Non-application of mind in prosecution sanction led to quashing and remand for fresh, reasoned consideration of the assessee's reply.

Prosecution sanction under the Income-tax Act was held vulnerable where the assessee's reply to the show-cause notice was not properly considered and no reasons were recorded for rejecting the explanation. The sanction order was treated as perfunctory, showing non-application of mind and inadequate adjudication of the defence raised. On that basis, writ interference was warranted under Article 226, and the sanction under Section 279(1) was quashed. The matter was remitted for fresh consideration of the reply and for passing of a reasoned order after hearing the assessee.

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Issues: Whether the sanction order issued for prosecution under the Income-tax Act, 1961 was sustainable when the assessee's reply to the show-cause notice was not properly considered, and whether the matter required interference under writ jurisdiction.

Analysis: The sanction order was found to have been passed in a perfunctory manner without proper consideration of the reply dated 29.4.2025 and without recording reasons for rejecting the explanation furnished by the assessee. In these circumstances, the case was treated as one warranting interference under Article 226 of the Constitution of India. The order also failed to reflect proper adjudication of the explanation offered in response to the notice, making it vulnerable on the ground of non-application of mind and absence of reasons.

Conclusion: The sanction order under Section 279(1) of the Income-tax Act, 1961 was quashed and set aside, and the matter was remitted for fresh consideration of the assessee's reply and for passing of a reasoned order after hearing the assessee.

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