Soni Commercial Enterprises Private Ltd Vs ACIT (ITAT Delhi)
Summary: The ITAT Delhi allowed the appeals filed by Soni Commercial Enterprises Private Ltd and quashed the impugned assessments passed under Section 153C read with Section 143(3) of the Income-tax Act, 1961, holding that the approval granted under Section 153D was mechanical and involved complete non-application of mind. The appeals arose from orders of CIT(A)-26, Delhi dated 06.08.2025 against assessment orders dated 31.12.2019 passed by the ACIT/A CIT, CC-14, New Delhi. The Tribunal considered an additional ground challenging the validity of the Section 153D approval dated 29.12.2019. It noted that approval had been granted in respect of as many as 11 different assessees for numerous years from AY 2011-12 to 2017-18 without the approval reflecting whether the assessment records and incriminating material forming the foundation of additions had been forwarded or examined. The Tribunal further observed that for AY 2015-16, a non-abated assessment, additions had not been made on the basis of incriminating material and that for AY 2014-15 no incriminating material found during search had actually been relied upon, with additions being based on financials and Form 3CD. Relying on judicial precedents, including ACIT v. Serajuddin and Co., PCIT v. Anuj Bansal and SEH Realtors Pvt. Ltd. Vs. ACIT, the Tribunal held that mechanical exercise of power under Section 153D vitiates the assessment order. It also rejected the Revenue’s contention regarding retrospective application of Section 292BC, observing that the amendment was made applicable retrospectively from 01.04.2021 in relation to approvals granted after that date. The appeals were accordingly allowed and the impugned assessments were quashed.
Cases Discussed
- Asst. CIT v. Serajuddin and Co. [2023 SCC OnLine Ori 992]— Orissa High Court decision concerning mechanical approval under Section 153D.
- PCIT v. Anuj Bansal [ITA 368/2023]— cited by the Tribunal on the validity of Section 153D approval.
- SEH Realtors Pvt. Ltd. Vs. ACIT, ITA No. 2503/Del/2017 and connected matters, order dated 23.07.2024 — Coordinate Bench decision concerning the mandatory nature of Section 153D approval and requirement of judicious application of mind.
For further TaxGuru coverage on the same issue, see Prior Approval Under Section 153D is Mandatory, ITAT Delhi Sets Aside Section 153C Assessments Due to Common Section 153D Approval, Mechanical Section 153D Approval: ITAT Delhi Quashes Assessment and PCIT Vs. Shiv Kumar Nayyar.
