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Facts
The assessee's appeal arose from an assessment order. The assessee raised an additional ground challenging the consolidated approval granted by the Additional CIT for multiple assessment years, alleging it was mechanical.
Held
The Tribunal held that the consolidated approval granted under Section 153D of the Income Tax Act for multiple assessment years was not in consonance with the law and vitiated the assessment. The Tribunal quashed the assessment.
Key Issues
Whether a consolidated approval under Section 153D of the Income Tax Act for multiple assessment years is valid and in accordance with the law.
Sections Cited
143(3), 153D
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Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI YOGESH KUMAR U.S.
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2018-19, arises out of the order of the ld. Commissioner of Income Tax (Appeals), Kanpur-4 [hereinafter referred to as ‘ld. CIT’, in short] in Appeal No. CIT(A)- IV.KNP/10593/2019-20 dated 14.12.2021 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 18.12.2019 by the Assessing Officer, DCIT, Central Circle, Ghaziabad (hereinafter referred to as ‘ld. AO’).
The assessee has raised an additional ground vide letter dated 24.03.2025 stating that the approval for the search assessment order was granted by the ld Additional Commissioner of Income Tax u/s 153D of the Act in a mechanical manner and that such approval was consolidated approval for all assessment years put together which is not in consonance with the provisions of Section 153D of the Act. This issue goes to the root of the matter and accordingly the additional ground is hereby admitted and taken up first for adjudication.
At the outset, we find that the approval of the draft assessment order was sought by the ld AO u/s 153D of the Act from the ld Addl. CIT, Central Range, Meerut vide letter dated 06.12.2019. The approval was sought by the ld AO for 8 assessees for AYs 2012-13 to 2018-19. The approval u/s 153D of the Act was granted by the ld Addl. CIT on 12.12.2019 for 7 assessees for all the assessment years put together. For the sake of convenience, the said approval is reproduced herein below:-
From the above, it could be seen that the ld Addl. CIT had granted a consolidated approval for all the assessment years put together and for 7 assessees together. Totally 49 approvals were given by the ld Addl. CIT comprising of 7 assessees for 7 AYs. Provisions of Section 153D of the Act insist approval to be given for each assessment year separately. The issue of granting a consolidated approval was subject matter of adjudication by the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Shiv Kumar Nayyar reported in 163 taxmann.com 9 (Del HC) and Hon’ble Orrisa High Court in the case of ACIT Vs. Serajuddin and Co. reported in 454 ITR 312(Ori), wherein it was held that combined approval granted u/s 153D of the Act for various AYs for framing assessment order vitiates the entire assessment itself. Respectfully following the same, we quash the assessment framed in the instant case. The ld DR placed on record the written submission of the ld AO wherein, it was submitted that the approval u/s 153D of the Act is directory and not mandatory in nature. We are unable to comprehend ourselves to accept to this proposition of the ld DR and the ld AO as the approval u/s 153D of the Act is statutory approval to be given by a quasi judicial authority after due application of mind by following due judicial process. Hence, it cannot be by any stretch of imagination be construed as directory in nature. In fact the ld AO is restricted from passing any assessment order pursuant to the search unless he gets prior approval u/s 153D of the Act from the ld Addl. CIT. When this is the language of the statute, it cannot be held to be not mandatory. Hence, the objections of the ld DR are hereby dismissed and additional ground raised by the assessee is allowed.
Since the entire assessment is quashed, the adjudication of other grounds raised by the assessee become academic in nature and they are left open.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30/07/2025.