N V Distilleries Pvt. Ltd. Vs DCIT (ITAT Delhi)
ITAT Delhi quashed search assessments for AYs 2015-16 to 2018-19 in the NV Distilleries / NV Distilleries & Breweries group, holding that the mandatory approval u/s 153D was granted in a mechanical and omnibus manner, vitiating jurisdiction itself.
The Addl. CIT granted a single, common approval dated 31.12.2019 for multiple assessees and multiple assessment years. The approval letter merely stated that approval is accorded “on the basis of discussions held from time to time”, without any reference to examination of seized material, appraisal report, draft assessment orders or year-wise issues. There was no indication of independent application of mind, nor was approval granted separately for each AY, as mandatorily required by s.153D.
Relying heavily on Delhi HC in Shiv Kumar Nayyar and Orissa HC in Serajuddin & Co. (SLP dismissed by SC), the Tribunal reiterated that:
– approval u/s 153D must be AY-specific & assessee-specific
– it is not an empty ritual or rubber-stamp exercise
– mere reproduction of statutory language or reference to “discussions” is insufficient
– mechanical / composite approvals are incurable jurisdictional defects, not procedural lapses.
The Revenue’s reliance on Usha Satish Salvi (Mumbai ITAT) was rejected as factually distinguishable, since in the present case no modifications, queries or evidence of scrutiny by the approving authority were shown.
Since assessments failed on this foundational jurisdictional defect, all other grounds on merits, additions, disallowances, seized material, incriminating evidence, etc. were rendered academic.
Result:
– All assessee appeals (AYs 2015-16 to 2018-19): allowed
– All Revenue appeals: dismissed as infructuous
– Law reaffirmed: Single / omnibus approval u/s 153D = assessment void ab initio.
FULL TEXT OF THE ORDER OF ITAT DELHI
