ITAT Quashes Search Assessments Over Mechanical S. 153D Approval for Each AY

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed assessments framed for Assessment Years (AYs) 2010–11 to 2012–13, holding that the approval granted under Section 153D of the Income Tax Act, 1961 was mechanical and failed to meet statutory requirements. The bench of Vimal Kumar (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that Section 153D explicitly mandates approval for “each assessment year.” Referring to precedents including the Delhi High Court’s decision in Pr. CIT v. Shiv Kumar Nayyar, the Bench observed that approval under Section 153D cannot be a mere formality or rubber stamp. The approving authority must apply independent mind to the draft assessment order for each assessment year separately. The department’s appeals challenging relief granted by the Commissioner of Income Tax (Appeals) were dismissed after the Tribunal admitted and allowed an additional legal ground raised by the assessee questioning the validity of the approval itself. The case arose from a search and seizure operation conducted under Section 132 in the Raus Infras group on 15 June 2011. Consequent notices under Section 153A were issued, and assessments were framed under Sections 153A/143(3) on 31 March 2014. For AY 2010–11 alone, the Assessing Officer made additions aggregating to ₹29.78 crore on various grounds, including alleged mismatch in sundry creditors, disallowance of job charges (30%), disallowance of expenses, additions based on seized documents, estimation of gross profit @ 30%, unexplained imprest account, and unsecured loans. The CIT(A), by orders dated 30 September 2014, deleted the additions, prompting the Revenue to file appeals before the ITAT. During appellate proceedings, the assessee invoked Rule 27 of the ITAT Rules, raising a legal objection that the approval accorded under Section 153D was mechanical and arbitrary, granted without independent application of mind, common for multiple assessment years and in violation of the statutory requirement of separate approval for “each assessment year” The department opposed the plea, arguing that Section 153D approval is administrative in nature and does not require elaborate reasoning. It also contended that the issue had not been specifically raised before the CIT(A), making it ineligible under Rule 27. Relying on the Supreme Court’s ruling in NTPC Ltd. v. CIT, the Tribunal held that a purely legal issue going to the root of jurisdiction can be raised at any stage. It therefore admitted the additional ground. The Bench noted that the assessment orders for all three years contained identical language stating that approval had been obtained from the Addl. Commissioner of Income Tax, Central Range-4, New Delhi. Significantly, the same approval number appeared across multiple assessment years. The Tribunal noted that identical approval numbers across years indicated a common approval rather than year-wise consideration. It further observed that despite directions, the Revenue did not produce the actual approval letter to demonstrate independent scrutiny. Drawing support from coordinate bench decisions in related group cases and judicial precedents of High Courts, the ITAT concluded that the approval granted was common across assessment years. There was no material to show independent evaluation for each year. The statutory mandate of Section 153D had not been fulfilled. The Tribunal held that the approval was mechanical and arbitrary, rendering the assessments void ab initio. Since the assessment orders themselves were quashed for want of valid approval, the Tribunal did not find it necessary to adjudicate the merits of the individual additions challenged by the department. Case Details Case Title: DCIT Versus M/s Raus Infras Limited Citation: JURISHOUR-219-ITA-2026(Del) Case No.: ITA No.6874/Del/2014 Date: 27.02.2026 Counsel For Appellant: Salil Agarwal, Adv. Counsel For Respondent: Monika Singh, CIT-DR Click Here To Read Order Read More: Centre Expands Mandatory Gold Hallmarking to More Districts; Issues 2026 Amendment Order

ITAT Quashes Search Assessments Over Mechanical S. 153D Approval for Each AY

Membership Required

Latest articles

Service Tax on TV Serial Production Despite Perpetual Copyright Assignment Upheld: CESTAT

Limitation for Export Refund to Be Counted from Foreign Exchange Realisation, Not From Export Invoices Issuance: CESTAT

Limitation Can’t Be Invoked Without Proof of Suppression: CESTAT Quashes Service Tax Demand on Real Estate Agent

Mere Sale of Advertisement Space Not Taxable as Advertising Agency Service: CESTAT

More like this

Service Tax on TV Serial Production Despite Perpetual Copyright Assignment Upheld: CESTAT

Limitation for Export Refund to Be Counted from Foreign Exchange Realisation, Not From Export Invoices Issuance: CESTAT

Limitation Can’t Be Invoked Without Proof of Suppression: CESTAT Quashes Service Tax Demand on Real Estate Agent

About us

Company

Categories