ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 25 NEW DELHI, DELHI V. JBM PROJECTS AND INFRASTRUCTURES PVT LTD, DELHI

ITA 2800/DEL/2024

AI Insights

The case involves the Income Tax Department (revenue) appealing against the deletion of an addition of Rs. 6.50 crores made on account of unexplained cash investment by JBM Projects and Infrastructures Pvt. Ltd (assessee). The primary legal contention was the validity of the assessment proceedings under section 153D of the Income-tax Act, 1961, which were challenged by the assessee on the grounds that the approval for the assessment was granted in a mechanical and arbitrary manner without proper application of mind. The tribunal found that the approval was indeed consolidated for multiple assessment years, which is not permissible under section 153D, leading to the quashing of the assessment proceedings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838343 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 31-05-2024
• Other Referred Cases: Dheeraj Chaudhary Vs. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRANTI
• Assessee Lawyers: SALIL AGARWAL
• Keywords: Competent authority; Validity of assessment
• Section: 143(3)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 2800/Del/2024 (Assessment Year:2015-16) ACIT, Central Circle-25, New Delhi Vs. JBM Projects and Infrastructures Pvt. Ltd, 89, Hemkunt Chamber, Nehru Place, Delhi (Appellant) (Respondent) PAN: AACCN7863M Assessee by : Shri Salil Agarwal, Sr Adv Shri Shailesh Gupta Revenue by: Ms. Kranti, CIT DR Date of Hearing 29/01/2026 Date of pronouncement 20/02/2026 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.2800/Del/2024 for AY 2015-16, arises out of the order of the ld Commissioner of Income Tax (Appeals)-28, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 08.03.2024 against the order of assessment passed u/s 153C/143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 09.03.2021 by the Assessing Officer, DCIT, Central Circle-25, New Delhi (hereinafter referred to as ‘ld. AO’). 2. The revenue has challenged the deletion of addition of Rs. 6.50 crores made on account of unexplained cash investment. The assessee has filed application under Rule 27 of ITAT Rules which are enclosed in pages 1 to 3 of the Paper Book wherein, the assessee had challenged the Printed from counselvise.com ITA No. 2800/Del/2024 JBM Projects and Infrastructures Pvt. Ltd Page | 2 validity of assessment proceedings on the ground that the approval u/s 153D of the act has been issued in a mechanical and arbitrary manner by the competent authority without application of mind. This goes to the root of the matter and accordingly we deem it fit to take up the Rule 27 application raised in Ground No. 1 first for adjudication. 3. We have heard the rival submissions and perused the materials available on record. The assessee company had filed its return of income for AY 2015-16 on 27.09.2015 declaring loss of Rs. 27,343/-. A search u/s 132(1) of the Act was conducted in the case of Shri Surendra Kumar Arya, JBM Group of Companies and key officer bearers of the Group on 05.10.2017 wherein certain documents and digital data indicating under invoicing and suppression of scrap sales by JBM Group companies to various scrap dealers were found and seized. Notice u/s 153C of the Act stood issued to the assessee for AYs 2012-13 to 2018-19 on 06.02.2020 after recording the satisfaction note. In response to the notice issued u/s 153C of the Act, the assessee filed return on 20.03.2020 showing loss of Rs. 27,343/-. Assessment was completed u/s 153C read with Section 143(3) of the Act. on 09.03.2021 determining the total income of Rs. 6,47,37,053/-. In the last paragraph of the assessment order, the ld AO had noted that the said search assessment order has been passed after obtaining the prior approval of the ld Addl. CIT, Central Range-7, New Delhi u/s 153D of the Act dated 04.03.2021. It is this approval which is sought to be challenged by the ld AR before us as having been granted in a mechanical manner. For the sake of convenience, the said approval is reproduced herein under:- Printed from counselvise.com ITA No. 2800/Del/2024 JBM Projects and Infrastructures Pvt. Ltd Page | 3 4. From the above, it could be seen that the consolidated approval has been granted by the ld Addl. CIT for various Assessment years which is not in consonance with the provisions of Section 153D of the Act. The provisions of Section 153D of the Act mandate that approval to be given for each assessment year separately and since, the consolidated approval has been granted by the ld Addl. CIT, the entire search assessment gets vitiated as it had to be construed that the approval has been granted by Printed from counselvise.com ITA No. 2800/Del/2024 JBM Projects and Infrastructures Pvt. Ltd Page | 4 the ld Addl. CIT in a mechanical manner. Reliance in this regard is placed on the decision of the Third Member of Delhi Tribunal in the case of Dheeraj ChaudharyVs. ACIT in ITA Nos. 6158 to 6160/Del/2018 and ITA Nos. 6214 to 6216/Del/2018 for AYs 2009-10 to 2014-15 dated 12.09.2025 wherein the entire decisions of various Hon'ble High Courts and the principles enunciated therein in the context of approval proceedings u/s 153D of the Act had been duly considered. For the sake of brevity, the said elaborate order is not reproduced herein. 5. Hence, respectfully following the decision of the Hon’ble Third Member of the Delhi Tribunal (supra), we quash the entire search assessment proceedings for want of valid approval u/s 153D of the Act. Accordingly, the application under Rule 27 of ITAT Rules is hereby allowed. 6. Since, the search assessment was quashed in the above mentioned terms, the grounds raised by the revenue need not be adjudicated and they are left open. Further, the other legal grounds raised by the assessee in its Rule 27 application also become academic in nature and they are left open. 7. In the result, the appeal of the revenue is dismissed and Rule 27 application of the assessee is allowed. Order pronounced in the open court on 20/02/2026. -Sd/- -Sd/- (CHALLA NAGENDRA PRASAD) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/02/2026 A K Keot Printed from counselvise.com ITA No. 2800/Del/2024 JBM Projects and Infrastructures Pvt. Ltd Page | 5 Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "