PR. COMMISSIONER OF INCOME TAX -10 vs. ATUL KUMAR BANSAL

The present appeals have been preferred by the Revenue under Section 260A of the Income-tax Act, 1961 (“the Act”), assailing the common order dated 10.09.2025 (“the impugned order”) passed by the Income Tax Appellate Tribunal, Delhi Bench „A‟, New Delhi (“the ITAT”), in the appeals pertaining to Assessment Years (AYs) 2008-09 to 2013-14. 2. By the impugned order, the learned ITAT has dismissed the appeal filed by the revenue and quashed the assessments framed under Section 153A read with Section 143(3) of the Act, holding that the

The facts of the case as stated by the appellant-revenue are as under : a) It is a case of the appellant that during the course of search conducted at the business premises of the assessee, various bill books were found and seized. During the course of post- search and assessment proceedings, the seized documents were examined, and it was found that several bills had been issued to BSBK Group, whose premises had also been covered during the search operation. b) Thereafter, the statement of the assessee, Shri Atul Kumar Bansal was recorded on oath According to the Revenue, the assessee admitted to issuing bogus transportation bills to entities belonging to the BSBK Group. It is also stated that in the further enquiry conducted by the Investigation Wing allegedly indicated that the assessee was engaged in providing accommodation entries. The assessment

It is this common order dated 10.09.2025 that has been assailed by the Revenue in the present appeals. QUESTION OF LAW

The principal question arising for consideration is: Whether the ITAT was correct in quashing the assessments

Section 153A of the Act, as applicable to the relevant assessment years, provides for the assessment of a person in whose case a search is initiated under Section 132 or books of account or other documents or assets are requisitioned under Section 132A. The relevant portion of Section 153A (1), in sofar as material to the present controversy, is read as under: “153A. Assessment in case of search or requisition- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, 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), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply

Section 153B of the Act prescribes the time limit for completion of assessments under Section 153A. The provision, insofar as relevant, reads as follows: “153B. Time limit for completion of assessment under section 153A.— (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment— (a) 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, within the period prescribed under this section; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within the period prescribed under this section.”

Section 153D of the Act, which is central to the controversy, reads as follows: “153D. Prior approval necessary for assessment in cases of search or requisition.— No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner: Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub-section (12) of section 144BA.”

The ITAT examined the approval granted by the learned Additional Commissioner of Income-tax, Central Range-4, New Delhi, for the assessments pertaining to AYs 2007-08 to 2013-14. It held that the approval constituted a consolidated approval for the assessment years covered by it and was not in conformity with the requirement of Section 153D of the Act.

In reaching this conclusion, the ITAT relied upon the decision of a coordinate Bench in Keher Singh v. DCIT, ITA Nos. 2835 to 2841/Del/2024, for AYs 2014-15 to 2020-21, decided on 19.03.2025. The relevant observations of the ITAT are reproduced hereinbelow:” “4.We find that approval granted by the Learned 2841/Del/2024 for assessment years 2014-15 to 2020-21 dated 19-3-25 wherein it was held as under- “7. After going through this set of evidences available at pages 2-15, we are of the considered view that only one approval u/s 153D was granted by letter F.No.Addl.CIT/CR- 7/2021-22/634 and by marking check mark ("√") for each year the approvals are shown to have been issued for each year, but, as a matter of fact, there is no change in the No. of letter being F.No.Addl.CIT/CR-7/2021- 22/634 under which the approval u/s 153D of the Act was issued by the competent authority. Thus, there is no dispute that a composite approval was sought and granted in the case of the assessee for assessment years 2014-15 to 2020-21. ITA 806/2026 & conn.

Then we find that although at the time of granting approval the ld. competent authority has mentioned that: “Approval is hereby accorded u/s 153D of the Income Tax Act, 1961 to the draft assessment order as amended in the following case, on the basis of the detailed

However, the aforesaid seems to be some sort of mechanical exercise only because in the corresponding letter from the ld. AO dated 27.09.2021 (supra) only draft orders were submitted for examination. There is no reference that appraisal report or seized documents were also forwarded. In fact, it is pertinent to observe that vide letter dated 27.09.2021 (supra), the AO had made a request that “online approval u/s 153D may kindly be accorded.” This shows that certainly, the assessment records were not forwarded, what to talk of appraisal report and relevant seized documents.

Furthermore, as we examine the approval dated 27.09.2021, we find that in para 3, the ld. competent authority has mentioned as follows- “3. Copies of the final assessment orders should be forwarded to this office immediately after passing the orders. Proposal for retention of seized material should also be forwarded to this office within time as per IT Act, 1961. Before passing the final order, in case, there is requirement of protecting the interest of revenue, permission u/s 281B from Pr.

The aforesaid observations of the ld. competent authority, as emphasized above in bold italics by us, when considered in the light of the alleged incriminating evidences used in assessments, we find that in fact, no data was seized in electronic format from hard drive/CDs/pen drives/mobile data so as to necessitate making these observations by the ld. Competent authority. The aforesaid observations and directions only indicate that in a perfunctory manner without application of mind post completion of assessment, on the draft orders the approval has been granted.

It is now settled proposition of law that the approval so granted without taking into consideration the assessment record, incriminating evidences and the approval not exhibiting the reasons for granting the approval independently on the draft assessment order cannot be sustained.

A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. "

In the case of ACIT, Circle-1 (2) Vs. Serajuddin and Co. the Hon'ble Supreme Court in SLP (Civil) Dairy No. 44989/2023 vide order dated 28/11/2023, dismissed the Appeal filed by the Department of Revenue against the order dated 15/03/2023 in ITA No. 43/2022 passed by the Hon'ble High Court of Orissa at Cuttack, wherein the Hon'ble High Court had quashed the Assessment Order on the ground of inadequacy in procedure adopted for issuing approval u/s 153D of the Act by expressing discordant note on such mechanical exercise of responsibility placed on designated authority under section 153D of the Act.

In the light of the aforesaid, we are inclined

It could be seen that the Learned Additional Commissioner of Income Tax, Central Range -4, New Delhi had accorded approval under Section 153D of the Act for assessment years 2007-08 to 2013-14, which constitute a consolidated approval for all the assessment years, which in our considered opinion, is not in consonance with the requirement of provisions of Section 153D of the Act. The plain reading of provisions of Section 153D of the Act makes it very clear and the section mandates approval under Section 153D of the Act to be given for each assessment year for each assessee. Here the consolidated approval has been given for various assessment years for one assessee, which is not in accordance with provisions of Section 153D of the Act. Hence, the search assessments framed based on this invalid approval under Section 153D of the Act deserves to be quashed. Accordingly, the assessments for assessment years 2008-09 to 2013-14 are quashed on this limited count itself.

Since, the entire search assessments are quashed, the various additional grounds and original grounds raised by the assessee as well as by the revenue both on law as well as on merits need not be gone into as adjudication of the same would only be academic in nature and hence they are left open.

In the result, all the appeals of the assessee are allowed and all the appeals of the revenue are dismissed.”

A perusal of the approval in the instant case indicates that the learned Additional Commissioner has accorded approval under

The issue is to whether such approval is permitted or not, has been held by a coordinate bench of this Court in Principal Commissioner of Income Tax-15 versus Shiv Kumar Nayyar.

The coordinate bench of this Court after quoting 153D of the Act has observed as under:

Notably, 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 fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above.”

This Court has concurred with the views taken by the Orissa high court and the Allahabad high court.

Further, the Legislative intent can be gathered from the CBDT Circular No.3 of 2008 dated 12.3.2008 which reads as under:

The section 154D of the Income-tax Act prescribes, there has to be application of mind for each year than a omnibus order clubbing seven assessment years in the approval cannot be permitted.

Though the learned counsel appearing for the Revenue has drawn the attention of this Court to order dated 20.03.2026 passed by the coordinate bench of this Court, in which the following question of law were framed: “The following substantial questions of law arise in the appeal: (i) Whether in the facts of the case, one common approval for different Assessment Years granted by the Additional Commissioner of Income Tax was contrary to law? (ii) In case the answer to the first question is in the affirmative, whether the lapse is procedural or substantial warranting annulment of the assessment proceedings?”

It is therefore submitted by the learned counsel for the appellant that this question is pending before this Court.

In the opinion of the Court, the coordinate bench of this Court

A view has been taken by this Court which is in consonance with view taken by the Orissa high court and the Allahabad high court, no question of law survives for consideration.

Therefore, the appeal is dismissed on the ground that no substantial question of law is arises for consideration.

The appeal stands dismissed.