VINOD KUMAR BAJAJ,DELHI V. DCIT, CENTRAL CIRCLE-32, NEW DELHI

ITA 2594/DEL/2022

AI Insights

The case involves cross-appeals by Shri Vinod Kumar Bajaj (the assessee) and the DCIT, Central Circle-32, Delhi (the Revenue), against the order of the Commissioner of Income-tax (Appeals), New Delhi. The appeals arose from an assessment order passed under sections 153A read with 143(3) of the Income Tax Act, 1961, for the assessment year 2015-16. The primary contention in the appeals was regarding the validity of the approval process under section 153D of the Act, which the assessee argued was not in accordance with the law and lacked proper application of mind.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314353 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Other Referred Cases: Inder Chand Bajaj vs DCIT, ACIT vs Serajuddin & Co.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR YADAV
• Assessee Lawyers: VED JAIN
• Keywords: Question of law; Assessment record; Procedural lapse
• Section: 143(3); 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER & SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.2594/Del/2022 [Assessment Year : 2015-16] Shri Vinod Kumar Bajaj, Plot No.1, Shivaji Enclave Road, Rajouri Garden, West Delhi-110027. PAN-ACOPB4322L vs DCIT, Central Circle-32, Delhi. APPELLANT RESPONDENT ITA No.2883/Del/2022 [Assessment Year : 2015-16] DCIT, Central Circle-32, Delhi. vs Shri Vinod Kumar Bajaj, Plot No.1, Shivaji Enclave Road, Rajouri Garden, West Delhi-110027. PAN-ACOPB4322L APPELLANT RESPONDENT Appellant by Shri Ved Jain, Adv., Shri Aman Garg, CA & Ms. Bulbul Singhal, CA Respondent by Shri Sunil Kumar Yadav, CIT DR Date of Hearing 22.04.2025 Date of Pronouncement 07.05.2025 ORDER PER ANUBHAV SHARMA, JM : The captioned cross-appeals are preferred by the assessee and Revenue against the order dated 22.09.2022 of the Commissioner of Income-tax (Appeals), New Delhi (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.10394/2019-20 arising out of the appeal before it against the order dated 17.12.2019 passed u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT, Central Circle-32, New Delhi (hereinafter referred to as the Ld. AO). ITA No.2594 & 2883/Del/2022 Page | 2 2. On hearing both sides in regard to these appeals before this Bench, it comes up that in regard to Ground No.6 as raised by the assessee in its appeal, the Ld.AR for the assessee has stressed for dismissal of the appeal of the Revenue and sustain the appeal of the assessee. As for convenience, Ground No.6 of the appeal of the assessee in ITA No.2594/Del/2022 (Assessment Year 2015-16) is reproduced as under:- 6. “On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law, in rejecting the contention of assessee that the proceedings initiated under section 153A against the appellant and the assessment framed under section 153A r.w.s 143(3) are in violation of mandatory provisions of Section 153D of the Act and as such the same is bad in eyes of law. The purported approval u/s 153D of the Act is illegal, bad in law and also without any application of mind.” 3. The Ld.AR for the assessee submitted that in regard to this ground, the Co-ordinate Bench of the Tribunal in ITA No.2873/Del/2022 for AY 2018-19 in the case of Inder Chand Bajaj vs DCIT decided on 17.01.2025 has taken consideration of approval under section 153B of the Act and held that the same is not in accordance with law and does not indicate the application of mind. 4. We have taken in consideration the approval under section 153D of the Act granted in the case of Inder Chand Bajaj (supra) order dated 17.12.2019/18.12.2019 which is similar to the approval granted on 17.12.2019 in the case of the present assessee also. The approval nowhere indicates as to what was the issue involved. What were the incriminating evidences considered and consolidated approval has been given by one letter while the law is not settled that as for the purpose of section 153D of the Act ITA No.2594 & 2883/Del/2022 Page | 3 there should be a separate approval for each year. As per completeness, we reproduced the findings of the Co-ordinate Bench in the case of Inder Chand Bajaj (supra) as under:- 9. “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 Hon’ble High Court made wide ranging observations towards the manner and legality of approval under s. 153D of the Act by observing 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 approval, held that it is not correct on the part of the Revenue to contend that the approval itself is not justifiable. 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 judgment ITA No.2594 & 2883/Del/2022 Page | 4 in the case of ACIT vs Serajuddin & Co. Kolkata was dismissed as reported in (2024) 163 taxmann.com 118 (SC). 10. 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. 11. As noted in the instant case, In the first para of the approval memo, the Addl. CIT referred the letter of the A.O. dated 17/12/2019, and in the second para, it was stated that the on the basis of discussion held from time to time the approval u/s 153D of the Act is granted in respect of seven cases. The approval dated accorded u/s 153D of the Act is bearing the printed date of 17/12/2019 and hand written date of ‘18/12/2019’ and the same has been signed on 18/12/2019. There is not even mentioning of any draft assessment order or the assessment records or the seized materials in the said approval letter. Such mechanical approval cannot be sustainable in law in the light of judicial dicta available. The approval memo is totally silent on the issues involved and has granted omnibus approval without any thoughtful process being discernible. A single approval u/s 153D has been accorded comprising out of seven Assessment Years. Applying the ratio of judgements delivered as noted above, the assessment order based on ritualistic approval stands vitiated and thus quashed by allowing Ground No. 9 of appeal of the Assessee. 12. Since, we have quashed the Assessment Order on the ground of erroneous approval accorded u/s 153D of the Act by allowing the Ground No. 9, we do not consider it necessary to address on other legal and factual contentions raised in the other grounds of Appeal of the Assessee.” 5. In the light of the aforesaid discussion, we are inclined to sustain Ground No.6 as raised by the assessee and accordingly, we allow the appeal of the assessee and consequently the appeal of the Revenue becomes infructuous and dismissed. The impugned assessment is quashed. ITA No.2594 & 2883/Del/2022 Page | 5 6. In the final result, the appeal of the assessee in ITA No.2594/Del/2022 (2015-16) is allowed and the appeal of the Revenue in ITA No.2883/Del/2022 (2015-16) is dismissed. Order pronounced in the open Court on 07th May, 2025. Sd/- Sd/- (S RIFAUR RAHMAN) ACCOUNTANT MEMBER (ANUBHAV SHARMA) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "