“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

Jameson Abraham, Kollam vs. Principal Commissioner of Income Tax, Trivandrum

In the result, the assessee’s appeal is dismissed

ITA 979/COCH/2022[2016-17]Status: DisposedITAT Cochin12 Apr 2024AY 2016-17

Bench: Shri Sanjay Arora & Shri Manomohan Dasjameson Abraham Principal Commissioner Emmanuel Cashes Industries Of Income Tax Chepara P.O., Kottarakara Vs. Thiruvananthuparam Kollam 691520 [Pan: Afopa7312Q] (Appellant) (Respondent)

For Appellant: Shri Surendranath Rao, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR

Section 143(3)Section 263

order erroneous and prejudicial to the interests of the Revenue. The same, it is to be noted, is an attribute or reflection of non-application of mind, which is among the four infirmities held by the Hon'ble Apex Court in Malabar Industrial ... words, the assessee’s explanation, citing quality claim, is irrelevant, if not false/invalid. What better proof, one may ask, could there be of non-application of mind. 5.3 The assessment, accordingly, has to be, as held by the revisionary authority, redone qua the relevant aspect thereof. Two things need

Prabhakar Reddy Sama, Hyderabad vs. Income Tax Officer, Ward-9(1), Hyderabad

In the result, appeal of the assessee is treated as allowed for statistical purposes

ITA 168/HYD/2024[2017-18]Status: HeardITAT Hyderabad10 Apr 2024AY 2017-18

Bench: Shri Rama Kanta Panda & Shri K.Narasimha Chary

For Appellant: Shri H. Srinivasulu, ARFor Respondent: Ms. Sheetal Sarin, DR

Section 142(1)Section 144

assessment order of some other assessee, and facts not at all related to the assessee. Learned AR therefore submitted that there is non-application of mind on the part of the learned CIT(A) and, therefore, this appeal deserves to be allowed by quashing the impugned order of the learned

Smt.Sulochanadevi Singhania School Trust, Mumbai vs. DCIT (Exem)-2(1), Mumbai

In the result, the appeal is partly allowed

ITA 3713/MUM/2023[2015-16]Status: DisposedITAT Mumbai10 Apr 2024AY 2015-16

Bench: Justice (Retd.) C V Bhadang, Hon’Ble & Shri B R Baskaran, Hon’Ble

For Appellant: S/Shri Nitesh Joshi & Hitesh TrivediFor Respondent: Dr Kishore Dhule- CIT DR

Section 11Section 12ASection 28Section 6

income or a claim of depreciation. The order of the Assessing Officer also shows that there are certain blanks left, which would indicate non-application of mind. 12. Coming to the appellate order, the CIT(A) has dealt with the issue as under: “5.2. Depreciation Claims: The appellant contends that

Neel Kanth Gum and Chemicals, Jhunjhunu vs. ACIT, Circle Jhunjhunu, Income Tax Office, Jhunjhunu

In the result, the appeal of the assesee is allowed

ITA 805/JPR/2023[A.Y. 2012-13]Status: DisposedITAT Jaipur09 Apr 2024

Bench: SHRI SANDEEP GOSAIN (Judicial Member), DR MITHA LAL MEENA (Accountant Member)

For Appellant: Shri G.S. Mehta, CAFor Respondent: Smt. Monisha Choudhary, Addl CIT-DR

Section 143(3)Section 271(1)Section 271(1)(c)Section 80Section 801Section 80I

irrelevant clause in the penalty notice shows that charge made against the assessee under section 271(1)(c)) is not firm and shows non-application of mind of the AO. There was thus ambiguity in the mind of the AO for the nature of default committed by the Assessee

Anil Kumar Lakhina, New Delhi vs. ACIT, Circle-30(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 5405/DEL/2018[2014-15]Status: DisposedITAT Delhi09 Apr 2024AY 2014-15

Bench: Shri Challa Nagendra Prasad & Shri M Balaganeshआ.अ.सं/.I.T.A No.5405/Del/2018 िनधा"रणवष"/Assessment Year:2014-15 बनाम Anil Kumar Lakhina Acit 203, Nehru Place, New Delhi. Vs. Circle 30(1), Pan No.Aazpl4961G Room No.1302, 13Th Floor, Civic Centre, New Delhi. अपीलाथ" Appellant ""यथ"/Respondent

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

assessee, stresses Kaushaiya, "fully knew in detail the exact charge of the Revenue against him". For Kaushaiya, the statutory notice suffered from neither non-application of mind nor any prejudice. According to it, "the so called ambiguous wording in the notice [has not] impaired or prejudiced the right ... should not be done ", 185. No doubt, there can exist a case where vagueness and ambiguity in the notice can demonstrate non-application of mind by the authority and/or ultimate prejudice to the right of opportunity of hearing contemplated under section 274. So asserts Kaushalya. In fact, for one assessment

Anavya Investments Pvt. Ltd., New Delhi vs. ITO Ward-2(4), New Delhi

In the result, appeal of the assessee is allowed

ITA 4828/DEL/2019[2010-11]Status: DisposedITAT Delhi08 Apr 2024AY 2010-11

Bench: Shri C. N. Prasad & Shri M. Balaganeshm/S. Anavya Investments Pvt. Ltd, Vs. Ito, C/O. Sanjay & Sanjay, A-1-A, 14B, Ward-2(4), Janakpuri, New Delhi New Delhi (Appellant) (Respondent) Pan:Aahc4820A Assessee By : Shri Sanjay Garg, Ca Shri Akarsh Garg, Adv Revenue By: Shri Kanv Bali, Sr. Dr Date Of Hearing 11/01/2024 Date Of Pronouncement 08/04/2024

For Appellant: Shri Sanjay Garg, CAFor Respondent: Shri Kanv Bali, Sr. DR

Section 115JSection 139(1)Section 143(3)Section 147Section 148Section 68

distinct all those materials and he must also show that what was material on record. Hence, initiation of proceedings is also based on non-application of mind much less independent application of mind……. 6.3 I further note that in the reasons recorded assessee has relied upon the information

K.P. Construction, Chennai vs. ACIT, Chennai

In the result, appeal filed by the assessee in ITA No

ITA 437/CHNY/2021[2016-17]Status: DisposedITAT Chennai05 Apr 2024AY 2016-17

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Ble

For Appellant: Shri G. Baskar, Advocate &For Respondent: Shri P. Sajit Kumar, JCIT

Section 115BSection 142(1)Section 143(2)Section 153CSection 153D

Rs.53,20,320/-, nor an opportunity given to respond, and the order being passed in a hurry at the fagend resulting in non-application of mind at the assessment and Approving Authority level the order of assessment is liable to be annulled as being in violation of the principles

DCIT CC 4(4), Mumbai vs. Aspen International Private Limited, Mumbai

In the result, all the appeals of the assessee are allowed

ITA 3594/MUM/2023[2014-15]Status: DisposedITAT Mumbai05 Apr 2024AY 2014-15

Section 133ASection 139(1)Section 143(3)Section 147Section 148Section 149Section 151Section 69C

therefore, recorded wrong, incorrect and non-existing reasons for reopening of the assessment. It makes clear that there is a total non-application of mind on the part of the AO while recording the reasons for reopening of the assessment. Considering the facts and circumstances of the case

DCIT CC 4(4), Mumbai vs. Aspen International Private Limited, Mumbai

In the result, all the appeals of the assessee are allowed and all the appeals of the Revenue are dismissed

ITA 3593/MUM/2023[2015-16]Status: DisposedITAT Mumbai05 Apr 2024AY 2015-16

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 133ASection 143(3)Section 147Section 148Section 149Section 151Section 69C

DCIT CC 4(4), Mumbai vs. Aspen International Private Limited, Mumbai

In the result, all the appeals of the assessee are allowed and all the appeals of the Revenue are dismissed

ITA 3591/MUM/2023[2016-17]Status: DisposedITAT Mumbai05 Apr 2024AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 133ASection 143(3)Section 147Section 148Section 149Section 151Section 69C

DCIT CC 4(4), Mumbai vs. Aspen International Private Limited, Mumbai

In the result, all the appeals of the assessee are allowed

ITA 3589/MUM/2023[2017-18]Status: DisposedITAT Mumbai05 Apr 2024AY 2017-18

Section 133ASection 139(1)Section 143(3)Section 147Section 148Section 149Section 151Section 69C

Aspen International Private Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle 4(4), Mumbai

In the result, all the appeals of the assessee are allowed

ITA 3469/MUM/2023[2014-15]Status: DisposedITAT Mumbai05 Apr 2024AY 2014-15

Section 133ASection 139(1)Section 143(3)Section 147Section 148Section 149Section 151Section 69C

Aspen International Private Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle-4(4), Mumbai

In the result, all the appeals of the assessee are allowed and all the appeals of the Revenue are dismissed

ITA 3468/MUM/2023[2015-16]Status: DisposedITAT Mumbai05 Apr 2024AY 2015-16

Section 133ASection 143(3)Section 147Section 148Section 149Section 151Section 69C

Aspen International Private Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle-4(4), Mumbai

In the result, all the appeals of the assessee are allowed and all the appeals of the Revenue are dismissed

ITA 3467/MUM/2023[2016-17]Status: DisposedITAT Mumbai05 Apr 2024AY 2016-17

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 133ASection 143(3)Section 147Section 148Section 149Section 151Section 69C

Aspen International Private Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle-4(4), Mumbai

In the result, all the appeals of the assessee are allowed and all the appeals of the Revenue are dismissed

ITA 3466/MUM/2023[2017-18]Status: DisposedITAT Mumbai05 Apr 2024AY 2017-18

Section 133ASection 143(3)Section 147Section 148Section 149Section 151Section 69C

Kunwar Pal Singh, Ghaziabad vs. ITO Ward - 1(3), Ghaziabad

In the result, the impugned notice is quashed

ITA 172/DEL/2020[2010-11]Status: DisposedITAT Delhi04 Apr 2024AY 2010-11

Bench: learned first appellate authority, inter alia, challenging the reopening of the assessment under section 147 of the Act.

Section 139(1)Section 144Section 147

consideration is as to whether the reopening which is made based on incorrect assumption of fact and non-application of mind by the Id. AO could be held to be valid. This issue has been addressed by the Hon'ble Jurisdictional High Court in the case of Dhiren Anantrai Modi

ADIT Infrapower & Multitrading Pvt Ltd, New Delhi vs. ITO Ward - 1(3), Gurgaon

The appeal is dismissed

ITA 903/DEL/2020[2014-15]Status: DisposedITAT Delhi28 Mar 2024AY 2014-15

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2014-15 Adit Infrapower & Multitrading Vs Ito, Pvt. Ltd., Ward-1(3), Da-08, 2Nd Floor, Vikas Marg, Gurgaon. Shakarpur, New Delhi. Pan: Aahca5582H (Appellant) (Respondent) Assessee By : None Revenue By : Shri Aasish Mohanty, Cit-Dr Date Of Hearing : 30.11.2023 Date Of Pronouncement : 28.02.2024 Order Per Anubhav Sharma, Jm:

For Appellant: NoneFor Respondent: Shri Aasish Mohanty, CIT-DR

Section 133(6)Section 143(3)Section 263Section 56Section 56(2)(viib)

circumstances of the case, the order passed by the learned Pr. Commissioner of Income Tax (CIT) under section 263 of the Act is non-application of mind of Hon’ble Pr. CIT as Hon’ble Pr. CIT is on the wrong facts i.e the assessee company has issued

Ahmed Alam Khan, Hyderabad vs. Deputy Commisioner of Income Tax Circle 2(1), Hyderabad

In the result, appeal of the assessee is allowed

ITA 167/HYD/2021[2015-16]Status: DisposedITAT Hyderabad26 Mar 2024AY 2015-16

Bench: Shri S. Rifaur Rahman(Virtual Hearing) & Shri K.Narasimha Chary

For Appellant: Shri Sashank Dundu, ARFor Respondent: Shri K. Madhusudan, CIT-DR

Section 143(2)Section 263Section 54Section 54B

capital asset into stock in trades and capital gains on sale of land. Further according to the learned AR, there is no non-application of mind on the part of the learned Assessing Officer inasmuch as the learned Assessing Officer raised a specific query as to whether the property sold

Priyasha Meven Finance Limited, Mumbai vs. Assistant Commissioner of Income Tax Circle 4(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3814/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Mar 2024AY 2015-16

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.3814/Mum/2023 (निर्धारण वर्ा / Assessment Years: 2015-16) Priyasha Meven Finance बिधम/ Acit, Circle-4(2)(1) Ltd Room No. 642/669, Vs. R 404 Rotunda Building, Aayakar Bhawan, M. K. Bombay Samachar Marg, Road, Mumbai-400020. Fort-400001. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aadcp2042F (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Mani Jain Revenue By: Shri H. M. Bhatt (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 05/03/2024 घोषणा की तारीख /Date Of Pronouncement: 21/03/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi, Dated 28.08.2023 For Ay. 2015-16. 2. The Assessee Has Challenged The Validity Of The Reopening By Ao (Jurisdiction) U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”). So The Legal Issue Is Taken Up First. According To The Ld. Ar, The Assessee Had Not Taken This Legal Issue Before The Ld. Cit(A). However, According To Him, Since It Is A Legal Issue, It Can Be Raised For The First Time Before This Tribunal & For Such A Preposition Relied Upon The Decision Of The Hon’Ble Supreme Court In The Case Of Ntpc Vs. Cit (229 Itr 383) (Sc). Per Contra, The Ld. Dr Objects To Raising Of This Legal Issue Before This Tribunal For The First Time. According To Him, The Assessee Had Not Taken Up This Issue Before The Ld. Cit(A), Therefore, The Same Should Be Remanded Back To The File Of The Ld.

For Appellant: Shri Mani JainFor Respondent: Shri H. M. Bhatt (Sr. DR)

Section 143(1)Section 147Section 148

basis of borrowed satisfaction of SEBI (interim ex-parte order) and therefore it is bad in law; and recorded reasons suffers from non-application of mind of AO while he recorded the reasons for re-opening the assessment, which vitiates the reopening of assessment. For the foregoing reasons, the impugned

Vallabhbhai K. Borad, Tal. Visavadar, Dist. Junagadh vs. Income Tax Officer, Ward-1, Patan

In the result, appeal preferred by the appellant is allowed for statistical purposes

ITA 900/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad20 Mar 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Respondent: Shri Nitin Vishnu Kulkarni, Sr. DR

Section 144Section 147

unexplained that too with corroborating evidences as indicated hereinabove, the order passed by the Ld. CIT(A) seems to be a product of non-application of mind, arbitrary and found to be bad in law. Thus, for the ends of justice, we find it fit and proper to set aside