contemporaneous with the proposal, or mirroring the Assessing Officer's view indicate mechanical exercise and borrowed satisfaction and are therefore invalid. The authority need not record exhaustive reasons but must show some perusal of records and distinct satisfaction for each assessment year and assessee. Because the approval here showed no independent consideration, it was held void and the consequent assessment orders were quashed.

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Issues: Whether the approval granted by the competent authority under Section 153D of the Income-tax Act, 1961 was granted mechanically and on the basis of borrowed satisfaction, thereby vitiating the approval and rendering subsequent assessment orders void.

Analysis: Section 153D requires prior approval by the competent authority for assessment orders in search/requisition cases for each assessment year and for each assessee, which presupposes application of independent mind by the approving authority. Judicial authorities have held that approval granted as a routine or collective exercise without any indication of perusal of draft orders or seized material, or given on the same date as the proposal, reflects mechanical exercise of power and borrowed satisfaction from the Assessing Officer. The approving authority need not record exhaustive reasons, but the approval must contain some indication that the authority examined the records and applied independent judgment for the relevant assessment year and assessee. The approval under challenge here was granted contemporaneously with the proposal, contains no wording reflecting independent satisfaction, and mirrors approvals previously held to be void for lack of application of mind.

Conclusion: The approval under Section 153D of the Income-tax Act, 1961 is invalid as having been granted mechanically and on borrowed satisfaction; consequently, the assessment orders based on such approval are quashed and the appeals are allowed in favour of the assessee.

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