On 2.5.2013, a search was conducted at the premises of different members/associates of Mantri-Soni Group of Jalna /Bhilwara and the assessee was one of the entities covered under search. The AO issued notice u/s. 153A of the Act to the assessee on 13.02.2014 and in response thereto the assessee filed its letter on 20.03.2014 requesting to treat return filed earlier on 28.09.2019 declaring income of Rs. 38,94,890/-be treated as return filed u/s. 153A. The assessment was completed on 30.03.2016 by making addition in respect of share capital/premium, unsecured loans as accommodation entries. The CIT (A) confirmed the order passed by the AO. On further appeal, the assessee challenged the validity of the assessments arguing that approval granted by the Joint Commissioner u/s. 153D of the Act was technical, procedural and without application of mind.  The approval was granted without mentioning any reason or justification for making additions. It was pointed out that the AO had sent orders for various entities for approval on 18.03.2019, on 19.03.2019, 20.03.2019 were Saturday, Sunday and the approval was granted on 21.03.2019 within which it was not possible to look into all facts and details of search proceedings. The DR argued that process of assessment was under continuous supervision and guidance of Joint Commissioner of Income-tax, he had applied his mind to seized material, appraisal report during assessment proceedings. Therefore, the allegation of the assessee that the approval was granted in four days without application of mind is baseless while approving draft order under section 153D and the perception and observation of authorised representative become infructuous.

After considering rival submissions and case laws referred, the Tribunal held that section 153D is a mandatory requirement and such approval is not meant to be given mechanically. Such approval granted mechanically without application of mind by the Additional Commissioner of Income-tax resulting in vitiating the assessment orders. Taking into account the sequence of events, the Tribunal held that the approving authority granted approval in one day mechanically without examining the relevant material. The Tribunal noted that admittedly, the Assessing Officer sought approval under section 153D of the Act in 49 assessment orders vide letter dated 18.03.2016 which was placed on record by the learned Departmental representative on 9.10.2023. The approving authority had to examine number of evidence, documents, statements of various persons, etc., recorded which were necessarily to be taken into consideration while granting approval under section 153D of the Act by the Joint Commissioner of Income-tax. On an examination of the approval dated 21.03.2016 which was on record placed by the learned DR, the Tribunal did not find such indication of examination of evidence, documents, statements of various persons, etc., at least, no reference whatsoever made by the Joint Commissioner of Income-tax, i. e., approving authority. Hence, Tribunal held that the approval granted mechanically vitiates the assessments and accordingly quashed the assessment orders. (AY.2009-10 to 2014-15)