KARMA KITCHEN AND BAR PVT LTD,DELHI V. ACIT, CC-14, JHANDEWALAN

CO 246/DEL/2025

AI Insights

The case involves multiple appeals and cross-objections related to the income tax assessments of Karma Kitchen & Bar Pvt. Ltd. for the assessment years 2016-17, 2017-18, and 2018-19. The primary legal issue was the validity of the assessments made under Section 153A of the Income Tax Act, following a search and survey operation. The Revenue challenged the deletions of certain additions made by the CIT(A), while the assessee contested the additions sustained by the CIT(A). A significant point of contention was the approval process under Section 153D, which the Tribunal found to be mechanical and lacking in independent application of mind by the approving authority.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839252 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 07-11-2025
• Other Referred Cases: Abhisar Buildwell, Serajuddin & Co., Anu Nagpal vs. ACIT, Prateek Nagpal vs ACIT, Mr. Gokul Kumar vs ACIT, DCIT vs Shiv Vani Buildwell P Ltd., Terveeni Singh vs Central Circle 14, Dheeraj Chaudhary Vs ACIT, Rajiv Singh Kushwaha vs ACIT, PCIT vs Subodh Aggarwal, PCIT vs Anju Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YUDHISTER MEHTANI
• Keywords: Opportunity of being heard; Retrospective amendment; Principle of natural justice; Search and seizure; Block assessment; Assessment record; Competent authority
• Section: 147; 143(3); 132; 153A; 69C; 12; 40A(3); 133A

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.5179/Del/2025, A.Y. 2016-17 ITA No.4167/Del/2025, A.Y. 2017-18 ITA No.4168/Del/2025, A.Y. 2018-19 Assistant Commissioner of Income Tax Room No. 266, 2nd Floor, ARA Centre, Jhandewalan, New Delhi Vs. Karma Kitchen & Bar Pvt. Ltd. House No. 1A, (Part-II) Basement Khirki Village, Chirag Delhi, Malviya Nagar, New Delhi PAN: AAFCK8921Q (Appellant) (Respondent) C.O. No. 246 & 247/Del/2025 (Arising out of ITA No. 5179 & 4167/Del/2025) A.Y. 2016-17 and 2017-18 Karma Kitchen & Bar Pvt. Ltd. D-72, Gound Floor, Saket, New Delhi-110017 PAN: AAFCK8921Q Vs. Assistant Commissioner of Income Tax Central Circle - 14 E-2, Jhandewalan, New Delhi (Appellant) (Respondent) ITA No.3309/Del/2025, A.Y. 2018-19 M/s. Karma Kitchen & Bar Pvt. Ltd. D-72, Gound Floor, Saket, Vs. Assistant Commissioner of Income Tax Central Circle - 14 E-2, Jhandewalan, Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 2 New Delhi-110017 PAN: AAFCK8921Q New Delhi (Appellant) (Respondent) Appellant by Sh. Yudhister Mehtani, CA Ms. Divya, Advocate Respondent by None Date of Hearing 03/02/2026 Date of Pronouncement 18/02/2026 O R D E R PER RAJ KUMAR CHAUHAN , J.M. : By this common order, we propose to dispose the above ITA Nos. 5179/Del/2025, A.Y. 2016-17, ITA No.4167/Del/2025, A.Y. 2017-18, ITA No.4168/Del/2025, A.Y. 2018-19 and ITA No. 3309/Del/2025, A.Y. 2018-19 and CO Nos. 246 & 247/Del/2025 (Arising out of ITA No. 5179 & 4167/Del/2025) as the facts are same, parties are same and issues are identical. 2. ITA No. 5179/Del/2025 is filed by the Revenue against the order of Learned Commissioner of Income Tax (Appeals)/ NFAC, Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 23.05.2025 for the A.Y. 2016-17 because all the additions made by Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 3 Assessing Officer (‘AO’) u/s 153A against the assessee were deleted. The revenue has challenged the impugned order by raising following grounds: “1. Whether on the facts and circumstances of the case and in law, Ld CIT(A) is correct in allowing relief to the assessee holding that the AO was not correct in assuming jurisdiction u/s 153A on the basis of incriminating material found during survey u/s 133A on the premises of the assessee on the same date as the date of search carried out u/s 132 in case of the assessee? 2. Whether on the facts and circumstances of the case and in law. Ld CIT(A) is correct in not appreciating that search u/s 132 and survey u/s 133A were conducted in the case of the assessee on the same date and the incriminating material was found during the survey operation as part of the search operation being carried at other premises of the assessee? 3. Whether on the facts and circumstances of the case and in law. Ld. CIT(A) is correct in not appreciating that when search action u/s 132 is initiated on a person at a number of premises then some of the premises may also be covered under survey u/s 133A during the same search action? 4. Whether on the facts and circumstances of the case and in law, Ld CIT(A) failed to appreciate that Hon'ble Apex Court's decision in case of Abhisar Buildwell was to define scope of assessment u/s 153A in case of abated & non- abated proceedings and does not deal with the case of present assessee where search u/s 132 of the act was carried out at some premises and as part of operation, survey u/s 133A of the act was also carried out on some other premise and that incriminating material could be found from the surveyed premises also? 5. Whether on facts & circumstances of the case Ld.CIT(A) erred in not appreciating that the seized document titled \"Dividend Disbursement\" contained Shareholder disbursement in cash which could not have been part of regular books of account especially when the company has not declared any dividends? 6. Whether on facts & circumstances of the case Ld.CIT(A) erred in not appreciating that the seized document titled \"Dividend Disbursement\" Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 4 contained inflow which was in form of cash profit from unrecorded Sales and did not form part of regular books of account? 7. Whether on facts & circumstances of the case Ld.CIT(A) erred in not appreciating that when the cash outflows of seized document titled \"Dividend Disbursement\" are not part of regular books then how could cash inflows of the same documents be part of the audited books? 8. (a) The Order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 2.1 The assessee has also filed cross objection No. 246/Del/2025 arising out of appeal No. 5179/Del/2025 for A.Y. 2016-17 by raising following grounds: “1. That having regard to the facts and circumstances of the case the Ld. CIT(A) ought to have quashed the assessment order passed by the Assessing Officer under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (‘the Act’), dated 31.12.2019, as the same is void ab initio being passed without obtaining the requisite prior approval of the higher authority u/s 153D, which is mandatory, must be year-specific, involve independent application of mind, and cannot be granted in a mechanical or blanket manner.” 3. ITA No. 4167/Del/2025 and Cross Objection No. 247/Del/2025 are directed against the NFAC/[CIT(A)] Delhi order dated 27.03.2025 wherein the addition made by the Ld. AO u/s 153A of the Act were deleted. Aggrieved by the impugned order, the Revenue has filed appeal raising following ground: Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 5 “A. Whether on the facts and circumstances of the case and in law, Ld CIT(A) is correct in allowing relief to the assessee holding that the AO was not correct in assuming jurisdiction u's 1534 the basis of incriminating material found during survey u/s 133A on the premises of the assessee on the same date as the date of search carried out u/s 132 in case of the assessee! B. Whether on the facts and circumstances of the case and in law, Ld CIT(A) is correct in not appreciating that search u's 132 and survey u/s 133A were conducted in the case of the assessee on the same date and the incriminating material was found during the survey operation as part of the search operation being carried at other premises of the assessee? C. Whether on the facts and circumstances of the case and in law, Ld CIT(A) is correct in not appreciating that when search action u/s 132 is initiated on a person at a number of premises then some of the premises may also be covered under survey u/s 133A during the same search action? D. Whether on the facts and circumstances of the case and in law, Ld CIT(A) failed to appreciate that Hon'ble Apex Court's decision in case of Abhisar Buildwell was to define scope of assessment also 153A in case of abated & non-abated proceedings and does not deal with the case of present assessee where search u/s 132 of the act was carried out at some premises and as part of operation, survey u/s 133A of the act was also carried out on some other premise and that incriminating material could be found from the surveyed premises also? E. The appellant craves leave to add, amend any all the grounds of appeal before or daring the fearing of the appeal.” 3.1 The assessee has also filed cross objection No. 247/Del/2025 (arising out of ITA No. 4167/Del/2025) raising following grounds as under: “1. That having regard to the facts and circumstances of the case the Ld. CIT(A) ought to have quashed the assessment order passed by the Assessing Officer under section 153A r.w.s. 143(#) of the Income-tax Act, 1961 (‘the Act’), dated 31.12.2019, as the same is void ab initio being passed without obtaining the requisite prior approval of the higher authority u/s 153D, which is mandatory, must be year-specific, involve independent Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 6 application of mind, and cannot be granted in a mechanical or blanket manner.” 4. The ITA No. 4168/Del/2025 by the department and ITA No. 3309/Del/2025 by the Assessee are directed against the order dated 27.03.2025 by NFAC, Delhi wherein the appeal of the assessee was partly allowed by deleting the entire addition except addition of Rs. 75,82,000/-. Hence, the department is in appeal against the deletion of Rs. 304,80,000/- out of total addition 3,80,00,000/- and the assessee is in appeal against the confirmation of addition of Rs. 75,82,000/-. The ground raised with respect to the non-compliance of Section 153D of the Act raised by the assessee was also dismissed. Since both the assessee and revenue has filed appeal for A.Y. 2018-19, hence, with the consent of the Ld. AR for the assessee and Ld. DR for the Revenue, ITA No. 4168/Del/2025 for A.Y. 2018-19 of Revenue and corresponding ITA No. 3309/Del/2025 for A.Y. 2018-19 of Assessee is taken as lead case for factual matrix. 4.1 The revenue in ITA No. 4168/Del/2025, A.Y. 2018-19 has raised following grounds of appeal: “1. Whether on the facts and circumstances of the case and in law, Ld CIT(A) is correct in allowing relief to the assessee by comparing the figures derived from impounded material with those of books of account and treating them as disclosed when the assessee had no documentary evidence so prove that Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 7 such receipts & expenses were actually recorded in the regular books of account? 2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in treating the expenditure, recorded in Annexure K-7, K-1, K- 4, K-2 of ASOG-5 and cash book (Annexure A-4 of ASO-8), as part of regular books of account without appreciating that most of such expenses Infringed the restrictions of Section 40A(3) of the Act and if such expenses had been part of regular books of account then they would have been flagged by the Auditor? 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) was justified in deleting the addition of Rs 3.98 er made by the AO on account of undisclosed sales? 4. Whether on the facts and under the circumstances of the case and in law, the Ld CIT(A) was justified in deleting additions u/s 69C of the Act for unexplained entertainment expenses of Rs 10 lakhs, unexplained day to day expenses of Rs 82.10 lakhs, unexplained cash expenses of Rs 56.95 lakhs and unrecorded cash expenses of Rs 8.41 lakhs despite clear and date-wise entries of cash payment in annexures K-1, K-2, K-4 and K-7? 5. Whether, on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in restricting the addition of 23,98,16,000/- made under section 69A of the Act on account of unrecorded cash sales to 275,82,000/-, despite the assessee's own admission of unaccounted turnover and the presence of corroborative evidence in the form of seized K-5 and K-6 registers clearly indicating suppression of sales. 6. Whether, on the facts and in the circumstances of the case, and in law, the Id. CIT(A) failed to appreciate that the additions made under sections 69A and 690 were based on credible evidence found during search and survey proceedings, and the assessee failed to substantiate its claim that such sales or expenses were duly recorded in the books, especially when key records were reported as destroyed in a fire.” 4.2 The assessee has also filed ITA No. 3309/Del/2025, A.Y. 2018-19 raised following grounds of appeal: “1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in lave and on facts in not deleting the entire addition of Rs 3,98,16,000/- made by Ld. AO u/s 69A of the Income-tax Act, 1961 (the Act), and that too on the basis of alleged material found during survey proceedings, and further erred in sustaining the same to the extent of Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 8 Rs.75,82,000/-, by also recording incorrect facts and findings and in violation of principles of natural justice and without there being any corroborative material evidence available on record. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in not deleting the entire addition of Rs.3,98,16,000/- made by Ld. AO u/s 69A of the Act and sustaining the same to the extent of Rs.75,82,000/-, is illegal, bad in law and against the facts and the circumstances of the case. 3. That in any case and in any view of the matter. Ld. CIT(A) ought to have deleted the addition made by Ld. AO by invoking provisions of section 69A of the Act, as the same is not justified either in law or on facts. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and on facts in upholding the impugned assessment order passed by the Ld. AO without obtaining a valid approval u/s 153D of the Act, and ought to have quashed the same as being void and unsustainable in law due to non-compliance with the mandatory statutory requirement. 5. That having regard to the facts and circumstances of the case, the assumption of jurisdiction for passing of the impugned assessment order u/s 143(3) dated 31.12.2019 which is illegal, bad in law, inter alia for the reason that the impugned assessment order and the approval u/s 153D has been issued/passed without DIN Numbers as is must as held in the judgement of Ashok Commercial Enterprises vs. ACIT dated 04.09.2023 (Bombay High Court) and CBDT Circular No. 19/2019 dated 14.08.2019. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A/234B/234C of the Act. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 5. The facts in brief as culled out from the order of the Authorities below are that the assessee company M/s. Karam Kitchen & Bar Pvt. Ltd. was registered as a private limited Company in August, 2015 and commenced commercial operations of operating Antares Restaurant and Bar in Goa in November, 2015. It filed its ITR for A.Y. 2018-19 on 31.10.2018. A Search was conducted at the premises of Nagpal Group on Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 9 10.01.2018, where some documents alleged to be related to the assessee were found by the department. Accordingly, a search operation was also conducted against the assessee company on 10.01.2018 and a survey was conducted at its Head Office at D-72(GF), Saket, New Delhi wherein several loose sheets of paper were found and seized/impounded. On 09.01.2019, a fire broke out at the premises of Antares Restaurant and Beach Club which also comprises of Assessee Company operated restaurant and the entire wooden structure along with company records were burnt/destroyed. As a result, many details and documents were not available with the assessee company to substantiate its claims during the assessment proceedings. Accordingly, the full details could not be submitted to the Investigation Wing as well as the Ld. AO. The Assessment u/s 153A of the Act was made wherein additions were made allegedly without giving a reasonable opportunity of hearing and without considering the explanation of documents and the evidences submitted by the assessee. After complete assessment following six additions were made by passing the assessment order u/s 143(3) of the Act dated 31.12.2019 as under: Sr. No. Description Material/Document impounded on the basis of which addition has been made by the Ld. AO Amount of Addition (Rs.) Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 10 1. Addition u/s 69A ASOG-5, Annexures K-5 and K-6 of impounding order dated 10.01.2018 3,98,16,000 2. Addition u/s 69C ASOG-5, Annexures K-7 of impounding oder dated 10.01.2018 10,00,000 3. Addition u/s 69C ASOG-5, Annexures K-1 of impounding order dated 10.01.2018 82,10,000 4. Addition u/s 69A Digital Data 57,85,000 5. Addition u/s 69C ASO-8, Annexures A-4 of impounding order dated 12.01.2018 56,95,493 6. Addition u/s 69C ASOG-5, Annexures K-2 of impounding order dated 10.01.2018 8,41,000 Total 6,13,47,493 6. Aggrieved by those additions, the assessee filed appeal before the Ld. CIT(A) who vide impugned order dated 27.03.2025 has deleted all additions except Rs. 75,82,000/- on account of suppressed sale identified from the difference of cash sales determined on the basis of the impounded material which was amounting to Rs. 3,80,00,000/- and the sale reflected in the books of account was Rs. 304,18,000/-. The ground with respect to the approval u/s 153D of the Act being mechanical, raised by the assessee before the Ld. CIT(A) was dismissed. 7. Aggrieved by the impugned order, both the parties are in appeal before us raising various grounds as enumerated by us in preceding paras. 8. We have heard the Ld. AR for the assessee and Ld. DR on behalf of the Revenue. Ld. AR at the very outset raised the issue of approval u/s 153D Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 11 of the Act being granted in mechanical manner without perusal of the searched material independently by the approval authority and also because of non-application of mind. Ld. AR placed reliance upon following case laws in favour of assessee as under: “1. Anu NAgpal vs. ACIT (ITA No. 463 to 465/Del/2022,dated 28.01.2026 (Hon’ble Delhi Tribunal) 2. Prateek Nagpal vs ACIT, ITA Nos. 466, 521 & 522/Del/2022, dated 10.01.2025 (Hon'ble Delhi Tribunal) 3. Mr. Gokul Kumar vs ACIT, ITA Nos. 5436 to 5445/Del/2025 (Del), dated 15.05.2024 (Hon'ble Delhi Tribunal) 4. DCIT vs Shiv Vani Buildwell P Ltd., ITA No. 5040/Del/2024 and CO No. 44/Del/2025, dated 06.06.2025 (Hon'ble Delhi Tribunal) 5. Terveeni Singh vs Central Circle 14, ITA No. 380 to 384/Del/2022, dated 28.01.2026 (Hon'ble Delhi Tribunal) 6. Dheeraj Chaudhary Vs ACIT (2025) 178 taxmann.com 360, dated 10.09.2025 (Hon'ble Delhi Tribunal) 7. Rajiv Singh Kushwaha vs ACIT, ITA No. 1452 to 1455/Del/2023 dated 29.11.2025 (Hon'ble Delhi Tribunal)” 8.1 Ld. CIT-DR on the other hand sought adjournment by submitting an adjournment application through ITO and was not available for arguments and in view of the submission of appellant that it is a covered matter by the Jurisdictional High Court as well as various Jurisdictional Tribunal’s orders, the request for adjournment was declined and matter was heard. 8.2 We have noticed that written submissions were filed by the Revenue wherein nothing has been mentioned with respect to the approval Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 12 granted u/s 153D of the Act if the same was proper or suffering from being granted in a mechanical manner. 9. We have considered the rival submission and examined the record. During the arguments, the assessee has produced request for approval under the provision of section 153D of the Act dated 30.12.2019 along with approval of the same date granted by the Additional Commissioner of Income Tax, CC-14, New Delhi. The same are extracted below as under: Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 13 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 14 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 15 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 16 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 17 10. In ITA No. 3309/Del/2025, A.Y. 2018-19 specific ground no. 3 was taken by assessee before the Ld. CIT(A) with respect to mechanical approval u/s 153D of the Act. The ld. CIT(A) has decided the said ground in para No. 16 to 20 extracted below as under: “16. As regards the contention of the appellant relating to mechanical approval u/s 153D of the Act, it is appropriate to deal with the scheme of approval as and envisaged under that section which is being discussed hereunder: - Scheme of Section 153D of the Act: Prior approval necessary for assessment in cases of search or requisition. 153D. 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 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, 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 144BA. Explanatory Notes to Finance Act 2007: Circular 3/2018: “50. Assessment of search cases-Orders of assessment and reassessment to be approved by the Joint Commissioner. 1. The existing provisions of making assessment and reassessment in cases where search has been conducted under section 132 or requisition is made under section 132A, does not provide for any approval for such assessment 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 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 18 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 requisition is made under section 132A. 3. Applicability-These amendments will take effect from the 1st day of June, 2007.” The provision of the law makes it clear that there was no provision in law for taking approval prior to introduction of section 153D of the Act. The explanatory notes also do not indicate any rationale or prescribe any procedure for taking the approval. The AO and the Range Heads have in good faith acted on the plain reading of the said section and provided the requisite approval u/s153D of the Act before passing of the assessment order. The fact that approval u/s153D was communicated before passing of the assessment order is not in dispute. (a) The section nowhere provides that the approval should not be given by a common letter for all assessment years. The AO and the Range Head are supposed to apply their minds on the entire case records and seized materials. Main issues arising from search are generally common to all assessment years. The ground that approval of each assessment year should be issued separately otherwise the entire assessment proceedings shall be vitiated is stretching the logic a bit too far. No prejudice whatsoever is caused to anybody, when, the Range office had issued a common letter for all assessment year in place issue of several letters for each assessment year, merely duplicating the approval. (b) The section nowhere provides that there should be tangible evidence to show that there is due application of mind by the Range Head by way of recording the comments while granting the approval unlike in situation where approval is prescribed to be recorded in writing. The Range head and the AO grapple with the seized material and case records for entire period before completing the assessment The Range head is equally answerable for any defect or inadequacy in the assessment order where he has granted approval. To assume that such approval has been given mechanically without application of mind by Range head is again not credible. No officer much less than a senior officer at the rank of Range Head can be condemned for negligence of responsibility without any positive evidence of negligence. (c) The section nowhere indicates that grant of a large number of approvals at the same day vitiates the entire assessment. Non-application of mind is underlying hypothetical assumption without any evidence It presupposes Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 19 that the RH did not discharge his functions during the entire period from the receipt of case records upto the date of grant of approval. This is more so when he can be held responsible for grant of statutory approval in a deficient case. Any person who had an acquaintance with search assessment would know that all actions of the AO are done with due consultation and proper monitoring in the entire proceedings. While the Range Head monitors that due actions are timely taken, the finalisation of draft order often reaches him at the fag end due to various reasons including delays caused by the assessee. Moreover, the various proceedings continue simultaneously and culminate at the same time. Therefore, it is very practical and prudent to have obtained the approval in a large number of cases on the same day Holding it to be such a serious defect so as to render the entire search assessment null and void is absolutely unnecessary and is akin to nullify all the efforts of the Department to unearth the tax evasion in the most severe cases where intrusive action like search is considered required. 17. Coming to the grounds taken in the different courts it is appropriate to discuss the same as under: i. In the case of ACIT Vs Serajuddin & Co. Kolkata (Hon'ble Orissa High Court) dated 15.03.2023, reliance has been placed on the provisions of Manual of Officer Procedure regarding timelines for submission of draft order to Range Head under section 158BG of the Act, requiring the AO to obtain a previous approval of the JCIT/Additional CIT by submitting a draft assessment order following a search and seizure operation. Relevant extracts of the decision in the case of Serajuddin & Co. Kolkata (supra)are reproduced below for reference: - 12. It must be noted at this stage that even prior to the introduction of Section 153D in the Act, there was a requirement under Section 158BG of the Act, which was substituted by a Finance Act 14 of 1997 with retrospective effect from 1st January 1997, of the AO having to obtain a previous approval of the JCIT/Additional CIT by submitting a draft assessment order following a search and seizure operation 13. The CBDT issued the Manual of Office Procedure in February 2003 in exercise of the powers under Section 109 of the Act. Para 9 of Chapter 3 of Volume-Il (Technical) of the Manual reads as under 9 Approval for assessment. An assessment order under Chapter XIV- B can be passed only with the previous approval of the range JOIT/ADDL CIT (For the period from 30-5-1995 to 31-12-1995 the approving authority was the CIT.) The Assessing Officer should submit the draft assessment order Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 20 for such approval well in time. The submission of the draft order must be docketed in the order-sheet and a copy of the draft order and covering letter filed in the relevant miscellaneous records folder Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date Finally once such approval is granted, it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet The assessment order can be passed only after the receipt of such approval The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself.” Two important points stand out which have missed the attention of the Court in that matter namely- (a) The Manual for office procedure is not a legal documents which is evident from the disclaimer contained in Manual of office Procedure 2019, reproduced below: - DISCLAIMER The Manual of Office Procedure has been revised in consultation with the various offices encompassing the Income-tax Department. The revised Manual is solely based on inputs received from offices/ verticals of CBDT and Income tax Department having domain knowledge and functional competence over the subject. The contents of this Manual are for information, ready reference purposes and for intra departmental use only and do not have any legal sanctity Any use of the contents of this Manual may be carried out having due regard to the provisions of extant and relevant Acts, Rules, Judicial Pronouncements and Administrative/ Technical instructions/ Circulers/Advisories/ Notifications of competent authority wherever applicable. No responsibility is taken for the accuracy and completeness of third party Circulars/ Citations etc referred to in this Manual. The Hyperlinks to third party websites that have been included in this Manual are provided for the sake of convenience only. The Department is not responsible for the contents or reliability of the hyperlinked websites and does not necessarily endorse the view expressed within them or guarantee the availability of such linked pages at all times Though every effort has been made to provide accurate and updated information, it is likely that the some details may require to be updated or corrected on a continual basis by the concerned offices. Hence the department does riot assume any legal liability on the complèteness, accuracy or usefulness of the contents of this Manual Suggestions to improve Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 21 this Manual are welcome and it is requested that errors (if any), may kindly be brought to notice. (b) In the section 158BG the Act, an opportunity of being heard is required to be given to the assessee, which is evident from the following extract: ‘Due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. Finally once such approval is granted. it must be in writing and filed in the relevant folder indicated above after making a due entry in the order-sheet’. Under section 153D of the Act, there is no requirement of giving opportunity of being heard by Supervisory Authority. This is upheld in the decision of Karnataka High Court in the case of Gopal S. Pandit Vs CIT 96. Taxmann.com233 dated 28.06.2018. Thus the timelines prescribed the Manual of Office Procedure 2003 do not appear either binding or applicable to the approval under section 153D of the Act. ii. In the case of PCIT Vs Subodh Aggarwal the Hon'ble Allahabad High Court had noted that the obligation of the approval of Range Head serves the purpose of (a) ensuring the interest of revenue against any commission of negligence by the AO in taxing the right income and (ii) to do justice with the tax payer by granting protection against arbitrary or creating baseless tax liability on the assessee. While there is no doubt about the obligations cast upon by the law on the Range Head, it is noted that there is no doubt about the obligations cast upon by the law on the Range Head, it is noted that there is no evidence on record that there was any negligence on the part of the AO in taxing the right income or any arbitrary addition was made in the assessment orders. Both the obligations are duly discharged by the Range Head in granting approval Without pointing out any defect in the assessment order that resulted in harming the interest of revenue or hurting the taxpayer, the courts have considered it fit for quashing the entire assessment. It may also be pointed out that there are adequate safeguards against either of the two situations mentioned in previous part. The Department can invoke remedial measure and the assessée can seek recourse with authorities higher than Range Heads. As such, no prejudice is caused to either of the party even if it is assumed that there was inadequate application of mind. (iii) In the case of PCIT vs. Anju Bansal, Hon'ble Delhi high Court had pointed out mismatch in the figures of the draft assessment order which was approved by the Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 22 Range Head, which according the court had made the assessment order defective. No such defect has been pointed out in the assessment orders making the facts of the case different. 18. In view of the foregoing, it is noted that the search assessments are made in the gravest of the tax evasion cases. The Department has to put in a lot of resources to make a search case successful and in making a tax evader pay the due taxes. On the ultra-technical ground of assumed and hypothetical non application of mind while granting approval by Range Head, in absence of any positive evidence thereof, finding fault in the assessment militates against the intent, purpose and spirit of the law Retrospective prescription of the guidelines judicially that are not prescribed in law and then making their purported violation a ground for quashing of assessment is unacceptable. The law does not mandate such an overly rigid interpretation, especially when the broader purpose of uncovering and assessing escaped income is being served and the Department's actions are supported by sufficient material on record. 19. For above proposition, reliance is placed on the recent decision of the Hon'ble Supreme Court in the case of Union of India v. Bansal [2024] 167 taxmann.com 70. The relevant extract of the said decision is reproduced below: ‘37. A statute is designed to be workable A statutory provision must be construed in a manner to make if workable to achieve the purpose of the legislation. A construction that fails to achieve the manifest purpose of legislation or reduces the statutory provisions to futility should be avoided. The machinery provisions must be construed to effectuate the object and purpose of statute and not defeat them. In JK Synthetics Ltd. v. CTO a Constitution Bench of has Court observed: “16. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective it therefore provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters Provision is also made for charging interest on delayed payments, etc Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must no doubt be so construed as would effectuate the object and purpose of the stabile and not defeat the same.” 38. The provisions in a taxing statute dealing with machinery for assessment have to be construed in accordance with the intention of the legislature to make the charge levied effective. While interpreting provisions that set up the machinery of assessment, the rule is that Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 23 construction should be preferred which makes the machinery workable and furthers the intention of the legislature in CIT v. Sun Engineering Works (P) Ltd., a two-Judge Bench of this Court observed that the provision dealing with reassessment contained in Section 147 of the Income Tax Act was for the benefit of the Revenue: “40. Although, Section 147 is part of a taxing statute, it imposes no charge on the subject but deals merely with the machinery of assessment and in interpreting a provision of that kind, the rule is that construction should be preferred which makes the machinery workable Since the proceedings under Section 147 of the Act are for the benefit of the Revenue and not an assessee and are aimed at gathering the escaped income of an assessee, the same cannot be allowed to be converted as provisional or 'review' proceedings at the instance of the assessee, thereby making the machinery unworkable\" 20. The principle of broader purposive interpretation of the statute has also been emphasized in the decision of Hon'ble Supreme Court in Hindustan Bulk Carriers 2 SCC 237 in the following words: \"If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility, and should rather accept the bolder construction, based on the view that Parliament would legislate only for the purpose of bringing about an effective result. (See Nokes v. Doncaster Amalgamated Collieries [(1940) 3 All ER 549: 1940 AC 1014: 109 LJKB 865: 163 LT 343 (HL)) referred to in Pye v. Minister for Lands for NSW [(1954) 3 All ER 514: (1954) 1 WLR 1410 (PC)]) The principles indicated in the said cases were reiterated by this Court in Mohan Kumar Singhania v. Union of India [1992 Supp (1) SCC 594: AIR 1992 SC 1].” In view of the above, this ground relating to mechanical approval by the Range Head is hereby dismissed.” 11. We have noticed that the question regarding granting of approval u/s 153D of the Act in mechanical manner without application of mind and without perusal of the seized material by the approval granting authority shall vitiate the assessment order is no more re integra as the same has been settled by the Jurisdictional High Court as well as various Jurisdictional Tribunal’s orders and also by the Hon’ble Orissa High Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 24 Court in the case of ACIT vs. Sirajudin and Company, [2023 SCC online Orissa 992] wherein the SLP preferred by the Revenue against the decision of the Hon’ble High Court of Orissa in Sirajudin (supra) stood dismissed by the Hon’ble Supreme Court vide order dated 28.11.2023 in SLP (C) Diary No. 44989/2023. 12. As per settled law, the additional Commissioner of Income Tax, Central Circle while granting approval was required to examine all the materials including the assessment records, appraisal report and seized material pertaining to each assessment year with reference to the addition proposed by the AO for which approval was sought alongwith draft assessment order and after due consideration of all the material, should have accorded the approval u/s 153D of the Act. He was further, required to grant separate approval for each assessment year by examining the material separately and independently. However, from the perusal of the approval letter as reproduced above, we have noticed that the common approval was given for numerous assessment years of different parties by single approval order which also included three assessment year of the assessee. The Ld. CIT(A) while dismissing ground No. 3 of the assessee with respect to mechanical approval u/s 153D of the Act has not considered the decision of the Jurisdictional Tribunal as well as the Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 25 Jurisdictional High Court and the judgment of the Hon’ble Orissa High Court. The Delhi Tribunal in the case of ONUS PLANTATIONS AND AGRO LIMITED Versus DCIT, CENTRAL CIRCLE-6, Delhi, ITA 5004/DEL/2025 dated 16.01.2026 in which one of us (Judicial Member) was party to the judgment, had the occasion to analyze and consider the relevant provisions and the settled legal precedents where on account of approval u/s 153D of the Act granted in a similar manner i.e. in a mechanical manner, the assessment order was quashed. 13. The finding of the Jurisdictional Tribunal in the above case would show that the dismissal of the ground by the Ld. CIT(A) with respect to the mechanical approval granted u/s 153D of the Act was found to be perverse and not sustainable in law. To understand the issue clearly, we find it expedient to extract to finding of the Jurisdictional Tribunal in ITA No. 5004/Del/2025 (supra) from Para 8 onwards extracted below as under: “8. The Adl. CIT, Central Range-2, New Delhi while granting approval, needs to examine all the material including the assessment records, full appraisal report and seized material pertaining to each Assessment Year with reference to the addition proposed by the AO for which approval is sought and the draft assessment order and after considering all the material should accord the approval. It is further provided that approval has to be granted for each assessment year separately and independently. From the perusal of the approval letter as reproduced above, it is seen that common approval was given for Sevene assessment years vide single order. Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 26 9. The Hon’ble Jurisdictional High Court in the case of Shiv Kumar Nayyar (supra) has held that the approval u/s 153D of the Act has to be granted for each Assessment year independently. The relevant observations of the judgement of Hon’ble High Court are as under:- \"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 subsection (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 PCIT v. Sapna Gupta [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 independent mind to the material on record for \"each assessment year\" in respect of ITA No.5004/Del/2025 Page | 17 \"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 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 27 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 and Co. [2023 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 and finds that it meets the requirement of the law. As explained in the ITA No.5004/Del/2025 Page | 18 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 (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 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 28 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 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 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 29 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.\" 10. 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 07 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. 11. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. [2023 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 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 Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 30 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] 12. It is relevant to mention that Special Leave Petition preferred by the Revenue against the decision in the case of Asst. CIT v. Serajuddin and Co. (supra), stood dismissed by the Hon’ble Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023. 13. 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 ritualistic formality or rubber stamping by the authority, rather it must reflect an appropriate application of mind. 14. Recently the hon’ble Third member in the case of Dheeraj Chaudhary Vs. ACIT in ITA Nos. 6158 to 6160/Del/2018 after considering all the judgements relied upon by the ld. CIT DR and further after detailed analyzing the provisions of section 153D, power and independence of assessing authority and the CBDT manual referred by the revenue has held that the common approval granted for various year and for various assessee without making any reference to the material seen is mechanical approval and cannot sustained in the eyes of law. A reference is also made the CBDT manual issued in respect to the procedure to be followed in this regard. The relevant observations of the hon’ble Third Member are as under: 22. I noted that the common thread discussed by Hon’ble Orissa High Court in the case of Serajuddin& Co. (supra), by Hon'ble Delhi High Court in the case of Anuj Bansal (supra) and by Hon’ble Allahabad High Court in the case of Sapna Gupta (supra) is that the requirement of previous approval of assessment by the Additional CIT/Joint CIT in terms of provisions of Section 153D of the Act being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the Section is not turned into an empty formality. Needless to say that before granting approval, the Additional CIT/Joint CIT, as the case may be, must have before him the material on the basis Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 31 whereof an opinion in this behalf has been formed by the Assessing Officer and the approval must reflect the application of mind to the facts of the case. The CBDT itself recognized the importance of this provision and the above laid down principle and hence issued Manual of Office Procedure in February, 2023 in exercise of powers under Section 119 of the Act. Vide Para 9 of Chapter 3 of Volume-II (Technical), a clear procedure is devised i.e., how an approval is to be granted for draft assessment for passing of assessment order in search cases. According to the Manual, the Assessing Officer should submit the draft assessment order for such approval well in time along with docketed in the order sheet, a copy of the draft assessment order, covering letter filed in the relevant miscellaneous records folder. Even, it is noted that due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. It is further noted that once such approval is granted, it must be in writing and filed in the relevant folder indicating above after making due entry in the order sheet. This is the mandate provided in the office manual of the Department. In view of above, I am of the view that the ‘approval’, as mandated u/s 153D of the Act, signifies a product of human thoughts based on the given set of facts and interpretation of the applicable law. It provides equality in treatment and thus prevents bias, prejudice and arbitrariness. It also prevents and avoids inconsistent and divergent views. The power of approval to the specified authority i.e., Superior authority has been envisaged with the objectives that no illegality or biasness, to either of the sides i.e., the assessee or the Revenue, remains. 23. In the present case before me, the above procedure is not at all followed as is evident from the proposal sent by the Assessing Officer as reproduced in Paragraph 10. It means that the approval granted is mechanical in manner and without application of mind by the approving authority i.e., by the Additional CIT. 15. In the present case notably, the order of approval dated 21.12.2021 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. A single approval u/s 153D has been accorded in respect of Seven Assessment Years through single order on the request of the AO made vide letter dt. 17.12.2021 which is filed in the paper book pages 01 & 02 of the assessee. There is no other material to show involvement of the superior authority during the assessment proceedings. 16. Regarding revenue’s reliance on the judgement of Co-ordinate Bench of Mumbai Tribunal in the case of Usha Satish Salvi Vs. ACIT in ITA No. 4237 to 4239/Mum/2023 order dated 23.01.2025 relied by the revenue, it is seen that in the said judgement, no comments were made on the decision of jurisdictional high court in the case of Shiv Kumar Nayyar (supra) relied by the assessee in that case and thus the ratio laid down by the Mumbai bench is not applicable. Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 32 17. Thus, applying the ratio of judgements delivered as noted above, the assessment order based on ritualistic approval stands vitiated and is hereby quashed by allowing Ground of appeal No. 4 taken by the Assessee. 18. Since we have already quashed the assessment order for Assessment Year 2015-16 by allowing Ground of appeal No. 4 taken by the assessee, regular grounds of appeal taken by the assessee become academic and thus, not adjudicated. 19. In the result, appeal of the assessee is allowed” 14. In the case in hand similarly, the order of approval dated 30.12.2019 which was produced before us by the Ld. Counsel for the assessee categorically shows that the single approval has been granted in 28 matters pertaining to different parties and the approval with regard to the three assessment years A.Y. 2016-17 to A.Y. 2018-19 of the assessee is shown as Serial No. 18. Thus, a single approval u/s 153D of the Act has been accorded in respect of 28 assessment years through single order on the request of the AO made vide letter dated 29.01.2026. 15. We have also noticed that the request letter is also dated 30.12.2019 and the approval is also granted on 30.12.2o19. It is not practically possible for the ACIT to go through the material of 28 cases on the same day. Moreover, the approval dated 30.12.2019 nowhere shows that the Ld. ACIT while granting approval u/s 153D of the Act has personally examined the material as it is simply stated that the approval as per Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 33 provisions of section 153D of the Act, in respect of draft assessment order(s) submitted in the above mentioned case(s), is hereby accorded. 16. In these facts and circumstances of the case, the irresistible conclusion which can be drawn is that the approval u/s 153D of the Act has been granted in a mechanical manner. Therefore, respectfully following the decision of the Ld. Co-ordinate Bench in ITA No. 5004/Del/2025 (supra), we are of the considered opinion that the assessment order based on ritualistic approval stands vitiated and are accordingly quashed. The Ground No. 4 raised in the appeal of the assessee is allowed. The appeal of the assessee ITA No. 3309/Del/2025, A.Y. 2018- 19 is accordingly allowed and the corresponding appeal by the Revenue ITA No. 4168/Del/2025, A.Y. 2018-19 is accordingly dismissed. ITA No. 5179/Del/2025, A.Y. 2016-17 & ITA No. 4167/Del/2025, A.Y. 2017-18 of the Revenue AND Cross Objection No. 246/Del/2025 & 247/Del/2025 of the Assessee 17. In view of the finding returned by us with respect to ITA No. 3309/Del/2025 by the assessee and ITA No. 4168/Del/2025 by the Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 34 Revenue wherein the assessment order has been quashed, the finding rendered therein shall mutatis mutandis apply to these cases also and the assessment order in these cases also stand quashed because the facts are identical and assessment order as well as appellate order are also identical and the approval u/s 153D of the Act is also ritualistic and mechanical, therefore, the appeals of the revenue are dismissed and Cross Objections of the assessee are allowed. 18. In the result, ITA No. ITA No.5179/Del/2025, A.Y. 2016-17, ITANo.4167/Del/2025, A.Y. 2017-18, ITA No.4168/Del/2025, A.Y. 2018-19 of the Revenue are dismissed and ITA No. 3309/Del/2025, A.Y. 2018-19 along with cross objection No. 246/Del/2025 & 247/Del/2025 of the assessee are allowed. 19. Since, we have already quashed the assessment orders for A.Y. 2016- 17, 2017-18 and 2018-19 by allowing ground No. 4 taken by the assessee in its appeal ITA No. 3309/Del/2025, A.Y. 2018-19, along with grounds of the cross objection No. 246/Del/2025 & 247/Del/2025, the regular grounds taken by the assessee and the Revenue in their respective appeals become academic and thus not adjudicated. Printed from counselvise.com ITA Nos. 5179, 4167 & 4168/Del/2025 ITA No. 3309/Del/2025 CO Nos. 246 & 247/Del/2025 Karma Kitchen & Bar Pvt. Ltd. 35 20. In the result, the appeal of the assessee along with Cross Objections are allowed and the appeals of the revenue are dismissed. Order pronounced in open Court on 18th February, 2026 Sd/- Sd/- (AMITABH SHUKLA) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:18/02/2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "