ITAT Delhi Quashes Multiple Assessments for Mechanical Approval Under Section 153D; Deletes Penalty
Court / Authority
Income Tax Tribunal
Update / Judgement Date
26 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
Key Facts and Tribunal Findings
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed a batch of appeals filed by Rajeev Aggarwal for Assessment Years 2015–16 to 2019–20, quashing the assessments on the ground of invalid approval under Section 153D of the Income Tax Act.
The case arose from search and seizure proceedings conducted under Section 132 on the Piyush Group, following which assessments were framed under the special provisions applicable to search cases. The assessee challenged the validity of such assessments on the ground that the mandatory approval granted by the Additional Commissioner of Income Tax under Section 153D was mechanical and lacked application of mind.
The Tribunal noted that a single consolidated approval was granted for multiple assessment years through one communication, without independent consideration of each year. It observed that the approval did not reflect examination of seized material, draft assessment orders, or issues specific to individual assessment years.
Relying on judicial precedents, including the Delhi High Court ruling in Shiv Kumar Nayyar and decisions in Serajuddin & Co., the Tribunal held that Section 153D mandates separate and independent approval for each assessment year. Mechanical or omnibus approval defeats the statutory safeguard intended to ensure due application of mind by the approving authority.
The Tribunal further observed that there was no indication that the approving authority had examined the records or engaged with the proposed additions. Such approval, being merely formal or ritualistic, was held to vitiate the entire assessment proceedings.
Accordingly, the Tribunal quashed the assessments for all relevant years. Consequentially, the penalty imposed for Assessment Year 2019–20 was also deleted, as it could not survive in absence of a valid assessment.
All appeals filed by the assessee were allowed.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about Income Tax Tribunal
- What is the Income Tax Appellate Tribunal (ITAT)?
- The ITAT, set up in 1941, is the second appellate authority in direct tax matters and the final fact-finding body. It hears appeals against orders of the Commissioner (Appeals) and certain other authorities, through benches across India.
- What is the time limit to file an appeal before the ITAT?
- An appeal must be filed within two months from the end of the month in which the order is communicated. This rule has applied since 1 October 2024 and continues under the Income-tax Act, 2025. The Tribunal can condone delay for sufficient cause.
- Can the ITAT stay a tax demand?
- Yes. The Tribunal can stay recovery of a disputed demand while an appeal is pending, usually on deposit of a part of the demand or furnishing security. Stays are granted for a limited period, and the appeal is expected to be decided within it.
- Where does an appeal go after the ITAT?
- An appeal against an ITAT order lies to the High Court, but only on a substantial question of law. A further appeal lies to the Supreme Court.
- How can White Collar Professional help with a ITAT matter?
- Post your requirement on White Collar Professional to receive proposals from verified Chartered Accountants and tax Advocates, compare them, and pay securely through the platform. This page also tracks the latest ITAT ITAT orders as they are reported.
