ACIT, CC- 15, NEW DELHI V. SALONI NARANG, NEW DELHI

ITA 1496/DEL/2018

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had deleted certain additions made by the Assessing Officer regarding unexplained bank interest and jewellery. The Tribunal had to decide on the validity of the approval under section 153D of the Income Tax Act, which was claimed to be granted mechanically without proper application of mind. The Tribunal, referencing several judicial precedents, concluded that the approval was indeed mechanical and set aside the assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782208 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 01-03-2018
• Other Referred Cases: Pr. CIT vs. Shiv Kumar Nayyar, Pr. CIT vs. Sapna Gupta, Pr. CIT vs. Subodh Agarwal, Shri Pranav Prafulchandra Vora, ITO vs. Gurinder Kaur, Hukum Chand Mills Ltd. vs. CIT, N. C. Cables Ltd. vs. CIT, Central India Electric Supply Co. Ltd. vs. ITO, Chhugamal Rajpal vs. CIT, Ess Adv. (Mauritius) S. N. C. Et Compagnie vs. ACIT, MDLR Hotels (P.) Ltd. vs. CIT, Anuj Bansal vs. CIT, Meenakshi Overseas Pvt. Ltd. vs. CIT, Experion Developers P. Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJINDER KAUR
• Assessee Lawyers: RAKESH GUPTA; SOMIL AGARWAL
• Keywords: Question of law; Unexplained investment; Period of limitation; Reopening of assessment; Search and seizure; Assessment record; Competent authority; Reason to believe; Time period of passing order
• Section: 148; 144; 143(3); 132; 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘F’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER ITA No.1496/Del/2018 [Assessment Year: 2012-13] Asst. Commissioner of Income Tax, Central Circle-15, Room No.353, E-2, ARA Centre, Jhandewalan Ext. New Delhi-110055 Vs Saloni Narang, 5, Dr. G.G. Narang Marg, Cavalary Lane, Delhi-110007 PAN-AAFPN2692C Appellant Respondent Assessee by Dr. Rakesh Gupta, Adv. & Shri Somil Agarwal, Adv. Revenue by Ms. Rajinder Kaur, CIT-DR Date of Hearing 31.07.2025 Date of Pronouncement 27.10.2025 ORDER PER AMITABH SHUKLA, AM, This appeal has been preferred by the Revenue against order dated 22.12.2017 of Ld. Commissioner of Income Tax (Appeals)-XXVI, New Delhi (hereinafter referred to as ‘ld. CIT(A)), in Appeal no.9/15-16, arising out of order dated 05.03.2015 passed u/s 153A143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by ACIT, Central Circle-15, New Delhi, pertaining to Assessment Year 2012-13. Printed from counselvise.com 2 ITA No.1496/Del/2018 2. The Revenue has raised following grounds of appeal:- Grounds of appeal:- 1. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs.5,44,752/- made by AO on account of interest accrued to the assessee on bank balances appearing in his foreign bank account maintained with HSBC Bank, Geneva, Switzerland. 2. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of (Rs.2,01,34,392-Rs.32,75,479) Rs. 1,68,58,913/- made by AO on account of unexplained jewellery seized from the premises of the assessee. 3. At the outset, the ld. Counsel for the assessee invited our attention to its petition dated 18.07.2025 requesting for admission of a ground for adjudication within the meanings of Rule-27 of the ITAT Rules, 1963. Thus, the ground raised by the appellant is a under:- “3. That having regard to the facts and circumstances of the case, the impugned assessment order passed by Ld. A0 u/s 143(3) is bad in law as the approval obtained us 153D is mechanical, without application of mind and is no approval in the eyes of law. 4. That having regard to the facts and circumstances of the case, the approval u/s 153D is mechanical and bad in law inter-alia also for the reason that the same has been given consolidatedly for various assessment years which is contrary to the settled position of law as held in the judgements of Pr. CIT vs. Shiv Kumar Nayyar, ITA No. 285/2024 & CM Appl. 28994/2024, dated 15.05.2024 (Del), Pr. CIT vs. Sapna Gupta, (2023) 147 taxmann.com 288 (All) and Pr. CIT vs. Subodh Agarwal, (2023) 149 taxmann.com 373 (All). 5. That in any view of the matter and in any case, the approval us 153D is bad in law.” 4. Before proceeding further, we deem it appropriate to briefly recapitulate the brief factual matrix of this case. The assessee lady is a 73 years old senior citizen. The assessee lost her industrialist husband on 23.07.2009. On 23.08.2011, search and seizure u/s 132 was conducted on residential and office premises of the assessee and her daughter. Search was conducted as a sequel to Printed from counselvise.com 3 ITA No.1496/Del/2018 information received by the Revenue indicating that the assessee had an account with HSBC Bank Geneva, Switzerland. The assessee apparently didn’t have any knowledge of the impugned account and had also signed a waiver form in favour of Income Tax Department. Order u/s 153 r.w.s. 143(3) dated 05.03.2015 was passed determining total income of the assessee at Rs.2,23,90,110/- after making addition of Rs.2,01,34,392/- u/s 69A of the Act on account of unexplained investment in jewellery and of Rs.5,44,752/- on account of unaccounted interest. The ld. CIT(A) through his order dated 22.12.2017 partly deleted the additions made by the ld. AO holding the same as, inter-alia, being made on whimsical basis. The Revenue is in appeal before us contesting the impugned decision of Ld. CIT(A) in according relief to the assessee of Rs.5,44,752/- and of Rs.1,68,58,913/-. 5. The issue raised by the assessee invoking provisions of Rule-27 of the ITAT Rules lies at the root of the present controversy and therefore we proceed to decide the same first. It is the case of the assessee that it is entitled to raise any ground under Rule-27 before the Tribunal, at any stage. The ld. Counsel for the assessee has accordingly requested for adjudication of its ground that the approval u/s 153D accorded by Competent Authority was a mechanical approval without application of mind. It has been argued that the Order u/s 153 r.w.s. 143(3) dated 05.03.2015 which is resting on the same, therefore, deserves to be set-aside. The ld. Counsel has placed reliance upon the decision of Hon’ble Delhi High Court in the case of Shiv Kumar Nair as at 467 ITR 186. Additionally, reliance has also been placed upon the decisions of Hon’ble Allahabad High Court in the case of Sapna Gupta (147 taxmann.com 288) and Subodh Aggarwal (149 taxmann.com 373) as well as a plethora of other cases. 6. The ld. DR vehemently argued against admission of the additional ground under Rule-27 of the ITAT Rules. It was argued that the objection has been made too late in the day to be given any consideration. It was urged that Printed from counselvise.com 4 ITA No.1496/Del/2018 its not a case of a mechanical approval and that the petition of the assessee deserves to be rejected. 7. We have heard rival submissions in the light of materials available on record. The first and foremost issue that deserves to be decided is regarding the admissibility per se of the ground raised by the assessee under Rule-27 of ITAT Rules, which reads as under:. “Respondent may support order on grounds decided against him. 27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.” 8. A perusal of above Rule-27 clearly stipulates that a respondent (in this case the assessee) is entitled to support the order appealed against by the plaintiff (in this case, the Revenue) on any ground as per its choice. Thus, the law clearly provides the impugned liberty to the respondents and there is no restriction on the same. We have also noted that the Hon’ble Ahmadabad Tribunal in its decision in I.T.A. No. 183/Ahd/2021 for Assessment Year : 2011- 12 in the case of Shri Pranav Prafulchandra Vora vide its order dated 15/05/2025 has held that 7. During the course of hearing, the ld. counsel for the assessee invoked Rule 27 of the ITAT Rules, 1963, for raising a legal ground before us in support of the order of the Ld.CIT(A). The ground raised challenged the validity of the jurisdiction assumed by the Assessing Officer in the present case u/s. 153C of the Act. His contention being that the satisfaction recorded by the Assessing Officer of the searched person was not within reasonable time and therefore the jurisdiction assumed u/s 153C of the Act to frame assessment u/s 153A of the Act was not valid. In this regard, he drew our attention to the facts relating to the issue and referred to various judicial decisions in support of his contention, as also to CBDT Circular. Before us, the ld. D.R. however vehemently objected to the entertainment of the grounds raised by the assessee as also to the merits of the contentions raised by the assessee. 8. We shall first deal with this issue. Printed from counselvise.com 5 ITA No.1496/Del/2018 9. Since the assessee has invoked Rule 27 of the ITAT Rules, 1963 (in short “Rules”) for raising grounds in Department’s appeal, it is pertinent to reproduce Rule 27 of the Rules which reads as under:- “27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.” 10. As is evident from a bare perusal of the above, if a respondent has not filed an appeal or cross-examination, he is entitled to raise grounds in support of the order appealed against, on any of the grounds which are decided against him. Clearly there is no bar on a respondent to an appeal raising grounds without filing an appeal or cross objection. As per Rule 27 of the ITAT Rules, the only condition is that the ground raised should be:  in support of order of ld. CIT(A),  on an issue decided against him. 11. In the present case, the grounds raised by the ld. counsel for the assessee as a respondent, is vis a vis challenging the validity of the jurisdiction assumed by the AO of the assessee u/s. 153C of the Act on the ground that satisfaction recorded by the Assessing Officer of the searched person was beyond limitation. Admittedly this ground was never raised before the CIT(A) and therefore this issue was not decided against the assessee. Therefore, strictly reading rule 27 of the ITAT rules, the assessee apparently is not entitled to raise this ground. 12. We have however noted that the ITAT Delhi Bench in the case of ITO vs. Gurinder Kaur (2007) 288 ITR 207 (Delhi), had an occasion to deal with an identical situation and held that even dehors Rule 27 of the Income Tax Appellate Tribunal Rules, 1963,it is open to the respondent in an appeal before the Tribunal to raise new grounds in defense of the order appealed against ,noting that the Tribunal has inherent powers u/s. 254(1) of the Act to entertain the argument of the respondent which amounted to a new ground. In the facts of the said case, the ld. CIT(A) had held the order passed by the Assessing Officer u/s. 147 of the Act to be invalid noting that the reasons recorded by the Assessing Officer for reopening the case of the assessee was based merely on suspicion and did not fulfil the parameter laid down u/s. 147 of the Act to form a belief of escapement of income. Before the ITAT, the Department come up in appeal against the order of the ld. CIT(A), where the assessee raised grounds in defense of the order of the ld. CIT(A), which were not dealt with by the ld. CIT(A). The assessee raised the ground of the notice u/s. 148 of the Act not being served on the assessee, the approval of the Joint CIT not being taken by the Assessing Officer before issuing notice u/s. 148 of the Act as required by section 151 of the Act and Printed from counselvise.com 6 ITA No.1496/Del/2018 jurisdiction for reopening being invoked for making only fishing or roving inquiries, which as per the assessee were not permitted in law. The ITAT noted that these issues were not adjudicated against the assessee by the ld. CIT(A) and therefore held that strictly speaking the assessee could not raise these grounds in terms of rule 27 of the ITAT Rules, 1963. However, it went on to note that the Hon’ble Apex Court in the case of Hukum Chand Mills Ltd. vs. CIT held that even assuming that Rule 27 of the ITAT Rules, is not strictly applicable, the Tribunal had inherent powers u/s. 254(2) to entertain arguments of the respondent subject to the condition that no new facts are required to be brought on record. Applying the said ratio laid down by the Hon’ble apex court, the ITAT held that the grounds raised by the assessee as respondent in the Department’s appeal, though not permitted to be entertained as per section 27 of the ITAT Rules, could be admitted for adjudication considering the inherent powers of ITAT: “10.. Before we proceed further, it is necessary to clear this point, namely, whether the assessee can raise these points before the Tribunal for the first time as a respondent defending the order of the CIT(A) which was based on the only question whether the reasons recorded by the Assessing Officer amounted to reason to believe or reason to suspect. The matter is not res integra. Rule 27 of the Appellate Tribunal Rules, says that the respondent in an appeal can support the order appealed against on any of the grounds decided against him even though he may not have filed an independent appeal or cross- objection. This Rule clearly supports the assessee. In the present case, the assessee has raised the point of non- recording of reason in ground No. 2 before the CIT(A) though this ground is not so categorical as the Ld. Counsel for the assessee wants us to read. Even so, such ground can be inferred from the fact that the assessee has been repeatedly asking for the reasons recorded which were not supplied to her. Even before the Tribunal right from September, 2004, the assessee has been requesting for production of the department's records obviously calling upon the department to show that reasons for reopening have been recorded, but due to some difficulty or the other, the department has not been able to produce the records. The CIT(A) has not recorded any finding on the question whether the reasons were recorded or not, but having regard to the judgment of the Hon'ble Delhi High Court in Rohtak and Hissar Districts Electric Supply Co. (P.) Ltd, v. CIT , it is possible to hold that he found against the assessee on this point. On this reasoning, it is open to the assessee to raise the question of non-recording of reasons for reopening the assessment before the Tribunal for the first time and seek to support the ultimate decision of the CIT(A). Even the non- Printed from counselvise.com 7 ITA No.1496/Del/2018 disclosure of the reasons can be said to be covered by ground No. 2 taken before the CIT(A) and in the absence of any definite decision by the CIT(A), the same conclusion would follow namely, that it is open to the assessee to invoke Rule 27 even in respect of this point. As regards the approval of the JCIT under Section 151(1), it is fairly admitted on behalf of the assessee that this was not specifically taken either before the Assessing Officer or before the CIT(A) and, therefore, we hold that Rule 27 may not be strictly speaking available to the assessee. 11. Even de hors Rule 27 of the Appellate Tribunal Rules, it is open to the respondent in an appeal before the Tribunal to raise a new ground in defence of the order appealed against. It has been so held by the Supreme Court in Hukam Chand Mills Ltd. v. CIT of the report it was held that even assuming that Rule 27 is not strictly applicable, the Tribunal has inherent powers under Section 254(1) to entertain the argument of the respondent which amounted to a new ground. It was further held by the Supreme Court as follows: It is necessary to state that Rules 12 and 27 are not exhaustive and the powers of the Appellate Tribunal. The rules are merely procedural in character and do not, in any way, circumscribe or control the power of the Tribunal under Section 33(4) of the Act. It is significant to note that in the case before the Supreme Court, the department which was the respondent sought to raise a new plea in defence of the order appealed against. Earlier, in New India Life Assurance Co. Ltd. v. CIT , the Bombay High Court while pointing out the difference between an appellant and respondent before the appellate court, observed at page 55 that the respondent \"may support the decision of the trial court, not only on the ground contained in the judgment of the trial court, but on any other ground\". Later, in the case of B.R. Bamasi v. CIT , the Bombay High Court which was dealing with the case of right of the respondent to defend the order appealed against held that the respondent would be entitled to raise a new ground in defence of the order appealed against, provided it is a ground of law and does not necessitate any other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. It was further held that the ground served as a weapon of defence against the appeal and, if accepted should not place the appellant in a worse than he would have been, had he not appealed. In CIT v. Gilbert and Barkar Mfg. Co. , the Bombay High Court Printed from counselvise.com 8 ITA No.1496/Del/2018 made no distinction between the appellant and respondent in an appeal before the Tribunal and held that both were entitled to raise new points or contentions subject only to the condition firstly that no new facts are required to be brought on record is capable of being disposed of on the facts on record and secondly that an opportunity is given to the other side to meet that point which is allowed to be raised for the first time in the appeal. This was also a case of the respondent. To the same effect are the decisions of the Allahabad, Gauhati, Kerala and Gujarat High Courts cited on behalf of the assessee. Therefore, whether it is the appellant or the respondent before the Tribunal, new points or contentions can be raised provided they did not involve investigation into facts (as contrasted with the record) and that an opportunity is given to the other side to meet the contentions. Applying these principles to the present case, we overrule the preliminary objection of the Ld. Sr. DR and permit the assessee to raise the new points before us as a respondent.” 13. Following the said decision, we hold that the grounds raised by the assessee, challenging the validity of jurisdiction assumed u/s. 153C of the Act is maintainable. 9. We have noted that similar view has also been held by another Co- ordinate Bench of this Tribunal in the case of Jubiliant Enpro Private Limited (2014) 150 ITD 0419 and in the case of Samast Vikas Ltd as at 175 taxmann.com 145. Thus, the legal position is clear regarding the admissibility of a ground by the respondents under Rule-27 of ITAT Rules with a view to support an order contested by the plaintiffs. 10. We are now left to decide the appropriateness of the ground raised by the assessee. It is the case of the assessee that the approval granted by the competent authority in section 153D is a mechanical approval and therefore deserves to be quashed along with order u/s 143(3) dated 05.03.2015. In support of its contentions, the assessee has placed reliance upon judicial Printed from counselvise.com 9 ITA No.1496/Del/2018 precedents, inter alia, including order of Hon’ble Delhi High Court the case of Shiv Kumar Nair (supra). We have noted that the impugned issue has been decided at length by the Hon’ble Delhi High Court the case of Shiv Kumar Nair (supra). Relevant part of the order is extracted hereunder:- “9. We have heard the learned counsels appearing on behalf of the parties and perused the record. 10. Before embarking upon the analysis of the factual scenario of the instant appeal, we deem it apposite to examine the underlying intent of the relevant provision of the Act i.e., section 153D, which is culled out as under : \"153-D. Prior approval necessary for assessment in cases or requisition. — No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of section 153- A] or the assessment year referred to in clause (b) of sub- section (1) of Section 153-B, except with the prior approval of the Joint Commissioner : Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the [Principal Commissioner or Commissioner] under sub-section (12) of Section 144-BA.\" 11. A plain reading of the aforesaid provision evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for \"each assessment year\" referred to in clause (b) of sub-section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of Pr. CIT v. Sapna Gupta [2023] 147 taxmann.com 288/[2022 SCC OnLine All 1294] which captures with precision the scope of the concerned provision and more significantly, the import of the phrase- \"each assessment year\" used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under: \"13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 153D of the Act, the Approving Authority shall have to apply Printed from counselvise.com 10 ITA No.1496/Del/2018 independent mind to the material on record for \"each assessment year\" in respect of \"each assessee\" separately. The words 'each assessment year' used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is fulfilled. It was held that the \"approval\" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. *** 19. The careful and conjoint reading of Section 153A(1) and Section 153D leave no room for doubt that approval with respect to \"each assessment year\" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under Section 153A.\" [Emphasis supplied] 12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for \"each assessment year\" for \"each assessee\" separately. 13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin & Co. [2023] 150 taxmann.com 146/292 Taxman 566/454 ITR 312/SCC OnLine Ori 992 to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under: \"22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having been perused by the Additional Commissioner of Income-tax. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders Printed from counselvise.com 11 ITA No.1496/Del/2018 and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere \"rubber stamping\" of the letter seeking sanction by using similar words like \"seen\" or \"approved\" will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section 153D of the Act. There are three or four requirements that are mandated therein, (i) the Assessing Officer should submit the draft assessment order \"well in time\". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind ; (ii) the final approval must be in writing ; (iii) the fact that approval has been obtained, should be mentioned in the body of the assessment order.\" [Emphasis supplied] 14. During the course of arguments, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin & Co. (supra), came to be dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 15. A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. 16. In the present case, the ITAT, while specifically noting that the approval was granted on the same day when the draft assessment orders were sent, has observed as under: \"10. We have gone through the approval granted by the ld. Addl. CIT on 30.12.2018 u/s 153D of the Act which is enclosed at page 36 of the paper book of the assessee. The said letter clearly states that a letter dated 30.12.2018 was filed by the ld. AO before the ld. Addl. CIT seeking approval of draft assessment order u/s 153D of the Act. The ld. Addl. CIT has accorded approval for the said draft assessment orders on the very same day i.e., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt. Neetu Nayyar. It is also pertinent in this regard to refer to pages 68 and 69 of the paper book which contains information obtained by Smt. Neetu Nayyar from Central Public Information Officer who is Printed from counselvise.com 12 ITA No.1496/Del/2018 none other than the ld. Addl. Commissioner of Income- tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page 36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt. Neetu Nayyar. The remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. Addl. CIT has granted a single approval for all assessment years put together.\" 17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above.” 11. We have further noted that Hon’ble Delhi High Court in its decision in the case of MDLR Hotels (P.) Ltd. as it 166 taxmann.com 327 held as under:- 2. The issue is principally concerned with the validity of the approval accorded in terms of Section 153D of the Income Tax Act,1961 [\"Act\"]. We note that the Tribunal has on facts ultimately found that the competent authority chose to accord approval to as many as 246 proposed assessments by way of a single letter of approval. That approval reads as follows: \"The above draft orders, as proposed, are hereby accorded approval with the direction to ensure that the orders are passed well before limitation period. Further , copies of final orders so passed be sent to this office for record.\" 3. It is the aforesaid facts which appear to have constrained the Tribunal to observe as follows: \"13. We have given thoughtful consideration to the orders of the authorities below and have carefully perused all the relevant documentary evidences brought on record. We have also gone through each and every approval granted by the Additional Printed from counselvise.com 13 ITA No.1496/Del/2018 Commissioner of Income tax, Central Range - 2 , New Delhi vis- a -vis, each and every proposal made by the DCIT, Central Circle - 15 , New Delhi. 14. The issue which we have to decide is, can these approvals be treated as fulfilling the mandate of provisions of section 153 D of the Act vis - a- vis legislative intent of the said section in the statute. Section 153 D of the Act reads as under \"No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of section 153A or the assessment year referred to in clause (b) of sub -section (1) of section 153 B, except with the prior approval of the Joint Commissioner. Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under subsection (12) of section 144 BA.\" 15. The Legislative intent can be gathered from the CBDT Circular No.3 of 2008 dated 12.3.2008 which reads as under: \"50. Assessment of search cases Orders of assessment and reassessment to be approved by the Joint Commissioner. 50.1 The existing provisions of making assessment and reassessment in cases where search has been conducted under 6 ITA. No . 4061/ Mum/2012 section 132 or requisition is made under section 132 A does not provide for any approval for such assessment. 50.2 A new section 153D has been inserted to provide that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the previous approval of the Joint Commissioner. Such provision has been made applicable to orders of assessment or reassessment passed under clause (b) of section 153A in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A. The provision has also been made applicable to orders of assessment passed under clause (b) of section 153B in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisitioned is made under section 132A. 50.3 Applicability- These amendments will take effect from the 1st day of June, 2007.\" 16. The Legislative intent is clear from the above, in as much as, prior to the insertion of Sec. 153D of the Act, there was no provision for taking approval in cases of assessment and Printed from counselvise.com 14 ITA No.1496/Del/2018 reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the material on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order. xxxx xxxx xxxx 18. In light of the afore-stated relevant provisions and legislative intent , approval dated 08.03.7.013 is in respect of 62 assessment orders as exhibited at pages 136 and 137 of the Index to Convenience Compilation furnished by the ld. counsel for the assessee. Approval dated 15.03.2013 is in respect of 37 assessment orders as exhibited at pages 138 and 139. Approval dated 18.03.2013 is in respect of 54 assessment orders as exhibited at pages 140 and 141. Approval dated 21.03.2013 is in respect of 24 assessment orders as exhibited at pages 142 and 143 and approval dated 25.02.2013 is in respect of 69 assessment orders as per exhibits in the Convenient Compilation. 19. Thus, the worthy Additional Commissioner of Income tax, Central Range - 2, New Delhi gave approval to 246 assessment order by a single approval letter u/s 153 D of the Act by mentioning as under: \"The above draft orders, as proposed, are hereby accorded approval with the direction to ensure that the orders are passed well before limitation period. Further, copies of final orders so passed be sent to this office for record.\" 20. In our considered opinion, there is no whisper of any seized material sent by the Assessing Officer with his proposal requesting the approval u / s 153D of the Act. All the requests for approval are exhibited at pages 123 to 135 of the Convenience Compilation. 21. Even the approval granted by the Additional Commissioner of Income tax, Central Range - 2, New Delhi does not refer to any seized material/assessment records or any other documents which could suggest that the Additional Commissioner of Income tax, Central Range - 2, New Delhi has duly applied his mind before granting approvals.\" 4. We note that dealing with an identical challenge of approval having been accorded mechanically and without due application of mind had arisen for our consideration in Pr. CIT v. PioneerTown Planners (P.) Ltd [2024] 160 taxmann.com 652/465 ITR 356 (Delhi) /[2024 SCC OnLine Del 1685 and where we had held as follows : Printed from counselvise.com 15 ITA No.1496/Del/2018 \"13. The primary grievance raised in the instant appeal relates to the manner of recording the approval granted by the prescribed authority under Section 151 of the Act for reopening of assessment proceedings as per Section 148 of the Act. 14. It is pertinent to first examine the mandate of Section 151 of the Act, as it stood prior to the substitution by Act No. 13 of 2021. For the sake of clarity, the same is reproduced as under: \"151. Sanction for issue of notice.—(1) No notice shall be issued under Section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under subsection (1), no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under Section 148, need not issue such notice himself.\" 15. A plain reading of the aforesaid provision would indicate that Section 151 of the Act stipulates that the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner must be \"satisfied\", on the reasons recorded by the AO, that it is a fit case for the issuance of such notice. Thus, the satisfaction of the prescribed authority is a sine qua non for a valid approval as per the said Section. xxxxx xxxxx xxxxx 17. Thus, the incidental question which emanates at this juncture is whether simply penning down \"Yes\" would suffice requisite satisfaction as per Section 151 of the Act. Reference can be drawn from the decision of this Court in N. C. Cables Ltd., wherein, the usage of the expression \"approved\" was considered to be merely ritualistic and formal rather than meaningful. The relevant paragraph of the said decision reads as under:— \"11. Section 151 of the Act clearly stipulates that the Commissioner of Income-tax (Appeals), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression \"approved\" says nothing. It is not as if the Commissioner of Income-tax (Appeals) has to record elaborate Printed from counselvise.com 16 ITA No.1496/Del/2018 reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the court is satisfied that the findings by the Income-tax Appellate Tribunal cannot be disturbed.\" 18. Further, this Court in the case of Central India Electric Supply Co. Ltd. v. ITO [2011 SCC OnLine Del 472] has taken a view that merely rubber stamping of \"Yes\" would suggest that the decision was taken in a mechanical manner. Paragraph 19 of the said decision is reproduced as under:— \"19. In respect of the first plea, if the judgments in Chhugamal Rajpal, [1971] 79 ITR 603 (SC) , Chanchal Kumar Chatterjee, [1974] 93 ITR 130 (Calcutta) and Govinda Choudhury and Sons case, [1977] 109 ITR 370 (Orissa) (Orissa) are examined, the absence of reasons by the Assessing Officer does not exist. This is so as along with the proforma, reasons set out by the Assessing Officer were, in fact, given. However, in the instant case, the manner in which the proforma was stamped amounting to approval by the Board leaves much to be desired. It is a case where literally a mere stamp is affixed. It is signed by an Under Secretary underneath a stamped Yes against the column which queried as to whether the approval of the Board had been taken. Rubber stamping of underlying material is hardly a process which can get the imprimatur of this court as it suggests that the decision has been taken in a mechanical manner. Even if the reasoning set out by the Income-tax Officer was to be agreed upon, the least which is expected is that an appropriate endorsement is made in this behalf setting out brief reasons. Reasons are the link between the material placed on record and the conclusion reached by an authority in respect of an issue, since they help in discerning the manner in which conclusion is reached by the concerned authority. Our opinion is fortified by the decision of the apex court in Union of India v. M.L. Capoor, (1973) 2 SCC 836 : AIR 1974 SC 87, 97 wherein it was observed as under: \"27.... We find considerable force in the submission made on behalf of the respondents that the 'rubber stamp' reason given mechanically for the supersession of each officer does not amount to 'reasons for the proposed supersession'. The most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. 28.... If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based Printed from counselvise.com 17 ITA No.1496/Del/2018 and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable.\" (emphasis supplied)\" 19. In the case of Chhugamal Rajpal, the Hon'ble Supreme Court refused to consider the affixing of signature alongwith the noting \"Yes\" as valid approval and had held as under:— 5. — Further the report submitted by him under Section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under Section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under Section 148. To Question 8 in the report which reads \"whether the Commissioner is satisfied that it is a fit case for the issue of notice under Section 148\", he just noted the word \"yes\" and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under Section 148. The important safeguards provided in Sections 147 and 151 were lightly treated by the Income Tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance. 20. This Court, while following Chhugamal Rajpal in the case of Ess Adv. (Mauritius) S. N. C. Et Compagnie v. ACIT [2021 SCC OnLine Del 3613], wherein, while granting the approval, the ACIT has written-\"This is fit case for issue of notice under section 148 of the Income- tax Act, 1961. Approved\", had held that the said approval would only amount to endorsement of language used in Section 151 of the Act and would not reflect any independent application of mind. Thus, the same was considered to be flawed in law. 21. The salient aspect which emerges out of the foregoing discussion is that the satisfaction arrived at by the prescribed authority under Section 151 of the Act must be clearly discernible from the expression used at the time of affixing its signature while according approval for reassessment under Section 148 of the Act. The said approval cannot be granted in a mechanical manner as it acts as a linkage between the facts considered and conclusion reached. In the instant case, merely appending the phrase \"Yes\" does not appropriately align with Printed from counselvise.com 18 ITA No.1496/Del/2018 the mandate of Section 151 of the Act as it fails to set out any degree of satisfaction, much less an unassailable satisfaction, for the said purpose. 22. So far as the decision relied upon the Revenue in the case of Meenakshi Overseas Pvt. Ltd. is concerned, the same was a case where the satisfaction was specifically appended in the proforma in terms of the phrase-\"Yes, I am satisfied\". Moreover, paragraph 16 of the said decision distinguishes the approval granted using the expression \"Yes\" by citing Central India Electric Supply, which has already been discussed above. The decision in the case of Experion Developers P. Ltd. would also not come to the rescue of the Revenue as the same does not deal with the expression used in the instant appeal at the time of granting of approval. 23. Therefore, it is seen that the PCIT has failed to satisfactorily record its concurrence. By no prudent stretch of imagination, the expression \"Yes\" could be considered to be a valid approval. In fact, the approval in the instant case is apparently akin to the rubber stamping of \"Yes\" in the case of Central India Electric Supply.\" 5. In view of the aforesaid, we find no justification to interfere with the view expressed by the Tribunal. No substantial question of law arises. The appeals fail and shall stand dismissed 12. Thus, we have noted that application of mind by the Competent Authority has been held as sine qua non for grant of a valid approval u/s 153D of the Act. We have noted that in the present case approval u/s 153D of the Act provided by the Addl. CIT, Range-4, Delhi, bearing no.Addl.CIT/CR-4/14- 15/1197 dated 05.03.2015 has been summarily given. There is nothing on record to adduce that a thorough application of mind was done by the said authority before granting the impugned approval. The action of the Revenue, therefore, gets hit by the judicial ratio laid down by Hon’ble jurisdictional High Courts in their decisions cited hereinabove. We have also noted that the same ratio has been described by several other Hon’ble High Courts and the Tribunal. Accordingly, we are of the considered view that a case of non-application of mind while issuing notice u/s 153D is clearly made out in this case. The ground raised by the assessee under Rule-27 of ITAT Rules, is therefore allowed. Consequently, the impugned approval u/s 153D is quashed and set- Printed from counselvise.com 19 ITA No.1496/Del/2018 aside. The assessment order u/s 153 r.w.s. 143(3) of the Act dated 05.03.2015 is also set-aside. As the basic assessment order per se has been set-aside, there is no merit left in the grounds of appeal raised by the Revenue. Accordingly, the appeal of the Revenue is dismissed. 13. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 27th October, 2025. Sd/- Sd/- Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:27.10.2025 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "