ITAT Quashes Assessments for Mechanical Approval Under Section 153D

The assessee challenged multiple assessment orders passed under Sections 153A/143(3) for AYs 2012-13 to 2014-15 and 2017-18 to 2018-19,saying that the mandatory prior approval under Section 153D was invalid. It was argued that no search was conducted on the assessee, additions were not based on seized material, and the Assessing Officer relied on documents allegedly found during the search of a third party. An additional legal ground was raised that the approval granted by the ACIT was common, mechanical, and without due application of mind.

The assessee relied on earlier decisions and Delhi High Court rulings where identical composite approvals issued on the same date had been held invalid. The Revenue defended the approval, asserting that due consideration had been given.

Issue Before ITAT: Whether assessments framed under Sections 153C read with 153A are valid when the mandatory approval under Section 153D is granted mechanically through a common approval without independent application of mind.

ITAT’s Ruling: The ITAT held that the approval granted under Section 153D dated 30.12.2019 was invalid as it was a composite approval covering multiple assessees and assessment years, issued without proper scrutiny or independent application of mind. The Tribunal ruled that such mechanical approval defeats the statutory safeguard embedded in Section 153D.

Therefore, the entire proceedings initiated under Sections 153C read with 153A were quashed for all assessment years under appeal. Since the assessments were annulled on this legal ground, all other grounds on merits were rendered academic and left open.

To Read Full Judgment, Download PDF Given Below