Reassessment Order and Notice Quashed as Sanction Was Granted Mechanically Without Considering Assessee’s Response

By | October 9, 2026
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Reassessment Order and Notice Quashed as Sanction Was Granted Mechanically Without Considering Assessee’s Response

Issue

Whether an order under Section 148A(d) and the consequent reassessment notice under Section 148 are legally sustainable when sanction under Section 151 is granted mechanically without considering the reply filed by the assessee to the notice issued under Section 148A(b).

Facts

  • Reassessment Proceedings: The tax authority initiated reassessment proceedings against the assessee for Assessment Year 2017-18 by issuing a notice under Section 148A(b).
  • Response Submitted: The assessee filed a detailed reply to the Section 148A(b) notice explaining its position.
  • Mechanical Approval Granted: While granting sanction under Section 151, the sanctioning authority recorded that the draft order was considered, but incorrectly proceeded on the premise that no response had been filed by the assessee.
  • Non-Application of Mind: The sanctioning authority’s order reflected no application of mind to the arguments or material submitted in the assessee’s reply.
  • Order and Notice Issued: Based on this sanction, the Assessing Officer passed an order under Section 148A(d) and issued a reassessment notice under Section 148.
  • Assessee’s Challenge: The assessee challenged the Section 148A(d) order and Section 148 notice before the court on the ground that the sanction was granted mechanically.

Decision

  • Sanction Vitiated: In favour of Assessee. Granting sanction under Section 151 without considering the reply filed by the assessee demonstrates mechanical approval and a total non-application of mind, which vitiates the sanction order itself. [Para 4]
  • Order and Notice Quashed: In favour of Assessee. Because the underlying sanction was invalid, the consequent order passed under Section 148A(d) and the reassessment notice issued under Section 148 were legally unsustainable and accordingly set aside. [Paras 4 and 5]

Key Takeaways

  1. Mandatory Application of Mind: Approval under Section 151 is a statutory safeguard requiring the approving authority to meaningfully consider all materials on record, including the taxpayer’s reply to the Section 148A(b) notice.
  2. Mechanical Sanction Fatal to Proceedings: A sanction granted on the false premise that “no response was filed” constitutes a mechanical exercise of power, rendering both the Section 148A(d) order and the Section 148 notice void ab initio.
  3. Protection Against Arbitrary Reassessment: Higher tax authorities cannot act as rubber stamps; failure to examine the assessee’s submissions at the approval stage invalidates subsequent reassessment proceedings.
HIGH COURT OF CALCUTTA
Jainco Transmission Ltd.
v.
Assistant Commissioner of Income-tax
Smita Das De, J.
WPA No. 15197 of 2024
SEPTEMBER  18, 2026
Avra Majumder, Ms. Alisha Das, Ms. Rupomita Ghosh and Ms. Maitreyee Naskar for the Petitioner. Soumen Bhattacharjee and Rounak Seal for the Respondent.
JUDGMENT
1. The present writ petition has been filed, inter alia , challenging the order dated 16th April, 2024 issued under Section 148A(d) of the Income Tax Act, 1961 (hereinafter referred to as the said Act) and the notice under Section 148 of the said Act dated 16th April, 2024 both in respect of the assessment year 2017-18.
2. The short point that falls for consideration in the instant writ petition is whether the approval granted under Section 151 of the said Act, by the sanction granting authority , in this case eing CCIT, Kolkata-2 can be said to be valid. By placing the approval granted under Section 151 of the said Act, Mr. Majumder, learned advocate representing the petitioner has claimed that the approval granting authority while grating the approval obviously did not consider the reply filed by the petitioner though, the petitioner had responded to the notice issued under Section 148A(b) of the said Act. He would submit that column NO. 15 of the aforesaid sanction order specifically records that the assessee did noyt file any response to the notice under Section 148A(b) of the said Act, though, the petitioner had in fact filed a response. According to him, the order passed by the assessing officer which is based on an approval issued by the sanction granting authority stands vitiated inasmuch as the sanction granting authority had granted the sanction without due application of mind. The above order cannot be sustained and should be set aside.
3. Mr. Soumen Bhattacharya, learned advocate appearing on behalf of the respondents although , has not placed before this Court the records of the case but has filed a short affidavit and has tried to justify the recording made in the column No. 15 of the sanction order issued under Section 151 of the said Act. According to him , ordinarily when a response to a notice under Section 148A9b) of the said Act is filed online, the same is reflected in the sanction order automatically without any human interference. However, in the event, if the response is filed manually , there is no such reflection in the order of the sanction granting authority. According to him, this is an unintentional error from an administrative oversight in the documentation process. The mistake was not deliberate. The same cannot have the effect of vitiating the above order inasmuch as the sanction granting authority had duly considerd the response.
4. Having heard the learned advocates appearing for the respective parties, I find from the disclosure made in the writ petition that the response to the notice under Section 148A(b) of the said Act was in fact filed, the same would corroborate from the order dated 16th April, 2024. Further in the sanction order though the sanction granting authority has recorded that he has considered the draft order, in my view, the same appears to be mechanical, as the same proceeds on the premise that no response was filed and there is also no reflection that he had considered the response.
5. Having regard to the above, this Court finds that while recommending the case, as a fit case for issuance of notice under Section 148, the sanction granting authority has only gone through the proposal of the AO and the materials on record, there is no reflection that the sanction granting authority had considered the response filed by the assessee. The above order appears to be mechanical. Since, the order under Seciton 148A(d) of the said Act was passed with the approval of the sanctioning authority, by reasons of the sanction being issued in a mechanical manner, the above order under Section 148A(d) of the said Act, also sands vitiated. The same cannot be sustained and the same is set aside.
6. Consequently, the notice issued under Section 148 of the said Act for the assessment year 2017-18 is also set aside. This shall , however, not impede upon the rights of the respondents to initiate proceedings afresh by notice from the stage of receipt of the response filed by the petitioner. The authority while disposing of the proceedings shall consider the response filed by the petitioner in accordance with law . For the purpose of limitation for passing the order under Section 148A(d), the period of one month shall commence when the notice in this regard is issued by the jurisdictional assessing officer provided , the notice is issued within a period of four months from date.
7. It is made clear that this Court has not gone into any other points raised by the petitioner and all other points are kept open. It is also made clear that if the petitioner is entitled to and seek for any additional document , the same shall be made over if found eligible.
8. With the above observations an directions, the writ petition is disposed of.
9. There shall be no order as to costs.
10. Urgent Photostat certified copy of this order , if applied for , be made available to the parties upon compliance of requisite formalities.