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Facts
The assessee's appeal was against an order of the CIT(A) concerning AY 2017-18. The core issue revolved around the validity of the approval granted under Section 153D of the Income Tax Act, 1961, for issuing the assessment order under Section 153A. The assessee contended that the approval was not granted in accordance with the law.
Held
The Tribunal held that the consolidated approval for multiple assessment years granted by the Addl. CIT was against the mandate of law. Such approvals require an independent application of mind for each assessment year and cannot be a mere ritualistic formality or rubber stamping.
Key Issues
Whether the consolidated approval granted by the approving authority under Section 153D of the Income Tax Act, 1961, for multiple assessment years, without an independent application of mind for each year, vitiates the assessment order passed under Section 153A.
Sections Cited
153A, 153D
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Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWALSmt. Komal Tyagi,
P a g e | 1 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, DELHI
BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER
ITA No.2462/Del/2025 (Assessment Year:2017-18)
Smt. Komal Tyagi, Vs. ACIT, 363, Purani Chungi, Central Circle-3 Faridabad NIT H.O, Faridabad-121001 �थायीलेखासं./जीआइआरसं./PAN/GIR No: AVTPT 5412 F Appellant .. Respondent
Appellant by : Dr. Rakesh Gupta, Adv& Sh. Saksham Agrawal, Adv& Sh. DeepeshGarg, Adv Respondent by : Ms. Pooja Swaroop
Date of Hearing 19.01.2026 Date of Pronouncement 23.01.2026 O R D E R PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 18.03.2025 of the Ld. Commissioner of Income Tax (Appeals)-23(hereinafter
P a g e | 2 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/APL/S/250/2024-25/1074633631(1) arising out of the order dated 28.09.2021u/s 153(A)of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the Deputy Commissioner of Income-Tax, Central Circle-03, New Delhi for AY: 2017-18.
At the time of hearing ld. Counsel has contended that assessee has raised ground No.3 whereby the impugned order u/s. 153A of the Act is alleged to be vitiated as the approval u/s 153D of the Act is not granted in accordance with law. Relying the copy of approval dated 26.09.2021 of which a typed copy was also provided separately, Ld. Counsel submitted that the consolidated approval for multiple years has been granted.
Ld. DR has countered the same by submitting that, it is merely an administrative function discharges by the competent authority u/s. 153D of the Act. It was submitted that there is a constant supervision of the assessment and Assessing Officer is given due instruction too so at the time of granting approval, much indulgence is not needed, specially when issues
P a g e | 3 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) are similar.Ld. DR pointed out that assessment records were made part of the letter dated 26.09.2021 by which approval was sought.
We have taken into consideration the copy of approval made available at page No.12-13 of the paperbook and we find that in para 2 the competent authority has observed as follows:-
“2. I have gone through the seized materials, appraisal report and other relevant materials pertaining to the case. I am satisfied that proper opportunity of being heard was given to the assessee on all the issues. All the issues emanating from the material available on record have been examined properly and are incorporated in accordance with law in the draft order. Relevant documents were verified before submitting the revised draft orders.”
We find that there is only a reference of letter dated 26.09.2021 of the Assessing Officer and the letter dated 26.09.2021 of the Assessing Officer does not mention of any previous communication to show that earlier a ‘draft orders’were forwarded which at the end of approving authority was examined and corrections, if any were proposed or advised, so now ‘revised draft orders’ were sent by the AO by letter dated 26.09.2021.
Ld. Counsel has also filed before us a chart showing how the Assessing Officer had examined a various issues in the relevant assessment years for which approval was sought including the fact that in AY 2014-15 in the
P a g e | 4 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) hands of assessee there is a protective addition while substantive additions were in hands of Dinesh Tyagi. Similarly, in AY 2016-17, 2017-18 also there were protective additions. In AY 2015-16 there were disallowance of expenses u/s. 44AD. Similar disallowance was in AY 2016-17 and then there was addition of agriculture income in AY 2016-17. In AY 2017-18 there was an issue of cash deposit during demonetization apart from issue of disallowances of expenses and agriculture income. Similarly, in AY 2018-19 there was disallowance u/s 56(1) followed by similar disallowance in AY 2019-20. Thus, in the light of different issues involved in different AY, we have considered view, that observations of the Ld. CIT(A) in the approval letter that all issues are emanating from material available on record having examined properly and which are incorporated in accordance with law in the draft orders is a very general observation and quite mechanical.
Thus the consolidated approval for multiple years is against the mandate of law as it has been held in various judicial proceedings that there should be separate approval or each assessment year involved and reliance for this can be placed on the decision of Hon’ble Jurisdictional Delhi High Court in Pr. Commissioner of Income Tax Vs. Shiv Kumar
P a g e | 5 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) Nayyarreported in 163 taxmann.com dated 15/05/2024 in ITA No. 285/2024 (CMP No. 28994/2024)and we reproduce the relevant part here below;
“11. A plain reading of the aforesaid provision evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for "each assessment year" referred to in clause (b) of sub-section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of PCIT v. Sapna Gupta [2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- "each assessment year" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under:- "13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply independent mind to the material on record for"each assessment year" in respect of "each assessee" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. 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." [Emphasis supplied]
P a g e | 6 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year"for "each assessee"separately. 13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 SCC OnLineOri 992] to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under:- "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 Commissioner of Income-tax. 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 "seen" or "approved" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein,(i) the Assessing Officer should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order." [Emphasis supplied] 14. During the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. 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
P a g e | 7 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) 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. 16. In the present case, the ITAT, while specifically noting that the approval was granted on the same day when the draft assessment orders were sent, has observed as under:- "10. We have gone through the approval granted by the ld. Addl. CIT on 30.12.2018 u/s 153D of the Act which is enclosed at page 36 of the paper book of the assessee. The said letter clearly states that a letter dated 30.12.2018 was filed by the ld. AO before the ld. Addl. CIT seeking approval of draft assessment order u/s 153D of the Act. The ld. Addl. CIT has accorded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt. NeetuNayyar. It is also pertinent in this regard to refer to pages 68 and 69 of the paper book which contains information obtained by Smt. NeetuNayyar from Central Public Information Officer who is none other than the ld. Addl. Commissioner of Income-tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page 36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt. NeetuNayyar. The remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together." 17. 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."
P a g e | 8 ITA No.2462/Del/2025 Komal Tyagi (AY: 2017-18) 8. In the light of the aforesaid discussion we sustain ground No.3 and the appeal of assessee is allowed. Impugned assessment is quashed.
Order pronounced in the open court on 23.01.2026
Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 23.01.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI