Sanjay Gupta vs DCIT, Central Circle-1

PER ANUBHAV SHARMA, JM:

These are appeals preferred by the Assessee against the orders of the Ld. Commissioner of Income-tax (Appeals) (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 153A/143(3) of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under:-

At the time of hearing, the ld. Counsel has pointed out that the only issue being contended at this stage is arising out of ground No. 7 in AY: 2014-15 which is common to other years also that the approval granted in terms of 153D of the Act is an outcome of non application of mind and is a mechanical approval. In this context, the ld. Counsel has placed before us the copy of approvals for AY: 2013-14, 2015-16 & 2017-18 granted by a consolidate letter dated 02.07.2021 and for AY: 2016-17, 2018-19 & 2019-20 given by letter dated 01.09.2021. As for convenience we reproduced both the approval letters as follows:

Ld. DR has submitted that this approval is an administrative function and otherwise the senior authorities are constantly providing guidance to AO and are well aware of notices issues, incriminating material relied and issues so grant of common approval is not illegality and approval cannot be called mechanical approval as there was sufficient time between the request made for granting approval and the approval actually granted for which ld. DR has relied the copies of the letters written and it was submitted that while in regard to AY: 2014-15 letter dated 23.08.2021 was written in fact AY: 2015-16 and 2017-18 letter dated 29.06.2021 was written and in regard to AY: 2016-17, 2018-19 & 2019-20 letter dated 31.08.2021 was written.

However, we go through this letters relied by ld. DR we find that these are not letters written seeking approval in regard to assessee alone but in assessee being part of M/s Piyush Group search assessments and case of assesse was also sent along.

Then, further we consider it appropriate to reproduce one of the letters dated 31.08.2021 as follows:

Now, this letter dated 31.08.2021 is considered and we find that draft assessment orders have been forwarded along with relevant assessment records but what ld. Approving authority records is that the approval is being granted subject to fact ‘as submitted’but are the facts which were submitted remains ambiguous as the same do not form part of the letter dated 31.08.2021.

At the same time, we are of the considered view that the content of approval granted indicates that consolidated approval for multiple years was granted and there was no independent application of mind to the material or seized document relied by the Assessing Officer while ld. AR has demonstrated that there were different issues forming different grounds for additions. Thus, the consolidated order merely accepting the fact that issues have been examined by the Assessing Officer did not serve the purpose.

The ld. counsel has relied a decision of a Coordinate Bench in Vinod Jindal Versus Dy. CIT Faridabad ITA 1979 to 1985/Del/2025 order dated 12.09.2025, wherein after relying decision of Hon’ble Jurisdictional High Court in Shiv Kumar Nayyar in ITA No. 285/2024, a similarly structured approval letter has been held to be not in accordance with law.

In light of aforesaid peculiar facts as discussed, we find that the approval granted is not in accordance with law. The corresponding ground in all the appeals deserves to be sustained. The appeals are allowed and the impugned assessment are quashed.