More Stories

Informist, Thursday, Nov. 27, 2025

 

NEW DELHI – Pulling up senior officers of the Income Tax Department for approving draft assessment orders without application of mind, the Bombay High Court observed that the entire approval process was reduced to a mere ritual, meaningless formality and a mockery of the procedure. Citing examples of officers who "rushed" to give approvals, the high court noted that, in some cases, draft proposals were received by an additional commissioner of Income Tax at 1702 IST, and approvals were granted for 30 assessments within minutes. 

"The entire approval process and the requirement for approval under Section 153D (of the Income Tax Act, 1961) were reduced to mere ritual, meaningless formality, or even a mockery in these matters," a bench of Justice Advait M. Sethna and Justice M.S. Sonak said. Most surprisingly, the draft orders that were supposed to accompany the approval proposals already included the date and number of the approval orders that had yet to be issued, the bench said. This shows that the approval was a foregone conclusion even before the proposal and draft orders were received by the additional commissioner of Income Tax, or that the authorities considered the mandatory approval a trivial formality subject to casual compliance, the bench added.

 

"... it is too much to accept that the additional commissioner, in a matter of minutes or, at most, a few hours, could have read, let alone applied his mind to, and issued the approvals," the court said. The bench rejected the Income Tax Department's argument that the officers "were discussing the matter on a routine basis". The so-called "discussions" between the official seeking approval and the additional commissioner of Income Tax cannot replace proper approvals, and that demonstrate no application of mind or even a basic reasoning process that might indicate some level of consideration, the court added. "If indeed such discussions were held and we are to assume they should be considered in explaining the haste with which the approvals were granted, then we wonder how so many glaring discrepancies crept into the approval orders," the bench said.

 

The approval orders need not resemble any reasoned decision or judgment, but such orders should reflect some minimal application of mind, the court said. Otherwise, this mandatory requirement of obtaining approvals will be reduced to a mere formality by rushing through the approvals, perhaps even without reading the papers or applying their minds to the issues raised, the court said.

 

The high court was hearing pleas by the Income Tax Department against the Income Tax Appellate Tribunal's 2024 order that had quashed the assessment proceedings against a batch of companies, including Citron Infraprojects Ltd., Helios Mercantile Ltd., Shri Vallabh Pittie South West Industries Ltd. and SVP Global Textiles Ltd. The appellate tribunal said that senior officers of the Income Tax Department had approved draft assessment orders against the companies without due application of mind. The high court rejected the Income Tax Department's appeals against the appellate tribunal order.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.