HARAKERE SRIKANTA NAGASHWARN,DELHI vs. ACIT, CENTRAL CIRCLE-16, NEW DELHI

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ITSSA 1/DEL/2024Status: DisposedITAT Delhi18 February 2026AY 2011-20126 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 additional ground raised by the assessee is sustained. The Tribunal found that while the AO relied on different incriminating evidence for different additions, a common approval under Section 153D for multiple assessment years indicated that the approval was not granted for 'each assessment year' as required by law. This practice suggests a mechanical exercise of power. The Tribunal relied on the decision of the Delhi High Court in PCIT Vs. Shiv Kumar Nayyar, which in turn relied on the Allahabad High Court's decision in PCIT Vs. Sapna Gupta, holding that a consolidated approval for multiple assessment years is vitiated. Consequently, the impugned approvals under Section 153D and the consequent assessment orders were held to be vitiated and not in accordance with the law. The appeals were allowed, and the impugned assessments were quashed.

What were the facts?

The assessee, Harakere Srikanta Nagashwarn, filed appeals before the Income Tax Appellate Tribunal (ITAT) challenging orders passed by the Assessing Officer (AO) under Section 143(3)/153A of the Income-tax Act, 1961. These orders were subsequently upheld by the Commissioner of Income-tax (Appeals) (CIT(A)). The appeals cover assessment years 2011-12 to 2016-17. The assessee raised an additional ground of appeal, arguing that the assessment orders were vitiated because the approval granted under Section 153D of the Act was done mechanically and without application of mind. The approval letter cited in the assessment orders was dated 29.12.2019 and was common for all assessment years.

What were the issues?

1. Whether the approval granted under Section 153D of the Income-tax Act, 1961, for the assessment orders was vitiated due to being granted mechanically and without application of mind, thereby invalidating the assessment orders? (Question of law and fact, turning on Section 153D). Assessee's contentions: The assessee argued that the approval under Section 153D was granted in a mechanical manner, as evidenced by a common approval letter dated 29.12.2019 for multiple assessment years. This indicated a lack of application of mind by the approving authority. Revenue's contentions: The revenue contended that this ground was not raised before the CIT(A). It was further argued that the approval was formal in nature, and the issues were duly considered at the assessment stage. The mere fact of a common approval did not automatically imply a mechanical exercise of power.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 153D,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL

For Appellant: Adv. Sh. Sumit Lalchandani, Adv, Adv. Ms. Ananya Kapoor, Adv
For Respondent: Ms. Pooja Swaroop, CIT, DR
Hearing: 15.01.2026Pronounced: 18.02.2026

PER ANUBHAV SHARMA, JM:

These are appeals preferred by the Assessee against the orders of the

Ld. Commissioner of Income-tax (Appeals) (hereinafter referred to as the

P a g e | 2 6 Appeals HarakereSrikantaNagashwarn (AYs: 2011-12 to 2016-17) First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before

him against the orders of the ld. Assessing Officer (hereinafter referred to as

the Ld. AO, for short) passed u/s 143(3)/153A of the Income-tax Act, 1961

(hereafter referred to as ‘the Act’). Further details of the orders of the lower

authorities are as under:-

ITA No. & Ld. FAA who Appeal No. & Date of order AO who passed the AY passed the appellate of the Ld. FAA assessment order & order Date of order 1/D/24 CIT(A)-26, New DIN: ACIT, CC-16 2011-12 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062548786(1) Dated 08.03.2024 2327/D/24 CIT(A)-26, New DIN: ACIT, CC-16 2012-13 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062887021(1) Dated 14.03.2024 2328/D/24 CIT(A)-26, New DIN: ACIT, CC-16 2013-14 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062889031(1) Dated 14.03.2024 2329/D/24 CIT(A)-26, New DIN: ACIT, CC-16 2014-15 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062819469(1) Dated 14.03.2024 2330/D/24 CIT(A)-26, New DIN: ACIT, CC-16 2015-16 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062891240(1) Dated 14.03.2024 2331/Del/24 CIT(A)-26, New DIN: ACIT, CC-16 Delhi ITBA/APL/M/250/2023- Dated 31.12.2019 24/1062892686(1) Dated 14.03.2024

P a g e | 3 6 Appeals HarakereSrikantaNagashwarn (AYs: 2011-12 to 2016-17) 2. At the time of hearing it was pointed out on behalf of the assessee that

among other grounds on merit assessee has also raised ground by way of

additional ground of appeal under Rule 11 of the Income Tax Appellate

Tribunal Rules 1963 wherein assessee has challenged the impugned

assessment orders being passed on a basis of approval granted u/s 153D of

the Act in a mechanical manner and without application of mind.

3.

In this context referring to the relevant page of the assessment order in

regard to all the appeals before us ld. Counsel submitted that the approval has

been granted by letter dated 29.12.2019. He pointed out that approval letter

details as mentioned in the assessment order is common and for convenience

the same is quoted here:

“F.No. Addl.CIT/CR-4/Approval u/s 153D/2019-20/1239 dated 29.12.2019”

4.

This has been opposed by Ld. DR by submitting that ground has not

been raised before ld. CIT(A). Further, it was contended that the approval

granted is a formal nature otherwise issue are duly considered at the

assessment stage only by continuous indulgence of the senior authorities so

P a g e | 4 6 Appeals HarakereSrikantaNagashwarn (AYs: 2011-12 to 2016-17) merely because there is common approval that does not lead to conclusion

that it was mechanical.

5.

We have taken into consideration the contentions of ld. DR and we are

of the opinion that same have been considered repeatedly in series of

decisions of the Coordinate Benches in which both of us have been in the

Coram. The fact that there was a common approval for multiple assessment

years involved is not disputed. As we go through the assessment orders we

find that some loose papers found in the search and statements as recorded

have been relied for making additions. In the paper book filed by the

department copies of appraisal report, statement recorded u/s 132(4) of the

and copy of seized document have been filed. As we go through the same we

find that there are different incriminating evidence considered by AO to make

different additions. In such a situation if at the time of granting approval a

common approval is granted for all the assessment years involved it only

goes to show that as required under law, that approval should be granted for

‘each assessment year’ the approval is not so granted. It is settled proposition

of law now that Section 153D approval should be granted for each

assessment year and Hon’ble Delhi High Court in PCIT Vs. Shiv Kumar

P a g e | 5 6 Appeals HarakereSrikantaNagashwarn (AYs: 2011-12 to 2016-17) Nayyar 285/2024 & CM APPL 28994/2024 by order dated 15.05.2024 has

relied the decision of Hon’ble Allahabad High Court in PCIT Vs. Sapna

Gupta (2022) SCC Online All 1294 to hold that approval has to be with

respect to ‘each assessment year’ thereby holding that consolidated approval

for multiple assessment year is vitiated and only indicates a mechanical

exercise of powers.

6.

We thus, sustain the additional groundsraised. The impugned approvals

u/s 153D and consequent assessment orders are held to be vitiated and not as

per law. Resultantly the appeals are allowed and the impugnedassessments

are quashed.

Order pronounced in the open court on 18.02.2026

Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 18.02.2026 Rohit, Sr. PS

P a g e | 6 6 Appeals HarakereSrikantaNagashwarn (AYs: 2011-12 to 2016-17) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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