High Court quashes income tax notice for 2012-2013 over errors in form, emphasizes scrutiny

The High Court of Bombay quashed and set aside a notice issued under Section 148 of the Income Tax Act for Assessment Year 2012-2013 due to errors in the form for reopening the assessment. The court criticized officers for not filing the affidavit themselves and highlighted discrepancies in the approval process. Emphasizing the importance of proper scrutiny before granting approval for reopening assessments, the court found a lack of application of mind in this case. Similar petitions were disposed of accordingly, without commenting on the possibility of issuing a fresh notice, leaving it open for the Revenue to take appropriate action.

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Issues:
Impugning a notice for Assessment Year 2012-2013 issued under Section 148 of the Income Tax Act, 1961 and an order on objections filed for reopening the assessment.

Analysis:
In the judgment, the High Court of Bombay addressed the issue of errors in the notice dated 31st March 2019 for Assessment Year 2012-2013 issued under Section 148 of the Income Tax Act, 1961 and the order on objections filed by the petitioner for reopening the assessment. The court highlighted that errors were present in the form for reopening, specifically in Column No. 8 and 9, which were considered to be bonafide mistakes by the officers involved. However, the court emphasized that the officers who signed the Form for re-opening should have filed the affidavit instead of a third party not involved at the relevant time. The court directed the concerned officers to explain the basis on which the reopening was approved despite the errors in the form. The officers, Mr. Trilochan Singh Khalsa, Mr. Ashok Pophare, and Ms. Irina Garg, were required to file affidavits within three weeks from the date of the order.

The court further examined the affidavits filed by the officers, where they admitted the mistakes in the form submitted for approval under Section 151 of the Act. The officers sought condonation for the inadvertent errors and emphasized that the approval was granted based on the reasons recorded. The court noted discrepancies in the amount mentioned in the form for income originally assessed and the actual income originally assessed, highlighting lapses in the approval process. The court criticized the Additional CIT and Principal CIT for mechanically according permission without scrutinizing the reasons for reopening, indicating a lack of proper application of mind.

Moreover, the court referred to previous judgments to emphasize the importance of verifying full and true relevant facts before granting approval for reopening assessments. The court concluded that the approval granted in this case suffered from a lack of application of mind, leading to the quashing and setting aside of the notice dated 31st March 2019 issued under Section 148 of the Act. The petitions were disposed of accordingly, with the court allowing similar petitions with almost identical facts based on the decision in the main petition. The court did not make any comments on the possibility of issuing a fresh notice under Section 148 of the Act, leaving it open for the Revenue to take appropriate action within the legal framework.

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