TaxTMI 
TaxTMI 
2025 (12) TMI 1765
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.... submissions of the parties herein on the issue of delay, I am of the considered view that since the said delay is not inordinate and there was no deliberate or malafide conduct on the part of the assessee, the said delay of 3 days is condoned and the appeal is heard on merits. 5. In this case, the assessee has filed both legal grounds as well as grounds on merits. The Ld. Counsel for the assessee submitted that he would assail the legal ground first and if the said legal ground is answered affirmative, then the grounds on merits shall become academic only. 6. The legal issue raised by the Ld. Counsel for the assessee is that "whether the approval granted by the Addl. Commissioner of Income Tax u/s. 153D of the Income Tax Act, 1961 (for short 'the Act') was done in mechanical and summary manner or not? " In this regard, the Ld. Counsel had placed on record copy of the approval u/s. 153D of the Act which is made part of this order as follows: It is observed that the said approval has been granted by Mr. Ajit Kumar Laskar, Addl. Commissioner of Income Tax, dated 29.09.2021 in response to the proposal made by the Assistant Commissioner of Income Tax (Central)-1, Raipur seekin....
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....he Ld. Counsel for the assessee is extracted as under: "Ground No.1: On the facts and circumstances of the case & in law, combined approval granted u/s. 153D dt. 16-03-21 on presumption basis for 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 i....
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....is not writing any findings regarding the fact or for that matter he is not providing any reasons so to understand his reasoning for granting of such approval. It is obvious that the approval is granted in a mechanical and summary manner and that 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 shal....
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....pproval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to "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 O....
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....." 9. Further, the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. MDLR Hotels (P) Ltd. (2024) 166 taxmann.com 327 (Delhi) has held that where competent authority accorded approval u/s. 153D of the Act as many as 246 proposed assessments 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 s....
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....ts of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the material on the basis of which the officer is making the assessment and after due 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 asse....
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....that the law is no more res-integra and the approval if granted in a mechanical manner wherein the approval letter itself does not disclose the reasons nor show any application of mind such an approval shall have to be held as void ab initio since it vitiates the very intent 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." 10. Respectfully following the aforesaid judicial pronouncements, the intent of the legislature and the purpose has been clearly laid down u/s. 153D of the Act and what are the process that has to be complied with by the competent authority before issuing such approval.....
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.... of the Act. Therefore, any proceedings based on such void approval shall become non-est as per law. I hold accordingly. Resultantly, the assessment order looses legal validity to sustain itself, hence quashed. 12. Since on this legal premise, the appeal of the assessee is allowed, rest all other grounds stands academic only. 13. In the result, appeal of the assessee is allowed. Order pronounced in open court on 24th day of December, 2025. ============= Document 1 20 Office of the Addl.Commissioner of Income tax, Range Central, Aayakar Bhawan, Civil Lines, Raipur [CG) Email:[email protected] 1286 Ph.&Fax 0771-2331044 Dated: 29.09.2021 F.No. Addl.CIT(C]/RPR/Tech./153D/2021-22/ To. The Assistant Commissioner of Income Tax (Central)-1, Raipur. Subject :- Approval u/s 153D of the I.T. Act-regarding- Please refer to your proposal dated 28.09.2021 on the above subject in the case mentioned below: 2. The draft assessment orders in the following case submitted vide above mentioned letter are hereby approved u/s 1530 of the I.T. Act subject to below mentioned conditions :- S. N. Name (M/s / Shri/Smt.] Group A.Y. 01 Neha ....