Reassessment u/ss 148 and 148A(b) invalid without AO's independent application of mind beyond mere audit objection

SC upheld the HC's quashing of reassessment proceedings initiated under Sections 148 and 148A(b) based solely on an audit objection. While affirming that, post 1.4.2021, an audit objection may constitute "information" for reopening, SC held that the AO is not mechanically bound to issue notice under Section 148 by merely reproducing the audit objection. The AO must independently apply mind, consider the specific facts, and evaluate the assessee's detailed reply to the Section 148A(b) notice. Finding absence of such application of mind, SC held the reopening invalid and dismissed the Revenue's SLP, confirming the HC's decision.

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The Supreme Court, exercising jurisdiction in a Special Leave Petition, first condoned the delay in filing. After hearing counsel for the petitioners, the Court examined the "facts and circumstances of the case" and concluded that the jurisdictional preconditions for reopening the assessment were not met. It expressly held that "it is not a case for reopening assessment" and, consequently, affirmed that "the High Court has not erred in quashing the show cause notices." On this basis, the Court declined to interfere with the High Court's decision and dismissed the Special Leave Petition, also disposing of all pending applications.

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