Shiv Kumar Nayyar Vs ACIT (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi Bench, in the case of Shiv Kumar Nayyar Vs. ACIT, has nullified search assessments for multiple assessment years, ruling that the mandatory prior approval under Section 153D of the Income-tax Act, 1961, was granted mechanically and without proper application of mind by the approving authority. The decision, which consolidated appeals for assessment years (AYs) 2011-12 to 2015-16, highlights the critical importance of a judicious review process for assessment orders following search and seizure operations.
The Genesis of the Appeals
The appeals before the ITAT stemmed from assessment orders passed by the Assessing Officer (AO) under Section 153A read with Section 143(3) of the Act for the aforementioned assessment years. These orders arose from a search and seizure action conducted on November 18, 2016, on the Nayyar group, which included the assessee, Kumar Nayyar.
During the search, documents indicating cash deposits, investments in mutual funds, and life insurance policies were seized. The assessee’s statement under Section 132(4) also revealed foreign tours. Following the search, a notice under Section 153A was issued, to which the assessee filed a return. The AO subsequently completed the assessments, making various additions to the declared income. Crucially, each assessment order stated that it was passed with the prior approval of the Additional Commissioner of Income-tax (Addl. CIT), Central Range-5, New Delhi, as mandated by Section 153D of the Act.
