Income Tax Appellate Tribunal - Delhi
Kawatra Tents And Caterers Private ... vs Deputy Commissioner Of Income Tax ... on 30 January, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, 'C': NEW DELHI
BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER
AND
SHRI M. BALAGANESH, ACCOUNTANT MEMBER
C.O. No. 133, 132, 137, 138/Del/2023
( In ITA Nos.2606, 2632,2728,2729/Del/2023)
[Assessment Year: 2013-14, 2017-18, 2018-19 & 2019-20]
DCIT Central Circle -16 Vs. Kawatra Tent and Caterers
Delhi Private Limited
5/108, Subhash Nagar, Delhi
PAN No.AAECK2061L
Appellant Respondent
Appellant Sh. Manoj Gupta, CA
Sh. Kundan D. Wahi, CA
Respondent Ms. Kranti, CIT DR
Date of Hearing 29.01.2026
Date of Pronouncement 30.01.2026
ORDER
PER C.N. PRASAD, JM,
All these four cross objections were restored back by the Hon'ble High Court vide orders dated 11.11.2025, 12.11.2025 and 11.12.2025 for the A.Y. 2013-14, 2017-18, 2018-19 and 2019-20 to the file of the ITAT, observing as under :-
High Court order dated 12.11.2025
3. The challenge in these appeals is to orders dated 20.08.2025 whereby years. These appeals are primarily relatable to cross-objections in ITA Nos. the Tribunal has decided the four ITAs, relatable to different assessment 2729/DEL/2023 and 2606/DEL/2023.
4. The learned counsel for the appellant states that the challenge is primarily relatable to the cross-objections in which the appellant has challenged the validity of the proceedings initiated under Section 153A of the Income Tax Act, 1961 ("Act") primarily on the ground that the approval under Section 153D of the Act was taken with regard to seven assessment years together and not separately as is contemplated in law laid down by this Court.
5. The learned counsel for the appellant would submit that though the Tribunal has in paragraph 7 recorded that no submission has been advanced in support of the cross-objections, he vehemently by drawing our attention to paragraph 19 and 20 of these appeals contend that as per the information given by Kundan Wahi, Chartered Accountant, who appeared for the appellant before the Tribunal, it is clear that Kundan Wahi had vehemently argued the cross-objections and also contested the appeal filed by the Revenue.
6. Mr. Agarwal states that the said aspect cannot be commented upon him. His only submission is that as the law relatable to the validity of the proceedings initiated under Section 153A of the Act, on the ground the approval sought under Section 153D of the Act is relatable to seven AY's together and not individually is well settled by the judgment of this Court in Pr.
Commissioner of Income Tax-15 v. Shiv Kumar Nayyar, ITA 285/2024.
7. If that be so, appropriate shall be that the cross- objections more specifically the above issue should be decided by the Tribunal. For this purpose, we remand the cross-objections being 138/DEL/2023 in ITA No. 2729/DEL/2023 and 133/DEL/2023 in ITA No. 2606/DEL/2023 relatable to assessment years 2019- 20 and 2013-14 respectively by reviving the same on the Board of the ITAT which shall decide the said issue after hearing the counsel for the parties, in accordance with law.
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8. ITAT. All the pleas of the parties are left open to be canvassed before the ITAT."
3. Subsequently by virtue of the order dated 11.12.2025 the Hon'ble High Court modified its earlier order dated 12.11.2025 restoring three cross objections for the A.Y. 2019-20, 2013-14 and 2017-18 to the file of the Tribunal by observing as under
:-
"4. Accordingly, we make it clear that paragraph 7 in the order dated 12.11.2025 henceforth shall read as under:-
"7. If that be so, appropriate shall be that the cross-objections more purpose, we remand the cross-objections being 138/DEL/2023 in ITA No. 2729/DEL/2023, 133/DEL/2023 in ITA No. 2606/DEL/2023 and 132/Del/2023 in ITA No. 2362/Del/2023 relatable to assessment years 2019-20, 2013-14 and 2017-18 respectively by reviving the same on the Board of the ITAT which shall decide the said issue after hearing the counsel for the parties, in accordance with law."
4. The Hon'ble High Court by order dated 11.11.2025 restored the cross objection No.137/Del/2023 in ITA No.2728/Del/2023 for the A.Y.2018-19 to the file of the Tribunal as under :-
ITA 594/20253. The challenge in this appeal is to an order dated 25.07.2024 whereby the Tribunal has decided the four ITAs, relatable to different assessment years. This appeal is primarily relatable to the assessment year 2018-19 in respect of cross-objections 137/Del/2023 in ITA No. 2728/Del/2023 . The learned counsel for the appellant states that the challenge is Page | 3
4. primarily relatable to the cross-objections in which the appellant has challenged the validity of the proceedings initiated under Section 153A of the Income Tax Act, 1961 ("Act") primarily on the ground that the approval years together and not separately as is contemplated in law laid down by this under Section 153D of the Act was taken with regard to seven assessment Court.
5. The learned counsel for the appellant would submit that though the Tribunal has in paragraph 7 recorded that no submission has been advanced in support of the cross-objections, he by drawing our attention to paragraph 22 of this appeal contend that as per the certificate issued by Manoj Gupta, Chartered Accountant, who appeared for the appellant before the Tribunal, it is clear that Manoj Gupta had vehemently argued the cross-objections and also contested the appeal filed by the Revenue.
6. Mr. Vipul Agrawal states that the said aspect cannot be commented upon by him. His only submission is that as the law relatable to the validity of the proceedings initiated under Section 153A of the Act, on the ground the approval sought under Section 153D of the Act is relatable to sever AY's together and not individually is well settled by the judgment of this Court in Pr.
Commissioner of Income Tax-15 v. Shiv Kumar Nayyar, ITA 285/2024.
7. If that be so, appropriate shall be that the cross- objections more specifically the above issue should be decided by the Tribunal, For this purpose, we remand the cross-objections being 137/Del/2023 in ITA No. 2728/Del/2023 relatable to assessment year 2018-19 by reviving the same on the Board of the ITAT which shall decide the said issue after hearing the counsel for the parties, in accordance with law.
8. All the plea of the parties are left open to be canvassed before the ITAT.
9. With the aforesaid observations the appeal is disposed of.
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5. Since these cross objections were restored back to the file of the Tribunal for the A.Y. 2013-14, 2017-18, 2018-19 and 2019-20 by the Hon'ble High Court the same were listed for hearing today 29.01.2026 to hear both the parties and to decide the grounds raised in cross objections. In all these four cross objections the assessee raised the following common grounds in respect of the issue relating approval u/s.153D of the Act.
"that in the facts and circumstances of the case and in law the Ld. CIT(A) failed to appreciate that approval accorded u/s.153D of Act was not in consonance with law laid to protect arbitraries".
6. Referring to the said ground the Ld. Counsel for the assessee submitted that there was a common approval granted by the Addl. CIT u/s.153D for the A.Y's 2013-14 to 2019-20 and this approval was granted in a mechanical manner without application of mind and it is not year wise approval but was consolidated one. The Ld. Counsel for the assessee submitted that the AO forwarded letter on 15.06.2021 for granting approval u/s.153D which was accorded on the very next day i.e. on 16.06.2021 without any application of mind.
7. The Ld. Counsel for the assessee placing reliance on the jurisdictional High Court in the case of Shiv Kumar Nayyar in ITA 285/2024 (TS - 343 - HC - 2024 -Delhi) submitted that on identical situation where a common approval was granted for various assessment years u/s.153D the Hon'ble High Court held that it is not valid approval and not in accordance with law as per section 153D of the Act since the requirement Page | 5 under the provisions of section 153D an approval shall be for each assessment year separately. Reliance was also placed on the decision of the Tribunal in the case of DCIT Vs. Kohli Tens in ITA No.2956, 2594 to 2597/Del/2023 and Cross Objection Nos. 127 to 130/Del/2023 dated 17.10.2025 in support of the above contentions.
8. Heard rival submissions, perused the orders of the authorities below. We find that in the case of the assessee the following common approval was granted u/s. 153D on 16.06.2021 by the Addl. CIT for completion of assessments u/s.153A /14(3) for the A.Y's 2013-14 to 2019-20 :-
9. The issue of whether the common approval granted u/s.153D is a valid approval or not, came up for consideration Page | 6 before the Hon'ble Delhi High Court in the case of Shiv Kumar Nayyar (supra). Following the above decision the Tribunal in the case of DCIT Vs. Kohli Tents Pvt. Ltd. held that such an approval is bad in law by observing as under :-
"11. Heard the contentions of both the parties and perused the material available on record. Before going further, we first consider the approval granted by ld. Adl. CIT, Central Range-4, New Delhi in the case of assessee which is reproduced as under :
12. The Additional CIT. Central Range while granting approval, needs 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 Page | 7 after considering all the material should accord the approval. It is further provided that approval has to be granted for each assessment year independently. From the perusal of the approval letter as reproduced above, it is seen that common approval was given for all the seven assessment years vide single order,
13. The Hon'ble Jurisdictional High Court in the case of Shiv Kumar Nayyar in ITA No.285/2024 [TS-343-HC- 2024-Delhil has held that the approval u/s 153D of the Act has to be granted for each Assessment year independently. The relevant observations of the judgement of Hon'ble High Court are as under:-
"11. A plain reading of the aforesaid provision evinces an uncontrived position of law that the approval under Section 153D of the Act has to be granted for "each assessment year" referred to in clause (b) of sub-section (1) of Section 153A of the Act. It is beneficial to refer to the decision of the High Court of Judicature at Allahabad in the case of PCIT v. Sapna Gupta 12022 SCC OnLine All 1294) which captures with precision the scope of the concerned provision and more significantly, the import of the phrase "each assessment year used in the language of Section 153D of the Act. The relevant paragraphs of the said decision are reproduced as under.
"13. It was held therein that if an approval has been granted by the Approving Authority in a mechanical manner without application of mind then the very purpose of obtaining approval under Section 153D of the Act and mandate of the enactment by the legislature will be defeated. For granting approval under Section 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" separately. The words 'each assessment year used in Section 153D and 153A have been considered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of Section 153A to 153D is Page | 8 fulfilled. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer 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.
19. 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 order under Section 153A."
[Emphasis supplied)
12. It is observed that the Court in the case of Sapna Gupta (supra) refused to interdict the order of the ITAT, which had held that the approval under Section 153D of the Act therein was granted without any independent application of mind. The Court took a view that the approving authority had wielded the power to accord approval mechanically, inasmuch as, it was humanly impossible for the said authority to have perused and appraised the records of 85 cases in a single day. It was explicitly held that the authority granting approval has to apply its mind for "each assessment year" for "each assessee" separately.
13. Reliance can also be placed upon the decision of the Orissa High Court in the case of Asst. CIT v. Serajuddin and Co. (2023 SCC OnLine Ori 992) to understand the exposition of law on the issue at hand. Paragraph no.22 of the said decision reads as under:-
"22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having Page | 9 been perused by the Additional Commissioner of Income-tax. 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 "seen" 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, (i) the Assessing Officer 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 giving him sufficient time to apply his mind; (ii) 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."
[Emphasis supplied]
14. During the course of argument, learned counsel for the assessee apprised this Court that the Special Leave Petition preferred by the Revenue against the decision in the case of Serajuddin (supra), came to be 14. During the course of arguments, learned counsel for the assessee dismissed by the Supreme Court vide order dated 28.11.2023 in SLP (C) Diary no. 44989/2023.
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15. A similar view was taken by this Court in the case of Anuj Bansal (supra), whereby, it was reiterated that the exercise of powers under Section 153D cannot be done mechanically. Thus, the salient aspect which emerges from the abovementioned decisions is that grant of approval under Section 153D of the Act cannot be merely a ritualistic the authority, rather it must appropriate application of mind. 16. In the present case, the ITAT, while specifically noting that the approval was granted on the same day when the draft assessment orders were sent, has observed as under.-
"10. We have gone through the approval granted by the ld. Addl. CIT on 30.12.2018 u/s 153D of the Act which is enclosed at page 36 of the paper book of the assessee. The said letter clearly states that a letter dated 30.12.2018 was filed by the ld. AO before the Id. Addi CIT seeking approval of draft assessment order u/s 153D of the Act The Id. Addl. CIT has accorded approval for the said draft assessment orders on the very same day ie., on 30.12.2018 for seven assessment years in the case of the assessee and for seven assessment years in the case of Smt. Neetu Nayyar. It is also pertinent in this regard to refer to pages 68 and 69 of the paper book which contains information obtained by Smt. Neetu Nayyar from Central Public Information Officer who is none other than the Id. Addl. Commissioner of Income-tax, Central Range-S, New Delhi, under Right to Information Act, wherein, it reveals that the ld. Addl. CIT had granted approval for 43 cases on 30.12.2018 itself. This fact is not in dispute before us. Of these 43 cases, as evident from page 36 of the paper book which contains the approval u/s 153D, 14 cases pertained to the assessee herein and Smt. Neetu Nayyar. The remaining cases may belong to some other assessees, which information is not available before us. In any event, whether it is humanly possible for an approving authority like ld. Addl. CIT to grant judicious approval u/s 153D of the Act for 43 cases on a single day is the subject matter of dispute before us. Further, section 153D provides that approval has to be granted for each of the assessment year whereas, in the instant case, the Id. Addl. CIT has granted a single approval for all assessment years put together."
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17. Notably, the order of approval dated 30.12.2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017-18 in the case of the assessee. The said order also fails to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order extracted above.
14. Similarly, the Hon'ble Orissa High Court in the case of ACIT us 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 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 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 not 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 Page | 12 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. was dismissed as reported in (2024) 163 taxmann.com 118 (SC).
15. The ratio of judgement delivered in the case of ACIT vs Serajuddin & Co., Orrisa and in PCIT vs Anuj Bansal in ITA No.368/2023 (Delhi High Court) has held in chorus that the approval granted under s. 153D of the Act, if granted mechanically, will vitiate the assessment order itself.
16. Recently the hon'ble Third member in the case of Dheeraj Chaudhary Vs. ACIT in ITA Nos. 6158 to 6160/Del/2018 after considering all the judgements relied upon by the Id. CIT DR and further after detailed analyzing the provisions of section 153D, power and independence of assessing authority and the CBDT manual referred by the revenue has held that the common approval granted for various year and for various assessee without making any reference to the material seen is mechanical approval and cannot sustained in the eyes of law. A reference is also made the CBDT manual issued in respect to the procedure to be followed in this regard. The relevant observations of the hon'ble Third Member are as under:
22. I noted that the common thread discussed by Hon'ble Orissa High Court in the case of Serajuddin& Co.
(supra), by Hon'ble Delhi High Court in the case of Anuj Bansal (supra) and by Hon'ble Allahabad High Court in the case of Sapna Gupta (supra) is that the requirement of previous approval of assessment by the Additional CIT/Joint CIT in terms of provisions of Section 153D of the Act being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the Section is not turned into an empty formality. Needless to say that before granting Page | 13 approval, the Additional CIT/Joint CIT, as the case may be, must have before him the material on the basis whereof an opinion in this behalf has been formed by the Assessing Officer and the approval must reflect the application of mind to the facts of the case. The CBDT itself recognized the importance of this provision and the above laid down principle and hence issued Manual of Office Procedure in February, 2023 in exercise of powers under Section 119 of the Act. Vide Para 9 of Chapter 3 of Volume-II (Technical), a clear procedure is devised ie., how an approval is to be granted for draft assessment for passing of assessment order in search cases. According to the Manual, the Assessing Officer should submit the draft assessment order for such approval well in time along with docketed in the order sheet, a copy of the draft assessment order, covering letter filed in the relevant miscellaneous records folder. Even, it is noted that due opportunity of being heard should be given to the assessee by the supervisory officer giving approval to the proposed block assessment, at least one month before the time barring date. It is further noted that once such approval is granted, it must be in writing and filed in the relevant folder indicating above after making due entry in the order sheet. This is the mandate provided in the office manual of the Department. In view of above, I am of the view that the 'approval', as mandated u/s 153D of the Act, signifies a product of human thoughts based on the given set of facts and interpretation of the applicable law. It provides equality in treatment and thus prevents bias, prejudice and arbitrariness. It also prevents and avoids inconsistent and divergent views. The power of approval to the specified authority Le., Superior authority has been envisaged with the objectives that no illegality or biasness, to either of the sides i.e., the assessee or the Revenue, remains. 23. In the present case before me, the above procedure is not at all followed as is evident from the proposal sent by the Assessing Officer as reproduced in Paragraph 10. It means that the approval granted is mechanical in manner and without application of mind by the approving authority i.e., by the Additional CIT.
17. 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 in respect of seven Assessment Years through single order on the request Page | 14 of the AO made on the very same day vide letter dt. 21.06.2021 which is available in paper book page 191 filed by the assessee. There is no other material to show involvement of the superior authority in the course of assessment proceedings. Thus applying the ratio of judgements delivered as noted above, the assessment order based on ritualistic approval stands vitiated and thus quashed by allowing cross objection No. 7 taken by the Assessee."
10. Facts being identical, respectfully following the above said decisions we quash the assessments framed us/.153A /143(3) of the Act for the A.Ys 2013-14, 2017-18, 2018-19 and 2019-20. The ground raised in cross objections with respect to the approval u/s.153D is allowed.
11. In the result, the cross objections for the A.Ys. 2013-14, 2017-18, 2018-19 and 2019-20 are allowed as indicated above.
Order pronounced in the open court on 30.01.2026.
Sd/- Sd/-
[M. BALAGANESH] [C.N. PRASAD]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 30.01.2026
NEHA , Sr.P.S.*
Copy forwarded to:
1. Appellant
2. Respondent
3. PCIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi
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