Loading judgment…
Facts
The assessee's appeals arose from assessment orders passed under Section 153A read with Section 143(3) of the Income Tax Act, 1961, following a search and seizure action. A key ground of appeal was the validity of the approval obtained under Section 153D of the Act.
Held
The Tribunal held that the approval granted by the Addl. CIT under Section 153D was mechanical and lacked due application of mind, rendering the entire search assessment proceedings void. Consequently, the assessment orders were quashed.
Key Issues
Whether the approval obtained under Section 153D of the Income Tax Act was valid and granted with due application of mind.
Sections Cited
153A, 143(3), 153D, 132, 127, 153C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI C. N. PRASAD & SHRI M. BALAGANESH
O R D E R PER BENCH: The appeal in to 5445/Del/2025 for AYs 2009-10 to 1. 2018-19, arises out of the order of the Commissioner of Income Tax (Appeals)-26, New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] dated 16.07.2025 against the order of assessment passed u/s 153A r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 31.12.2019 by the Assessing Officer, ACIT, Central Circle-14, New Delhi (hereinafter referred to as „ld. AO‟). The assessee also filed Stay Page | 1 to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar Petitions vide Stay Application Nos. 538 to 547/Del/2025 for AYs 2009-10 to 2018-19. Identical issues involved are involved in all these appeals and hence, they are taken up and heard together and disposed of by this common order for the sake of convenience.
With the consent of both the parties, the appeal of the assessee in 2. for AY 2009-10 is taken up as a lead case and the decision rendered thereon shall apply mutatis mutandis for all other assessment years except with variance in figures.
Through, the assessee has raised several grounds of appeal before 3. us, the preliminary ground raised by the assessee vide ground No. 7 for the year under consideration is challenging the action of the ld CIT(A) in not quashing the impugned assessment order passed by the ld AO for want of valid approval u/s 153D of the Act in accordance with the law. This issue goes to the root of the matter and hence, we deem it fit and appropriate to address the same first.
We have heard the rival submissions and perused the material 4. available on record. It is not in dispute that a search and seizure action u/s 132 of the Act was carried out on 10.01.2018 and on subsequent dates at different business and residential premises of Nagpal Group of cases. The case of the assessee was centralized with ACIT, Central Circle, New Delhi dated 10.05.2018 and subsequently order u/s 127 of the Act was also passed to this effect. A notice u/s 153A of the Act stood issued to the assessee on 20.12.2019. In response to the said notice, the assessee filed return of income for AY 2009-10 on 23.12.2019 declaring total income of Rs. 5,50,000/-. The search assessment was completed u/s 153A read with Section 143(3) of the Act on 31.12.2019 determining total income of the assessee for AY 2009-10 at Rs. 13,80,000/-. In the last paragraph of the to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar said assessment order, the ld AO had duly mentioned that assessment order has been passed after taking prior approval of the ld Addl. CIT, Central Range-4, New Delhi vide his approval No. 1247 dated 30.12.2019.
The draft assessment orders seeking approval u/s 153D of the Act 5. were duly forwarded by the ld AO on 30.12.2019 for AYs 2008-09 to 2018- 19 in the case of the assessee along with various other assessees for different AYs. For the sake of convenience, the said letter dated 30.12.2019 seeking approval u/s 153D of the Act is reproduced herein:- to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar It is pertinent to note that the ld AO had forwarded only draft 6. assessment orders while seeking approval u/s 153D of the Act as is evident from the aforesaid letter. The ld Addl. CIT, being the competent authority u/s 153D of the Act, had accorded approval u/s 153D of the Act on 30.12.2019 for various assessees for various assessment years by a single consolidated approval vide approval in F. No. Addl.CIT/CR-4/Approval 153D/ 2019-20/1247 dated 30.12.2019. For the sake of convenience, the said approval granted by the ld Addl. CIT u/s 153D of the Act is reproduced below:- to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar 7. to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar It is also pertinent to note from the aforesaid approval in the case of 8. Shiv Vani Buildwell Pvt. Ltd in which appears at Sl No. 10, this Tribunal had an occasion to adjudicate the validity of the approval u/s 153D of the Act, wherein after going through the entire contentions of both of both the parties and their submissions made thereon, this Tribunal had held that approval granted by the ld Addl. CIT to be mechanical in nature and without due application of mind. The relevant operative portion of the said Tribunal order is reproduced herein:-
2. Heard and perused the records. Assessee raises an additional ground which is reproduced below; “1. That having regard to the facts and circumstances of the case, Ld. C1T(A) ought to have quashed the impugned assessment order passed by Ld.AO u/s 153A without obtaining approval under section 153D in accordance with law and without complying with the mandatory conditions laid down under that section.
As the additional ground raised is purely legal and can be decided on the basis of admitted facts on record, the same is admitted.
4. We find the aforesaid legal issue is fully covered by the Coordinate Bench, common order dated 10.01.2025 passed in name of other persons case which were centralized and for which a common approval was given u/s 153 D of the Act. The ld. DR defends the approval on similar basis.
5. Before deciding the legal issue in dispute, we may gainfully reproduce the approval u/s. 153D of the Income Tax Act (for short „the Act‟), which read as under:- to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar
It can be observed that in Prateek Nagpal vs. ACIT decided vide (AY 2012-13), (AY 2013-14) & (AY 2014-15) and Anu Nagpal V. ACIT ITA No.3843/DEL/2024 order dated 16.04.2025 on similar facts and circumstances of the case as well common approval u/s 153D of the to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar Income Tax Act dated 30.12.2019, the coordinate bench has quashed the entire proceedings initiated under section 153C r.w.s. 153A of the Act in the absence of a valid approval granted by the ACIT, Central Range-4, New Delhi.
The copy of approval u/s. 153D of the Act dated 30.12.2019 granted in total 28 assessees cases wherein, the present assessee‟s name is mentioned at serial no. 10 and also perused the Tribunal‟s order dated 10.1.2025 passed in the case of Prateek Nagpal‟s case whose name also stands mentioned at serial no. 3 and of Anu Nagpal whose name is mentioned at Sr. 1&2 of the said approval u/s. 153D of the Act. In view of the aforesaid factual matrix, we find considerable cogency in the contention of the Ld. AR that exactly on similar facts and circumstances of the case, the Coordinate Bench vide its common order dated 10.01.2025 passed in another case viz. Prateek Nagpal (supra) similar legal issue was decided in favour of the assessee by quashing the entire proceedings initiated under section 153C r.w.s. 153A of the Act in the absence of a valid approval granted by the ACIT, Central Range-4, New Delhi.
Notably, the order of approval dated 30.12.2020 reproduced establishes that a single approval has been granted for various assessment years and various 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.
We accordingly sustain the additional ground raised in the CO and allow the same. The impugned assessment is quashed. The appeal of Revenue is dismissed. “ Respectfully following the same, we have no hesitation to hold that 9. approval has been granted by the ld Addl. CIT u/s 153D in a mechanical manner without due application of mind which would vitiate the entire search assessment proceedings. Accordingly, the entire search assessment proceedings is hereby quashed. The ground No. 7 raised by the assessee is hereby allowed.
As stated in the earlier part of this order, the decision rendered herein 10. for AY 2009-10 shall apply mutatis mutandis for other assessment years also qua the issue of invalid approval u/s 153D of the Act. to 5445/Del/2025 SA Nos. 538 to 547/Del/2025 Mr. Gokul Kumar Since, the entire search assessments are quashed for impugned 11. assessment years, the stay applications of the assessee are hereby dismissed as infructuous.
In the result, the appeals of the assessee are allowed and stay 12. applications of the assessee are dismissed as infructuous.
Order pronounced in the open court on 26/11/2025.