Section 153D — Prior Approval Necessary for Assessment in Cases of Search or Requisition
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (for the section 153A/153C window). No order of assessment or reassessment under section 153A or 153C shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner (subject to the carve-out where the order is required to be passed with the approval of the Principal Commissioner/Commissioner under section 144BA(12)).
FA 2026: No amendment by the Finance Act, 2026.
A. SECTION COMMENTARY
Section 153D interposes a mandatory, high-level approval as a safeguard in the sensitive area of search assessments: the AO (if below the rank of Joint Commissioner) cannot pass the section 153A/153C order without the prior approval of the Joint Commissioner. The object is to ensure that the often steep additions in search cases are passed only after a senior officer has applied his mind to the draft order and the assessment record.
The decisive principle, developed by the High Courts, is that the approval must be a real, considered approval reflecting application of mind to each assessee and each assessment year — not a mechanical, omnibus or rubber-stamp endorsement granted without examining the draft orders and the material. A mechanical approval (for example, a single-line approval covering numerous cases granted on the same day without time or material to consider them) is no approval, and the assessment passed on its strength is vitiated. The requirement is mandatory and jurisdictional, not a curable formality.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:
Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub-section (12) of section 144BA.
C. AUTHORITIES
The authorities require genuine application of mind; mechanical approval invalidates the search assessment.
1. Approval must reflect application of mind
PCIT v. Sapna Gupta (2022) — Allahabad High Court
Court: Allahabad High Court.
Held: The approval under section 153D is not an empty formality; the approving authority (Joint Commissioner) must apply its mind to the draft assessment order and the assessment record before granting approval. A mechanical or perfunctory approval, granted without such application of mind, does not satisfy section 153D and renders the consequent assessment unsustainable.
Significance: A leading High Court authority that a mechanical section 153D approval vitiates the search assessment; the approval is a meaningful, mandatory safeguard.
PCIT v. Serajuddin & Co. (Orissa High Court) — SLP dismissed by the Supreme Court
Court: Orissa High Court; the Revenue's Special Leave Petition was dismissed by the Supreme Court.
Held: Section 153D requires the approving authority to examine the material and apply its mind before granting approval; where the approval was granted mechanically (without the record/draft orders being meaningfully considered), the assessment was held invalid. The dismissal of the SLP lent the principle the weight of the Supreme Court's imprimatur.
Significance: Frequently relied upon to strike down search assessments founded on mechanical/omnibus section 153D approvals.
Mechanical / omnibus approval — settled position
Position: A consistent body of High Court authority (Allahabad, Orissa, Delhi and others) holds that a section 153D approval granted mechanically — for instance, a common approval for a large number of cases/years on a single day, or an approval that on its face shows no consideration of the draft orders or seized material — is no approval in law, and the assessment is a nullity. The approval must be assessee-wise and year-wise in substance, reflecting genuine application of mind.
Candour note: While the principle is consistent, its application is fact-specific and a few decisions have upheld approvals where application of mind was demonstrable; the controlling test in every case is whether the approving authority genuinely applied its mind.
2. Mechanical / omnibus approval — further authority
Pr. CIT v. Shiv Kumar Nayyar (2024) (Delhi High Court)
Court: Delhi High Court (2024).
Held: Approval under section 153D must demonstrate application of mind by the approving authority to the draft assessment order and the seized material for each assessee and year; a common, mechanical or omnibus approval granted without such consideration does not satisfy section 153D and vitiates the assessment.
Significance: A recent Delhi High Court authority reinforcing the Sapna Gupta / Serajuddin line that mechanical section 153D approval is no approval. (Practitioners should confirm the precise reported citation/neutral citation before independent reliance.)
Relevance: On the mandatory, jurisdictional character of statutory conditions precedent in search assessments (there, the section 158BD satisfaction); the same insistence on substantive, non-mechanical compliance informs the section 153D approval. (See section 153C / Chapter XIV-B s.158BD.)
3. Section 153D approval — further authority
Pr. CIT v. Subodh Agarwal (2023) 450 ITR 526 (Allahabad)
Court: Allahabad High Court.
Held: Prior approval under section 153D is not a mere formality; the Joint Commissioner must apply his mind to the draft assessment order and the material before granting approval. Where the approval was granted mechanically (without such consideration, or as a common approval for many cases without the records being examined), the assessment was unsustainable.
Significance: A recent, squarely-reported High Court authority reinforcing the Sapna Gupta / Serajuddin line that a mechanical section 153D approval vitiates the search assessment.
Common / omnibus approval for many cases — settled position
Position: A single, common section 153D approval covering a large number of assessees/years, granted on one date without the draft orders and seized material being meaningfully considered, is treated as a mechanical approval and is no approval in law; the approval must, in substance, be assessee-wise and year-wise and reflect genuine application of mind.
Candour note: Supported by a consistent body of Tribunal and High Court authority; a few decisions uphold approvals where application of mind is demonstrable. The controlling test in every case is whether the approving authority genuinely applied its mind.
4. Tribunal authority — approval must be year-wise and mind-applied
Held: The approving authority (Joint Commissioner) must grant approval under section 153D for each assessment year after applying an independent mind to the material on record; a single approval given for all the years together, in a mechanical and ritualistic manner as an empty formality, is invalid and bad in law and vitiates the assessment for want of valid approval.
Significance: A leading and much-followed Tribunal decision on the quality of section 153D approval — approval must be assessee-wise and year-wise, reflecting application of mind. (Confirm the exact ITA No./date.)
Mechanical / omnibus approval — consistent Tribunal line
Position: A consistent body of ITAT authority (Delhi, Lucknow, Amritsar and other benches) quashes search assessments where the section 153D approval was a single, common approval for numerous cases/years granted without the draft orders and seized material being examined; the approval must, in substance, be year-wise and reflect genuine application of mind.
Candour note: Stated as the settled Tribunal trend (consistent with the High Court authority in Sapna Gupta, Serajuddin & Co. and Subodh Agarwal); individual orders are fact-specific and their exact citations should be confirmed before reliance.
5. Mass / single approval of many assessments — recent High Court authority
PCIT v. MDLR Resorts (P) Ltd. / PCIT v. Believe Constructions (P) Ltd. (Delhi High Court)
Court: Delhi High Court (a line of recent decisions, including MDLR Resorts, MDLR Hotels, King Buildcon and Believe Constructions).
Held: A single, common approval under section 153D covering a large number of search assessments (in the reported facts, of the order of 246 assessments) granted in one go, without the draft orders and the seized material being examined assessee-wise and year-wise, is a mechanical approval and is no approval in law; the resulting assessments are unsustainable. Revenue appeals against the Tribunal's quashing were dismissed.
Significance: Recent, squarely-reported High Court authority that mass/omnibus section 153D approval vitiates the search assessments; consolidates the Sapna Gupta / Serajuddin / Subodh Agarwal line and the Sanjay Duggal Tribunal view. (Confirm the precise neutral/reported citations for the specific order relied on.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 153D — Prior Approval Necessary for Assessment in Cases of Search or Requisition
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (for the section 153A/153C window). No order of assessment or reassessment under section 153A or 153C shall be passed by an Assessing Officer below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner (subject to the carve-out where the order is required to be passed with the approval of the Principal Commissioner/Commissioner under section 144BA(12)).
FA 2026: No amendment by the Finance Act, 2026.
A. SECTION COMMENTARY
Section 153D interposes a mandatory, high-level approval as a safeguard in the sensitive area of search assessments: the AO (if below the rank of Joint Commissioner) cannot pass the section 153A/153C order without the prior approval of the Joint Commissioner. The object is to ensure that the often steep additions in search cases are passed only after a senior officer has applied his mind to the draft order and the assessment record.
The decisive principle, developed by the High Courts, is that the approval must be a real, considered approval reflecting application of mind to each assessee and each assessment year — not a mechanical, omnibus or rubber-stamp endorsement granted without examining the draft orders and the material. A mechanical approval (for example, a single-line approval covering numerous cases granted on the same day without time or material to consider them) is no approval, and the assessment passed on its strength is vitiated. The requirement is mandatory and jurisdictional, not a curable formality.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:
Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub-section (12) of section 144BA.
C. AUTHORITIES
The authorities require genuine application of mind; mechanical approval invalidates the search assessment.
1. Approval must reflect application of mind
PCIT v. Sapna Gupta (2022) — Allahabad High Court
Court: Allahabad High Court.
Held: The approval under section 153D is not an empty formality; the approving authority (Joint Commissioner) must apply its mind to the draft assessment order and the assessment record before granting approval. A mechanical or perfunctory approval, granted without such application of mind, does not satisfy section 153D and renders the consequent assessment unsustainable.
Significance: A leading High Court authority that a mechanical section 153D approval vitiates the search assessment; the approval is a meaningful, mandatory safeguard.
PCIT v. Serajuddin & Co. (Orissa High Court) — SLP dismissed by the Supreme Court
Court: Orissa High Court; the Revenue's Special Leave Petition was dismissed by the Supreme Court.
Held: Section 153D requires the approving authority to examine the material and apply its mind before granting approval; where the approval was granted mechanically (without the record/draft orders being meaningfully considered), the assessment was held invalid. The dismissal of the SLP lent the principle the weight of the Supreme Court's imprimatur.
Significance: Frequently relied upon to strike down search assessments founded on mechanical/omnibus section 153D approvals.
Mechanical / omnibus approval — settled position
Position: A consistent body of High Court authority (Allahabad, Orissa, Delhi and others) holds that a section 153D approval granted mechanically — for instance, a common approval for a large number of cases/years on a single day, or an approval that on its face shows no consideration of the draft orders or seized material — is no approval in law, and the assessment is a nullity. The approval must be assessee-wise and year-wise in substance, reflecting genuine application of mind.
Candour note: While the principle is consistent, its application is fact-specific and a few decisions have upheld approvals where application of mind was demonstrable; the controlling test in every case is whether the approving authority genuinely applied its mind.
2. Mechanical / omnibus approval — further authority
Pr. CIT v. Shiv Kumar Nayyar (2024) (Delhi High Court)
Court: Delhi High Court (2024).
Held: Approval under section 153D must demonstrate application of mind by the approving authority to the draft assessment order and the seized material for each assessee and year; a common, mechanical or omnibus approval granted without such consideration does not satisfy section 153D and vitiates the assessment.
Significance: A recent Delhi High Court authority reinforcing the Sapna Gupta / Serajuddin line that mechanical section 153D approval is no approval. (Practitioners should confirm the precise reported citation/neutral citation before independent reliance.)
Manish Maheshwari v. ACIT (2007) 289 ITR 341 (SC) — cross-reference
Relevance: On the mandatory, jurisdictional character of statutory conditions precedent in search assessments (there, the section 158BD satisfaction); the same insistence on substantive, non-mechanical compliance informs the section 153D approval. (See section 153C / Chapter XIV-B s.158BD.)
3. Section 153D approval — further authority
Pr. CIT v. Subodh Agarwal (2023) 450 ITR 526 (Allahabad)
Court: Allahabad High Court.
Held: Prior approval under section 153D is not a mere formality; the Joint Commissioner must apply his mind to the draft assessment order and the material before granting approval. Where the approval was granted mechanically (without such consideration, or as a common approval for many cases without the records being examined), the assessment was unsustainable.
Significance: A recent, squarely-reported High Court authority reinforcing the Sapna Gupta / Serajuddin line that a mechanical section 153D approval vitiates the search assessment.
Common / omnibus approval for many cases — settled position
Position: A single, common section 153D approval covering a large number of assessees/years, granted on one date without the draft orders and seized material being meaningfully considered, is treated as a mechanical approval and is no approval in law; the approval must, in substance, be assessee-wise and year-wise and reflect genuine application of mind.
Candour note: Supported by a consistent body of Tribunal and High Court authority; a few decisions uphold approvals where application of mind is demonstrable. The controlling test in every case is whether the approving authority genuinely applied its mind.
4. Tribunal authority — approval must be year-wise and mind-applied
Sanjay Duggal v. ACIT (ITAT, Delhi) (2021)
Tribunal / Bench: Income-tax Appellate Tribunal, Delhi.
Held: The approving authority (Joint Commissioner) must grant approval under section 153D for each assessment year after applying an independent mind to the material on record; a single approval given for all the years together, in a mechanical and ritualistic manner as an empty formality, is invalid and bad in law and vitiates the assessment for want of valid approval.
Significance: A leading and much-followed Tribunal decision on the quality of section 153D approval — approval must be assessee-wise and year-wise, reflecting application of mind. (Confirm the exact ITA No./date.)
Mechanical / omnibus approval — consistent Tribunal line
Position: A consistent body of ITAT authority (Delhi, Lucknow, Amritsar and other benches) quashes search assessments where the section 153D approval was a single, common approval for numerous cases/years granted without the draft orders and seized material being examined; the approval must, in substance, be year-wise and reflect genuine application of mind.
Candour note: Stated as the settled Tribunal trend (consistent with the High Court authority in Sapna Gupta, Serajuddin & Co. and Subodh Agarwal); individual orders are fact-specific and their exact citations should be confirmed before reliance.
5. Mass / single approval of many assessments — recent High Court authority
PCIT v. MDLR Resorts (P) Ltd. / PCIT v. Believe Constructions (P) Ltd. (Delhi High Court)
Court: Delhi High Court (a line of recent decisions, including MDLR Resorts, MDLR Hotels, King Buildcon and Believe Constructions).
Held: A single, common approval under section 153D covering a large number of search assessments (in the reported facts, of the order of 246 assessments) granted in one go, without the draft orders and the seized material being examined assessee-wise and year-wise, is a mechanical approval and is no approval in law; the resulting assessments are unsustainable. Revenue appeals against the Tribunal's quashing were dismissed.
Significance: Recent, squarely-reported High Court authority that mass/omnibus section 153D approval vitiates the search assessments; consolidates the Sapna Gupta / Serajuddin / Subodh Agarwal line and the Sanjay Duggal Tribunal view. (Confirm the precise neutral/reported citations for the specific order relied on.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.