The Bombay High Court has held that re-assessment notice issued with non-application of mind cannot be rectified by invoking Section 292B of the Income Tax Act.
A division bench comprising of Justice Riyaz I. Chagla and Justice M.S. Sanklecha were said so while considering the appeal of assessee. The said petition was issued by Assistant Commissioner of Income tax after having obtained necessary sanction from the Joint Commissioner of Income Tax in terms of Section 151(2) of the Income Tax Act.
In its objection the counsel argued that Joint Commissioner of Income Tax has mechanically granted the sanction without due application of mind but AO rejected the petitioners objection.
While observing the prescribed format of application for seeking the approval, AO indicated that the notice has been issued under section 143(b) of the act.
The main issue was that there is no proper sanction with view of non-application of mind of authorities. The revenue also argued that the same is curable defect under section 292B of the Income Tax Act.
The court directed that it was a settled principle of law that sanction granted by the higher authority for issuing of a reopening notice has to be on due application of mind and also added that while granting the sanction from higher authority without pointing a mistake or error is an evidence of non-application of mind from the part of sanctioning authority.
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