Poonam Lohia Vs ACIT (ITAT Delhi)
The ITAT Delhi allowed the assessee’s appeal and quashed the assessment framed u/s 153C for AY 2015-16 after admitting additional legal grounds challenging validity of approval u/s 153D. The Tribunal observed that the approval granted by the Addl. CIT was mechanical and showed clear non-application of mind, as the subject line of the approval letter itself omitted AY 2015-16 and a single combined approval was granted for multiple assessment years. Relying on judicial precedents including PCIT vs. Shiv Kumar Nayyar and MDLR Hotels (P) Ltd., the Tribunal held that such omnibus approval vitiates the entire assessment proceedings. Consequently, the assessment was quashed and other grounds on merits were treated as academic.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals)-23, Delhi in Appeal No. CIT(A), Delhi-23/10930/2014-15 dated 28.3.2025. Assessment was framed by the ACIT, CC-2, New Delhi vide order dated 31.3.2023 u/s. 153C of the Act relevant to assessment year 2015-16.
2. Assessee’s AR filed Application dated 5.2.2026 which has been placed on record, under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 requesting for admission of following additional legal grounds in the instant matter which are purely legal and goes to the root of the matter and needs to be admitted, on the anvil of the decisions of the Hon’ble Apex Court in the case of CIT vs. Varas International, reported in 294 ITR 80 (SC), National Thermal Power Co. Ltd. vs. CIT reported in 229 ITR 383 (SC) and the Special Bench decision in DHL Operators, reported in 108 TTJ 152 (SB).
i. That on the facts and circumstances of the case and in law, the CIT(A) has grossly erred in upholding the assessment framed under section 153C of the Act, without appreciating that the mandatory condition precedent of recording a valid satisfaction by the jurisdictional AO was not fulfilled. In the absence of any satisfaction demonstrating that the seized material had a bearing on the determination of the total income of the assesee for the relevant assessment year, the assumption of jurisdiction u/s. 153C stands vitiated. Hence, the very initiation as well as consequential assessment proceedings are bad in law and liable to be quashed.
2. That on the facts and circumstances of the case and in law, the the CIT(A) has grossly erred in upholding the assessment framed u/s. 153C of the Act, despite the fact that the mandatory prior approval u/s. 153D was mechanical and without independent application of mind, having been accorded in a ritualistic manner, thereby vitiating the entire assessment proceedings and rendering the assessment order void ab intio and without jurisdiction.
3. We have heard both the parties at length and perused their respective submissions alongwith all the case files.
