ITAT Delhi Quashes Multiple Assessments for Mechanical Approval Under Section 153D; Deletes Penalty

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.