ACIT, CENTRAL CIRCLE-19, DELHI, DELHI vs. DEEPA TALWAR, DELHI

3. That the impugned assessment order has been passed in gross contravention of provisions of section 153D of the act being necessary approval accorded by Ld. Jt. CIT, Central Range 5, Delhi was a mechanical approval and assessment completed on the basis of said approval is bad in law and deserves to be quashed.

7. The assessee (Yasmin Kapoor) in CO 98/Del/2025 arising out of for AY 2016-17 raised ground No. 4 as under:-

4. That the Ld. CIT(A) has erred in law and facts of the case while upholding the assessment framed under section 153A r.w.s. 143(3) of the act without appreciating the fact that the mandatory approval under Section 153D of the Income Tax Act, 1961 have been given in mechanical manner without application of mind and in contravention of pre-requisite being approval accorded vide common letter instead of independent approval for each case. As such, the assessment order passed by the Ld. AO is illegal and may please be quashed.

That the impugned assessment order has been passed in gross contravention of provisions of section 153D of the act being necessary approval accorded by Ld. Jt. CIT, Central Range 5, Delhi was a mechanical approval and assessment completed on the basis of said approval is bad in law and deserves to be quashed.

10. We find that the ld JCIT, Central Range-5, (hereinafter referred as Competent Authority) had granted approval for Wave Hospitality Private Limited (for 7 years); Yasmin Kapoor (for 1 year) and Deepa Talwar (for 1 year) in a single consolidated approval order u/s 153D of the Act on 27.12.2019. It is pertinent to note that letter was sent by the ld AO for seeking approval u/s 153D of the Act dated 26.12.2019 and ld JCIT had granted approval in the above cited cases on 27.12.2019. On 29.12.2019, the ld Competent Authority had granted approval for Yasmin Kapoor (for 1 year); Tarun Kapoor (for 1 year) and Rahul Khare (for 1 year) in a consolidated order dated 29.12.2019. It is pertinent to note that the letter was sent by the ld AO for seeking approval u/s 153D of the Act dated 29.12.2019 and ld JCIT had granted approval in the above cases on 29.12.2019. The ld AR filed case law compilation wherein this issue has been decided in favour of assessees by various High Courts, including Hon‟ble Jurisdictional High Court and by various Tribunals as under:-

S. No. Case Laws on section 153D of the Act Dated 1. ACIT vs. Deepa Talwar CO No. 62/Del/2025 15.10.2025 2. PCIT vs. MDLR Hotels (P.) Ltd. [2024] 166 30.07.2025 taxmann.com 327 (Del.) 3. PCIT vs. Shiv Kumar Nayyar [2023] 147 15.05.2024 taxmann.com 9 (Del.) 4. PCIT vs. Sapna Gupta [2023] 147 taxmann.com 12.11.2022 288 (All.) 5. ACIT vs. Serajuddin & Co. [2023] 150 taxmann.com 15.03.2023 146 (Ori.) 6. Rajesh Kumar Gupta v. ACIT 2025 SCC Online ITAT 06.02.2025 902 7. Ram Narayan Bajaj vs. DCIT 2025 SCC Online ITAT 31.01.2025 591

“Issue pertaining to Section 153 D approval: 2. Assessee raised technical issues including bulk approval and non- application of mind by the Range Head while granting approval u/s 153D on this issue written submission is as under: 3. Issue pertaining to Section 153 D approval. 3.1 With respect to the issue pertaining to grant approval u/s 153D, it is stated that the Range Head, Ld. JCIT has duly applied his mind as is evident from the approval dated 27.12.2019. Moreover, Range Head, JCIT had issued specific direction in granting approval with specific remarks. He while granting approval has specifically mentioned that the approval has been granted "in view of the details furnished, perusal of assessment records and various discussions". 3.2 From perusal of the approval letter, the following facts may be observed: i). The AO had submitted proposal for approval along with draft order on 26.12.2019. The RANGE HEAD, JCIT granted approval on 27.12.2019 based on perusal of the thus submitted assessment records and draft Assessment order. ii). It may also be noted that the AO had submitted only 09 case files of the Assessee company to the Range Head, JCIT for approval which he perused and gave approval. iii). The case laws cited by the assessee are those in which approval u/s 153D was given mechanically without application of mind due to time constraint. But, the facts of the impugned case are completely different. Perusal of 09 files is undoubtedly a humanly possible task. Thus, it cannot be considered by any stretch of imagination that the approving authority was not in a position to apply his mind to the facts of the case and issues involved while granting approval under section 153D of the Act. The approving authority had sufficient time to go through all the records and relevant material to arrive at decision granting approval Under Section 153D of the I.T Act in judicious manner in the instant case. Hence, there is no illegality in the approval at all.

3.3 It is not a gainsaying that the assessment is a continuous process involving administrative as well statutory roles being donned by the Range Head. It is incumbent upon the Range Head to examine and monitor the assessments which can't be denied if the same is not reduced in writing at every point of time till the finalization of the assessment. The approval of the approving authority underlines that he has examined the assessment records, relevant copies of seized documents and the relevant issues arising from the material on record judiciously in independent manner by way of due application of mind. It would not be out of place to mention here that the assessee has not come out with any case that there is case of non-application of mind. The Hon'ble Supreme Court in the case of Chuharmal vs. CIT 172 ITR 250had held that there was a presumption in law, specifically section 114(e) of the Evidence Act that Judicial and Official Acts supposed to be performed in a particular manner had actually been performed in the way they were supposed to be conducted. There could not be presumption of illegality. 3.4 There is no reason to hold the assessments to be invalid on account of any irregularity in the approval process. It was submitted that cases had come up for decision where there was absolute lack of approval and there too the Courts had not held such assessments to be invalid. The lack of approval had been held to be a procedural irregularity that was not fatal to the order passed. Our attention wasinvited to the judgment of the Hon'ble Karnataka High Court in the case of Gayathri Textiles vs. CIT (2000) 111 taxman 123 (Kar) wherein the ld. CIT(A) had cancelled the penalty levied under section 271(1)(c), holding that the ld. AO had not obtained the previous approval of the IAC as required under section 274(2). On appeal by the Revenue, the Tribunal had reversed the order, holding that the failure to obtain the previous permission from the IAC for imposing penalty under section 271(1)(c) was only a procedural error and it was not fatal to the order of penalty under section 271(1)(c). The Hon'ble High Court held that in the said case, the proceedings were validly initiated and the proceedings under section 271(1)(c)(iii) only require prior approval of the IAC for direction for payment of penalty and not for the initiation of proceedings. Page | 9 3.5 The assessee has to positively prove that there is a case of non- application of mind in light of the submission that the approval u/s 153D is an administrative approval. Here, it would not be out of place to highlight that the relevant seized documents in a case are always part of the assessment records as per practice, and requirement of the work. They are not kept separately as relevant seized material is frequently referred to by the assessing officer during the course of assessment proceedings and also made part of assessment order most of the time. In fact, as per the law, seized material is considered as part of records before Assessing Officer and all such seized records, return of income, notices etc. used during an assessment proceeding when considered collectively is known as 'Assessment record'. Therefore, from the letter seeking approval, it is evident that the entire assessment records which included seized material was placed before the approving authority for the purpose of taking decision with regard to approval under section 153D of the Act. 3.6 Further, in the present case, the Range Head (RANGE HEAD, JCIT/Addl CIT) had been involved and hence, was well aware about the progress of the assessment proceedings, relevant issues of the assessee, nature and content of the seized material in light of the fact that the as per the CBDT guideline F. No. 286/161/2006-IT (Inv. II) dt. 22.12.2006, copy of appraisal report is shared by Investigation Wing with both the assessing officer and Range Head, JCIT. In fact, CBDT guideline dt. 22.12.2006 on the subject of the search and Seizure Assessments clearly outlines such close coordination. Thus, as per the prevailing Practice and Guidelines, the approving authority has good idea of issues involved in particular case before hand i.e. much before the cases are sent to him for approval Under Section 153D of the Act. This guideline of CBDT is relevant piece of information, which throws light on the way search assessments are taken up by the filed officers. Therefore, in light of such peculiar fact of instant case, it cannot be inferred that the approval granting authority was not in a position to independently apply his mind in judicial manner to the case of assessee on the same day. 3.5. In this regard, it is further submitted that on perusal of case laws on the issue of requirements for proper approval under section 153D, it is found that Hon'ble jurisdictional high court has emphatically held that such an issue is essentially a question of fact and has to be decided based of factual matrix of a particular case, Further, it has been held that approval cannot be reduced to a mechanical exercise and approving authority is required to apply his/her independent mind while granting such an approval. Thus, all the cases have been decided on this point by Hon'ble Tribunal and Hon'ble High court in light of peculiar facts of those cases only. Some of such peculiar facts of such cases are outlined here in under to emphasize upon distinguishing nature of facts of instant cases from those cases. : Case Name and Peculiar Facts of cases in mentioned Distinguishing facts of the Citation in first col. instant case HIGH COURT OF DELHI in -No Assessment records were sent along Appellant has not been able to the case of PCIT vs. Anuj with draft assessment order prove that its case and facts are in -There were infirmities in the figures of alliance with the cited case. Bansal ITA 368/2023 Original Return of income and Assessed Further, there is nothing on the Dated July 13,2023 income. record to suggest that in the instant -Range Head, JCIT did not apply his mind as case of the assessee, there were he did not notice such errors/infirmities. some factual infirmities in the order granting approval. None of the peculiar factual aspects are present in the instant case. Therefore, the case of Anuj Bansal had distinguishable facts than those of instant case. HIGH COURT OF DELHI in The approval order failed to make any Further, in the instant case, the case of Principal mention of the fact that the draft approval is given for the case of Commissioner of Income- assessment orders were perused at all, assessee only. tax v. Shiv Kumar Nayyar much less perusal of the same with an Therefore, facts of the instant case [2024] 163 taxmann.com 9 independent application of mind. are distinguishable. (Delhi) Also, in this case of Shiv Kumar Nayyar, there was no fact brought on the record by the Revenue to prove that identical issues (involving similar facts) were involved in different cases submitted for approval by the AO. It was in absence of such factual information that granting of approval for 43 cases in a single day was viewed by the Hon‟ble High Court. ITAT NEW DELHI in the The approving authority had granted In the instant case, approval is case of Seh Realtors Pvt. approval in 232 cases in a single day. given for the case of assessee only Ltd. v. ACIT Central Circle- Therefore, issue of judicious approval for and that too in single case. such large number of cases from the angle Therefore, facts of the instant case Dated 23.07.2024 of human limitations was an issue before are distinguishable. Hon‟ble Bench.

Reliance is placed in the case of Home Finders Housing Ltd. v Income-tax Officer Ward 2(3), Chennai [2018] 93 taxmann.com 371 (Madras) wherein it was held that in case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated.

Further, reliance is also placed on the judgement of Hon‟ble Kerala High Court in OP(C) No. 340 of 2019 against the order in IA 3123/2018 in OS 125/2018 of II Additional Sub Court, Ernakulam dated 23.06.2022, wherein it is held that the “5 Courts should endeavor to dispose of a case on merits rather than on default The Apex Court in the case of Improvement Trust, Ludhiyana vs Ujagar Singh & Ors on 09.06.2010 in Civil Appeal NO. 2395 of 2008 also held that “ After all, justice can be done only when the matter is fought on merits and in accordance with law rather to dispose it of on such technicalities and that too at the threshold. Both sides had tried to argue the matter on merits but we refrain ourselves from touching the merits of the matter as that can best be done by the Executing Court which had denied an opportunity to the appellant to lead evidence and to prove the issues so formulated. In our opinion, ends of justice would be met by setting aside the impugned orders and matter is emitted to the Executing Court to consider and dispose of appellant‟s objections filed under Order 21 Rule 90 of CPC on merits and in accordance with law, at an early date. It is pertinent to point out that unless malafides are writ large on the conduct of the party, generally as a normal 1 rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. ” 3.6 The Hon‟ble ITAT Mumbai in the case of Smt. Usha Satish Salvi vs ACIT Central Circle-4(4), Mumbai in & 4238/Mum/2023 dated 23.01.2025 has examined all the following judgements of the Tribunal and Hon‟ble High & Courts [Para 6.2] and rejected the objection raised by the assessee that approval granted u/s 153D of the Act has been accorded on presumption and without application of mind rather opined that approval was granted by the Addl CIT after due application of mind: 6.2 (i) Decision dated 06/06/2024 of Delhi bench of the Tribunal in the case of Shri Guvinder Singh Duggal in to 863/Del/2021 for AY 2012-13 to2018-19. (ii) Decision dated 29/04/2024 of Delhi Bench of Tribunal in the case of MDLR Airline (P) Ltd. in & and 2008- 09. (iii) Decision of Hon ‟ble Allahabad High Court in the case of PCIT vs Sapna Gupta in of2022.

(iv) Decision of Hon ‟ble Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar in ITA 285/2004 & CMAppela 28994/2024 (v) Decision of Mumbai Bench of Tribunal in the case of Arch Phamalabs Ltd in for AY 2011-12 and other appeals. (vi) Decision of Hon‟ble Delhi High Court in the case of PCIT Vs M/s Hotels P Ltd in ITA 593/2023 (vii) Decision dated 24/04/2024 of Delhi Bench of Tribunal in the case of Veena Singh in & 295/Del/2022for AY 2016-17 and 2017-18. 3.7 It is submitted that Central Ranges are specialized ranges designated for assessment of search and seizure cases. The structure ensures deep involvement of the Addl. Commissioner with each case. These are not routine assessments; the number of cases is limited, and the Range Head, JCIT plays a crucial role throughout the lifecycle of the case. The assumption by the assessee that the Range Head, JCIT was a stranger to the assessment work is factually erroneous and perverse. It is further submitted that there cannot be any presumption drawn against the approving authority with regard to application of mind merely on the ground that number of cases approved in a day were high. There cannot be any threshold limit set for the same. How many cases will be considered unreasonably high and how many cases will be considered reasonable? It is submitted that every approval needs to be examined in light of its peculiar facts such as number of issues involved, nature of issue involved, modus-operandi involved, number of cases involved and inter-relationship among facts of such cases. If identical issues are involved involving same modus-operandi and cases are of same search group only, it would not be unreasonable to consider that an approving authority will be able to apply its independent mind judiciously to relatively larger number of cases in a single day. Ultimately, it boils down to factual matrix of the cases sent for approval. In the instant case, in light of the factual matrix that additions were made in different cases of the group on the same ground based on same factual position with regard to same accommodation entry provider and involving same modus-operandi, it would be justified to consider that the approving authority would have been in a position to apply his mind to all such cases sent for approval by the AO on the same day, particularly when number of such cases is not too high and facts/issues involved are in the knowledge of approving authority beforehand i.e. before receiving proposal for approval. 3.8 It is submitted that Section 153D does not prescribe any specific procedure or method for the grant of approval. As long as Range Head, JCIT is satisfied with the draft assessment order and conveys his approval, the mandate of law stands fulfilled. 3.9 In the present case, the approval was in fact granted under Section 153D. There is no finding that the assessment was so fundamentally flawed as to render it unfit for any reasonable authority to approve it. This is not a case where Approval has not been granted. 3.10 It is relevant to point out that approval u/s 153D of the Act needs to be put at a different pedestal in comparison to sanction u/s 151 of the Act. Section 151 deals with prior approval for issuing notices for reopening assessments (such as under section 148). The approval here is for cases where the Assessing Officer believes income has escaped assessment; higher authorities‟ consent is required before such notices are issued. If the sanction u/s 151 is not proper, the jurisdictional notice issued u/s 148 has been held to be void. However, the approval u/s 15 3D has to be granted by the Ld. Add. CIT once the draft assessment order is prepared by the Ld. Jurisdictional Officer making the assessments u/s 153A/153C of the Act. In this case, there is no challenge to the validity of search, procedure followed by the Department in search, however the only challenge raised by the assessee before this Hon‟ble Tribunal is that the approval granted by Range Head, JCIT is mechanical. No evidence to prove the same have been sufficiently submitted by the assessee. CBDT has issued guideline for search and seizure assessments in F. No.286/161/2006-IT (Inv. II) on 22.12.2006 contained in Appendix V of the Search &Seizure Manual 2007, involves the Range Head in the assessment process right from the stage of receipt of the appraisal report and the seized material to the granting of the final approval. As brought out by the ld. DRs, it is observed that the Range Head (approving authority) is involved in scrutinizing the appraisal a report and the seized material at the time of preparation of the examination note to decide which cases were to be taken up under section 153A, 153C or section 148.Subsequently, he was also supposed to vet the action note prepared by the A within 90 days of receipt of seized material after methodological examination of the seized material and it has been brought to our knowledge by the DRs that usually these action notes are prepared by the Id. AO and the Range Head in consultation with each other. We also observe that the Range Head has been directed to ensure proper satisfaction note are recorded before issuance of notices under section 153Cor under section 148. Furthermore, it appears that the Board envisaged that the Range Head was to be associated with the preparation of the detailed questionnaire and could even give directions under section 144A where it was considered necessary. Therefore, when the Range Head has been actively monitoring the assessment proceedings the whole year, then it cannot be averred that the same officer granted several other approvals during the same period resulted in non-application of mind.

3.11 Even if the said approval is held to be mechanical, then the submissions of the Revenue is that the matters may be remanded back to the Assessing Officer for curing the defect.Hon‟ble Madhya Pradesh High Court in the case of CIT vs. Vijay Dal Mills (1998) 230 ITR 301 (M.P.) following its earlier order in the case of Prabhudayal Amichand vs. CIT (1989) 180 ITR 84 (M.P.) which in turn held that a procedural irregularity not involving the question of jurisdiction can be cured. Similarly, Hon‟ble Kerala High Court in the case of G. Manoharan vs. ACIT (2006) 155 taxman 569 (Ker), Hon‟ble Kolkata High Court in the case of Sagar Dutta vs. CIT (2014) 44 taxman.com 311 (Calcutta) and Hon‟ble Supreme Court in the case of Guduthur Bros, vs Income-Tax Officer (1960) 40 ITR 298 (SC) and the Hon‟ble ITAT (Allahabad Bench) in bunch matters of Ramji Vaish v DCIT &Vijay Stone Product v ACIT (ITA Nos. 30, 31, 32, 33/ALLD/2019) had taken a similar view that in case an illegality vitiated the proceeding after it was lawfully initiated, the proceedings were to be restored back to the stage at which the illegality occurred and not quashed altogether. In view of the above, it is humbly prayed that the assessee's plea may kindly be rejected being devoid of merit.”

12. We find that the issue in dispute is squarely covered by the decision of the Third Member case in the case of Dheeraj Chaudhary Vs. ACIIT reported in 178 taxmann.com 360 (Delhi Trib) (TM ) wherein the coordinate bench of this Tribunal has held as under:-

“PER MAHAVIR SINGH, VICE PRESIDENT (AS THIRD MEMBER) By the order of President, ITAT vide U.O. No.F.28- Cent.Jd(AT)/2025 dated 24th March, 2025, the undersigned has been nominated to adjudicate the difference of opinion between the learned Judicial Member and learned Accountant Member on the following question:- “As to whether under the present facts and circumstances of the matters, the approval granted by the ACIT, dated 27.12.2016 under Section 153D of the Income Tax Act, 1961 are sustainable in the eyes of law or not.” Brief facts are that a search under Section 132 of the 2. Income-tax Act, 1961 (hereinafter referred to as „the Act‟) was carried out on the assessee group of cases on 27th April, 2014. Consequently, for the assessment years 2009-10 to 2015-16, notices under Section 153A of the Act were issued by the Revenue Page | 15 to the assessee. The assessee, during the course of assessment proceedings, submitted that the original returns filed be considered as returns filed in response to notices under Section 153A of the Act. Accordingly, assessments were framed by the ACIT, Central Circle-8, New Delhi for the relevant assessment years 2009-10 to 2015-16 vide different orders dated 27th December, 2016 under Section 153A read with Section 143(3) of the Act. Aggrieved by the additions made by the Assessing Officer, the assessee preferred appeals before learned CIT(A) and learned CIT(A) also passed appellate orders for these above assessment years. Aggrieved against the appellate orders, assessee preferred appeals before the Tribunal.The assessee, vide letter dated 27th October, 2021, for these assessment years, raised additional ground in all these appeals. The ground as raised is identical and hence, I will take the ground raised in assessment year 2009-10, which reads as under:-

3. The CIT(A) has erred in law in confirming the addition made by the AO, without considering that the mandatory approval given by the Addl. CIT in this case U/s 153D has been given, in a complete mechanical manner, without application of mind and the same therefore makes the entire assessment order bad in law and void ab initio.” This ground was adjudicated by the learned Judicial

3. Member and learned Accountant Member after admitting the same and there is no dispute about admissibility of this ground. Before me, learned Counsel for the assessee filed copy of approval (which is in Hindi language but assessee filed a translated copy), which reads as under:- “F.No./A.C.I.T./C.R.-2/2016-17/1029 Dated:- 27-12- 2016 To, The Assistant Commissioner of Income Tax (Central) (Circle)-8, New Delhi. Subject:- Karan Luthra Group Income Tax Rules 153D for approval andclosing proceedings. Please refer to letter F.No. Assistant Commissioner of Income Tax/Central Circle-08/2016-17/1311, dated – 27/12/2016 received in this office from Assistant Commissioner of Income Tax/Central Circle-08, New Delhi regarding the above subject. These draft orders are sent by you for approval under section 153D. S.No. Name of the Assessee Section PAN A.Y. Filed Income Assessed Income 1 Mr. 153A AASPK9267B 2009-10 137940 1340304

DheerajChoudhary 2 Mr. 153A AASPK9267B 2010-11 307943 10241352 DheerajChoudhary 3 Mr. 153A AASPK9267B 2011-12 403908 15000460 DheerajChoudhary 4 Mr. 153A AASPK9267B 2012-13 438939 23094073 DheerajChoudhary 5 Mr. 153A AASPK9267B 2013-14 1018269 10903269 DheerajChoudhary 6 Mr. 153A AASPK9267B 2014-15 584183 30911700 DheerajChoudhary 7 Mr. 143(3) AASPK9267B 2015-16 1004820 221698040 DheerajChoudhary The above proposed orders are approved with the direction that the assessment orders be passed before the prescribed time limit. It is also specified that a copy of the final orders passed be sent to this office. (Rinku Singh) Additional Commissioner of Income Tax Central Range-2, New Delhi” Learned Counsel stated that the copy of approval is 4. obtained through RTI and Department, vide letter dated 2ndAugust, 2021, provided this approval.Accordingly, the additional groundsare raised vide application dated 27th October, 2021. Learned Counsel for the assessee made argument that as per the mandate of Section 153D of the Act, the approval is to be granted to the assessment order by the Additional CIT/JCIT after due application of mind. Learned Counsel for the assessee stated that this approval dated 27.12.2016 was granted in lieu of proposal sent by the Assessing Officer i.e. the Assistant Commissioner of Income Tax, Central Circle-08, New Delhi dated 27.12.2016. It means, according to learned Counsel, the Additional CIT granted approval of these seven draft assessment orders on the same date. He further explained that as per this proposal, the Assessing Officer, no assessments records, search materials, replies filed by assessee or any material related to these assessments was provided or examined by the Additional CIT. In view of these facts, learned Counsel argued that that this issue is now settled by the decision of Hon'ble Delhi High Court in the case of PCIT(Central)-2 Vs. Anuj Bansal – [2024] 165 taxmann.com 2 (Delhi) and PCIT Vs. Shiv Kumar Nayyar – [2024] 163 taxmann.com 9 (Delhi). Even this issue has been dealt with by Hon‟ble Orissa High Court in the case of ACIT Vs. Serajuddin& Co. – [2023] 150 taxmann.com 146(Orissa). Similar view is taken by Hon‟ble Allahabad High Court in the case of PCIT Vs. Sapna Gupta – [2023] 147 taxmann.com 288 (Allahabad). Learned Counsel argued that the jurisprudence arising out of the above case laws is that an approval under Section 153D of the Act is considered to be as given with no application of mind and given in a mechanical manner when the approval itself does not reflect any application of mind. He narrated the facts of the present case stating that on 27th December, 2016, the Assessing Officer sent the draft assessment order to the Additional CIT for approval and on the very same date i.e., 27th December, 2016, the Additional CIT granted approval. He produced before us the said letter of the Assessing Officer along with approval granted by the Additional CIT. From a perusal of the above said approval, it was argued that there is not even a token of mention of the draft orders having been perused by the Additional CIT, rather, the letter simply grants approval. He argued that even the bare minimum requirement of the approving authority, having to indicate what the thought process was involved was, is missing in the aforementioned approval order. In the approval order, there is no whisper in regard to the fact that the Additional CIT has examined the seized documents or the proposed additions made in the draft assessment order as the same was forwarded to him for her perusal. From the approval, it is clear that there is no reason given and it is bare minimum for the approving authority that there should have been some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the Act. In terms of the above, learned Counsel for the assessee stated that the above approvals are mechanical and without application of mind and hence, the assessment orders approved without application of mind is to be quashed. He supported the order of learned Judicial Member.

5. On the other hand, learned CIT-DR Ms. PoojaSwaroopsubmitted that as pointed out during the course of hearing, there is a mistake in the question of law framed, as reproduced below:- “As to whether under the present facts and circumstances of the matters, the approval granted by the ACIT, dated 27.12.2016 under Section 153D of the Income Tax Act 1961 are sustainable in the eyes of law or not.” She submitted that approvals under Section 153D of the Act are granted by the Joint/Additional CIT. However, in the present case, ACIT has been stated, which is incorrect, because ACIT is actually Assistant Commissioner of Income Tax and not Additional Commissioner of Income Tax. Without prejudice to the above, she drawn our attention to Paragraph 11 and 14 to 17 of the draft order of learned Accountant Member. She also produced copies of relevant guidelines enunciated by the Search & Seizure Manual and relevant SOPs for search assessments issued by the CBDT. She also referred to Appendix-V of the Assessment Manual issued by the Income-tax Department in regard to search and seizure assessments dated 22nd December, 2006 vide F.No.286/161/2006-IT(Inv.II). She particularly referred to Paragraph 1.3 and argued that the Range Head i.e., Additional CIT/JCIT is involved in scrutinizing the seized material and Page | 18 issuance of notices under Section 153A, 153C and 148 of the Act and also where assessment in other than the searched person is to be done. The relevant Paragraph 1.3 referred by her reads as under:- “1.3 On receipt of the appraisal report and seized material, the Assessing Officer and Range Head should jointly scrutinize the appraisal report and seized material and prepare an Examination Note to decide: i. Cases where notices u/s 153A of the Income-tax Act, 1961 (the Act) are required to be issued. ii. Cases where notices u/s 153C of the Act are required to be issued. iii. Cases where notices u/s 148 of the Act are required to be issued. iv. Cases where seized material pertains to persons other than those whose cases have been centralised.” Subsequently, she referred to Paragraph 2.9 and stated that 6. in case the Assessing Officer is not in agreement with any findings/conclusions drawn in the Appraisal Report, the matter should be brought to the knowledge of the Additional CIT/JCIT who should resolve the issue with the concerned Addl./Joint DIT(Inv) and also with CIT(Central) or DIT(Inv). She further referred to Paragraph 2.10 of the Manual and stated that even the Additional CIT/JCIT can issue instructions to the Assessing Officer in terms of Section 144A of the Act. She stated that even the Additional CIT/JCIT is involved in the preparation of final assessment order by way of instructing the Assessing Officer issuing final show cause notice. She referred to Paragraph 3.2 of the Manual, which reads as under:- “3.2 All the issues and evidence that is going to be relied upon in the assessment order should be made available to the assessee. The final show cause notice should be prepared in consultation with the Addl. CIT and should contain: i. The proposed structure of the order; ii. The evidence in possession of the department; iii. The case laws being relied upon; iv. The opportunity of rebuttal being provided to the assessee.”

In view of the above, she prayed that approval under Section 153D of the Act is neither invalid nor bad in law nor given without application of mind by the Additional CIT, as emphasized by the learned Accountant Member in his order.

20. 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 order under section 153A.

21. In the instant case, the draft assessment order in 85 cases, i.e. for 85 assessment years placed before the Approving Authority on 30-12-2017 was approved on same day i.e. 30-12-2017, 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 85 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.” In the present case before me also, as is evident from the 9. copy of approval, as reproduced above, granted by the Additional CIT, is for all the six assessment years vide one approval. Hence, on this count also, the approval granted by the Additional CIT is bad in law and consequent assessment order passed in all these six assessment years is bad in law.

Name of the PAN A.Y. Section Returned Income Assessed Income assessee Sh. Dheeraj AASPK9267B 2009-10 153A Rs.1,37,940/- Rs.13,40,304/- Chaudhary Sh. Dheeraj AASPK9267B 2010-11 153A Rs.3,07,943/- Rs.1,02,41,352/- Chaudhary Sh. Dheeraj AASPK9267B 2011-12 153A Rs.4,03,908/- Rs.1,50,00,460/- Chaudhary Sh. Dheeraj AASPK9267B 2012-13 153A Rs.4,38,939/- Rs.2,30,94,073/- Chaudhary Sh. Dheeraj AASPK9267B 2013-14 153A Rs.10,18,269/- Rs.1,09,03,269/- Chaudhary Sh. Dheeraj AASPK9267B 2014-15 153A Rs.5,84,183/- Rs.3,09,11,700/- Chaudhary Sh. Dheeraj AASPK9267B 2015-16 143(3) Rs.10,04,820/- Rs.2,21,68,040/- Chaudhary Yours Faithfully, Sd/- (Pratibha Singh) Asst. Commissioner of Income Tax Central Circle-08, New Delhi”

From the above proposal, it is clear that the same is not 11. accompanied by any assessment folder, seized material or any other related documents for completion of assessment. It means that before the Additional CIT, only a proposal vide letter F.No.ACIT/Central Cir.-08/2016-17/1311 dated 27th December, 2016 was sent by the Assessing Officer. In the given facts, whether this approval granted by the Additional CIT is mechanical or there is due application of mind or not.

In terms of the above, I concur with the decision of learned Judicial Member quashing the above assessments. The matter shall now be placed before the regular Bench for passing appropriate orders in accordance with the majority opinion.

PER BENCH: