Court quashes assessment notice lacking valid basis, citing precedents.

The Court ruled in favor of the petitioner, quashing the notice dated 30.03.2021 and the order disposing of objections dated 11.11.2021. The Court found discrepancies in the reasons for reopening the assessment, emphasizing the lack of foundational facts and a valid basis for the notice. Due to the Assessing Officer's failure to demonstrate a proper basis for reopening the assessment, the Court held the notice unsustainable, citing previous judgments. Consequently, the Court allowed the Special Civil Application, quashing the impugned notice and order, and decided not to award costs.

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Issues:
- Whether the notice dated 30.03.2021 issued under Section 148 deserves to be quashed or set aside for any reason whatsoeverRs.

Analysis:
1. The petitioner, a limited company engaged in manufacturing, exports, and trading of Dyes Intermediates, filed its return of income for the assessment year 2013 - 2014, which was processed under Section 143(1) of the Income Tax Act, 1961. Subsequently, a notice under Section 143(2) was issued, and an assessment order was passed under Section 143(3) on 21.03.2016. However, on 30.03.2021, a notice for reopening the assessment was issued, alleging that income chargeable to tax had escaped assessment. The petitioner objected to this notice, highlighting that no loan was obtained from a specific company as alleged in the notice. The petitioner argued that even if the alleged loan amount was added, it would not change the tax implication due to the Minimum Alternate Tax provision. Additionally, the petitioner contended that no sanction was obtained as required under Section 151 of the Act before issuing the notice.

2. The respondent, representing the assessee, supported the impugned notice and the order overruling the petitioner's objections. However, upon perusal of the records and arguments presented by both parties, the Court found discrepancies in the reasons for reopening the assessment. The notice was based on the premise that the petitioner received a fictitious loan from a particular company, which the petitioner denied, stating that such a transaction did not occur. The Court emphasized that without foundational facts, the reasons for reopening the assessment were baseless, indicating a lack of due application of mind by the Assessing Officer. Citing previous judgments, the Court highlighted that without a valid foundation, the Assessing Officer lacked the authority to reopen the assessment, rendering the notice unsustainable.

3. The Court referred to similar cases where it was established that incorrect or unfounded reasons for reopening assessments rendered the notices invalid. Based on the lack of foundation in the notice issued to the petitioner, the Court ruled in favor of the petitioner, quashing the notice dated 30.03.2021 and the order disposing of objections dated 11.11.2021. The Court concluded the judgment by allowing the Special Civil Application, quashing the impugned notice and order, and deciding no costs to be awarded.

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