PACK PLAST INDIA PRIVATE LIMITED, NEW DELHI,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, NEW DELHI, NEW DELHI

ITA 5081/DEL/2025

AI Insights

The case involves Pack Plast India Pvt. Ltd., which was implicated in a series of accommodation entry schemes linked to the Alankit Group and its promoters. Following a search and seizure operation, the Income Tax Department initiated reassessment proceedings under Section 153C of the Income Tax Act, 1961, for the assessment years 2014-15, 2016-17, and 2017-18. The company contested the validity of these proceedings, arguing that the approvals for the assessments were granted in a mechanical manner without proper examination of the seized materials. The Income Tax Appellate Tribunal (ITAT) in Delhi, after reviewing the submissions and the procedural adherence, found that the approvals were indeed mechanical and not in compliance with the statutory requirements, leading to the quashing of the assessment orders.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834011 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Appeal Filed On: 21-08-2025
• Other Referred Cases: Saksham Commodities Ltd. Vs. ITO, PCIT (Central)-3 vs. Ridgeview Construction Pvt. Ltd., PCIT vs. Shiv Kumar Nayyar, PCIT vs. Anuj Bansal, DCIT vs. Ramesh Sharma, ACIT vs. Serajuddin & Company
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S. GUPT
• Assessee Lawyers: SALIL KAPOOR; . SUMIT
• Keywords: Opportunity of being heard; Question of law; Unexplained cash credit; Document seized; Documents seized; Capital Gains; Search and seizure; Accommodation entries; Block assessment; Assessment record; Procedural lapse; Bogus
• Section: 271(1)(c); 68; 69C; 139

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRIS. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.5079/Del/2025, A.Y. 2014-15 ITA No.5080/Del/2025, A.Y. 2016-17 ITA No.5081/Del/2025, A.Y. 2017-18 Pack Plast India Pvt. Ltd. 234, DDA Office Complex, Cycle market, Jhandewalen Extn., New Delhi PAN: AAACP1468Q Vs. Deputy Commissioner of Income Tax, Central Circle-25, New Delhi (Appellant) (Respondent) Appellant by Sh. Salil Kapoor, Adv. Sh. Sumit Lalchandani, Adv. Shivam Yadav, Adv. Ms. Sejal Arora, Adv. Respondent by Ms. Amisha S. Gupt, CIT-DR Date of Hearing 11/12/2025 Date of Pronouncement 04/02/2026 O R D E R PER RAJ KUMAR CHAUHAN (J.M.): By this common order, we propose to dispose of ITA Nos. 5079.Del.2025, A.Y.2014-15, ITA No. 5080.Del.2025, A.Y. 2016-17 and ITA No. 5081.Del.2025, A.Y. 2017-18 as the issues are identical, material facts are similar and the assessees are also the same and the grounds Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 2 raised by the assessee are also same and identical and impugned order are of the same date, therefore, in order to avoid multiplicity of decisions, these matters are disposed of accordingly. The ITA No. 5079. Del.2025 for A.Y. 2014-15 is taken as the lead case. 2. All these three appeals are filed by the assessee against the separate orders of the CIT(A)-25, New Delhi even date i.e. 18.07.2025 under section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), wherein the assessment order in all the three appeals of even dated i.e. 29.03.2024 was confirmed and appeal was dismissed. 3. The brief facts as culled out from the proceedings before the authorities below are that the search and seizure action is taken against the Alankit Group along with its key promoters Sh. Alok Kumar Agarwal, his son Ankit Agarwal and his close associates and key employees of Sh. Alok Kumar Agarwal on 18th October, 2019. From the evidences recovered during the search proceedings, it was established that Sh. Alok Kumar Agarwal, the key promoter of the Alankit Group was involved in providing accommodation entries to various beneficiaries in shape of bogus Long Term Capital Gain/ Short Term Capital Loss/ Unsecured Loan/ bogus speculation income/ loss. The assessee M/s. Pack Plast India Pvt. Ltd. was found to be one of the beneficiary who has taken Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 3 bogus accommodation entry from Mr. Alok Kumar Agarwal and his controlled allies/ entities. On 11.05.2022, the DCIT, Central Circle-28, New Delhi, the Assessing Officer (‘AO’) of the searched person has recorded the satisfaction note to reopen the case of assessee for A.Y. 2014-15 u/s 153C of the Act. Subsequently, the Jurisdictional Assessing Officer i.e. ITO, Ward-19(3), New Delhi recorded his satisfaction to re- open the case u/s 153C of the Act. The notice u/s 153C of the Act was issued to the assessee on 1st September, 2022, wherein the assessee was asked to file his return of income and accordingly, the assessee has filed its return of income declaring total income of Rs. 8,430/-. Even otherwise the assessee has filed original return of income for A.Y. 2014- 15 on 29.04.2024 declaring total income of Rs. 8,430/-under section 139 of the Act. Similar notices were also issued for A.Y. 2016-17 wherein in pursuance of notice 153C of the Act, the assessee filed return of income declaring total income of Rs. 17,050/- and for A.Y. 2017-18, the assessee filed return of income declaring total income of Rs. 88,901/-. During the course of search at the residence of Sh. Sunil Kumar Gupta, the key employee and accountant of Sh. Alok Kumar Agarwal, it is found that he has maintained all the accounted as well as unaccounted transactions taking place through the paper company, statement of Sh. Sunil Kumar Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 4 Gupta was recorded u/s 132(4) of the Act wherein he has admitted that Sh. Alok Kumar Agarwal had been taking unaccounted cash and was giving corresponding RTGS in the Form of unsecured loan, capital gains to the beneficiaries through paper companies. 3.1 In his statement, Sh. Sunil Kumar Gupta has stated that he has recorded same transactions in three places, i.e. hand written diaries, Excel sheets and books of accounts maintained in Tally. He further stated that the transactions in hand written Diaries and Excel sheets were maintained on day to day basis, and the date of transaction mentioned in Excel Sheets is the actual date of transaction and the date of transaction recorded in hand written diaries is recorded as that of 30 years ago and the date of transaction mentioned with respect to the transactions recorded in books of accounts maintained in Tally is recorded as that of 20 years ago. The satisfaction note of searched assessing officer as well as jurisdictional assessing officer was also supplied to the assessee. On 13.03.2024, a show cause notice was issued to the assessee wherein various details of different transaction were asked for including the source of cash deposits and RTGS. In response to the show casue notice, the assessee vide letter dated 22.03.2024 submitted its reply explaining that the amount of Rs. 13,00,000/- received from M/s. Diwakar Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 5 Commercial Private Limited and was utilized for cash withdrawal and an amount of Rs. 28,50,000/- has also been received from M/s. Diwakar Commercial Pvt. Ltd. and was utilized to make payment towards Aamby Valley. The assessee has claimed that the amount has been transferred through banking channel and also filed the copy of ITR and balance sheet of M/s. Diwakar Commercial Pvt. Ltd. The reply of the assessee was not found satisfactory by the Ld. A.O. because the creditworthiness and genuineness of companies was not proved and Sh. Sunil Gupta has accepted that M/s. Diwakar Commercial Pvt. Ltd. was one of the entitites controlled and managed by Sh. Alok Kumar Agarwal. 4. The incriminating documents in the form of tally data and excel sheets were found during the course of search from the premises of Sh. Sunil Kumar Gupta and he has explained the entire modus-operandi of the accommodation entries activities carried out by Alok Kumar Agarwal through his own companies and companies controlled by him. The accommodation entries taken and given by the assessee in lieu of cash is corroborated from the tally data, excel sheet and bank account statements of the assessee for the relevant year. It was therefore observed by the Ld. AO that the incriminating documents seized from the premises of Sh. Sunil Kumar Gupta are related to the assessee and the contents of Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 6 such documents are duly corroborated and considered as true. The AO therefore, came into conclusion that the sum of Rs. 41,50,000/- was received by the assessee from M/s. Diwakar Commercial Pvt. Ltd. and the assessee has failed to prove the identity, creditworthiness of the party and genuineness of the transactions, hence, the said amount was found to be unexplained credits recorded in the books of the assessee and is accordingly added to the total income u/s 68 of the Act. Further, the sum of Rs. 1,24,500/- which is 3% of Rs. 41,50,000/- was added to the total income of the assessee u/s 69C of the Act as the commission amount taken by the assessee for accommodation entries. The total addition made to the income assesseed u/s 153C was Rs. 42,82,930/-, penalty proceeding was also initiated. 5. Aggrieved, the assessee filed appeal before the Ld. CIT(A) taking various objection including the assessment order having been passed by the AO without following the precedure laid down u/s 153D of the Act. Another ground was with respect to no material belonging to the assessee was found during the search or supplied to the assessee during the assessment proceeding and there exist no incriminating material for the year under consideration. The Ground No. 14 and 15 regarding non- following of the procedure u/s 153D of the Act were disposed of vide para Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 7 no. 3 of the impugned order stating that the approval u/s 153D of the Act was accorded vide letter dated 28.03.2023 and order was passed on 29.03.2024. It was further observed that the said approval u/s 153D of the Act was accorded after due examination of the relevant records and verification by the Additional/ Joint Commissioner of Income Tax and was not given in a mechanical manager. There was no mandatory requirement of detail reasoning or elaborate record of application of mind and the case relied by the assessee, according to the Ld. AO was distinguishable. Accordingly, the ground raised by the assessee with respect to non-following procedure u/s 153D of the Act were dismissed. The appeal of the assessee was dismissed. 6. Aggrieved by the impugned order, the assessee is in appeal before the Tribunal and has raised following grounds of appeal: “1. That the notice issued and, the ussessment order passed under Section 153C of the Income Tax Act, 1961 ('the Act') by the Assessing Officer ('AO') are fundamentally flawed, being without jurisdiction, barred by limitation, and passed in violation of the statutory framework goverming such proceedings, thereby rendering them legally unsustainable. 2. The notice issued under Section 153C of the Act and the consequent assessment proceedings are illegal, void ab initio, and without jurisdiction, as the statutory preconditions for invoking Section 153C of the Aut were not satisfied, rendering the proceedings bad in law and liable to be quashed. 3. That on the facts and in the circumstances of the case, the AO has erred in failing to record the requisite satisfaction as mandated under Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 8 law, thereby rendering the impugned proceedings invalid, bad in law, and without jurisdiction. 4. That the approval granted under Section 153D of the Act for passing the assessme order under Section 153C is invalid, as it has been granted in a mechanical manner without independent application of mind, rendering the assessment order bad in law. 5. That on the facts and in law, the approval under section 153D stands vitiated due to non-application of mind, as both the proposal and the approval are mere carbon copies acmss years and group entities, issued in the fag end, in breach of the statutory mandate. 6. That the approval under Section 153D of the Act is bad in law as both the proposal and the approval under Section 153D were invalid being issued without a Document Identification Number (DIN) in violation of CBDT Circular No. 19/2019 dared 14.08.2019. 7. On the facts and in law, the AO/CIT(A) failed to appreciate that, in the absence of incriminating material found during the search, the interference with a completed assessment and additions under Section 153C of the Act are unsustainable and without jurisdiction. 8. On the facts and in law, excel sheets and tally data retrieved from electronic devices are inadmissible as evidence due to non-compliance with Section 658 of the Indian Evidence Act, 1872 and the CBDT Manual, rendering the additions made by the AO liable to be deleted. 9. On the facts and circumstances of the case and in law, the AO has erred in relying upon the retracted statements and material seized from the residential premises of Mr. Sunil Kumar Gupta without providing an opportunity to cross-examine despite specific request. 10. On the facts and circumstances of the case and in law, the AO erred in passing the assessment order under Section 153C of the Act without generating, allotting, quoting, and communicating a valid DIN, in contravention of Circular No. 19 of 2019 dated 14.08.2019, rendering the entire proceedings and assessment order invalid. 11. That the CIT(A) erred in upholding the validity of the notice and assessment under Section 153C and in sustaining the additions, without independent application of mind and without properly considering the detailed submissions filed, rendering the order arbitrary and legally unsustainable. 12. On the facts and circumstances of the case, the CIT(A) failed to appreciate the fact that the additions/disallowances made by the AO are beyond the scope of the satisfaction note Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 9 13. On the facts and circumstances of the case arfd in law, the AO erred in making illegal additions and completing the assessment at income of Rs. 42,82,930/-. 14. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 41,50,000/-under Section 68 of the Act and CIT(A) has erred in upholding the same. 15. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 1,24,500/- under Section 69C of the Act and CIT(A) has erred in upholding the same. 16. On the facts and circumstances of the case and in law, the AO erred in charging interest and initiating penalty proceedings under Section 271(1)(c) of the Act. That in view of the facts and circumstances of the case, the appellant craves leave to add. amend or alter any of the grounds of appeal.” Since the identical grounds has been taken in all the three appeals, so we have not produced the grounds of other appeals in order to avoid the repetition. 7. The ground no. 4, 5 and 6 pertains to the non-following of provisions of Section 153D of the Act as the sanction allegedly having been granted in a mechanical manner and without independent application of mind, rendering the assessment order bad in law. 8. We have heard the Ld. AR for the Assessee and Ld. DR for the Revenue. The Ld. AR at the very outset, submitted that the impugned order is not legally sustainable because the procedure laid down u/s 153D of the Act has not been followed and the approval was granted in mechanical Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 10 manner and therefore, confined his arguments to the legal ground Nos. 4 and 5 pertaining to Section 153D of the Act. 9. The assessee has also filed written submissions wherein the assuming of the jurisdiction u/s 153C of the Act was alleged to be vitiated at the very inception on the ground that the satisfaction recorded by the assessing officer of the searched person and the Ld. A.O. of the assessee were patently mechanical, non-speaking and contrary to the mandatory requirement embedded in Section 153C(1) of the Act. Therefore, both the satisfaction notes demonstrably failed to meet their statutory threshold because the searched person’s AO has not established as to how the document allegedly seized can be said to “belong to” the assessee and the jurisdictional AO has wholly failed to record any finding that material has any bearing on the assessee’s income. Secondly, he has argued that Hon’ble Delhi High Court in Saksham Commodities Ltd. Vs. ITO, [2024] 161 taxmann.com 485, order dated 09.04.2024 has expounded upon the meaning of the expression used in Section 153C of the Act i.e. “having a bearing on the determination of the total income”, it is submitted that the Hon’ble Delhi High Court in the above case came to the conclusion that mere discovery of books, documents or assets would not justify the initiation of proceedings u/s 153C of the Act and the jurisdictional Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 11 assessing officer must be satisfied upon receiving of the said material that those material would have an impact on the determination of total income of the assessee. Thirdly, It is argued that the bare perusal of the satisfaction note would show that the Ld. AO has blatantly erred in not recording the satisfaction as per the mandate of the law. The Ld. AO has failed to determine as to how the information gathered during the search has a bearing on the determination of total income of the assessee. Fourthly, without there being any actual document belonging to the appellant, the Ld. AO have proceeded to frame the assessment agaisnt the assessee on the basis of assumptions and presumption on incorrect facts. Fifthly, the exercise of the power u/s 153C of the Act, to assess or reassess six preceding assessment years or even the relevant assessment year is not an automatic power and the jurisdiction can be invoked only when the AO is satisfied that the seized books, documents or assets have bearing on the determination of the total income of the particular year which is sought to be reopened (Saksham Commodities Ltd. (supra) relied). 10. Sixthly, The satisfaction note failed to indicate the quantum of undisclosed income for the relevant assessment year and instead generically covers multiple years in a consolidated manner and as such Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 12 there is no clear identification of seized material corresponding to each assessment year, making the AO’s satisfaction illusory and legally untenable. In that regard another recent judgment of the Hon’ble Delhi High Court in Pr. CIT (Central)-3 vs. Ridgeview Construction Pvt. Ltd. ITA No. 618/2019 & 621/2019 order dated 13.02.2025 is relied. In the said case it was held that it is incombent upon the AO of the non- searched assessee to form a prima facie opinion that such material forwarded to him by the AO of the searched person indicated undisclosed income or was likely to impact the assessment. It was further held that the seized material must relate to undisclosed income and must meaningfully connect with the assessment year sought to be reopened. Thus, it was held that the satisfaction is not a formality, and as such no proceedings under section 153C of the Act can be triggered unless the AO of the other person independently evaluates and finds that the material incriminating for the particualr assessment year. 11. Seventhly, It was also argued by the Ld. AR for the assessee that the approval u/s 153D of the Act was mechanical due to non-application of mind by the authority which stand proved from the fact that in the assessment order, there is no mention of approval taken u/s 153D of the Act. The Ld. Counsel further pointed out that the copy of the approval Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 13 placed on record during the arguments as paper book no. 2 would show from the contents of para no. 2 that the approving authority has not applied its mind before according approval as it has not perused any of the seized document/material. It is therefore argued that on this sole ground the case of the Revenue falls and assessment order is liable to be quashed. 12. The Ld. DR on behalf of the Revenue has supported the judgment of the Ld. Lower authorities stating that the ld. CIT(A) has categorically elaborated the manner and procedure adopted by the approving authority for granting approval u/s 153D of the Act and the legislative requirement of the said provision has been fulfilled. It is therefore argued that the approval in this case has been given separately for each year and is not mechanical and the assessment proceeding has been carried lawfully and appeal is liable to be dismissed. 13. We have considered the rival submission and examined the record. The separate approval granted dated 28.03.2024 and copy of approval of the each case is extracted as below: Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 14 Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 15 Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 16 Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 17 14. From the contents of para 2 of the approval in each case similarly worded shows that the approval is accorded on the basis of detail discussion held with the AO from time to time and also on the facts mentioned in the appraisal report and relevant seized documents perused by the AO had not by the approving authority. The word used are ”relevant seized document perused by you and brought to the notice of undersigned”. Now the question before us is whether the wording of the approval as noted above would satisfy the requirement of Section 153D of the Act? 15. The Commissioner of Income Tax, Central Circle, Central Range-7, New Delhi while granting approval, needed 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. From the perusal of the approval letter as reproduced above, it is seen that similarly worded and same dated approval was given without perusal of the seized material. Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 18 16. In that regard, we find that the Hon’ble Delhi High Court in the case of PCIT vs. Shiv Kumar Nayyar reported in 163 taxmann.com 9 dated 15.05.2024 in ITA No. 285/2004 (CMP No. 28994/2024) was pleased hold that ”for granting approval u/s 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 ”each assessee” seperately”, it was further held that ”approval” as contemplated u/s 153D of the Act requires the approving authority i.e. Joint Commissioner to verify the issues raised by the AO in draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the AO 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. 17. We also noticed that the Hon’ble Allahabad High Court in case of PCIT v. Sapna Gupta [2023] 147 taxmann.com 288 (Allahabad) was pleased to hold that 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. We further noticed that Hon’ble Orissa High Court in the case of ACIT vs. Serajuddin & Company (2023) 150 taxmann.com 146 (Orissa), it was Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 19 held that 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 needs the requirement of the law. It was further held that 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”. (ii) the final approval must be in writing; (iii) in fact that approval has been obtained, should be mentioned in the body of the assessment order.” Regarding the above, the observations of the Hon’ble Orissa High Court in para 22 of the judgment can be quoted with profit and extracted below: ”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 CIT. 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 'see' 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, (7) the AO 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 Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 20 giving him sufficient time to apply his mind: (i) 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.” The SLP filed against the aforesaid judgment in the case of ACIT vs. Sirajjudin & Co. (supra) was dismissed by the Hon’ble Supreme Court as reported in (2024) 163 taxmann.com 118 (SC). 18. In the case of PCIT vs. Anuj Bansal, ITA No. 368/2023 dated 13.07.2023, it was reiterated that the exercise of powers u/s 153D of the Act cannot be done mechanically. The grant of approval u/s 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. Further, we noticed that the Ld. Co-ordinate Bench in the case of DCIT vs. Ramesh Sharma, ITA No. 6881/Del/2014, order dated 23.01.2026 regarding mechanical granting of the approval u/s 153D of the Act which relevant part is reproduced as under: “8. Significantly, the Hon’ble Orissa High Court in the case of ACIT vs Serajuddin & Co. 454 ITR 312 (Orissa) had an occasion to examine substantial question of law on the propriety of approval granted under s. 153D of the Act. The Orissa High Court made wide ranging observations towards the manner and legality of approval under s. 153D of the Act. The Hon’ble High Court inter-alia observed that the approval under s. 153D of the Act being mandatory, while elaborate reasons need not be given, there has to be some indication that approving authority has examined draft orders and finds that it meets the requirement of law. The approving authority is expected to indicate his thought process while granting Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 21 approval, held that it is not correct on the part of the Revenue to contend that the approval itself is not justiciable. Where the Court finds that the approval is granted mechanically, it would vitiate the assessment order itself. The Hon’ble High Court inter-alia observed that there is no even a token mention that draft order has been perused by the Ld. Addl. CIT. The approval letter simply grants approval. In other words, even the bare minimum requirement of approving authority having to indicate what thought process involved leading to the aforementioned approval has not been provided. As explained, the mere repeating of words of the Statue or mere rubber stamping of the communication seeking sanction by using similar words like ‘approval’ will not, by itself, meet the requirement of law. The Hon’ble Court made reference to manual issued by the CBDT in the context of erstwhile section 158BG of the Act and observed that such manual serves as a guideline to the AOs. Since it was issued by CBDT, the powers of issuing such guidelines can be traced to section 119 of the Act. The Hon’ble High Court also held that non-compliance of requirement of section 153D of the Act is not a mere procedural irregularity and lapse committed by Revenue may vitiate the assessment order. The SLP filed against the aforesaid judgement in the case of ACIT vs Serajuddin & Co. Kolkata was dismissed as reported in (2024) 163 taxmann.com 118 (SC). 9. The ratio of judgement delivered in the case of ACIT vs Serajuddin & Co. Kolkata; PCIT vs Anuj Bansal; PCIT vs Shiv Kumar Nayyar; and PCIT vs Subhash Dabas (supra) has held in chorus that the approval granted under s. 153D of the Act, if granted mechanically, will vitiate the assessment order itself. Hence, applying the ratio of judgements delivered as noted above, the assessment 16 order based on ritualistic approval stands vitiated and thus quashed by allowing additional Ground of appeal of the Assessee.” 19. On perusal of the aproval u/s 153D of the Act and the assessment order, we have noticed that there is no mention of taking of the approval u/s 153D of the Act in the assessment order which has violated the para 9 of chapter 3 of valume II (Technical) manual of office procedure issued by CBDT in February 2003, in exercise of its powers u/s 109 of the Act, Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 22 which were discussed and approved by Hon’ble Orissa High Court in Sirajuddin & Co. Case (supra) extracted below as under: \"9. Approval for assessment-An assessment order under Chapter XIV-B can be passed only with the previous approval of the range JCIT/ADDL.CIT (For the period from 30-6-1995 to 31-12-1996 the approving authority was the CIT.). The Assessing Officer should submit the draft assessment order 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 t the proposed block assessment, at least one month before the time barring date. Finally once suc. 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.\" 20. Further, the approval granted by the concerned authority in these cases as noted by us was not on the basis of perusal of the material by the approving authority as the approving authority has not perused the seized material personally and merely relied upon the perusal of the seized documents by the AO/ applicant and there is no personal satisfaction of the officer granting approval which makes the said approval u/s 153D of the Act as mechanical having been granted without independent satisfaction and non-application of mind. Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 23 21. Thus, the assessment order based on mechanical approval stand vitiated and is hereby quashed by allowing the ground no. 4 and 5 of appeal taken by the assessee. 22. Since we have quashed the assessment order for assessment year 2014- 15 by allowing the ground no. 4 & 5 taken by the assessee, the regular grounds of appeal taken by the assessee are rendered academic and thus not adjudicated. ITA No. 5080/Del/2025, A.Y. 2016-17 & ITA No. 5081/Del/2025, A.Y. 2917-18 23. Since the grounds taken by the assessee in these appeals are similar and identical to the Ground No. 4 & 5 in the ITA No. 5079/Del/2025, A.Y. 2014-15, hence, the finding returned by us in ITA No. 5079/Del/2025, A.Y. 2014-15 shall, mutatis mutandis, apply to the years i.e A.Y. 2016-17 & 2017-18 also and the Ground No. 4 & 5 raised in these appeals regarding approval u/s 153D of the Act, being mechanical, are allowed. Thus, the assessment order based on mechanical approval stand vitiated and is hereby quashed by allowing the ground no. 4 and 5 of appeal taken by the assessee. The other grounds in view of quashing of the assessment order are rendered Printed from counselvise.com ITA No.5079 to 5081/Del/2025 Pack Plast (India) Pvt. Ltd. 24 academic, hence not adjudicated. The appeals of the assessee are allowed in above terms. 24. In the result, the appeals of the assessee are allowed. Order pronounced in open Court on 04 February, 2026. Sd/- Sd/- (S. RIFAUR RAHMAN) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 04/02/2026 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 "