In Assistant Commissioner of Income Tax, Central Circle-25 v. Avtar Singh Kochar (ITAT Delhi, order dated 09 January 2026), the Delhi Bench of the Income Tax Appellate Tribunal adjudicated cross-appeals arising from an assessment framed under Section 143(3) pursuant to a search and seizure operation under Section 132 for Assessment Year 2019-20.

The assessee, an individual engaged in the business of running a petrol pump as proprietor of M/s Singh Petro, was subjected to search and survey proceedings, during which electronic and digital material was seized. The assessment was completed after obtaining approval under Section 153D, which was granted by the Additional Commissioner in a consolidated manner for seven assessment years.

Before the Tribunal, the assessee raised an additional legal ground contending that the mandatory approval under Section 153D was granted mechanically and without independent application of mind, thereby rendering the assessment void ab initio. The Tribunal admitted the additional ground, being purely legal and arising from admitted facts.

On examination of the approval order and the assessment records, the Tribunal observed that the approval merely recorded reliance on the Assessing Officer’s certification regarding electronic and digital evidence, without demonstrating any independent verification of the collection, integrity, admissibility, or chain of custody of such digital evidence, as mandated under the CBDT Digital Evidence Investigation Manual. The Tribunal noted that the assessment was founded substantially on multiple electronic records extracted from various digital devices, making meaningful scrutiny by the approving authority indispensable.

Placing reliance on binding judicial precedents, including ACIT v. Serajuddin & Co. (Orissa High Court), affirmed by the Supreme Court, PCIT v. Shiv Kumar Nayyar (Delhi High Court), and PCIT v. Anuj Bansal, the Tribunal reiterated that approval under Section 153D is a mandatory jurisdictional requirement. While elaborate reasons are not required, the approval must indicate that the approving authority has applied its independent mind to the draft assessment order for each assessment year. Mechanical or ritualistic approval defeats the legislative intent and vitiates the assessment proceedings.

In the absence of a valid approval under Section 153D, the Tribunal held that the assessment order was unsustainable in law. Consequently, the assessee’s appeal was allowed, the assessment order was quashed, and the Revenue’s appeal was dismissed.

 Source Link- https://itat.gov.in/public/files/upload/1767954102-h7bATH-1-TO.pdf

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