Saraswat Co-operative Bank Ltd. Vs ACIT (Bombay High Court)
Bombay High Court held that entire process of according sanction under section 151 of the Income Tax Act for initiation of reassessment granted in a mechanical manner without application of mind is unjustified and hence reassessment proceedings quashed.
Facts- This Writ Petition challenges the reassessment proposed to be undertaken by the Revenue, of the income tax return filed by the Petitioner-Bank for the Assessment Year 2015-16. The notice dated 30th March, 2021 initiating reassessment issued under Section 147 read with Section 148 of the Income Tax Act, 1961 has been approved under Section 151 of the Act on the premise that income had escaped assessment owing to absence of full and true disclosures by the Petitioner at the time of the original assessment.
Conclusion- Held that the entire process of according sanction demonstrates non-application of mind to the ingredients of Section 147, rendering the sanction to be arbitrary, calling for intervention by a writ court. Evidently, the proposal, the recommendation and the approval in the instant case was mechanical, without either application of mind to the law and the facts or even a modicum of how the ingredients of the law had been met. In short, the machinery under Section 151 completely failed.
