Reassessment under Income Tax Act based on alleged sale deed quashed as no jurisdictional fact to reopen assessment.

Reassessment proceedings under the Income Tax Act were initiated solely on an alleged sale deed; the factual assumption lacked the necessary jurisdictional fact to form satisfaction to reopen assessment under the statutory scheme. Because the revenue conceded absence of the jurisdictional fact, the High Court exercised writ jurisdiction and granted discretionary relief, quashing the reassessment proceedings for the relevant assessment year and preventing further substantive adjudication based on the erroneous factual premise.

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Issues involved:
The judgment involves the quashing of reassessment proceedings initiated against the petitioner under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2015-16.

Details of the Judgment:

Issue 1: Basis of Reassessment Proceedings
The petitioner, identified as a petty farmer, had only engaged in the purchase of a small parcel of land during the assessment year in question. The reassessment proceedings were initiated solely based on a sale deed, which was later found to be a wrong assumption by the revenue authorities. The Assessing Authority's satisfaction to initiate the reassessment proceedings was solely based on this sale deed, with no other supporting information. The petitioner expressed apprehension about being unnecessarily drawn into legal proceedings due to this error.

Issue 2: Correction of Mistake by Revenue Authorities
After realizing their mistake, the revenue authorities were reluctant to drop the reassessment proceedings and instead chose to conclude them on merits. However, upon further investigation, it was revealed that there was a mistake in initiating the reassessment proceedings against the petitioner. The jurisdictional assessing authority communicated this error to the faceless assessing authority, and instructions were received from the Principal Commissioner regarding potential remedies available to the petitioner.

Issue 3: Court's Decision
After hearing arguments from both parties and reviewing the record, the Court acknowledged that the revenue authorities recognized their fault in initiating the reassessment proceedings without proper jurisdictional facts. As a result, the Court decided to quash the reassessment proceedings against the petitioner for the Assessment Year 2015-16 under the Income Tax Act, 1961. The petitioner was granted discretionary relief under Article 226 of the Constitution of India, despite other facts presented by the revenue authorities.

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