Power to Approve Assessment Reopening cannot be exercised casually on a routine perfunctory manner

Vodafone India Ltd Vs Deputy Commissioner of Income Tax (Bombay High Court)

Power to Approve Assessment Reopening cannot be exercised casually on a routine perfunctory manner

The Bombay High Court recently delivered a significant ruling in the case of Vodafone India Ltd Vs Deputy Commissioner of Income Tax, shedding light on the proper exercise of power in approving assessment reopening under the Income Tax Act, 1961. The judgment emphasizes the importance of applying due diligence and avoiding casual or routine approvals.

The case revolved around a notice issued under Section 148A(b) of the Income Tax Act, 1961 (“the Act”), an order passed under Section 148A(d) of the Act, and a subsequent notice issued under Section 148 of the Act. The petitioner challenged these actions on various grounds, including the contention that the approval for issuing the order under Section 148A(d) was granted without proper application of mind.

The court observed that the approval process for the order under Section 148A(d) of the Act appeared to have been conducted mechanically, without careful consideration of the relevant facts. The discrepancy between the amount mentioned in the notice and the amount in the order raised doubts about the diligence exercised in the approval process.

Please become a Premium member. If you are already a Premium member, login here to access the full content.