NITIN GUPTA,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 16, NEW DELHI, INCOME TAX OFFICE, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI

PDF · subscribers
ITA 1990/DEL/2023Status: DisposedITAT Delhi13 August 2025AY 2017-185 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned assessment framed by the Assessing Officer on 30 December 2018 is a non-est one in the eyes of law on both counts. Firstly, regarding the validity of the section 153D approval, the Tribunal found that there was no separate approval for the assessment year 2017-18. A common approval for multiple persons and multiple assessment years, without the prescribed authority properly applying its mind, was held to be not a substantive compliance with section 153D. The Tribunal relied on several High Court and Supreme Court judgments, including ACIT Vs. Serajuddin and Co. and PCIT Vs. Anuj Bansal, which held that such mechanical exercise of approval is invalid. Secondly, concerning the absence of section 148 or section 153C proceedings, the Tribunal held that since documents belonging to the assessee were seized during a search, the Assessing Officer could not have proceeded under a regular section 143(3) assessment for the year of search without initiating either section 148 reopening or section 153C proceedings. The Tribunal cited PCIT Vs. Naveen Kumar Gupta, which indicated that section 148 proceedings could be initiated in such instances. Therefore, the Tribunal quashed the impugned assessment on this ground as well. All other pleadings were rendered academic.

What were the facts?

The assessee, Sh. Nitin Gupta, and the Revenue are in cross-appeals before the ITAT, Delhi Bench, concerning assessment year 2017-18. The appeals arise from the order of the CIT(A)-31, New Delhi, dated 10.05.2023, which partly upheld the assessee's appeal against the Assessing Officer's order dated 30.12.2018, passed under section 143(3) of the Income-tax Act, 1961. The Assessing Officer's assessment was finalized after a search operation dated 25.11.2016 in Mr. Mohit Garg & Others' cases, where certificates/documents belonging to the assessee were seized. The assessee filed his return on 28.03.2018. The core dispute revolves around the validity of the assessment proceedings, specifically the lack of a valid section 153D approval and the absence of section 148 or section 153C proceedings.

What were the issues?

The Tribunal had to decide two primary legal issues: 1. Whether the impugned assessment framed under section 143(3) by the Assessing Officer on 30.12.2018 is valid for want of a proper section 153D approval, as required by the Act. 2. Whether the Assessing Officer could proceed against the assessee under section 143(3) for assessment year 2017-18, which was the year of search, in the absence of initiated section 148 or section 153C proceedings. Assessee's Contentions: The assessee argued that a common approval dated 29.12.2019 for eight persons, including the assessee, for assessment years 2011-12 to 2016-17, did not constitute substantive compliance with section 153D for the impugned assessment year. The assessee also contended that the assessment was bad in law due to the absence of section 148 or section 153C proceedings, especially since documents belonging to the assessee were seized during a search. The assessee relied on various Supreme Court and High Court judgments, including ACIT Vs. Serajuddin and Co., PCIT Vs. Anuj Bansal, PCIT Vs. MDLR Hotels (P) Ltd., PCIT Vs. Shiv Kumar Nayyar, PCIT Vs. Sapna Gupta, and PCIT Vs. Naveen Kumar Gupta. Revenue's Contentions: The Revenue's submissions on both issues were rejected by the Tribunal. No specific arguments or authorities relied upon by the Revenue are recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153D,Section 148,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH

For Respondent: Ms. Amisha S. Gupta, CIT(DR)
Hearing: 22.07.2025Pronounced: 13.08.2025

ORDER PER SATBEER SINGH GODARA, JM These assessee’s and Revenue’s cross appeals & 2195/Del/2023 for assessment year 2017-18, arise against the Commissioner of Income Tax (Appeals)-31 [in short, the “CIT(A)”], New Delhi’s order dated 10.05.2023 passed in case no. 1121/21- 22, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case files perused.

2.

We note at the outset that there arise the twin legal issues of validity of the impugned section 143(3) assessment framed by the Assessing Officer dated 30th December, 2018 inter alia for want of a valid section 153D approval as well as on account of a fact that the learned lower authorities had neither initiated section 148 or section 153C proceedings herein, as the case may be.

3.

We now advert to the basic relevant facts in the instant twin cross appeals. There is not dispute that the learned departmental authorities had carried out the search in question dated 25.11.2016 in Mr. Mohit Garg & Others’ cases wherein “certificates/documents belonging to the assessee were seized” as per the assessment order dated 30.12.2018. The assessee filed his return on 28.03.2018 declaring total income/loss of Rs.9,84,010/- . The Assessing Officer issued section 143(2) notice dated 28.09.2018; and, thereafter, he finalized his assessment in question inter alia making various additions which are not discussed herein since we are dealing with the above twin legal issues at this stage. The assessee appears to have challenged the Assessing Officer’s foregoing action before the CIT(A) who has partly accepted his lower appeal.

1.

2 | P a g e This is what leaves both these parties aggrieved who have preferred their respective cross appeals herein.

1.

4. We now come to the above former issue of validity of the impugned assessment for want of a section 153D approval. Learned counsel has invited our attention to page 10 in his paper- book indicating a common approval dated 29.12.2019 involving total eight persons including the assessee at serial no. 3 in assessment years 2011-12 to 2016-17.

4.

It is in this factual backdrop that we sought to verify the clinching fact herein as to whether there is any separate approval for the impugned assessment year 2017-18 in the assessee’s case or not. No satisfactory reply has come from the Revenue side throwing sufficient light on the issue. We are thus constrained to hold that there was a common approval in the assessee’s and other seven persons’ cases which has already been held as not a substantive compliance to the provisions of the Act in ACIT Vs. Serajuddin and Co. [2024] 163 taxmann.com 118 (SC), PCIT Vs. Anuj Bansal [2024] 466 ITR 254 (SC), PCIT Vs. MDLR Hotels (P) Ltd. [2024] 166 taxmann.com 327 (Delhi), PCIT Vs. Shiv Kumar Nayyar [2024] 163 taxmann.com 9 (Delhi) and PCIT Vs. Sapna

3 | P a g e Gupta [2023] 147 taxmann.com 288 (All.) already deciding the very issue in assessee’s favour and against the department. Their lordships further hold that such a mechanical exercises of section 153D approval could not be mechanically finalized in absence of the prescribed authority having properly applied its mind. We thus decide the above former legal question in the assessee’s favour and against the department to conclude that the impugned assessment framed by the Assessing Officer on 30th December, 2018 is itself a non-est one in the eyes of law.

More judgments on Section 153D

All 2,907 judgments and leading authorities on Section 153D →

Recent GST High Court judgments

Search GST case law →