Kehar Singh Vs DCIT (ITAT Delhi)
Summary: ITAT Delhi allowed Kehar Singh’s appeals for AYs 2014-15 to 2020-21 and quashed assessments passed under Section 153A read with Section 144 of the Income-tax Act, holding that the approval under Section 153D was granted mechanically and without proper application of mind. Search and seizure proceedings had been conducted on 04.03.2020, following which the AO made additions under Sections 68, 69 and 69A, Chapter VI-A and other heads. Before the Tribunal, the assessee primarily challenged the validity of the Section 153D approval.
The Tribunal found that the AO sought approval on 27.09.2021 and the Additional CIT granted it on the very same date through a single composite approval covering AYs 2014-15 to 2020-21. Although the approval referred to assessment records, the appraisal report and seized documents, the AO’s forwarding letter indicated that only draft orders were submitted for examination. The Tribunal also noticed standard observations concerning electronic data from hard drives, CDs, pen drives and mobile data even though no such electronic data had been seized, which indicated a perfunctory exercise.
Relying upon Delhi High Court rulings in PCIT v. Anuj Bansal and PCIT v. Shiv Kumar Nayyar, and noting the Supreme Court’s dismissal of the Revenue’s SLP in ACIT v. Serajuddin and Co., ITAT held that Section 153D approval cannot be a ritualistic formality or rubber stamp. Ground No. 5 was therefore allowed and all impugned assessments for the relevant years were quashed.
Cases Discussed
- 466 ITR 254 (Delhi) – PCIT Vs Anuj Bansal (Delhi High Court) — Relied upon. ITAT applied the principle that approval under Section 153D granted without considering the assessment record and incriminating evidence and without independently applying mind to the draft assessment order cannot be sustained.
- ITA No. 285/2024, dated 15.05.2024 – PCIT Vs Shiv Kumar Nayyar (Delhi High Court) — Relied upon. The Tribunal reproduced the Delhi High Court’s finding that Section 153D approval cannot be a ritualistic formality or rubber stamping and must reflect appropriate application of mind.
- SLP (Civil) Diary No. 44989/2023, order dated 28.11.2023 – ACIT Vs Serajuddin and Co. (Supreme Court) — Relied upon. ITAT noted that the Supreme Court dismissed the Revenue’s appeal against the Orissa High Court decision which had quashed an assessment over inadequacy in the procedure adopted for Section 153D approval and had disapproved mechanical exercise of the statutory responsibility.
FULL TEXT OF THE ITAT DELHI ORDER
