Aman Feed Industries Vs DCIT (ITAT Chandigarh)
Mechanical 153D Approval for 42 Cases Vitiates Entire 153A Assessments – ITAT Quashes All Years, Revenue Appeals Fail
A search u/s 132 was conducted on 25.04.2018 on AFI Group. For all years, Assessee had already filed returns u/s 139, & in response to notice u/s 153A filed returns declaring the same income. AO, however, made additions on various issues: alleged bogus purchases from Goyal Enterprises, estimation of turnover, rejection of books u/s 145(3), GP additions, unexplained cash/stock, capital introduction, & other search-related loose papers. For AY 2019-20, AO also made additions of ₹1 crore each for excess cash & stock. CIT(A) partly confirmed & partly reduced the additions. Hence, both Assessee & Revenue filed cross-appeals.
The first & most crucial jurisdictional ground raised by Assessee for all years was that approval u/s 153D was granted mechanically & in a common manner for 42 draft assessment orders of 7 assessees, without application of mind. AO had written a letter dated 18.08.2021 enclosing draft orders of multiple assessees & years. Addl. CIT approved all 42 assessments by a single omnibus order. Assessee relied on several High Court & Supreme Court decisions (Serajuddin & Co., Anuj Bansal, Sapna Gupta, MDLR Hotels, Shiv Kumar Nayyar, Siddarth Gupta, SP Singla Constructions, etc.) holding that 153D approval must be independent, year-wise & assessee-wise, & mechanical / bulk approvals vitiate assessment.
