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“non application of mind”

Natural JusticeApplication of MindApplication of Mind701 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. Kaushalya
216 ITR 660 · 1995 · High Court
511
citing judgments

A penalty levied under Section 271(1)(c) for concealment or furnishing inaccurate particulars of income is not invalidated by the Assessing Officer's failure to strike off irrelevant portions in the show cause notice, provided the assessee understood the exact charge and suffered no prejudice, indicating an application of mind by the AO.

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.

PCIT v. Meenakshi Overseas Pvt. Ltd.
395 ITR 677 · 2017 · High Court
471
citing judgments

Reassessment proceedings initiated solely based on an investigation wing/appraisal report, without the Assessing Officer's independent application of mind to form a 'reason to believe' that income has escaped assessment, are beyond jurisdiction, bad in law, and void ab initio.

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.

Judgments citing non application of mind

The Mysore Co-Op. Housing Society Ltd., Mumbai vs. Pr. CIT-27, Navi Mumbai

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

ITA 730/MUM/2021[2015-16]Status: DisposedITAT Mumbai10 Aug 2022AY 2015-16

Bench: Shri Pavan Kumar Gadale & Shri Amarjit Singhthe Mysore Co-Op Vs. Pr.Cit-27, Housing Society Ltd, Room No -401, 4 Th Gateno2, Mysore Colony, Floor, Tower-6, Vashi Near Rcf Factory, Railway Station Anik,Off Majul Road, Commercial Complex, Chembur, Vashi,Navi Mumbai- Mumbai-400074 400073. Pan/Gir No. : Aacft7837N Appellant .. Respondent Appellant By : Mr.M.Subramanian.& Ms.Varsha Nanwani.Ar Respondent By : Mr. Ajay. Cit Dr Date Of Hearing 08.08.2022 Date Of Pronouncement 10.08.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed An Appeal Against The Order Of The Principal Commissioner Of Income Tax (Pr.Cit), Mumbai Passed U/S 263 Of The Act Dated 17.03.2021. Mysore Co-Op Housing Society Ltd. Mumbai. 2. The Brief Facts Of The Case Are That The Assesse Is A Cooperative Housing Society & Derives Income House Property & Interest From Bank & Provides Credit Facilities To Its Members. The Assessee Has Filed The Return Of Income For The A.Y 2015-16 Electronically On 26.10.2015 Disclosing A Total Income Of Rs.43,08,320/- After Claiming Deduction U/S 80P(2)(D) Of The Act Of Rs.85,80,391/-In Respect Of Interest Income Received On Deposits With Co-Op Banks. The Return Of Income Was Processed U/S 143(1) Of The Act. Subsequently The Case Was Selected For Limited Scrutiny Through Cass For Verification Of (I)Income From Heads Of Income Other Than Business/Profession Mismatch(Ii)Sales Turnover Mismatch & (Iii) Deduction Under Chapter Vi-A. The Assessing Officer (A.O.) Issued Notice U/S 143(2) & 142(1) Of The Act Along With The Questionnaire. In Compliance, The Ld.Ar Of The Assessee Appeared From Time To Time, Produced The Books Of Accounts & Submitted The Relevant Details & Documents & The Case Was Discussed.

For Appellant: Mr.M.Subramanian.&For Respondent: Mr. Ajay. CIT DR
Section 143(1)Section 143(2)Section 143(3)Section 263Section 80P(2)(d)

considered the facts that the A.O has called for the information and the case was discussed and there cannot be any non application of mind by the A.O. We find that the A.O has considered one of the possible views based on the information and it is not necessary that ... order of ITO observing that order of ITO did not contain discussion in regard to allow ability of claim for deduction which indicated non-application of mind and that claim of assessee required examination as to whether expenditure in question was a revenue or capital expenditure and directed