Hari Kishan Rathi Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, pronounced its order on 7 November 2025 in an appeal filed by the assessee, Hari Kishan Rathi, against the order of the Commissioner of Income Tax (Appeals)–31, New Delhi, dated 11 July 2023 for Assessment Year 2015–16.
The assessee raised three main grounds of appeal:
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The order passed by the CIT(A) was erroneous in law and on facts.
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The CIT(A) erred in holding that the approval under Section 153D of the Income Tax Act, granted by the Additional Commissioner of Income Tax (Addl. CIT) on 30 December 2019, was not mechanical. The assessee contended that such approval was obtained on the same day the show cause notice was issued, leaving no reasonable time for meaningful consideration.
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The CIT(A) further erred in sustaining an addition of ₹2,27,717 on account of renovation expenses.
At the hearing, the assessee’s authorised representative argued that the approval under Section 153D was granted in a mechanical and routine manner without due application of mind. It was highlighted that the compliance date for the show cause notice was fixed for the following day, implying that the approval was accorded hastily. The assessee relied on ITAT Delhi’s decisions in his own earlier case (ITA No. 2566/Del/2022 for AY 2018–19), M/s Millenium Vinimay (P) Ltd. v. ACIT (ITA No. 458/Del/2022), and the Delhi High Court ruling in PCIT v. Shiv Kumar Nayyar (ITA No. 285/2024), all of which held that mechanical approvals under Section 153D invalidate the assessment.
The Department’s representative opposed the appeal, maintaining that Section 153D approval is merely administrative and that its procedure holds no relevance to the assessee’s proceedings.
After considering submissions and materials on record, the Tribunal noted that the approval under Section 153D was common and composite, rather than separate for each assessment year as required by law. It held that Section 153D mandates prior approval of the Joint Commissioner for each assessment year individually, and a consolidated approval contravenes this requirement.
The Tribunal referred extensively to the ITAT Delhi Bench ruling in Millenium Vinimay (P) Ltd. v. ACIT, which dealt with an identical issue. That decision, supported by earlier judicial authorities such as Shreelekha Damani v. DCIT (Bombay High Court, 307 CTR 218), held that mechanical approvals under Section 153D—granted without independent application of mind—defeat the statutory purpose of oversight. The Bombay High Court in Shreelekha Damani affirmed that when the approving authority expressly admits to a lack of time to analyse the draft order and simply grants approval “as submitted,” such action amounts to a perfunctory approval lacking legal validity.
The Tribunal also referred to the Supreme Court’s dismissal of the Revenue’s appeal in ACIT v. Serajuddin & Co. (SLP Civil Diary No. 44989/2023), where similar mechanical approval was found inadequate by the Orissa High Court. Consistent with these precedents, the Tribunal reiterated that approval under Section 153D must be exercised judiciously, with due consideration of each draft assessment order, and cannot be treated as an empty formality.
The ITAT found that in this case, the Addl. CIT, Central Range–7, New Delhi, had issued a single, common approval for multiple assessment years without separately verifying the material or recording reasons for each year. This demonstrated a clear lack of application of mind. Such an approval was contrary to the statutory requirement and rendered the entire assessment process arbitrary and invalid.
In support, the Tribunal cited the Delhi High Court judgment in PCIT v. Shiv Kumar Nayyar, where it was held that the Addl. CIT had granted approval for 43 cases on a single day, including 14 cases of two assessees, through a common order. The High Court concluded that such mass approvals were humanly impossible to review judiciously and therefore mechanical in nature, lacking independent evaluation. It ruled that approval under Section 153D must reflect genuine application of mind for each year and each case separately, and a single approval covering multiple cases violates statutory intent.
Following these precedents, the ITAT Delhi held that in the case of Hari Kishan Rathi, the approval granted by the Addl. CIT, Central Range–4, Delhi, on 30 December 2019, was invalid as it was mechanical and non-compliant with Section 153D. Consequently, the Tribunal quashed the entire assessment proceedings initiated under Section 153A read with Section 143(3) of the Income Tax Act for want of a valid approval.
As the legal ground was decided in favour of the assessee, the ITAT refrained from adjudicating the remaining grounds relating to factual additions, keeping them open for future consideration if necessary.
Result: The appeal was partly allowed, with the assessment proceedings quashed due to lack of a valid Section 153D approval.
FULL TEXT OF THE ORDER OF ITAT DELHI
