TISH CONSULTANTS PVT LTD,DELHI V. DCIT,CENTRAL CIRCLE-2, NOIDA

ITA 2311/DEL/2025

AI Insights

The case involves Tish Consultants Pvt. Ltd., which appealed against the orders of the Commissioner of Income Tax (Appeals)-3, Noida, concerning the assessments made under section 144 of the Income-tax Act, 1961 for the Assessment Years 2016-17 and 2018-19. The primary contention was the mechanical approval granted by the Learned Additional Commissioner of Income Tax under section 153D, which was argued to be a violation of the requirement for separate approvals for each assessee and each assessment year. The tribunal examined the procedural adherence to section 153D in the context of a search and seizure operation that affected the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652762 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: PCIT vs Siddharth Gupta, Hitesh Golcha vs ACIT, PCIT vs Sidharth Gupta, PCIT vs Subodh Agarwal, PCIT vs Sapna Gupta, PCIT vs Anuj Bansal
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: KAPIL GOEL
• Keywords: Search and seizure
• Section: 144; 153A

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA Nos.2310 & 2311/Del/2025 (Assessment Years: 2016-17 & 2018-19) Tish Consultants Pvt. Ltd, C/o. Kapil Goel Adv, F- 26/124, Sector-7, Rohini, Delhi Vs. DCIT, Central Circle-II, Noida (Appellant) (Respondent) PAN: AAACT2343Q Assessee by : Dr. Kapil Goel, Adv Revenue by: Shri Jitender Singh, CIT DR Date of Hearing 03/06/2025 Date of pronouncement 16/06/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeals in ITA No.2310 & 2311/Del/2025 for AYs 2016-17 and 2018- 19, arises out of the order of the Commissioner of Income Tax (Appeals)-3, Noida [hereinafter referred to as „ld. CIT(A)‟, in short] dated 19.11.2024 against the order of assessment passed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 29.12.2019 by the Assessing Officer, DCIT, Central Circle-II, Noida (hereinafter referred to as „ld. AO‟).Identical issues are involved in both these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. The facts of Assessment Year 2016- 17 are taken up for adjudication and decision rendered thereon shall apply mutatis mutandis for Assessment Year 2018-19 also. 2. Though the assessee has raised several grounds before us, the preliminary issue raised by the assessee is with regard to mechanical approval given by the ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 2 Learned Additional Commissioner of Income Tax (Ld. Addl CIT) under section 153D of the Act. This goes to the root of the matter and hence we proceed to adjudicate this issue first. 3. We have heard the rival submissions and perused the materials available on record. A search and seizure operation under section 132(1) of the Act was carried out in the case of Samtel Group on 18-01-2018. Various residential and business premises of the directors and group companies were covered under the search and survey operations. Warrant was issued in the name of M/s Tish Consultants Pvt. Ltd i.e assessee herein. In view of the search operation, the group case was centralized to Central Circle II, Noida. vide order passed by the Learned PCIT under section 127 of the Act on 15-04-2019. Pursuant to the search, notice under section 153A of the Act stood issued to the assessee on 23- 04-2019. In response to the notice, the assessee electronically filed its return of income on 08-12-2019 declaring total income of Rs. Nil. It is pertinent to note that assessee had also filed its original return of income for Assessment Year 2016-17 on 28-09-2016 declaring total income of Rs. Nil. The search assessment was completed under section 153A read with section 144 of the Act on 29-12-2019 for Assessment Year 2016-17 determining total income of the assessee at Rs. 51,54,04,230/-. This assessment order was framed by the Learned AO after getting approval under section 153D of the Act from the Learned Additional Commissioner of Income Tax Central Range, Meerut vide proceedings dated 28-12-2019. The assessee preferred an appeal before the Learned CIT(A), wherein the fact of approval under section 153D of the Act being granted in a mechanical manner by the Learned Additional CIT thereby making the entire assessment proceedings void ab initio, was indeed raised, vide Ground No. 1.1. The case of the assessee falls under the jurisdiction of Hon‟ble Allahabad High Court. Hence, the decision of Hon‟ble Allahabad High Court would become Jurisdictional High Court decision for the assessee and would be binding on all the subordinate authorities. Accordingly, the assessee placed reliance on the decision of Hon‟ble Jurisdictional Allahabad High Court in the case of PCIT vs Siddharth Gupta reported in 450 ITR 534 (All) in support of its contentions. The ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 3 assessee also pointed out that the Special Leave Petition (SLP) preferred by the revenue against this decision before the Hon‟ble Supreme Court has been dismissed by the Hon‟ble Supreme Court in Special Leave Petition (Civil) Diary No. 43280/2023 dated 9.8.2024. However, the Learned CITA chose to rely on the decision of Hon‟ble Chhattisgarh High Court in the case of Hitesh Golcha vs ACIT reported in TAXC No. 76 of 2024 dated 10.4.2024, wherein it was held that there cannot be any presumption as to non-application of mind by the Learned Addl CIT while granting approval under section 153D of the Act. No comments were made by the Learned CITA regarding the non-applicability of decision of Jurisdictional High Court decision of Allahabad. 4. The Learned DR before us filed detailed written submissions supporting the approval granted by the Learned Additional CIT under Section 153D of the Act to be a valid approval and accordingly all the decisions relied upon by the Learned AR cannot be made applicable to the facts of the instant case. But on perusal of the entire written submissions of the Learned DR, we find that what has been sought to be addressed by the Learned DR is only to drive home the point that the approval proceedings of Learned Additional CIT is merely an administrative act and not a quasi-judicial act and hence such administrative approvals cannot be subjected to challenge. But the moot point to be noted in the instant case is the Learned Additional CIT has given consolidated approval for 11 assessees‟ for Assessment Years 2012-13 to 2018-19 on a single day which is in violation of provisions of Section 153D of the Act itself as the said section mandates approval to be given for each assessee for each assessment year separately. Hence the entire written submissions of the Learned DR would not advance the case of the revenue in any manner. 5. The Learned DR vehemently argued that very existence of high presumption of law which is also codified u/s 114(e) of the then Indian Evidence Act, 1872 that all official acts are regularly performed and therefore, the Tribunal had to accept that the presumption of approval are validly granted. The Learned ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 4 DR further stated that merely because the approvals were granted by one letter does not mean that it was not granted for each assessment year. 6. For the sake of convenience, the approval granted under section 153D of the Act by the Learned Additional CIT, Meerut is reproduced below:- ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 5 7. On perusal of the above, we find that the Learned Additional CIT, Central Range, Meerut had granted approval in terms of Section 153D of the Act for all the cases for all assessment years vide consolidated approval in F.No.Addl CIT/CR/MRT/Approval/153D/2019-20/1516 dated 28.12.2019. Hence, it is very clear that a common approval was given by the Learned Additional CIT under section 153D of the Act vide Approval No. 1516 dated 28.12.2019 for various assessees‟ for various assessment years. This goes to prove that the approval under section 153D of the Act has not been given by the Learned Addl. CIT for „each assessment year‟ and for „each assessee‟ separately which is mandate of the provisions of Section 153D of the Act. This issue is no longer res integra in view of the decision of the Hon‟ble Jurisdictional Allahabad High Court in the case of PCIT vs Sidharth Gupta reported in 450 ITR 534 (All) wherein it was held as under:- “16. The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in the assessment order. It is admitted by Sri Gaurav Mahajan, learned counsel for the appellant-revenue that the approval order is an administrative exercise of power on the part of the Approving Authority but it is sought to be submitted that mere fact that the approval was in existence on the date of the passing of the assessment order, it could not have been vitiated. This submission is found to be a fallacy, in as much as, the prior approval of superior authority means that it should appraise the material before it so as to appreciate on factual and legal aspects to ascertain that the entire material has been examined by the Assessing Authority before preparing the draft assessment order. It is trite in law that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. The requirement of approval under section 153D is pre-requisite to pass an order of assessment or re-assessment. 17. Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of \"each assessment year\" referred to in clause (b) of sub-section (1) of section 153A which provides for assessment in case of search under section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of \"each assessment year\" falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 6 18. 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 orders under section 153A. 19. In the instant case, the draft assessment orders in 123 cases, i.e. for 123 assessment years placed before the Approving Authority on 30-12-2017 and 31- 12-2017 were approved on 31-12-2017, which not only included the cases of respondent-assessee but the cases of other groups as well. It is humanly impossible to go through the records of 123 cases in one day to apply independent mind to appraise the material before the Approving Authority. The conclusion drawn by the Tribunal that it was a mechanical exercise of power, therefore, cannot be said to be perverse or contrary to the material on record.” (emphasis supplied by us) 8. Similar views were expressed by the Hon‟ble Allahabad High Court in the case of PCIT Vs. Subodh Agarwal reported in 149 taxmann.com 373 (All. HC); PCIT Vs. Sapna Gupta reported in 147 taxmann.com 288 (All. HC) and by Hon‟ble Delhi High Court in the case of PCIT vs Anuj Bansal reported in 165 taxmann.com 2 (Del. HC), among others. 9. We find that if a consolidated approval given by the Learned Addl. CIT for various assessees‟ for various assessment years is to be considered as an approval given for “each assessment year”, then it would render the requirement of passing an order for “each assessment year” with prior approval under section 153D of the Act, nugatory. Therefore, the obligation on the approving authority is to verify the draft assessment order of each assessment year together with the related seized document to ascertain whether it complies with law as well as the procedure laid down. Hence it is established that the action of the Learned Additional CIT in granting common approval for all the assessment years for various assessees‟ in a mechanical manner without application of mind is writ large. 10. Since the issue is covered by the decision of Hon‟ble Jurisdictional Allahabad High Court, the decision of Hon‟ble Chhattisgarh High Court relied upon by the Learned DR need not be gone into in view of the principles of binding precedents. ITA Nos.2310 & 2311/Del/2025 Tish Consultants Pvt. Ltd Page | 7 11. In view of the aforesaid observations and respectfully following the judicial precedents relied upon herein above, we have no hesitation in holding that the approval under section 153D of the Act has not been granted for each of the assessment year which is in violation of provisions of Section 153D of the Act itself thereby making the approval being granted in a mechanical manner without due application of mind. Hence, the Ground No. B raised by the assessee is hereby allowed. Consequentially the assessment framed for Assessment Years 2016-17 and 2018-19 are hereby quashed. Since, the assessments are quashed based on Ground No. B, the other grounds raised by the assessee need not be gone into and they are left open. 12. In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 16/06/2025. -Sd/- -Sd/- (C. N. PRASAD) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16/06/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "