Search Assessments Quashed for Lack of Prior U/s 153D Approval

ACIT Vs Inderjit Mehta Constructions Pvt. Ltd. (ITAT Delhi)

Section 153A Assessments Void Without Prior 153D Approval; Post-Facto Sanction Cannot Cure Defect

In search assessments for AYs 2018-19 to 2021-22, the Assessing Officer passed orders under section 143(3) read with section 153A on 21.03.2022, whereas the mandatory approval under section 153D was granted only later on 23.03.2022. Thus, on the date the assessment orders were actually passed, no prior approval of the Joint/Additional Commissioner existed.

The CIT(A) held that prior approval under section 153D is a statutory pre-condition for a valid search assessment and that a post-facto sanction cannot validate an order already passed. Since the assessments were admittedly made before obtaining such approval, the entire proceedings were quashed as being without jurisdiction.

Before the Tribunal, the Revenue could not dispute these dates. Upholding the CIT(A)’s view, the Tribunal ruled that absence of prior 153D approval is a fatal legal defect, not a curable procedural lapse. Consequently, all four assessments were held bad in law and the Revenue’s appeals were dismissed for all years.

With the assessments themselves quashed, the assessee’s cross-objections were rendered infructuous and were also dismissed.

FULL TEXT OF THE ORDER OF ITAT DELHI

The captioned appeals preferred by the Revenue and the respective cross-objections preferred by the assessee are directed against separate orders passed by the Ld. CIT(Appeals)-30, New Delhi under Section 153A r.w.s. 143 of the Income Tax Act, 1961 (herein after referred to as the “Act”). Relevant details are tabulated as under:

2. Facts of the case involved in all these matters are identical and therefore, these were taken up for hearing analogously and are being disposed of by a single composite order for the sake of convenience.

3. None appeared on behalf of the assessee at the time of hearing. Application for adjournment of hearing moved on behalf of the assessee has been rejected by the Bench for want of insufficient reasons.

4. ITA No. 5730/Del/2025 for A.Y. 2021-22 is made the lead case and facts in all the cases being identical our order therein shall follow mutatis mutandis in other appeals. The moot question before us is as to whether the order passed by the Learned CIT(Appeals) is sustainable in the eyes of law in quashing the assessment order due to lack of valid prior approval under Section 153D of the Act. In this particular case the order was passed by the Learned Assessing Officer under Section 143(3) r.w.s. 153A of the Act on 21.03.2022 whereas the approval under Section 153D of the Act was granted on 23.03.2022 which is evident from the intimation sent to the Ld. DR which has been placed on record before us. Thus, as the assessment order admittedly was passed without prior approval as envisaged under the provisions of law is found to be bad in law and in that view of the matter the Learned CIT(A) quashed the entire assessment proceeding which is appearing at pages 18-19 of the same. The detailed discussion is further evident from page 339 of the order impugned dated 13.05.2025 passed by the Ld. CIT(A) for A.Y. 2021-22. Having regard to the provisions of law as found to have been applied by the Ld. CIT(A), in our considered opinion is just and proper, warranting no interference. The order of Ld. CIT(A) is thus, upheld. The appeal preferred by the Revenue is devoid of any force and is dismissed accordingly. The same reasoning shall follow mutatis mutandis in appeals for A.Y. 2018-19, 2019-20 & 2020-21. Consequently, all the appeals preferred by the Revenue are dismissed.

5. Since the appeals preferred by the Revenue have been dismissed as above, the cross-objections moved by the assessee have become infructuous and are dismissed accordingly.

6. In the result, Revenue’s appeals as well as assessee’s cross objections are dismissed.

Order pronounced in open court on 13.01.2026.