Smt. Peu Veer vs. DCIT Central Circle –2 Gurgaon, ITA Nos.3367 to 3370/Del/2024 & 3380 to 3381/Del/2024
In a significant group of rulings, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has struck down assessments made under Section 153A for Assessment Years (AYs) 2013–14 to 2015–16 and 2019–20 due to two primary legal lapses:
Additions made in concluded assessments without incriminating material, and Mechanical and non-judicious approval under Section 153D.
Key Legal Takeaways
1. No Additions in Unabated Assessments Without Incriminating Material
The Tribunal reaffirmed that for unabated assessments—i.e., those not pending at the time of search—additions under Section 153A can only be made if backed by incriminating documents seized during the search. In these appeals, no such material was cited. Instead, the Assessing Officer relied on reappraisal of bank entries and gift deeds, which the ITAT held to be outside the permissible scope of Section 153A following the Supreme Court’s ruling in:
Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399 (SC) PCIT v. King Buildcon (P) Ltd. [2024] 154 taxmann.com 189 (SC)
2. 153D Approval Was Mechanical and Non-Independent
The Tribunal came down heavily on the combined, boilerplate approval memo issued under Section 153D by the Additional CIT. The memo merely repeated assurances from the AO about due process and did not reflect any independent application of mind by the approving authority. The approval was termed “technical,” “symbolic,” and “ritualistic,” defeating the statutory intent of Section 153D as a safeguard against arbitrary assessments.
The Tribunal cited a long line of judgments, including:
ACIT v. Serajuddin & Co. [2023] 150 taxmann.com 146 (Orissa), affirmed by SC PCIT v. Anuj Bansal [466 ITR 251 (Del.)] PCIT v. Shiv Kumar Nayyar [467 ITR 186 (Del.)] Veena Singh v. ACIT [ITA No.294/Del/2022] Daze Construction Pvt. Ltd. v. ACIT [ITA Nos. 594–598/Del/2023]
3. CIT(A) Findings Also Lacked Legal Backing
The CIT(A)’s dismissive treatment of the Section 153D challenge was criticized as being superficial and devoid of judicial reasoning, ignoring binding precedents.
Final Verdict
All the appeals were allowed. The assessments under Section 153A for all six AYs were quashed due to:
Absence of incriminating material in concluded assessments Invalid approval under Section 153D
Practical Implication
Taxpayers facing assessments under Section 153A must examine:
Whether their assessment year was abated or unabated, and Whether approval under Section 153D was specific, detailed, and based on actual application of mind.
This ruling further strengthens the legal doctrine that procedural compliance is not a mere formality—it is fundamental to the validity of assessments.
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