TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 174
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....2710/Del/2025 -do- 2015-16 31.03.2023 -do- 5. 2711/Del/2025 -do- 2016-17 31.03.2023 -do- 6. 2712/Del/2025 -do- 2017-18 31.03.2023 -do- 7. 2713/Del/2025 -do- 2018-19 31.03.2023 -do- 8. 4008/Del/2025 Revenue -do- 31.03.2023 -do- 9. 2714/Del/2025 Assessee 2019-20 31.03.2023 -do- 10. 2715/Del/2025 -do- 2020-21 31.03.2023 -do- 11. 2716/Del/2025 -do- 2021-22 29.03.2023 143(3) of the Act 12. 2717/Del/2025 -do- 2022-23 31.03.2023 -do- 2. As all the captioned appeals filed by the assessee and revenue are having common issues which are inter-linked, inter-connected and this fact has been admitted by both the parties during the course of hearing before us, therefore, all the appeals filed by the assessee and revenue are taken together and decided by a common order. 3. First, we take Revenue's appeal in ITA No.4153/Del/2025 for AY 2012-13. ITA No. 4153/Del/2025 (Assessment Year : 2012-13) 4. Brief fact are that assessee company is engaged in the business of furniture manufacturing, interior designing as well as trading of decora....
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....visions of Section 149(1)(b) and Section 153C of the Act? 2. Whether on the facts and circumstances of the cate and in law the Ld. CIT(A) was justified in holding that calculation of block period for assessment u/s 148 of the Act have to be calculated from FY, relevant to the date, of initiation of proceedings us/ 148, by taking reference to Sec. 153C of the Act and not from the date of actual search by relying on the judgement in the case of Ojjus Medicare and Sh. Dinesh Jindal in in which it was held that time period for reassessment would be as per First Proviso to Section I53C even when this Proviso cannot override the main proviso of Section 153C(1), which clearly mentions net calculation of block period has to be done from the year of search? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that block periods for assessment u/s 153C of the Income Tax Act 1961, have to be calculated from the date of receipt of the books of accounts, documents OR assets seized, by the jurisdictional AO of the non-searched person and not from the date of initiation of search by relying on First Proviso to Section 153C, ev....
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....e falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:" 8. According to Ld. CIT DR, the AO issued the notice u/s 148 for the impugned assessment year i.e. AY 2012-13 which is falling with the period of ten years from the end of the assessment year in which search is conducted. Ld. CIT DR further submits that the Ld. CIT(A) has wrongly applied the judgments of the PCIT Vs. Ojjus Medicare Pvt. Ltd. reported in 161 taxmann.com 160 (Delhi HC) and further in the case of Sh. Dinesh Jindal v. ACIT reported in (2024) 469 ITR 32 (Delhi HC). The Ld. CIT-DR thus submits that the order passed by the Ld. CIT(A) deserves to be quashed and the order of the AO be restored. 9. On the other hand, the Ld. AR of the assessee vehemently supported the orders of the Ld. CIT(A) and submits that in case of search carried out after 0....
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....represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April 2021, if such notice could not have been issued at that time on account of being immediately beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021:" (emphasis supplied) 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old r....
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....hether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 12. The Hon'ble Supreme Court in the aforesaid cases of Rajiv Bansal (supra) has protected the interest of the assessee and held that while reopening the assessee for the years prior to Assessment Year 2021-22, the process should be governed by the old ....
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....tion 153A, the assessment could have been reopened only for assessment year relevant to the year of search and 9 preceding assessment years, which in facts of the present case would have ended at assessment year 2013-14. 4.5 For the aforesaid proposition, the assessee also relied upon the decision of Delhi High Court in the case of M/s. Ojjus Medicare Pvt. Ltd. & Others in 161 taxmann.com 160 (Delhi) confirming the aforesaid computation under the old law of Explanation-1 to section 153A of the Act. The assessee also relied upon subsequent decision of Delhi High Court in the case of Dinesh Jindal v. AGIT: in 469 ITR 32 and Delhi High Court KAD Housing P. Ltd. v. DCIT in 168 taxmann.com 470, where the aforesaid computation of limitation to reopen. assessment under old provisions of section 153A or 1530 were applied to notices issued under section 148 under the new regime by applying the provisions of grandfathering contained in First Proviso to new section 149(1)(b) of the Act. 4.6 I have examined the issue of limitation raised by the assessee and find considerable force in it. The language of the First Proviso to new section 149(1)(b) is unambiguous and have been c....
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....on 153A, reproduced hereinafter, the assessment year relevant to the previous year in which search is conducted (09.02.2022) becomes the first assessment year, which in facts of the present case was AY 2022-23: Explanation 1. For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is mode 4.10 The total of 10 assessment years in terms of the aforesaid Explanation-1 needs to be computed including assessment year relevant to the year of search and therefore, the 9 preceding assessment years could have been reopened under the old provisions of section 153A of the Act. 4.11 For the aforesaid interpretation, reference can he made to the following observations from the successive derisions of High Courts, including jurisdictional Delhi High Court: * The Hon'ble High Court of Delhi in the case of Ojj....
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....e Madras High Court in the case of Safiullah vs. ACIT (WP (MD) No. 4327 of 2021) wherein the Hon'ble Court also laid down the same law for the computation of ten years for the purpose of assessment under section 1534. The relevant extract of the decision is also reproduced as under "9. Explanation-l is clear as to the manner of computation of the ten assessment years, it clearly and firmly fixes the starting point it is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie. 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows: 1st Year 2019-20 2nd Year 2018-19 3rd Year 2017-18 4th Year 2016-17 5th Year 2015-16 6th Year 2014-15 7th Year 2013-14 8th Year 2012-13 9th Year 2011-12 10th Year 2010-11 The case on hand pertains to ....
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....ts or documents and assets seized or requisitioned are transonitted to the AD of mch "other person", ha held that for the purposes of determining limitation u/s 14911) of the Act, the sord Proviso would have to be construed and tested with reference to the date when the 10 decides to initiate action against the non-senrched entity, Le the date of issue of notice u/s 148 of the Act. The relevant extract of the judgement is reproduced as under: "..... Viewed in that light, it is manifest that AY 2013-14 would fall beyond the block period of ten years. It becomes pertinent to note that the First Proviso to Section 149(1) compels us to test the validity of initiation of action for reassessment commenced pursuant to a search, based upon it being found that the proceedings would have sustained bearing in mind the timelines prescribed in Sections 149, 153A and 1536, as they existed prior to the commencement of Finance Act, 2021. This necessarily requires us to advert to the timeframes comprised in both Section 149(1)(b) as well as Section 153C os it existed on the statute book prior to 01 April 2021, which undisputedly was the date from when Finance Act, 2021 came into effect. 13....
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....o placed on the judgement of KAD Housing (P.) Ltd. ves. Deputy Commissioner of Income-tax [2024] 168 taxmann.com 470 (Delhi). wherein the Hon'ble Jurisdictional High Court has upheld the position of law laid down in Dinesh Jindal (supra). The relevant extract of the judgement is reproduced as under: "....... 5. In the present case, the petitioner's assessment is sought to be reopened on the basis of the information available pursuant to a search conducted on 11 102023 in respect of Sterling Agro Industries Ltd. Apparently, certain formation pertaining to the petitioner was found during the course of the said proceedings and on 16.08.2024, the same was forwarded to the Assessing Officer (hereafter AD) exercising jurisdiction in the case of the assessee. On receipt of the said information, the AO issued a notice dated 17.08.2024 under Section 148A(b) of the Act setting out the information, which according to the AD suggested that the petitioner's income for the relevant AY 2015-16, has escaped assessment ...... 8. Concededly, in case any incriminating material was found in respect of o non-search party during the search proceedings, pro....
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.... would stop at AY 2013-14. Thus, assessment year 2012-13 fell beyond the period of limitation as per the old provisions and therefore was barred by limitation." 14. From the above, it is amply clear that the for reopening any assessment year after 01.4.2021, which is AY 2021-22 or any preceding assessment year, the period of limitation should be reckoned from the limitations provided under the old section as has been held by Hon'ble Supreme court in the case of Rajeev Bansal(supra). Since, the Ld. CIT(A) has followed the said judgement of Hon'ble supreme court and further given a reasonable finding by placing reliance on the later judgement of Hon'ble Delhi high court in the case of Ojjus Medicare, which observations have not controverted by revenue before us by bringing any contrary judgment, therefore, we find no error in the order of the Ld. CIT(A) and, accordingly, the same is hereby upheld. All the grounds of appeal of the Revenue are dismissed. 15. The Appeal of the revenue in ITA No.4153/Del/2025 for Assessment Year 2012-13 is dismissed. 16. Now coming to the remaining appeals of the assessee and Revenue for Assessment Years 2013-14 to 2022-23 in ITA Nos. 2708/Del/2....
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.... submissions which read as under: "1. The assessee challenges the assessment orders passed by the Assessing Officer ("AO") for the captioned assessment years as illegal, void ab initio, and bad in law, on the ground that the approval granted by the Additional Commissioner of Income Tax, Central Range-5, Delhi under Section 148B of the Income-tax Act, 1961 ("the Act") for passing the said assessment orders was accorded in mechanical manner and without any independent application of mind. 2. Section 148B of the Act mandates that no order of assessment, reassessment, or recomputation shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year falling under clauses (i) to (vi) of Explanation 2 to Section 148, except with the prior approval of the specified higher authority. The relevant statutory provisions reads as under: "Prior approval for assessment, reassessment or recomputation in certain cases. 148B. No order of assessment or reassessment or recomputation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which claus....
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....trast, for certain other assessment years i.e., AYs 2012-13 to 2018-19, the AO had granted the benefit of additional income declared in the return filed pursuant to Section 148 proceedings, thereby highlighting inconsistency and lack of scrutiny at the approval stage. 31.03.2023 The AO passed the assessment orders for AYs 2012-13 to 2020-21 and AY 2023-24. For AY 2021-22 Date Particulars 28.03.2023 The AO made a separate proposal seeking approval under Section 148B of the Act for AY 2021-22. [Copy of the proposal was handed over to the Hon'ble Bench during the course of hearing.] Along with the proposals, the AO forwarded only the draft assessment orders and the assessment folders. Seized material and the appraisal report were not forwarded to the approving authority, as confirmed by the RTI reply dated 16.09.2025 placed at page 6 of the Paper Book (Sr. No.3). 29.03.2023 The proposal for AY 2021-22 was received by the Additional Commissioner of Income Tax, Central Range-5, New Delhi. 29.03.2023 On the very same day, approval under Section 148B of the Act for AY 2021-22 was granted without examination of seized materials and ap....
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....n on a plain grammatical and dictionary interpretation, the expressions "an assessment year" and "each assessment year" convey the same legal consequence in the present context. The word "an", being an indefinite article, denotes one out of many and is used distributively, signifying a singular and separate unit taken individually. As per standard dictionary usage, "an" refers to one, any one, or one by one, depending upon the context. Similarly, the word "each" is defined to mean every one of two or more persons or things, regarded and considered separately. Thus, both expressions emphasize individuality and separateness, rather than collectivity or aggregation. 7. Therefore, the use of the phrase "an assessment year" in Section 148B cannot be construed to permit a composite or omnibus approval for multiple years. On the contrary, it mandates that every assessment year must be independently examined and approved, just as is statutorily required under Section 153D. Any interpretation otherwise would render the safeguard illusory and defeat the very object of legislative control over reassessment proceedings. 8. In light of the above, it is respectfully submitted t....
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...., Circle-1(2), Bhubaneshwar vs. M/s. Serajuddin & Co. Kolkata -[2023] 454 ITR 312 (Orissa High Court) * Principal Commissioner of Income-tax v. Shiv Kumar Nayyar - [2024] 467 ITR 186 (Delhi High Court) * Pr. Commissioner of Income Tax (Central)-2 v. Anuj Bansal -ITA 368/2023 (Delhi High Court) * Shri Dheeraj Chaudhary v. Assistant Commissioner of Income Tax, CC 8 New Delhi (Third Member) - ITA Nos. 6158 to 6160/Del/2018 [ITAT Delhi] Judicial Precedents against Consolidated / Mechanical Approval under Section 148B of the Act 12 Reliance is also placed on the decision of the Hon'ble Delhi Bench of the Tribunal in Manish Sharda v. ACIT, Central Circle [2025] 176 taxmann.com 250 (Delhi - Trib.), wherein the Tribunal examined the very validity of the impugned assessments and held that the combined approval granted by the prescribed authority under Section 148B of the Act for multiple assessment years was unsustainable in law. Relevant extract of the same is reproduced below for your reference: "3. It emerges during the course of hearing that there arises the first and foremost issue of validity of the impugned assessments itself ....
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....the due date of completion of search assessment. The Id. ICIT is supposed to examine the seized documents, questionnaires raised by the Ld. AO on the assessee seeking explanation of contents in the seized documents, replies filed by the assessee in response to the questionnaires issued by the Ld. AO and the conclusions drawn by the Ld. AO vis-à-vis the said seized documents after considering the reply of the assessee. All these functions, as stated earlier, are to be performed by the Id. ICIT in a judicious way after due application of mind. In our considered opinion, if the arguments of the Ld. CIT DR are to be appreciated that the Id. (CIT need not apply his mind while granting approval of the draft assessment orders u/s 153D of the Act as it is not provided in section 153D of the Act, then it would make the entire approval proceedings contemplated u/s 153D of the Act ofiose. The law provides only the Ld. AO to frame the assessment, but, certain checks and balances are provided in the Act by conferring powers on the Id. JCIT to grant judicious approval u/s 153D of the Act to the draft assessment orders placed by the Ld. AO. * Shiv Kumar Nayyar vs. ACIT Central Cir....
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....after going through the seized records and replies filed by the assessee. Ld. CIT DR submits that the Adl. CIT has closely monitored the assessment progress, and the Assessing Officer after due consultation with the Additional CIT passed the order and, therefore, it cannot be said that the approval granted is mechanical approval. She Prayed accordingly. 21. Heard both the parties and perused the materials available on record. In the instant case, the claim of the AR of the assessee is that the approval granted by the Addl. CIT u/s 144B of the Act is mechanical where the Addl. CIT(A) has not applied his mind before granting the approval and common approval was given for all the Assessment Years except Assessment Year 2021-22 where the AO sought approval in terms of letter dated 28.03.2023 received by the Office of Additional CIT on 30.03.2023 and the Addl. CIT on the very same day has approved the draft assessment orders. The relevant letters seeking approval by the AO and granting approvals by the Addl. CIT are reproduced as under: 22. It is further observed that the assessee under RTI Act, 2005 has requested the AO to supply the material which was sent by the Assessing Offic....
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....nder this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1.-For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,- (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.-For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, ....
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.... assessment in the case of assessee for three assessment years immediately preceding the assessment year relevant to the previous year in which search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee. Accordingly, proceedings for various assessment years were initiated to reassess the income of the assessee by issue of notice u/s 148 after obtaining approval from the competent authorities. As per section 148B, a rider is imposed that before passing any order where the reassessment proceedings are initiated under clause (i) to (iv) of Explanation 2 of section 148, prior approval of Additional Commissioner of Income Tax should be obtained. 27. Under the old provisions related to the assessment in the case of search as provided in section 153A, where approval of draft assessment order was statutorily required u/s 153D of the Act. The erstwhile section 153D regarding approval of draft assessment order before completing the assessment reads as under: Prior approval necessary for assessment in cases of search or requisition. 153D. No order of assessment or reassessment shall be passed....
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....f approval under section 153D and section 148B is drawn, from which it is evident that approval under section 153D was earlier required only in cases where assessments were completed under section 153A/153C and also for search year. However, under the amended provisions, approval under section 148B is now required in all cases where proceedings are initiated pursuant to a search, requisition, or survey, or where asset/material/documents found during such search pertain to or relate to another person. In such cases, the Assessing Officer must take the approval under section 148B from the specified higher authority. Aspect Section 153D Section 148B (with Explanation 2 to Section 148) Applicable Period Search initiated between 01.06.2003 to 31.03.2021 Search/survey initiated on or after 01.04.2021 but before 01.09.24 Context Search assessment under Section 153A/153C All cases where assessment / reassessment is based in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to section 148 Triggering Event Search or requisition on the assessee under Sections 132/132A or material is used against as....
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....ly 2022, and not under the mandatory provisions of section 148B of the Income tax Act, 1961. At the outset, it is important to note that the approval so obtained does not mention or consider any of the seized materials sourced from the third-party. searches conducted on Sh. Ajay Kumar Prabhakar and Sh. Ravi Kapoor, despite the AO having heavily. relied on those materials in framing the additions. The approval merely states that the appraisal report was considered, without any reference to the original documents seized or to the statutory procedure outlined under section 148B. It is pertinent to refer to the Manual of Office Procedure in February 2003, which lays down a mandatory protocol: that in all search cases, especially where material pertains to persons other than the one searched, such material is to be forwarded in original to the approving authority, and a draft order is required to be submitted for approval at least 30 days in advance. In the present case, the approval letter was issued by the DCIT only on 22nd August 2023, which clearly contravenes this procedural requirement. This procedural lapse is further compounded by the judgment of the Hon'ble Supreme Court in....
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....ment order were sent to the Addl. CIT along with records which is a fact on record. Further since that the additional CIT has granted approval for more than 10 assessment years on the same day it appears that before granting the approval, he has not even gone through each individual case file containing notices and replies filed by assessee. This clearly shows that Additional Commissioner has granted the approval u/s 148B of the Act without having independent application of mind and granted the approval in mechanical manner. 31. The coordinate bench of ITAT, Chandigarh in the case of M/s Malbros International Pvt. Ltd. Versus DCIT Central Circle-2 Ludhiana reported in 2026 (1) TMI 983 - ITAT Chd. has dealt the issue of validity of approval granted u/s 148B of the Act wherein the bench by following its earlier decision in the case of Homelife Buildcon (supra) has held the approval u/s 148B as invalid. The relevant observations of the bench are reproduced as under: "9. ...................... The coordinate bench, on identical facts, held that Ld. AO proceeded to frame the assessment u/s 143(3) despite relying heavily on material found during searches conducted on....
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....ch circumstances, the importing and reliance upon material seized from third-party searches would go beyond the jurisdiction conferred u/s 143(3) particularly, where the applicable law i.e., Explanation-2 to section 148 (as amended by the Finance Act, 2021) mandates prior approval from the Principal Commissioner of Income Tax (PCIT) before initiating reassessment proceedings on the basis of such material. The failure to comply with such requirement would render the assessment legally untenable. The Ld. AO did not issue a notice u/s 148 nor did he followed the due process of law under the new reassessment framework, including recording of satisfaction and obtaining prior sanction from the PCIT. Therefore, the assessment framed u/s 143(3), because of being based on third-party material without adhering to statutory safeguards, would be bad-in-law. The AO was only empowered to verify the return of income and restrict his scope of inquiry accordingly and he was not permitted to expand the assessment by importing and relying upon third-party seized material without following the mandatory procedure laid down under the law. It was mandatory statutory requirement that in all cases involvi....
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....ally defective but also without jurisdiction. The bench further observed that while framing the assessment u/s 143(3), the AO has, on the last page of the assessment order, referred to an approval obtained from the supervisory authority. However, this approval was obtained in reference to F.No. 299/36/2020/1DAR/INV3(3)/577 dated 15-07-2022, i.e., in accordance with the CBDT Circular dated 15-07-2022 and not under the mandatory provisions of section 148B of the Income-tax Act, 1961. It was to be noted that the said approval did not mention or consider any of the seized materials sourced from the third party despite the fact that AO heavily relied upon that material while making the additions. The approval merely states that the appraisal report was considered, without any reference to the original documents seized or to the statutory procedure outlined under section 148B. Pertinently, the manual of office procedure issued in February 2003 lays down a mandatory protocol that in all search cases especially where material pertains to persons other than the one searched, such material is to be forwarded in original to the approving authority and a draft order is required to be submitted....
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....ement of income including that unearthed during a search. A plain reading of Sec.143(2) would show that such a notice could be issued only when a return of income was furnished u/s 139 or in response to notice u/s 142(1). It empowers the AO to scrutinize that return if he considers that income has been understated or tax was underpaid. However, when a search u/s 132 takes place and materials are found indicating possible escapement of income, the statute envisages a different route for carrying out assessment or reassessment u/s 147 r.w.s. 148 which is special mechanism for bringing to tax the income discovered in consequence of a search. Although Sec.148 (inserted w.e.f. 01.04.2021) does not begin with a non-obstante clause similar to the erstwhile section 153A, its context and Explanation-2 makes it clear that where a search is initiated, the jurisdiction thereafter must flow through this special channel, subject to prior satisfaction and approval of the Principal Commissioner or Commissioner. The legislative intent is to ensure that when a search is carried out, the assessment is framed under the specific provisions meant for such cases and not under the general provision of Sec....
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....lies, if any, received in the office and the queries raised by the Addl. CIT. The bench then referred to the decision of Tribunal in the case of AB Alcobev Pvt. Ltd. (ITA Nos. 356/Chd/2024 & ors.) and the decision in Pushpanjali Construction Pvt. Ltd. (ITA No.1001/Del/2025) wherein it was held that approval granted in a mechanical manner without application of mind renders the assessment order invalid. Once the statutory approval suffers from non-application of mind, the consequential assessment cannot survive in the eyes of law. On these facts, the assessment order was held to be without jurisdiction and the assessment order was held to be passed without taking the approval from the competent authority as envisaged under the Act. The approval was mechanical one and was not in accordance with law. Finally, the assessment order was quashed on legal grounds. We find that the above said legal propositions squarely apply to the facts of the present case before us. 32. Similar view is expressed by the coordinate bench of Lucknow Tribunal in the case Rakesh Kumar Pandey Vs.rsus A.C.I.T., Central Circle-2, Lucknow reported in 2025 (12) TMI 1645 - ITAT Lucknow. The Chandigarh bench of T....
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....ourt in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. 36. Recently the hon'ble Third member in the case of Dheeraj Chaudhary Vs. ACIT in ITA Nos. 6158 to 6160/Del/2018 after considering all the judgements relied upon by the ld. CIT DR and further after detailed analyzing the provisions of section 153D, power and independence of assessing authority and the CBDT manual referred by the revenue has held that the common approval granted for various year and for various assessee without making any reference to the material seen is mechanical approval and cannot sustained in the eyes of law. A reference is also made the CBDT manual issued in respect to the procedure to be followed in this regard. The relevant observations of the hon'ble Third Member are as under: 22. I noted that the common thread discussed by Hon'ble Orissa Hi....
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....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. 37. Further with respect to argument of the Revenue that Addl. CIT and AO had worked together in consultation with each other on regular basis and after seeking directions from the Addl. CIT from time to time, AO passed the assessment order. We find that working of AO under close supervision and directions of Adl. CIT tantamount to interference in the independence of the AO and assessment proceeding. The Hon'ble Punjab and Haryana High Court in the case of FinDoc Finvest Private Ltd Vs. DCIT reported in 172 Taxmann.com 773 (P&H HC) made certain observations which are very relevant on the issue of independence of the AO, the same are reproduced herein below:- "20.....
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....direction or in compliance with some higher authority's instruction, then it will be a case of failure to exercise discretion altogether. In other words, the discretion vested in the DSP in this case by Section 20A (1) was not exercised by the DSP at all. 12. Reference may be made in this connection to Commissioner of Police v. Gordhandas Bhanji, 1952 SCR 135, in which the action of Commissioner of Police in cancelling the permission granted to the respondent for construction of cinema in Greater Bombay at the behest of the State Government was not upheld, as the concerned rules had conferred this power on the Commissioner, because of which it was stated that the Commissioner was bound to bear his own independent and unfettered judgment and decide the matter for himself, instead of forwarding an order which another authority had purported to pass. 13. It has been stated by Wade and Forsyth in 'Administrative Law', 7th Edition at pages 358 and 359 under the heading 'SURRENDER, ABDICATION, DICTATION' and sub- heading "Power in the wrong hands" as below:- "Closely akin to delegation, and scarcely distinguishable from it in some cases, is ....
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....he Act, defines the Income Tax Authorities as different and distinct authorities. Such different and distinct authorities have to exercise its powers in accordance with law in specified circumstances. Thus, the Assessing Officer would have to exercise its own discretion to reach a conclusion and would not be influenced by any other officer. In view thereto, we find force in the contention raised by the learned senior counsel for the petitioner that the concerned Assessing Officer was influenced by the consultation and discussion with his superior officers. In fact the order passed by the Assessing Officer appears to have been already prepared even before the reply was received as the consultations have been conducted on 26.10.2023, 11.01.2024 and 14.03.2024 by the Assessing Officer as mentioned by him in the order itself. Again after the reply was received and the order was passed by the Assessing Officer, the same has been approved by the Joint Commissioner. As such, we find that the Joint Commissioner has in fact comprehensively and actively participated in the making of the assessment order while his role was only limited to the approval of the assessment order in terms of the C....
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....same day since he is involved with the assessment proceedings right from the inception. Accordingly, she argued that the objection raised by the ld. AR has no force. 8. We find, as per the scheme of the Act, for framing search assessments, the ld. AO can pass the search assessment order u/s 153A or u/s 153C of the Act only after obtaining prior approval of the draft assessment order and the conclusions reached thereon from the ld. Addl. CIT in terms of section 153D of the Act. This is a mandatory requirement of law. The said approval granting proceedings by the ld. Addl. CIT is a quasi judicial proceeding requiring application of mind by the ld. Addl. CIT judiciously. In order to ensure smooth implementation of the aforesaid provisions, in consonance with the true spirit of the scheme of the Act, it is the bounden duty of the ld. AO to seek to place the draft assessment order together with copies of the seized documents before the ld. Addl. CIT well in time much before the due date of completion of search assessment. The ld. Addl. CIT is supposed to examine the seized documents, questionnaires raised by the ld. AO on the assessee seeking explanation of contents in the seiz....
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....yyar (supra) further held that approval u/s 153D of the Act has to be granted for each Assessment year independently. The relevant observations of the judgement of Hon'ble High Court are 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:- "13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D o....
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....proving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons 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 "rubber stamping" of the letter seeking sanction by using similar words like "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the Assessing Officer should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." ....
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....D 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 of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together." 17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above." 40. It is observed that the hon'ble jurisdictional high 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 witho....
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....020-21 & 143(3) for AY 2022-23 of the Income Tax Act, 1961 in the case of M/s Proform Interiors Private Limited (PAN: AAHCS5999J) - Reg. 2. Kindly refer to the above cited subject. In this connection, Draft Assessment Order in the following case, along with its assessment folder(s), is being put up for your kind perusal and necessary approval u/s 148B and 119 of the IT Act, 1961: Sr. No. Name of the Assessee PAN A.Y. U/s Returned Income Assessed Income / Loss 1. M/s Proform Interiors Private Limited AAHCS5999J 2012-13 148 1,24,91,433 3,20,56,960 2013-14 148 62,80,028 2,90,93,276 -2014-15 148 61,14,312 2,08,83,284 2015-16 148 70,71,699 2,50,37,137 2016-17 148 81,44,534 2,58,16,417 2017-18 148 75,97,188 2,60,85,878 2018-19 148 89,93,774 4,21,11,366 2019-20 148 9,28,80,870 11,03,04,910 2020-21 148 5,97,16,980 7,77,34,406 2022-23 143(3) 18,96,60,770 20,40,04,369 AAHCS5999J Encl. Draft Order & Case File. Yours faithfully. 2 (ANSHUL) Addl. Commissioner of Income Te. Central Range-5, New Delhi Deputy Commissioner of Income-Tax, Central Circle-20, Delhi. 3 0 MAR 2023 10 6 सतà¥à¤¯à¤®à¥‡à¤µ ....
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....ndewalan Exten., New Delhi-110055 F.No. DCIT/CC-20/RTI/2025-26/522 Dated :- 16.09.2025 Name of Applicant Tarun Chanana (Authorised Representative- M/s Proform Interiors Pvt. Ltd.) Address of the Applicant 201, Lind Floor, Mercantile House, KG Marg, New Delhi-110001 Date of Receipt of Application 19.08.2005 Order under section 7(1) of the RTI Act, 2005 Sh. Tarun Chanana has sought below mentioned information under the Right to Information Act, 2005 vide RTI application dated 01.08.2025 which has been received in this office on 19.08.2025. The said application has been transferred to this office by ITO & Nodal Officer (RTI Cell) for Pr. CCIT(CCA), Delhi vide letter dated 06.08.2025 2. In this connection, the information sought by the applicant and point wise replies in respect to this office are being provided as under -: S. No. Information sought by the applicant Reply 1. Copy of the proposal sent by the Id. DCIT, Central Circle-20, Delhi to the ld. Addl. CIT, Central Range- 05, New Delhi, seeking approval us 148B of the Act for AY 2012-13 to 2022-23 Copy of proposal is attached herewith 2. Copy of all documents submitted along with the above-mention....