ITAT Delhi Quashes Multiple Assessments for Invalid Approval Under Section 148B; Grants Partial Relief on Additions

Key Facts and Tribunal Findings

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed a batch of appeals involving multiple assessees from the Agarwal group for Assessment Years 2014–15 to 2022–23, quashing assessments on account of invalid approval under Section 148B of the Income Tax Act.

The Tribunal admitted additional legal grounds challenging the validity of assessments and the applicability of reassessment provisions, holding that such grounds go to the root of the matter. It examined the approval granted by the Additional Commissioner of Income Tax and found that, despite claims of having examined seized material, there was no evidence on record to demonstrate that relevant documents or appraisal reports were actually placed before the approving authority.

Relying on judicial precedents, including PCIT v. Siddarth Gupta, Serajuddin & Co., and PCIT v. Anuj Bansal, the Tribunal held that absence of proper application of mind renders such approval invalid, thereby vitiating the entire assessment proceedings.

Additionally, for Assessment Years 2021–22 and 2022–23, the Tribunal held that assessments ought to have been framed under Section 147 pursuant to search proceedings, and not under Section 143(3), rendering them legally unsustainable.

On merits, the Tribunal granted partial relief by reducing additions relating to unexplained investment in property, accepting seized material indicating a lower quantum. It also directed the Assessing Officer to allow telescoping benefit in respect of cash additions to avoid double taxation, where such income had already been assessed in the hands of a related company.

Accordingly, all appeals filed by the assessees were allowed, while the Revenue’s cross-appeals were dismissed.