DCIT Vs Rajiv Mittal (ITAT Delhi)
In a significant ruling reinforcing the importance of due process in search assessments, Delhi ITAT has quashed assessments for three years after finding that the mandatory approval u/s 153D was granted in a mechanical, omnibus manner.
A search & seizure action u/s 132 was carried out on 05.10.2017 in the case of Assessee, leading to the transfer of jurisdiction to Central Circle New Delhi. AO completed assessments for AYs 2016-17, 2017-18 & 2018-19, making substantial additions u/s 69A for alleged unexplained cash/RTGS transactions- ₹2.40 crore (AY 2016-17), ₹4.12 crore (AY 2017-18) & ₹2.15 crore (AY 2018-19).
CIT(A) granted substantial relief & Revenue preferred appeals before the ITAT. Assessee, by filing petitions under Rule 27, challenged the very validity of the assessments on the ground that the mandatory approval u/s 153D was invalid.
Assessee contended that Addl. CIT’s approval u/s 153D was granted on 31.12.2019 in one single note covering multiple years. There was no independent or year-wise application of mind, nor any reference to the draft assessment orders, seized material, or issues for each year. Such blanket approvals have been held invalid by various High Courts, including PCIT vs. Shiv Kumar Nayyar (Delhi HC), PCIT vs. Sapna Gupta (Allahabad HC) & ACIT vs. Serajuddin & Co. (Orissa HC), affirmed by SC.
