PCIT-1 Vs Ashutosh Developers Pvt. Ltd. (Delhi High Court)
No Mind, No Mandate: Bulk Approval of 246 Assessments by Single Letter Invalid – Delhi HC Rules Against Rubber-Stamp Approvals in Search Assessments
The Delhi High Court once again reaffirmed that approvals under Section 153D must reflect conscious application of mind, dismissing a set of Revenue appeals involving Ashutosh Developers Pvt. Ltd., Shivgori Builders Pvt. Ltd., & MDLR Resorts Pvt. Ltd. The common challenge arose from the Tribunal’s order which had invalidated assessments on the ground that approvals u/s 153D were granted mechanically through a single omnibus letter without due examination of individual records.
Delay Condoned but Appeal Fails on Merits
The Court first condoned an extraordinary delay of over 800 days in re-filing each appeal but noted that the issues stood fully covered by its earlier decision in PCIT (Central Circle-2) v. MDLR Hotels Pvt. Ltd., ITA 593/2023 & connected matters, which dealt with identical approvals arising out of the same common ITAT order dated 08.02.2023.
Facts & Findings from the MDLR Hotels Precedent
In the earlier MDLR Hotels case, the Tribunal had found that the Additional CIT had accorded a blanket approval for 246 assessment orders by a single letter stating: “The above draft orders, as proposed, are hereby accorded approval with the direction to ensure that the orders are passed well before limitation period.” The Tribunal, relying on the legislative intent behind Section 153D & CBDT Circular No. 3/2008, held that such an approval defeats the object of ensuring supervisory application of mind by a higher authority in search-related assessments. The approval, being a mere formality without reference to seized materials or assessment records, was invalid in law.
