Section 153D Approval Cannot Be Presumed When Approval Letters Are Untraceable: ITAT Surat

Vimal Ranchhodbhai Patel Vs ACIT (ITAT Surat)

Summary: The Income Tax Appellate Tribunal, Surat Bench dealt with six cross-appeals, comprising three appeals by the assessee and three by the Revenue, arising from assessments for AYs 2011-12, 2012-13 and 2013-14. The assessee, an individual engaged in real estate business, had been searched under section 132 as part of the “Piyush Patel Group” on 27.12.2012. Assessments for AYs 2011-12 and 2012-13 were framed under sections 153A read with 143(3), while the assessment for AY 2013-14 was framed under section 143(3). The assessee raised additional legal grounds challenging, inter alia, compliance with section 153C and the validity of approval under section 153D. Relying on National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC), the Tribunal admitted the additional grounds as they were legal in nature, went to the root of the matter, required no fresh evidence and could be adjudicated on the material already on record.

The principal issue adjudicated by the Tribunal was whether the assessment-orders could be sustained when the approval-letters allegedly granted under section 153D had not been produced and the AO himself had stated that those approval-letters were not traceable. The assessee relied upon the AO’s letter bearing DIN ITBA/COM/F/17/2025-26/1080468649(1) dated 09.09.2025. Point No. 2 of the information furnished by the AO stated that the relevant approval letters were not traceable, although the assessment-orders contained references to approval particulars. The assessee submitted that when the Revenue could not produce the approval letters issued by the Joint Commissioner/Additional Commissioner, compliance with section 153D could not be presumed merely from recitals in the assessment-orders.