· The petition challenges the notice dated 08.03.2017 issued u/s 148 of the Act after obtaining necessary sanction from JCIT, in terms of section 151(2) of the Act.
· The objection raised by the assessee was that the JCIT had mechanically granted the sanction to the AO without due application of mind.
· The Court took note of the fact that the JCIT while granting sanction has recorded the word “satisfied”.
· The Court held that it is a settled principle of law that sanction granted by the higher Authority for issuing of a reopening notice has to be on due application of mind, and cannot be a mechanical approval without examining the proposal sent by the AO.
· The Court further held that if the JCIT would have applied his mind to the application made by the AO, then the very first thing which would have arisen, was the basis of the notice, as the provision of law on which it was based is no longer in the statute.
· The Court, thus, concluded that not pointing out of mistake/error by the JCIT on the part of the AO is prima facie evidence of non-application of mind on the part of the sanctioning authority while granting the sanction.
· Therefore, the Court directed an interim stay to the reassessment proceedings.
For further reading, refer the attachment.
Further Reading