TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1461
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.... 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 arrived at independently by the competent authority for issuing such approval u....
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....e 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 153-B, except with the prior approval of the Joint Commissioner : Provided that nothing contain....
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....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 having been perused by the Additional Commissioner of Income-tax. The letter simply grants an approval. In other words, even the bare minimum requirement....
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....ervations 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 or the assessment year referred to in clause (b) of sub - section (1) of section 153B, except with the prior approval of the Joint Commissioner. Provided that nothing contained in this section shall ....
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....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. Further, copies of final orders so passed be sent to this office for record." 20. In our considered opinion, there is no whisper of any seized material sent by the Assessing Officer with his proposal requesting the approval u/s.153D of the Act. All the requests for ....