Calcutta HC quashes Re-Assessment passed without Application of Mind [Read Order]

The Calcutta High Court has held that the re-assessment passed under section 148 of the Income Tax Act, 1961 without the application of mind is not sustainable under the law.

The petitioner, Realization Stock & Equity Pvt. Ltd has challenged the impugned notice dated 31^st March, 2021 under Section 148 of the Income Tax Act, 1961 relating to the assessment year 2017-18 and subsequent notice dated 14th January, 2022 issued under Section 142 (1) of the Income Tax Act on the ground that the impugned notice under Section 148 and subsequent proceeding is bad and not sustainable in law for the reason that the same has been issued in total non-application of mind.

Justice Md. Nizamuddin observed that one ofthe reasons for reopening of assessment is that no regular assessment under Section 143 (3) of the Act was made in the instant case and even in the last paragraph of the said reason again it has been recorded again that no assessment order as per Section 2 (40) of the Act was made in the instant case which is totally incorrect and contrary to the respondent’s own record from where it appears that the regular assessment under Section 143 (3) of the Act was passed on 10th December, 2019 being Annexure P-10 to the writ petition.

Quashing the order, the Court observed that “though this Court in exercise of Constitutional Writ Jurisdiction under Article 226 of the Constitution of India is very reluctant to interfere with the sufficiency of the findings and reasonings of the recorded reason for the purpose of reopening of any assessment but since it is a case of patent non-application of mind by the assessing officer concerned as appears from the reason recorded by him repeatedly recording that no regularassessment was made in the instant case which is totally incorrect and contrary to respondent’s own record and which is the basis of the reopening of assessment, the impugned notice under Section 148 of the Income Tax Act and all subsequent proceedings are quashed. However, quashing of the impugned notice and subsequent proceeding will not prevent the assessing officer concerned to initiate any fresh proceeding in future in accordance with law.”

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