Taran Pal Wadhwan Vs ACIT (ITAT Delhi)
Composite & mechanical approval u/s 153D invalidates assessments framed u/s 153C- Approval must be specific to each year & cannot be a perfunctory exercise
These two appeals were filed against order of CIT(A) arising from assessments framed u/s 153C r.w.s. 144 for AYs 2018-19 & 2019-20. The primary ground raised by Assessee was the validity of approval obtained u/s 153D before completing assessments.
Assessee contended that AO had merely forwarded draft assessment orders to Additional CIT while seeking approval u/s 153D & no case records or seized material were placed before the approving authority. Yet, in his letter dated 30.03.2023, Additional CIT mechanically granted one consolidated approval covering multiple years, even recording that case records were perused, though such records had never been forwarded. Assessee argued that this showed a purely ritualistic & mechanical exercise.
Tribunal examined record & found merit in Assessee’s contention. It noted that identical mechanical approvals had been quashed earlier by coordinate benches including in Keher Singh Vs DCIT (ITA Nos. 2835–2841/Del/2024 dated 19.03.2025). Tribunal relied on binding precedents such as PCIT Vs Anuj Bansal (466 ITR 254, Delhi HC), PCIT Vs Shiv Kumar Nayyar (Delhi HC, ITA No. 285/2024), & the Supreme Court’s dismissal of Revenue’s SLP in Serajuddin & Co. where such mechanical approvals were held invalid. Tribunal reiterated that approval u/s 153D cannot be a rubber stamp or composite sanction but must reflect independent application of mind for each assessment year. Since approval was found invalid, Tribunal quashed entire assessments for AYs 2018-19 & 2019-20 framed u/s 153C. All other grounds on merits were left open as academic.
