IMPRESS ESTATES PVT LTD.,NEW DELHI vs. ACIT CENTRAL CIRCLE-19, NEW DELHI

6.1 Section 153D of the Act is for administrative purposes and does not require that an opportunity of hearing is required to be given to the assessee. The Hon'ble Supreme Court in S. Narayanappa vs. CIT 63 ITR 219 (SC) as to whether such approval is merely an administrative act or whether such approval can be brought under judicial scrutiny. The apex court held that the stage of obtaining approval from higher authority was administrative in character and not a quasi-judicial act. What is to be seen is whether the Approving Authority is competent to grant approval is important and under scheme of things the JCIT is the competent authority to grant approval u/s 153D of the Act. In view of the above, it is submitted that aforementioned ground of appeal on the issue of invalid approval under section 153D of the IT Act may kindly be dismissed for the reason mentioned above.

6.2 The Hon'ble High Court of Karnatka in Rishabhchand Bhansali vs. DCIT in 136 taxman 579 held the approval granted by the JCIT is an administrative act and does not create any right to the appellant. to 1108/Del/2019, & 2047/Del/2019 & Ors.

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. 6.3 Without prejudice to above objection, It is submitted that combined reading of letter dated Joint CIT/CR-5/153D/2016-17/1105 dated 30.12.2016 giving approval under section 153 D of the I.T. Act and letter dated 30.12.2026 seeking approval under section 153D of the 1.T, make it amply evident that in the instant case, approving authority i.e. Joint Commissioner of Income Tax, Central Range, 05, New Delhi had applied his mind independently in judicious manner while granting his approval in accordance with the provisions of the Act.

6.4 It is not a gainsaying that the Joint CIT hold the concurrent jurisdiction and that the assessment is a continuous process involving administrative as well statutory roles being donned by the Joint CIT. And it is incumbent on the approving authority 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 to 1108/Del/2019, & 2047/Del/2019 & Ors. not be out of place to mention here that the appellant has not come out with any case that there is case of non-application of mind. The appellant 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.

6.5 In view of the same, it cannot be inferred in any manner from the letter seeking approval by the AO and the letter granting approval by the Joint CIT that approval under section 153D of the Act was granted in mechanical manner without independent application of mind by the Joint CIT. to 1108/Del/2019, & 2047/Del/2019 & Ors.

6.6 It is pertinent to submit here that, single assessee has been granted approval on single day. 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, 6.7 Further, in search cases, a Joint CIT is well aware about progress of the assessment proceedings, relevant issues of different 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 that the assessing officer and Joint CIT. In fact, CBDT guideline dated 22.12.2006 (Copy enclosed) 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. to 1108/Del/2019, & 2047/Del/2019 & Ors.

6.8 Therefore in light of such peculiar fact of instant case, it cannot be inferred that the Joint CIT was not in a position to independently apply his mind in judicial manner to the case of assessee on the same day.

6.9 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 Peculiar Facts of cases in Distinguishing facts of Citation and mentioned in first col. the instant case HIGH COURT -No Assessment records were Appellant has not been OF DELHI in the sent along with draft assessment able to prove that its case of PCIT vs. order case and facts are in Anuj Bansal ITA alliance with the cited -There were infirmities in the 368/2023 Dated case. figures of Original Return of July 13,2023 income and Assessed income. Further, there is nothing on the record to suggest -Addl. CIT did not apply his 13 to 1108/Del/2019, & 2047/Del/2019 & Ors. mind as he did not notice such that in the the order errors/infirmities. granting approval. instant case of the assessee, there were some factual infirmities in 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 The approval order failed to Further, in the instant OF DELHI in the make any mention of the fact case, approval is given case of Principal that the draft assessment orders for the case of assessee Commissioner of were perused at all, much less only. Income-tax v. perusal of the same with an Therefore, facts of the Shiv Kumar independent application of mind. instant case are Nayyar [2024] Also, in this case of Shiv Kumar distinguishable. 163 taxmann.com Nayyar, there was no fact 9 (Delhi) 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 The approving authority had DELHI in the granted approval in 232 cases in case of Seh a single day. Therefore, issue of Realtors Pvt. Ltd. judicious approval for such large v. ACIT Central number of cases from the angle Circle-8 ITA of human limitations was an to 1108/Del/2019, & 2047/Del/2019 & Ors. issue before Hon'ble High Court no.2503/Del/2017 Dated 23.07.2024 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. 6.10 We therefore make the position clear that non-compliance of the procedure indicated in the GKN Driveshafts (India) Ltd. 's case (supra) would not make the order void or non-est. Such a violation in the matter of procedure is only an irregularity which could be cured by remitting the matter to the authority.

6.11 Later, the Hon'ble Supreme Court also dismissed the SLP raised in the matter.

“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 to 1108/Del/2019, & 2047/Del/2019 & Ors. 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. 6.12 In our opinion, ends of justice would be met by setting aside the impugned orders and matter is remitted 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 technalities."

6.13 It is submitted that Central Ranges are specialized ranges designated for assessment of search and seizure cases. The structure ensures deep involvement of the Joint Commissioner with each case. These are not routine assessments; the number of cases is limited, and the JCIT plays a crucial role throughout the lifecycle of the case. The assumption by the assessee that the 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 to 1108/Del/2019, & 2047/Del/2019 & Ors. needs to be examined in light of its peculiar facts such as number of issue 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.

6.14 It is submitted that Section 153D does not prescribe any specific procedure or method for the grant of approval. As long as Ld. JCIT is satisfied with the draft assessment order and conveys his approval, the mandate of law stands fulfilled. to 1108/Del/2019, & 2047/Del/2019 & Ors.

6.15 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. Although this Hon'ble Tribunal has decided the said issue of approval u/s 153D against the Revenue in several cases including the cases of Brij Kishore (ITA 8878,8788,8879/DEL/2019) and other connected matters and the case of Metro Tyres Ltd. (ITA 1031/DEL/2013) and other connected matters. It is apprised that Hon'ble Delhi High Court is considering the issue of Approval u/s 153D in ITA 160/2025 and ITA 251/2025 where in Hon'ble Court has issued notice in the Revenue Appeal. Next date of hearing in these matters is 04.09.2025.. 15/12/2025 6.16 It is relevant to point out that approval u/s 153D of the Act needs to be put at a different pedestrian 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 153D has to be granted by the Ld. JCIT once the draft assessment order is prepared by the Ld. Jurisdictional Officer making the assessments u/s 153A/153C of the Act. In these cases, there is no challenge to 1108/Del/2019, & 2047/Del/2019 & Ors. to the validity of search, procedure followed by the Department in search, however the only challenge raised by the assessee in the additional ground before this Hon'ble Tribunal is that the approval granted by Ld. JCIT is mechanical. 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 at the stage of Draft Assessment order which shall not prejudice the assessee and also protect the interest of Revenue.

6.17 Therefore, it is submitted that even if there were any procedural infirmities, the same do not constitute jurisdictional defects. The Hon'ble Tribunal may kindly remand the matter for fresh approval rather than annulling the entire assessment.

"12. This aspect was brought to the fore by the Tribunal in the impugned order. The Tribunal, thus, concluded there was a complete lack of application of mind, inasmuch as the ACIT, who granted approval, failed to notice the said error. 12.1 More particularly, the Tribunal notes that all that was looked at by the ACIT, was the draft assessment order.

14. In this appeal, we are required to examine whether any substantial question of law arises for our consideration.

15. Having regard to the findings returned by the Tribunal, which are findings of fact, in our view, no substantial question of law arises for our consideration. The Tribunal was right that there was absence of application of mind by the ACIT in granting approval under Section 153D. It is not an exercise dealing with a immaterial matter which could be corrected by taking recourse to Section 292B of the Act.

16. We are not inclined to interdict the order of the Tribunal."

12. In view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we have no hesitation in holding that the approval u/s 153D of the Act has been granted by the ld. JCIT in the instant case before us in a mechanical manner without due application of mind, thereby making the approval proceedings by a high ranking authority, an empty ritual. Such an approval has not been mandated by the provisions of the Act and Hon’ble Jurisdictional High Court (Delhi High Court) referred to supra. Hence, we find lot of force in the arguments advanced by the Ld. AR in support of the additional grounds raised for all assessment years under consideration before us 24

ITA Nos.1102 to 1108/Del/2019, & 2047/Del/2019 & Ors. for all the assessees. Accordingly, additional grounds of appeal challenging approval under Section 153D as mechanical taken in to 1108/Del/2019 titled as “Impress Estates Pvt. Ltd. Vs. ACIT” , to 1734/Del/2019 titled as “Sh. Mohd. Shahnawaz Vs. ACIT”, ITA Nos. 1836 to 1842/Del/2019 titled as “Moin Akhtar Qureshi Vs. ACIT” and ITA Nos. 2412 & 2413/Del/2019 titled as “Nasreen Moin Qureshi vs. ACIT” for all the assessment years under consideration are hereby allowed.

13. Since, pursuant to the allowing of the additional grounds, the entire search assessment framed in the hands of all the assessees is to be declared illegal and bad in law, the other legal grounds and grounds on merits raised by the assessees for various assessment years need not be gone into as adjudication of the same would be merely academic in nature and, hence, they are left open.

14. Penalty orders being consequential are set aside. The appeals challenging penalty orders are allowed. 15. In the net result, all the appeals of assessees are allowed and appeals of Revenue are dismissed. Order pronounced in the open court on 28th October, 2025. Sd/- Sd/- ( M BALAGANESH ) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:28 /10/2025 Mohan Lal to 1108/Del/2019, & 2047/Del/2019 & Ors.