TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 38
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....ties Ltd. and its related entities (SMC Group of cases). A search warrant of authorization u/s 123 of the Act was issued in the name of the Assessee and search was carried out on 20/07/2018. An approval u/s 153D of the Act dated 10/04/2021 has been accorded by the Additional Commissioner of Income Tax, Central Range-1, New Delhi for assessment years 2013-14 to 2019-20. Based on the said approval granted u/s 153D of the Act, assessment proceedings have been initiated against the Assessee for the assessment years under consideration. Assessment orders came to be passed u/s 153A of the Acton 10/04/2021 by making various additions for Assessment Year 2016-17 to 2019-20 which are the subject matter of present Appeals. As against the assessment orders, Assessee preferred Appeals before the Ld. CIT(A). The Ld. CIT (A) confirmed certain additions made by the A.O. vide orders impugned, which are called in question before us in the captioned Appeals filed by the Assessee. 3. The Revenue has also filed Appeals against the order of the Ld. CIT (A) pertaining to Assessment Years 2017-18 to 2019-20, challenging the deletion of certain additions/disallowances made by the Ld. CIT(A). 4. The ....
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....o force and the approval has been accorded by duly applied the mind. 6. Further, the Ld. DR vehemently argued that bare reading of provisions of section 153D of the Act, which provides only about existence of approval from the ld. ACIT. There is no mention of application of mind on the part of the ld. ACIT or the approving authority in the said section. The expression "application of mind" is only provided by the judicial decisions and not provided in the statute. Further submitted that, the literal interpretation is to be given to the provisions of section 153D of the Act which does not provide for application of mind of the approving authority and hence any other interpretation contrary to the same would only result in re-writing the law. The Ld. DR also argued that in some of the cases the Assessee files details at the last moment and that is why the approval is obtained from Ld. ACIT in the last moment. The Ld. Department's Representative has also submitted that the Grounds challenging the approval issued u/s 153D of the Act has not been raised before the Ld. CIT(A), which cannot be raised before the Tribunal in the belated stage. The Ld. Department's Representative ....
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....ls. The Addl. CIT, has not uttered a word on the subject matter of additions in the approval letter. The approval is in the nature of Performa approval; the approval granted smacks of mechanical or perfunctory approval in a symbolic exercise of powers vested under Section 153D of the Act. Apart from the same, single approval has been granted for 7 Assessment Years pertaining to the Assessee. 10. The Hon'ble Jurisdictional High Court in the case of Pr. Commissioner of Income Tax Vs. Shiv Kumar Nayyar (supra) held as under:- "11. A plain reading of the aforesaid provision evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for "each assessment year" referred to in clause (b) of sub-section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of PCIT v. Sapna Gupta [2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- "each assessment year" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under....
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....ely. 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 OnLineOri 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 of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/05/2024 at 21:34:51 need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rub....
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....rded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt. NeetuNayyar. It is also pertinent in this regard to refer to pages 68 and 69 of the paper book which contains information obtained by Smt. NeetuNayyar from Central Public Information Officer who is none other than the ld. Addl. Commissioner of Income-tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page 36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt. NeetuNayyar. The remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each....
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.... issued by CBDT, the powers of issuing such guidelines can be traced to section 119 of the Act. The Hon'ble High Court also held that non-compliance of requirement of section 153D of the Act is not a mere procedural irregularity and lapse committed by Revenue may vitiate the assessment order. 12. The ratio of judgment delivered in the case of ACIT vs Serajuddin& Co. Kolkata; PCIT vs Anuj Bansal; PCIT vs Shiv Kumar Nayyar; and PCIT vs SubhashDabas (supra) have held in chorus that the approval granted under s. 153D of the Act, if granted mechanically, will vitiate the assessment order itself. The SLP filed against the aforesaid judgment in the case of ACIT vs Serajuddin& Co. Kolkata was dismissed as reported in (2024) 163 taxmann.com 118 (SC). 13. In so far as the order of the Co-ordinate Bench of the Tribunal in the case of Kailash Gahlot-ITA No. 3431/Del/2023 (supra) relied by the Ld. Department's Representative is concerned, the said appeal in ITA No. 3431/Del/2023 has been heard on 28/07/2025 and the Final order has been passed in the said matter on 24/10/2025. However, it is brought to the notice of the Bench that, the very same issue regarding approval u/s 1....
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....ng Officer fails to follow any judgment of the High Court or of the Supreme Court, the assessee has adequate statutory remedies by way of an appeal and revision against the assessment order but, the Court should not try to control the mode and manner in which an assessment should be made. Hence, the higher authority including the Additional CIT/JCIT or CIT or CCIT, being administrative controlling authorities of the Assessing Officer, are not entitled to interfere in the judicial process of the Assessing Officer while framing assessment. In view of the above, I am of the view that, while making an assessment, the Assessing Officer is solely to be guided by the provisions of law and he cannot avail of any instructions or directions given by his higher authority including CBDT in making a particular assessment in a particular way. While passing assessment orders, he is only bound by what, if any, has been directed under Section 144A of the Act by his Additional CIT/JCIT or the instructions issued by the CBDT under Section 119 of the Act or what has been decided by the appellate authorities as mentioned in the Act. He has also to follow the precedence established by Hon'ble High Court....
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....ating above after making due entry in the order sheet. This is the mandate provided in the office manual of the Department. In view of above, I am of the view that the 'approval', as mandated u/s 153D of the Act, signifies a product of human thoughts based on the given set of facts and interpretation of the applicable law. It provides equality in treatment and thus prevents bias, prejudice and arbitrariness. It also prevents and avoids inconsistent and divergent views. The power of approval to the specified authority i.e., Superior authority has been envisaged with the objectives that no illegality or biasness, to either of the sides i.e., the assessee or the Revenue, remains. 23. In the present case before me, the above procedure is not at all followed as is evident from the proposal sent by the Assessing Officer as reproduced in Paragraph 10. It means that the approval granted is mechanical in manner and without application of mind by the approving authority i.e., by the Additional CIT. Now, in view of the above discussion and legal position, I answer the question as under:- Question framed by the Bench Answer to the Question As to whether under the present fact....
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....bsp;54/Del/2024, Ground No. 3 in ITA No. 55/Del/2024, ITA No. 651/Del/2024, Ground No. 6 in ITA No. 652/Del/2024 of the Appeals filed by the Assessee. 16. In the result, the appeal of the Assessee in ITA No. 54/Del/2024, ITA No. 55/Del/2024, ITA No. 651/Del/2024, ITA No. 652/Del/2024 of the Appeals are partly allowed. 17. Since, we have quashed the Assessment Orders for Assessment Years 2016-17 to 2019-20 on the ground of erroneous approval accorded u/s 153D of the Act, we do not consider it necessary to address on other legal and factual contentions raised in the other grounds of Appeal of the Assessee. 18. As we have quashed the Assessment Orders pertaining to Assessment Year 2017-18, 2018-19 and 2019-20 on the ground of erroneous approval accorded u/s 153D of the Act, Appeals filed by the Revenue have become in-fructuous. Accordingly Appeals of the Revenue in ITA No. 330/Del/2024, 864/Del/2024 and 857/Del/2024 are hereby dismissed. Order pronounced in the open court on 19th December, 2025. ============= Document 1 Date of Hearing, 31.10.2028 कारà¥à¤¯à¤¾à¤²à¤¯ अपर....