ARCHIT JINDAL,DELHI vs. DCIT, CENTRAL CIRCLE-25, NEW DELHI

The issues involved in both captioned appeals are interlinked, therefore, they have been heard together and accordingly, adjudicated by a common order.

First, we take assessee’s appeal in ITA No. 1359/Del/2022 for AY 2016-17.

During the course of hearing assessee has taken following additional grounds of appeal: The Additional Commissioner of Income-tax, Central Range - 7, New Delhi erred in not granting an appropriate approval as required under section 153D of the Act. The appellant contends that on the facts and in the circumstances of the case and in law, the approval granted by the Addl CIT under section 153D of the Act is mechanical and without application of mind and hence, the consequent assessment order needs to be quashed.

Before us the learned A/R for the assessee, in support of the additional grounds of appeal submits they are purely legal in nature and go to the very root of the matter. The same arise from the facts already on record and do not require investigation of any new or fresh facts. For this reliance is placed on the judgement of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT reported in [1998] 229 ITR 383 (SC) wherein the hon’ble Apex court has held that the Tribunal has wide powers to allow additional grounds to be raised if it is satisfied that the grounds raised are bona fide and that the same could not have been raised earlier for good reasons.

On the other hand, learned CIT DR submits that these grounds of appeal require verification on the part of the therefore they should not be admitted at this stage.

Heard the parties and perused the additional grounds of appeal taken. It is observed that in additional grounds of appeal assessee has challenged the validity of the approval granted u/s 153D of the Act. Since these grounds are borne out from the assessment order and requires no verification of the facts and are legal in nature, therefore, by respectfully following the judicial pronouncement relied upon by the assessee of the Hon’ble Supreme Court as stated above, the additional grounds of appeal raised by the assessee are admitted for adjudication

First we take additional grounds of appeal, wherein the learned AR of the assessee submitted that Ld. CIT(A) erred in law in upholding the impugned assessment order passed under section 143(3) of the Act when the AO has sought common approval u/s. 153D for the AYs 2010-11 to 2016- 17 and which also was granted by the Ld. Addl. CIT, Central Range-7, New Delhi by a common letter dt. 29.12.20217 for all the assessment years from 2010-11 to 2016-17 purely in mechanical manner, without application of mind and when such approval is a non-est in the eyes of law and vitiates the entire assessment itself.

The Ld. CIT DR of the Revenue relied upon the orders of the authorities below and objected to the submissions of the ld. AR. He submitted that 153D approval is not applicable as per the amendment effective from 01.04.2021.

Heard the contentions of both the parties and perused the material available on record. We note that there arises the first and foremost issue of validity of all the impugned assessment framed u/s 143(3) of the Act, on the ground that the learned prescribed authority had not accorded a valid approval thereto u/s 153D of the Act. We may reproduce the approval u/s 153D of the Income Tax Act, which read as under:

We find that in the case of ACIT, Circle1(2) vs. M/s Serajudeen and Co., the Hon’ble Supreme Court dismissed the appeal filed by the Department of Revenue against the order dated 15-03-2023 in ITA No. 43/2022 wherein the Hon’ble Orissa High Court in ITA No. 39 to 45/2022 held that: “22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words even the bare minimum requirement of the approving 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 see or approved will not satisfied the requirement of law.” 12. We further find that in the case of Pr. Commissioner of Income Tax -15 v. Shiv Kumar Nayyar the Hon’ble Delhi High Court held that : “17. Notable, 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 fail to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same

We observe that learned Assessing Officer had sought the prescribed authority’s approval on 20.12.2017 which stood granted on 29.12.2017. The sole issue is that the learned Assessing Officer herein had infact sought a common approval for the assessment years from 2010-11 to 2016-17 which stood granted, and therefore, we quote PCIT Vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Del.), PCIT Vs. MDLR Hotels (P) Ltd. (2024) 166 taxmann.com 327 (Del.) and ACIT vs. Serajuddin and Co. (2024) 163 taxmann.com 118 (SC), to conclude that such a combined section 153D approval indeed vitiates the entire assessment itself. We draw strong support therefrom, to quash the impugned assessment framed herein in assessee’s case for Assessment Year 2016-17 in very terms. Regarding the recent amendment introducing new section 292BC of the Act, wherein it is provided that no order should be held as invalid for any defective approval. However, such amendment is applicable for the approval granted on or after 01.04.2021 however, in the instant case as observed above, the ld. Adl. CIT has granted the approval u/s 153D of the

Since we have already allowed the additional ground of appeal and quashed the assessment on the issue of invalid approval u/s 153D of the Act, the other grounds of appeal taken on the merits of the additions become academic.

In the result, appeal of the assessee is allowed.

In the result, appeal of the assessee is allowed.

In the final result, both appeals of the assessee in ITA No.1359/Del/2022 and ITA No.535/Del/2023 [Assessment Year 2016-17] are allowed.