NV Distilleries Pvt. Ltd. Vs DCIT (ITAT Delhi)
The assessee challenged the validity of assessment framed pursuant to search proceedings by raising additional legal grounds before ITAT questioning the legality of approval granted u/s 153D. The Tribunal admitted the additional grounds as they were purely legal issues going to the root of the matter, relying on the Supreme Court ruling in NTPC Ltd. vs. CIT.
On facts, the AO had obtained a common approval from the Addl. CIT covering multiple assessment years through a single communication issued on the same date. The Tribunal observed that such consolidated approval without independent application of mind violates the statutory requirement of valid sanction u/s 153D. Relying on recent Delhi High Court rulings including PCIT vs. Shiv Kumar Nayyar and other precedents, ITAT held that combined approval vitiates the entire assessment. Accordingly, the assessment for AY 2018-19 was quashed and other grounds on merits were treated as academic. The assessee’s appeal was allowed
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)-30, New Delhi in Appeal No. 30/10543/2019-20 dated 17.3.2025. Assessment was framed by the DCIT, CC-31, New Delhi vide order dated 31.12.2019 u/s. 143 of the Income Tax Act, 1961 (hereinafter referred the “Act”) relevant to assessment year 2018-19.
