Court quashes Income Tax Act notice due to errors in re-opening reasons and lack of sanction details.

The court allowed the petition, quashing the notice under Section 148 of the Income Tax Act, 1961, the order disposing objections, and the notice/summons. The court found errors in the reasons for re-opening, lack of provided sanction details, and a lack of proper application of mind in the re-assessment process. The respondent's failure to deny factual inaccuracies and provide the required sanction raised concerns about procedural irregularities, leading to the court's decision to grant the writ in favor of the petitioner.

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Issues:
Impugning notice under Section 148 of the Income Tax Act, 1961 and order disposing objections to re-opening.

Analysis:
The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961, and the order disposing of objections to the re-opening on various grounds, including non-application of mind by the Assessing Officer. Upon reviewing the petition, documents, respondent's reply, and hearing both parties, the court found that the reasons for re-opening were based on erroneous and incorrect facts, displaying a clear lack of application of mind by the Assessing Officer. The court noted that the return of income for the relevant assessment year had been assessed under Section 143(3) of the Act, contrary to the Assessing Officer's claim that it was only processed under Section 143(1), indicating a significant error in factual understanding. The court highlighted that the respondent failed to deny the petitioner's allegation regarding the incorrect factual basis for re-opening in the affidavit in reply, further emphasizing the lack of proper consideration in the decision-making process.

The court also addressed the issue of the petitioner's request for a copy of the sanction under Section 151 of the Act, which was not provided despite repeated requests. The court observed that the respondent did not deny this averment in the affidavit in reply and failed to produce the sanction obtained, leading to an adverse inference against the respondent. This raised concerns about whether the sanctioning authority under Section 151 of the Act had applied its mind, given the evident lack of application of mind by the Assessing Officer in the reasons recorded for re-opening. The court suggested that either no proper sanction was obtained or it was granted mechanically without due consideration of the facts, further highlighting procedural irregularities in the re-assessment process.

Consequently, the court allowed the petition and issued a writ quashing the notice under Section 148 dated 26th March 2019, the order disposing objections dated 22nd October 2019, and the notice/summons dated 22nd October 2019. The court's decision was based on the grounds of incorrect factual basis for re-opening, failure to provide the requested sanction details, and the overall lack of proper application of mind in the re-assessment process.

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