Wrong Facts, No Jurisdiction! Patna HC Cancels Reassessment Initiated on False Premise
Recently, Patna HC cancelled the re-assessment Initiated on False Premise.
Let us have a Short Overview of the case:
The assessee filed ITR for AY 2015–16 on 30.03.2016 declaring Rs 7.99 lakh income and exempt LTCG of Rs 25.04 lakh. Despite this, the AO issued a notice under Section 148A(b) on 23.03.2022 alleging he was a “non-filer” with escaped income of Rs 1.04 crore.
The Court noted the AO’s claim was “based on palpably incorrect information,” and that the “first paragraph of the annexure… seems to be incorrect and maybe a result of cut-and-paste practice.” The re-assessment was clearly triggered to cross the Rs 50 lakh threshold and invoke extended limitation under Section 149(1)(b).
The Department failed to provide any material or evidence with the 148A(b) notice – violating the mandate laid down in Rajeev Bansal (SC), which requires not just a show cause but also disclosure of material relied upon.
The Court held that “no effective show-cause notice under section 148A(b) was served” and that the entire proceeding was “vitiated due to jurisdictional error.”
Re-assessment and Rs 19.45 lakh demand were quashed. The judgment reaffirms: wrong facts and absence of material = no jurisdiction under the new regime.
The copy of the order is as under:
