TaxTMI 
TaxTMI 
2026 (3) TMI 792
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....no signature on the said approval and it is left blank. That since simultaneously two legal grounds have been raised by the Ld. Counsel for the assessee, I would first adjudicate the issue of mechanical approval granted by the competent authority u/s.153D of the Act. The approval granted u/s. 153D of the Act, dated 14.09.2021 is made part of this order as follows: 3. That on perusal of the aforesaid approval, it is noted that request for seeking approval by the A.O was also done on the same date i.e. 14.09.2021 and the said request letter dated 14.09.2021 is also made part of this order as follows: 4. Therefore, the date of request letter and the date of approval granted u/s. 153D of the Act are same. In other words, on the very same date when the request was made for seeking approval u/s. 153D of the Act, the competent authority had granted the said approval. Further, going through the contents of the approval u/s. 153D of the Act, I find that the aforesaid issue is squarely covered by the reported decision of ITAT, SMC Bench, Raipur in the case of Sunil Sponge Private Limited Vs. The Assistant Commissioner of Income Tax, Central Circle-1, Raipur (C.G.), 2025 (12) TMI 1765-I....
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....een no independent application of mind by the competent authority while providing the said statutory approval which vitiates such approval and any subsequent order/proceedings becomes "non-est" as per law. 8. Per contra, the Ld. Sr. DR supported the findings of the Revenue authorities. 9. That even without going into the merits of the matter regarding this legal contention raised in the case of the assessee on the same parameter of facts and reasoning, this Bench of the Tribunal in the case of Mamta Agrawal Vs. Assistant Commissioner of Income Tax, Central Circle, Bilaspur (C.G.), 2025(6) TMI 1461, ITAT Raipur, dated 21st May, 2025 had held and observed as follows: "3. In this regard, the legal ground assailed by the 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 appro....
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....given for A.Ys. 2013-14 to 2019-20 i.e. 7 years. On a careful reading of the said approval granted on 16.03.202, not even a word has been written by the competent authority which shows any independent application of mind. It is evident from Para 3 and 4 wherein the competent authority presumes that the A.O had given appropriate opportunity of hearing to the assessee and thoroughly verified seized material and that the A.O has satisfied himself that all the issues emanating from records have been verified and the additions wherever required have been proposed. Thereafter, the competent authority writes at Para 4 that "you may act accordingly". That when the competent authority is issuing approval u/s. 153D of the Act for 7 years, he 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....
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.... to apply independent mind to the material on record for "each assessment year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, 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 Cou....
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.... of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. A similar view was taken by this Court 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." 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 a....
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....s conducted under section 132 or requisition is made under section 132A. The provision has also been made applicable to orders of assessment passed under clause (b) of section 153B in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisitioned is made under section 132A. 50.3 Applicability- These amendments will take effect from the 1st day of June, 2007." 16. The Legislative intent is clear from the above, in as much as, prior to the insertion of Sec.153D of the Act, there was no provision for taking approval in cases of assessment and reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments 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 a....
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.... records for each of the assessment years and though it is not mandatory to give exhaustive reasons for such approval but at least requirement of law shall be complied if such authority pronounces few words in the said approval given which shall reflect his independent application of mind. 11. Reverting to the present case, on a perusal of entire approval order and as examined hereinabove, no such exercise has been done by the competent authority which itself vitiates such approval in the eyes of law and any proceedings thereafter shall have to be declared non-est as per law. 12. After giving thoughtful consideration to the matter on record and various decisions of the Hon'ble High Courts, I am of the considered view 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. ....
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....Commissioner of Income Tax had not provided any reasoning to show his independent application of mind while giving such approval pertaining to the various assessees spanning number of assessment years. The law does not prescribe that the competent authority while issuing approval u/s.153D of the Act shall have to pronounce in detail all reasoning but at least some words should be there through which it can be understood that the competent authority has exercised his independent application of mind and reasoning to arrive at a decision to grant such approval. But in the present case, the entire exercise has been done based on borrowed satisfaction from the A.O which therefore fails the objective and intent of the legislature enshrined u/s.153D 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." 5. The law does not prescribe that the compe....
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....e AO has - * given proper opportunity of hearing to the assessee, thoroughly verified the seized materials and that there are no adverse findings. . Satisfied himself that all the issues emanating from the records have been verified and the additions wherever required have been proposed. 4. You may act accordingly. The copy of the final order may be submitted for record purpose in this office in a CD. Retention proposals if any may be submitted well within time. Enel- case records (Ajit Kumar Laskar) Addl Commissinmer of Incoese Tav Range-Central Raipur Document 2 GOVERNMENT OF INDIA MINISTRY OF FINANCE: DEPARTMENT OF REVENUE, Office of the Assistant Commissioner of Income Tax, (Central)-1, Raipur (C.G.] Central Revenue Building, Civil Lines, Raipur (C.G.J - 492001. Fax - 0771-2331059; E-mail : raipur.deit.cen [email protected] F. No./ACIT/Central-1/RPR/153D/2021-22/ 55 Dated: 14.09.2021 To The Addl. Commissioner of Income Tax (Central) Raipur (C.G.) Sir, Sub: Request for seeking approval u/s 153D of the Income Tax Act, 1961 --- Regarding Kindly refer to the subject cited above and find enclosed herewith draft : assessment order u/s 153A/....
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....been proposed. 4. You may act accordingly. The copy of the final order may be submitted for record purpose in this office in a CD. Retention proposals if any may be submitted well within time. (Ajit Komar Laskar) Addl.Commissioner of Income Tax, Ench: case records. Document 4 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 assessment orders u/s 153A) ir the following cases submitted vide above mentioned letter are hereby approved u/s 153D of the I.T. Act with the following remarks :- S.No letter Name of the assessee are hereby approved u/s 153D of PAN the I.T. Act with the following remarks :- A.Y 01 Pawan Kumar Agrawal ACIPA0094L 2013-14 TO 2019-20 02 Mamta Agrawal ACHPA9814D 2013-14 TO 2019-20 PAN the I.T. Act with the following remarks ....