TISH CONSULTANTS PVT LTD,DELHI vs. DCIT,CENTRAL CIRCLE-2, NOIDA

The Learned DR before us filed detailed written submissions supporting the approval granted by the Learned Additional CIT under Section 153D of the Act to be a valid approval and accordingly all the decisions relied upon by the Learned AR cannot be made applicable to the facts of the instant case. But on perusal of the entire written submissions of the Learned DR, we find that what has been sought to be addressed by the Learned DR is only to drive home the point that the approval proceedings of Learned Additional CIT is merely an administrative act and not a quasi-judicial act and hence such administrative approvals cannot be subjected to challenge. But the moot point to be noted in the instant case is the Learned Additional CIT has given consolidated approval for 11 assessees‟ for Assessment Years 2012-13 to 2018-19 on a single day which is in violation of provisions of Section 153D of the Act itself as the said section mandates approval to be given for each assessee for each assessment year separately. Hence the entire written submissions of the Learned DR would not advance the case of the revenue in any manner.

The Learned DR vehemently argued that very existence of high presumption of law which is also codified u/s 114(e) of the then Indian Evidence Act, 1872 that all official acts are regularly performed and therefore, the Tribunal had to accept that the presumption of approval are validly granted. The Learned & 2311/Del/2025 Tish Consultants Pvt. Ltd DR further stated that merely because the approvals were granted by one letter does not mean that it was not granted for each assessment year.

For the sake of convenience, the approval granted under section 153D of the Act by the Learned Additional CIT, Meerut is reproduced below:-

On perusal of the above, we find that the Learned Additional CIT, Central Range, Meerut had granted approval in terms of Section 153D of the Act for all the cases for all assessment years vide consolidated approval in F.No.Addl CIT/CR/MRT/Approval/153D/2019-20/1516 dated 28.12.2019. Hence, it is very clear that a common approval was given by the Learned Additional CIT under section 153D of the Act vide Approval No. 1516 dated 28.12.2019 for various assessees‟ for various assessment years. This goes to prove that the approval under section 153D of the Act has not been given by the Learned Addl. CIT for „each assessment year‟ and for „each assessee‟ separately which is mandate of the provisions of Section 153D of the Act. This issue is no longer res integra in view of the decision of the Hon‟ble Jurisdictional Allahabad High Court in the case of PCIT vs Sidharth Gupta reported in 450 ITR 534 (All) wherein it was held as under:-

“16. The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in the assessment order. It is admitted by Sri Gaurav Mahajan, learned counsel for the appellant-revenue that the approval order is an administrative exercise of power on the part of the Approving Authority but it is sought to be submitted that mere fact that the approval was in existence on the date of the passing of the assessment order, it could not have been vitiated. This submission is found to be a fallacy, in as much as, the prior approval of superior authority means that it should appraise the material before it so as to appreciate on factual and legal aspects to ascertain that the entire material has been examined by the Assessing Authority before preparing the draft assessment order. It is trite in law that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. The requirement of approval under section 153D is pre-requisite to pass an order of assessment or re-assessment.

Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of "each assessment year" referred to in clause (b) of sub-section (1) of section 153A which provides for assessment in case of search under section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). Page | 5 & 2311/Del/2025 Tish Consultants Pvt. Ltd

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 orders under section 153A.

In the instant case, the draft assessment orders in 123 cases, i.e. for 123 assessment years placed before the Approving Authority on 30-12-2017 and 31- 12-2017 were approved on 31-12-2017, which not only included the cases of respondent-assessee but the cases of other groups as well. It is humanly impossible to go through the records of 123 cases in one day to apply independent mind to appraise the material before the Approving Authority. The conclusion drawn by the Tribunal that it was a mechanical exercise of power, therefore, cannot be said to be perverse or contrary to the material on record.” (emphasis supplied by us)

Similar views were expressed by the Hon‟ble Allahabad High Court in the case of PCIT Vs. Subodh Agarwal reported in 149 taxmann.com 373 (All. HC); PCIT Vs. Sapna Gupta reported in 147 taxmann.com 288 (All. HC) and by Hon‟ble Delhi High Court in the case of PCIT vs Anuj Bansal reported in 165 taxmann.com 2 (Del. HC), among others.

We find that if a consolidated approval given by the Learned Addl. CIT for various assessees‟ for various assessment years is to be considered as an approval given for “each assessment year”, then it would render the requirement of passing an order for “each assessment year” with prior approval under section 153D of the Act, nugatory. Therefore, the obligation on the approving authority is to verify the draft assessment order of each assessment year together with the related seized document to ascertain whether it complies with law as well as the procedure laid down. Hence it is established that the action of the Learned Additional CIT in granting common approval for all the assessment years for various assessees‟ in a mechanical manner without application of mind is writ large.

Since the issue is covered by the decision of Hon‟ble Jurisdictional Allahabad High Court, the decision of Hon‟ble Chhattisgarh High Court relied upon by the Learned DR need not be gone into in view of the principles of binding precedents. Page | 6 & 2311/Del/2025 Tish Consultants Pvt. Ltd

In view of the aforesaid observations and respectfully following the judicial precedents relied upon herein above, we have no hesitation in holding that the approval under section 153D of the Act has not been granted for each of the assessment year which is in violation of provisions of Section 153D of the Act itself thereby making the approval being granted in a mechanical manner without due application of mind. Hence, the Ground No. B raised by the assessee is hereby allowed. Consequentially the assessment framed for Assessment Years 2016-17 and 2018-19 are hereby quashed. Since, the assessments are quashed based on Ground No. B, the other grounds raised by the assessee need not be gone into and they are left open.

In the result, both the appeals of the assessee are allowed.