TaxTMI 
TaxTMI 
2025 (6) TMI 1461
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....14 years without application of mind in routine manner for mere formality, without even recording any word of own satisfaction on the facts of the assessee's case for A.Y.2019-20 i.e., each year for each assessee separately in the approval order u/s.153D; approval order u/s.153D is invalid and hence, assessment made u/s. 143(3) r.w.s. 153A dt. 25-3-21 would be invalid and is liable to be quashed." 4. It is also relevant to extract the approval u/s.153D of the Income Tax Act, 1961 (for short 'the Act'), dated 16.03.2021 a/w. request letter dated 16.03.2021 for the said approval which reads as follows: Approval u/s. 153D of the Act, dated 16.03.2021 Request letter dated 16.03.2021 5. That the first contention raised by the Ld.Counsel is that date for request for seeking approval u/s.153D of the Act by the ACIT was dated 16.03.2021 and it is on the same date i.e. 16.03.2021, the said approval was granted by the competent authority as is evident from the aforesaid letter and that too for A.Y. 2013-14 to 2019-20 i.e. for 7 years. The second contention raised by the Ld. Counsel is that as evident from Para 3 and 4 of the said approval, there is no satisfaction arr....
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.... too on the same date, on which, the request letter has been furnished before the competent authority. That further, the entire action has been taken on the basis of borrowed satisfaction from the A.O. 8. The Hon'ble High Court of Delhi in the case of PCIT Vs. Shiv Kumar Nayyar (2024) 299 Taxman 385/467 ITR 186 (Delhi)(HC) had an occasion to deal with an almost identical issue i.e. grant of approval u/s. 153D of the Act in a mechanical manner and without application of mind. For the sake of completeness, the relevant discussions of the said decision are extracted as follows: "10. Before embarking upon the analysis of the factual scenario of the instant appeal, we deem it apposite to examine the underlying intent of the relevant provision of the Act i.e., Section 153D, which is culled out as under:- "153-D. Prior approval necessary for assessment in cases or requisition.--No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of Section 153-A] or the assessment year referred to in clause (b) of sub-section (1) of Section 1....
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....each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A." [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately. 13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC OnLine Ori 992] to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under:- "22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders....
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....s mechanically by way of a single letter of approval without application of mind, the impugned assessment is liable to be quashed. For the sake of clarity, the relevant observations of the Hon'ble High Court are culled out as follows: "3. It is the aforesaid facts which appear to have constrained the Tribunal to observe as follows: "13. We have given thoughtful consideration to the orders of the authorities below and have carefully perused all the relevant documentary evidences brought on record. We have also gone through each and every approval granted by the Additional Commissioner of Income tax, Central Range - 2, New Delhi vis- a - vis, each and every proposal made by the DCIT, Central Circle -15, New Delhi. 14. The issue which we have to decide is, can these approvals be treated as fulfilling the mandate of provisions of section 153 D of the Act vis- a-vis legislative intent of the said section in the statute. Section 153 D of the Act reads as under : "No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of section 153A....
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....ue application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order. xxxx xxxx xxxx 18. In light of the afore-stated relevant provisions and legislative intent, approval dated 08.03.7.013 is in respect of 62 assessment orders as exhibited at pages 136 and 137 of the Index to Convenience Compilation furnished by the ld. counsel for the assessee. Approval dated 15.03.2013 is in respect of 37 assessment orders as exhibited at pages 138 and 139. Approval dated 18.03.2013 is in respect of 54 assessment orders as exhibited at pages 140 and 141. Approval dated 21.03.2013 is in respect of 24 assessment orders as exhibited at pages 142 and 143 and approval dated 25.02.2013 is in respect of 69 assessment orders as per exhibits in the Convenient Compilation. 19. Thus, the worthy Additional Commissioner of Income tax, Central Range - 2, New Delhi gave approval to 246 assessment order by a single approval letter u/s.153 D of the Act by mentioning as under: "The above draft orders, as proposed, are hereby accorded approval with the direction to ensure that the orders are passed well before limitation period. Fur....
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....nt of the legislature enshrined u/s.153D of the Act. Therefore any proceedings on basis of such void approval thereafter shall become non-est in the eyes of law. I hold accordingly. Resultantly, the assessment order looses legal validity to sustain itself, hence quashed. 13. As per the aforesaid terms even without going into the merits of the matter on this legal premise itself the appeal of the assessee stands allowed. Since this legal ground is answered in affirmative, therefore, all other grounds on merits including any other legal grounds if any, becomes academic only. 14. In the result, appeal of the assessee is allowed. Order pronounced in open court on 21^st day of May, 2025. ============= Document 1 Office of the Addl. Commissioner of Income tax, Range Central, Aayakar Bhawan, Civil Lines, Raipur (CG) Email:[email protected] Ph.&Fax 0771-2331044 Dated: 16.03.2021 F.No.Addl.CIT (C)/RPR/Tech./153D/2020-21/ To. The Asstt. Commissioner of Income Tax (Central), Bilaspur. Subject :- Approval u/s 153D of the I.T. Act-regarding- Please refer to your letter F.No ACIT/Central/BSP/153D/2020-21/2311 dated 16.03.2021 2. The draft a....