Reopening conclusion that assessee was “Non-Filer” was non-application of mind – High Court

Reopening conclusion that assessee was “Non-Filer” despite assessee clearly stating in reply that he had filed ITR was non-application of mind – High Court

In a recent judgment, Hon’ble High Court set aside reopening notice holding that conclusion arrived by the Assessing Officer that the assessee was a “Non-Filer” despite assessee clearly stating in reply that he had filed ITR for the relevant Assessment Year, was non-application of mind

ABCAUS Case Law Citation:
5060 (2026) (03) abcaus.in HC

In the instant case the Assessee/Petitioner had filed a Writ to challenge order passed under Section 148A(3) of the Income Tax Act, 1961 (the Act) and the consequential notice issued under Section 148 of the Act for the assessment year 2021-22. 

Initially, a show cause notice under Section 148A(b) had been issued to the petitioner calling upon him to show cause as to why re-assessment proceedings should not be initiated by issuing a notice under Section 148 of the Act on the ground that the petitioner was a “Non-Filer” in respect of the said assessment year. 

The petitioner responded to the said notice under Section 148A(b) detailing therein the particulars of the Income Tax Return that the petitioner had filed for the said assessment year and thereby asserted that re-assessment proceedings under contemplation should be dropped. 

However, the Assessing Officer by the order impugned, rejected the petitioner’s contention and held that the case at hand is fit for issuance of a reopening notice under Section 148 of the Act.

The Petitioner submitted that the order impugned had been passed without considering the petitioner’s reply.

On the contrary, the Revenue stated that the Assessing Officer had clearly noted the petitioner’s contentions in the reply and that although it may be contended that the ultimate conclusion reached by the Assessing Officer was not to the liking of the petitioner, yet, it could not be said that the case at hand is one of total non-application of mind. It was submitted that since the petitioner’s reply has been clearly taken note of by the Assessing Officer, the conclusion reached by him should not be disturbed.

The Hon’ble High Court observed that the Assessing Officer had extracted the petitioner’s reply in verbatim, in the impugned order, yet not even one line had been spared by the Assessing Officer that would evince that he had bestowed any consideration to the said reply. The ultimate conclusion of reopening of the petitioner’s case for re-assessment of his income for the assessment year 2021-22 was not based on any reason.  

The Hon’ble High Court observed that it is settled that reasons are live links between the proposition and the conclusion which were absent in the case at hand. In the first two and a half pages of the 11-pages order, the Assessing Officer had recorded information on the basis of which the initial notice to show cause was issued; the rest of the pages till the 10th page have been devoted to paraphrase the notice to show cause and to extract the petitioner’s reply. The last page recorded an abrupt conclusion that the petitioner’s case should be reopened without indicating why and how could the petitioner be still treated as a “Non-Filer” when the petitioner had brought on record material to show that the petitioner had indeed filed his return of income for the relevant assessment year.

The Hon’ble High Court opined that the conclusion that the petitioner was “Non-Filer” despite a reply clearly indicating an Income Tax Return having been filed for assessment year 2021-22 itself could be nothing else but product of non-application of mind. 

The Hon’ble High Court held that since the order impugned clearly evinced total non-application of mind, the same cannot withstand scrutiny under Article 226 of the Constitution of India.

Accordingly, the order impugned and the consequential notice of under Section 148 of the Act were set aside. The Assessing Officer was directed to re-visit the matter and pass a fresh order upon considering the petitioner’s reply.

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