Assessment Quashed as Section 153D Approval Was a Mechanical Exercise: ITAT Dehradun

DCIT Vs Sawhney Builders (ITAT Dehradun)

The Dehradun Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeal for Assessment Year 2012-13 after holding that the assessment order passed under Section 143(3) was invalid due to the absence of a valid approval under Section 153D of the Income-tax Act. The Tribunal examined the approval dated 30.01.2014 granted by the prescribed authority, which covered five different assessees and assessment years from 2006-07 to 2012-13.

It noted that judicial precedents, including decisions of the Delhi High Court and the Supreme Court, had already settled the issue that approvals granted through a mere mechanical exercise involving multiple assessees do not satisfy the requirements of Section 153D and are non-est in law. Relying on these precedents, the Tribunal accepted the assessee’s legal challenge and quashed the assessment framed by the Assessing Officer on 30.01.2014. Since the assessment itself was held to be invalid, all other issues raised on merits became academic and required no adjudication. Consequently, the Revenue’s appeal was dismissed.

FULL TEXT OF THE ORDER OF ITAT DEHRADUN

This Revenue’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Dehradun’s order dated 18.02.2015 passed in case no. 570A/CIT(A)/DDN/13-14, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2. It emerges at the outset that there arises the first and foremost legal issue of validity of the impugned section 143(3) assessment framed on 30.01.2014 in assessment 2012-13 for want of a valid approval under section 153D of the Act.

3. We have given our thoughtful consideration to the assessee’s and the Revenue’s respective vehement contentions regarding the first and foremost issue of validity of the impugned assessments as lacking valid approval under section 153D of the Act. The learned prescribed authority’s common approval dated 30.01.2014 granted in five different assessees cases for assessment years 2006-07 to 2012-13 forms part of the case records. Various landmark precedents i.e. PCIT Vs. Shiv Kumar Nayyar (2024) 467 ITR 186 (Del.), PCIT Vs. Anuj Bansal (2024) 466 ITR 254 (SC) and PCIT Vs. MDLR Hotels (P.) Ltd. (2024) 166 com 327 (Del.) have already settled the issue in assessee’s favour and against the department that such an approval involving mere mechanical exercise involving multiple assessees u/s 153D is a non-est one only. We thus accept the instant first and foremost legal grounds/arguments in assessee’s favour to quash the impugned assessment herein framed by the Assessing Officer on 30.01.2014 in assessment year 2012-13 in very terms.

All other pleadings on merits herein stand rendered academic.

4. This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 25^th May, 2026