“non-application of mind”

ReassessmentSection 147Section 1472,166 judgments

The decision most relied on for non-application of mind is CIT v. Max India Ltd. (295 ITR 282), cited in 1,162 judgments on BharatTax.

Leading authorities on non-application of mind

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

CIT v. Gabriel India Ltd.

203 ITR 108 · 1993 · High Court

990

citing judgments

The Commissioner cannot revise an assessment order under Section 263 merely because they hold a different opinion or believe a deeper inquiry was warranted if the Assessing Officer has applied their mind and conducted some inquiry. Revision under Section 263 is permissible only in cases of a complete lack of inquiry or non-application of mind by the Assessing Officer, not for merely inadequate inquiry.

Dilip N. Shroff v. JCIT

291 ITR 519 · 2007 · Supreme Court

565

citing judgments

A penalty notice issued under Section 271(1)(c) is invalid if the Assessing Officer fails to strike out the inapplicable limb (concealment or furnishing inaccurate particulars) from the standard proforma, indicating non-application of mind. The initial burden of proving concealment or inaccurate particulars rests on the Revenue.

CIT v. Manu Engg

122 ITR 306 · 1980 · High Court

505

citing judgments

When levying a penalty under Section 271(1)(c), the Assessing Officer must clearly specify whether it is for concealment of income or furnishing inaccurate particulars. An ambiguous notice or order using "and/or" for these limbs, or a standard proforma without striking irrelevant clauses, indicates non-application of mind and renders the penalty unsustainable.

CIT v. Shri Samson Perinchery

392 ITR 4 · 2017 · High Court

417

citing judgments

A penalty levied under section 271(1)(c) of the Income-tax Act is unsustainable if it is initiated on one limb (e.g., concealment of income) but ultimately levied on the other limb (e.g., furnishing inaccurate particulars). This also applies if the initial penalty notice is vague or ambiguous regarding the specific charge.

CIT v. S. Goyanka Lime & Chemical Ltd.

64 Taxmann.com 313 · 2015 · Supreme Court

340

citing judgments

A mechanical approval by the prescribed authority under Section 151, made without independent application of mind, vitiates and renders the entire reassessment proceedings invalid. Such approvals, often indicated by brief, unreasoned endorsements, lead to the quashing of the reopening of assessment.

222 Taxman 15 (Gujarat)(MAG.), Principal Commissioner of Income-tax-4 v. G & G Pharma India Ltd.

384 ITR 147 · 2016 · High Court

274

citing judgments

An assessment can be reopened if there is tangible material indicating escapement of income, demonstrating a live link between the material and the reasons recorded for reopening. The Assessing Officer must apply their mind to the material facts, and the sanction under section 151 should not be based on borrowed satisfaction.

CIT v. Mithila Motor's (P.) Ltd.

149 ITR 751 · 1984 · High Court

248

citing judgments

Minor defects or mistakes in a penalty notice issued under Section 274 do not invalidate penalty proceedings under Section 271(1)(c) if the assessee suffers no prejudice and is aware of the charge. However, significant vagueness or ambiguity that demonstrates non-application of mind or causes prejudice can still render the notice invalid.

Judgments citing non-application of mind

Alok & Co LLP, Delhi vs. DCIT, Central Circle-28, Delhi

In the result, appeal filed by the assessee are partly allowed

ITA 2736/DEL/2025[2017-18]Status: DisposedITAT Delhi11 Mar 2026AY 2017-18

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumar

Section 153CSection 153DSection 65BSection 69A

assessment order bad in law. 5. That on the facts and in law, the approval under section 153D stands vitiated due to non-application of mind, as both the proposal and the approval are mere carbon copies across years and group entities, issued in the fag end, in breach

Alok & Co LLP, Delhi vs. DCIT, Central Circle-28, Delhi

In the result, appeal filed by the assessee are partly allowed

ITA 2735/DEL/2025[2016-17]Status: DisposedITAT Delhi11 Mar 2026AY 2016-17

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumar

Section 153CSection 153DSection 65BSection 69A

East Delhi Leasing P.Ltd, New Delhi vs. ITO, Ward-8(1), New Delhi

In the result, appeal filed by the assessee is allowed

ITA 7917/DEL/2019[2010-11]Status: DisposedITAT Delhi11 Mar 2026AY 2010-11

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumar

Section 142(1)Section 147Section 148

deficiencies in the reasons canvassed by the AO for his satisfaction of the income of the Assessee escaping assessment. There is complete non-application of mind on the part of the prescribed Authority too. In this way the case is directly hit by the mandate of the apex Court ... satisfaction as recorded by him there is no live link or nexus to propose escapement of income; for the fact that there is non-application of mind both by the AO and the prescribed authority u/s. 151 of the Act; for the fact that the AO recorded the satisfaction

Shri Gandhi Maulana Azad Shramjivi Ashra, Kutch vs. Income Tax Officer, Exemption Ward 1, Rajkot

In the result, appeals of the assessee, are allowed

ITA 612/RJT/2025[2016-17]Status: DisposedITAT Rajkot10 Mar 2026AY 2016-17

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

For Appellant: Shri Kalpesh Doshi, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 10Section 10(23)(iiia)Section 11Section 139Section 142(1)Section 145(3)Section 147Section 148Section 148ASection 149(1)(b)

apart from the issue pertaining to the unsigned approval memo, the said approval is invalid and bad-in-law due to the non-application of mind by the designated authority before granting approval. 2. The reasons recorded by the designated authority while granting the approval nowhere suggests that

Shri Gandhi Maulana Azad Shramjivi Ashra, Kutch vs. Income Tax Officer, Exemption Ward 1, Rajkot

In the result, appeals of the assessee, are allowed

ITA 611/RJT/2025[2017-18]Status: DisposedITAT Rajkot10 Mar 2026AY 2017-18

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

For Appellant: Shri Kalpesh Doshi, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 10Section 10(23)(iiia)Section 11Section 139Section 142(1)Section 145(3)Section 147Section 148Section 148ASection 149(1)(b)

Gopal Anil Kumar, Bangalore vs. DCIT, Central Circle-1(3), Bangalore

In the result the appeal filed by the assessee is allowed

ITA 862/BANG/2025[2018-19]Status: DisposedITAT Bangalore05 Mar 2026AY 2018-19

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year : 2018-19

For Appellant: Ms. Pooja Maru, A.RFor Respondent: Sri Balusamy N., D.R

Section 132Section 142(1)Section 143(2)Section 147Section 148Section 151Section 250Section 37Section 44ASection 68

casual and routine or mechanical manner while granting Gopal Anil Kumar, Bengaluru Page 12 of 13 sanction would show non-application of mind and such sanction cannot be upheld. The note about satisfaction while granting sanction must show which material; information; documents and which other aspects have been gone through

Cisco Commerce India Private Limited, Bangalore vs. Principal Commissioner of Income Tax, PCIT, Bengaluru-2, Bangalore

In the result, the appeal by the assessee is dismissed

ITA 1235/BANG/2025[2021-22]Status: DisposedITAT Bangalore05 Mar 2026AY 2021-22

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year: 2021-22

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Smt. N. Hemalatha, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 154Section 194JSection 263Section 40

representative referred to observations from the that case without addressing that the PCIT's main concern there was the assessing officer’s alleged non-application of mind, as indicated in paragraph 4 of that order. Furthermore, paragraph 4.3 notes the assessee had submitted details relevant to section 263, making

M/S. Avm Productions, Chennai vs. ACIT, Non Corporate Circle-20(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 2359/CHNY/2025[2017-18]Status: DisposedITAT Chennai04 Mar 2026AY 2017-18

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

Section 270Section 270A

section (9) of section 270A of the Act to warrant imposition of penalty for ‘underreporting in consequence of misreporting income’. Non-application of mind is discernable from perusal of the penalty order itself, since there is no whisper as to which limb of sec.270A(9) is attracted ... Therefore, in the light of the aforesaid discussion, we find that penalty levied by the AO suffers from the infirmity of non-application of mind and therefore, the impugned action of Ld CIT(A) can’t be sustained in the eyes of law and therefore, it is set-aside

Hind Charitable Trust, Lucknow vs. PCIT(Central), Lucknow

The appeal of the assessee stands allowed

ITA 26/LKW/2021[NA]Status: DisposedITAT Lucknow27 Feb 2026

Bench: Shri Sudhanshu Srivastava & Shri Nikhil Choudharyassessment Year: Na Hind Charitable Trust Vs. Pcit(Central) Lucknow Block B, Church Road, Indira Uttar Pradesh-226010. Nagar, Lucknow-226016. Tan/Pan:Aaath5498M (Appellant) (Respondent)

For Appellant: Shri G. C. Srivastava, AdvocateFor Respondent: Shri R. K. Agarwal,CIT (DR)

Section 12ASection 13(1)(c)Section 132

been opened and looked into. The Ld. AR also submitted that the impugned order cancelling the registration was based on complete non-application of mind in as much as the satisfaction of the Ld. PCIT (C) was based on the erroneous findings of the AO only and there

Starshine Land Developers Private Limited, Andheri East, Mumbai vs. Principal Commissioner of Income Tax, Mumbai-5, Aayakar Bhavan, Mumbai

In the result, the appeal filed by the assessee is dismissed

ITA 2148/MUM/2024[2015-16]Status: DisposedITAT Mumbai27 Feb 2026AY 2015-16

Bench: Shri Saktijit Dey & Shri Jagadishassessment Year: 2015-16

Section 142(1)Section 143(2)Section 143(3)Section 144BSection 148Section 23(5)Section 263

contra, the Ld. DR strongly supported the order of the Ld. PCIT and submitted that the reassessment order itself demonstrates complete non-application of mind. The Ld. DR placed reliance on the judgment of the Hon’ble Supreme Court in PCIT vs. Paville Projects Pvt. Ltd.[(2023) 149 taxmann.com

Badami Devi, Barmer vs. ITO, Ward-1, Barmer

In the result, the appeal of the assessee is allowed

ITA 678/JODH/2024[2017-18]Status: DisposedITAT Jodhpur26 Feb 2026AY 2017-18

Bench: Dr. Mitha Lal Meena, Hon’Ble & Shri Sudhir Pareek, Hon’Blebadami Devi Income Tax Officer, M/S Sbl & Co Llp Ward No. -1 Barmer. (Chartered Accountant) E-75, Kalpatru Shopping Center, Opp. Bioscope Cinemas, Shastri Nagar, Jodhpur, Rajasthan–342003. Pan No. Aaopd1969R Assessee By Shri Gautam Chand Baid, Ca (Physical) Revenue By Shri Lalit Kumar Bishnoi, Addl. Cit-Dr Virtual Date Of Hearing 28.01.2026. Date Of Pronouncement 26.02.2026. Order Dr. Mitha Lal Meena, A.M.: This Appeal Filed By The Assessee Is Directed Against The Order Of The Commissioner Of Income Tax (Appeals), Addl/Jcit (A) Panaji, [Hereinafter Referred To As The Jcit (A)] Dated 28.06.2024 With Respect To Assessment Year 2017-18. 2 2. The Appellant Assessee Has Taken Following Grounds Of Appeal:-

Section 68

again an entry of Rs. 2,00,000/- cash creditor, found recorded in the books of account. Such an observations itself proves the non-application of mind by the Assessing Officer in examination and verification of the cash creditors and in turn making addition by invoking Section

Amber Corporation, Kalyan vs. ITO Ward 3(1), Kalyan, Thane

In the result the Assessee’s Appeal is allowed

ITA 8373/MUM/2025[2010-2011]Status: DisposedITAT Mumbai26 Feb 2026AY 2010-2011

Bench: Shri Narender Kumar Choudhry & Shri Jagadishassessment Year: 2010-11

For Appellant: Shri. Hitesh ShahFor Respondent: Shri. Surendra Mohan (SR. DR.)

Section 250Section 271Section 271(1)(c)Section 274

standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. 16. The Hon'ble High Court of Delhi

M/S.Allied Digital Services Limited, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle 1(3), Mumbai

In the result the Assessee‟s Appeal is allowed

ITA 8147/MUM/2025[2010-11]Status: DisposedITAT Mumbai26 Feb 2026AY 2010-11

Bench: Shri Narender Kumar Choudhry & Shri Jagadishassessment Year: 2010-11 M/S. Allied Digital Services Deputy Commissioner Of Limited, Income Tax, Central 808, 8Th Floor, Mafatlal Centre, Circile 1(3), 905,9Th Floor, Nariman Point, Vs. Mumbai – 400021. Old Cgo Building, Pan – Aaaca5509K Pratishtha Bhavan, M.K. Road, Mumbai – 400020. (Appellant) (Respondent) Present For: Assessee By : Ms. Vinita Shah, Ld. A.R. Revenue By : Shri Surendra Mohan, Sr. D.R. Date Of Hearing : 12.02.2026 Date Of Pronouncement : 26.02.2026 O R D E R Per : Narender Kumar Choudhry: This Appeal Has Been Preferred By The Assessee Against The Order Dated 11.07.2025, Impugned Herein, Passed By Ld. Commissioner Of Income Tax (Appeals) (In Short Ld. Commissioner) U/S 250 Of The Income Tax Act, 1961 (In Short „The Act‟) For The A.Y. 20101-11. 2. In The Instant Case, The Ao Vide Assessment Order Dated 28.03.2013 Under Section 143 (3) R.W.S. 153(A) Of The Act Has Made The Additions Of Rs.5,35,91,882/- & Rs.1,25,66,049/- On Account Of Disallowances Under Section 69C Of The Act & Section 2 M/S. Allied Digital Services Limited

For Appellant: Ms. Vinita Shah, Ld. A.RFor Respondent: Shri Surendra Mohan, Sr. D.R

Section 143Section 2Section 250Section 271(1)(c)Section 274Section 69C

irrelevant clause would lead to an inference of non- application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. 16. The Hon'ble High Court of Delhi in the case of M/s. Sahara India Life Insurance Company

Superhouse Limited, Kanpur vs. CIT, International Taxation-3, Delhi

In the result, both appeals of the assessee are allowed

ITA 356/LKW/2024[2014-15]Status: DisposedITAT Lucknow25 Feb 2026AY 2014-15

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharyita Nos. 356 & 357/Lkw/2024 A.Ys. 2014-15 & A.Ys. 2015-16 Superhouse Limited, 150 Feet Vs. The Commissioner Of Income Tax Road, Jajmau, Kanpur-208010 International Taxation-3, Delhi Pan: Aabcs9328K (Appellant) (Respondent) Assessee By: Sh. G.C. Srivastava, Adv & Sh. Kalrav Mehrotra, Adv Revenue By: Sh. R.K. Agarwal, Cit Dr Date Of Hearing: 03.12.2025 Date Of Pronouncement: 25.02.2026 O R D E R Per Nikhil Choudhary, A.M.: These Two Appeals Have Been Filed By The Assessee Against The Orders Of The Cit, (International Taxation)-3, Delhi Passed Under Section 263 Of The Act For The A.Ys. 2014-15 & 2015-16, Both Dated 29.03.2024, Wherein The Ld. Cit Has Set Aside The Earlier Orders Of The Assessing Officer For Making Of Fresh Orders In Accordance With The Directions Issued By Her. The Grounds Of Appeal Are As Under:- “1. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit Has Erred In Assuming Jurisdiction Under Section 263 Of The Act & In Doing So, Has Sought To Substitute His Opinion With The Order Under Section 201(1)/201(1A) Passed After Undertaking Extensive & Detailed Consideration Of The Issue By The Ito (Tds). 2. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit Has Erred In Assuming The Jurisdiction Under Section 263 Of The Act Without Appreciating That The Order Under Section 201(1)/201(1A) Passed By The Ito (Tds) Was Unerring & In Consonance With The Settled Principles Of Law. 3. Because, On The Facts & Circumstances Of The Case & In Law, The Impugned Order While Premised On An Illegal Assumption Of Jurisdiction, Further Suffers From Non-Application Of Mind Since The Submissions Of The Assessee Have Not Been Considered [As Illustrated Infra]. A.Ys. 2014-15 & 2015-16

For Appellant: Sh. G.C. Srivastava, Adv & Sh. KalravFor Respondent: Sh. R.K. Agarwal, CIT DR

Section 201(1)Section 263Section 90

facts and circumstances of the case and in law, the Impugned Order while premised on an illegal assumption of jurisdiction, further suffers from non-application of mind since the submissions of the Assessee have not been considered [as illustrated infra]. A.Ys. 2014-15 & 2015-16 4. BECAUSE, on the facts ... facts and circumstances of the case and in law, the Impugned Order while premised on an illegal assumption of jurisdiction, further suffers from non-application of mind since the submissions of the Assessee have not been considered [as illustrated infra] A.Ys. 2014-15 & 2015-16 5) BECAUSE, on the facts

Dinesh Verma, Manali, Himachal Pradesh vs. ITO, ITO Ward Kullu

In the result, appeal filed by the Assessee is dismissed

ITA 897/CHANDI/2025[2018-19]Status: DisposedITAT Chandigarh24 Feb 2026AY 2018-19

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Vinamar Gupta, C.A (Virtually)For Respondent: Shri Manav Bansal, CIT, DR

Section 147Section 148Section 151ASection 263Section 270A

When the statute itself mandates consideration of penalty in defined situations, failure of the Assessing Officer to examine the issue amounts to non-application of mind and lack of enquiry. Therefore, the assessment order becomes erroneous and 5 prejudicial to the interest of revenue within the meaning of section