AO conducted search u/s 132 of Income Tax Act on the Assessee and made certain additions in an orders passed u/s 153A for AY 2009-10 to AY 2015-16 on the alleged ground that Assessee is beneficial owner of a foreign company. On appeal, the Tribunal set-aside the orders passed u/s 153A on the ground that the AO has failed to discharge the burden to prove with evidence that the Assessee was the beneficial owner of the foreign company.

Subsequently, the AO passed on the same information to the BMA authorities. The BMA authorities based on such information issued notice u/s 10 of BMA. The Assessee challenged the notice u/s 10 of BMA in writ petition before the Karnataka High Court.

The High Court held that the basis for order u/s 153A of the IT Act and notice u/s 10 of BMA were the same. and that that the Tribunal in appeals against orders u/s 153A held that the AO had failed to apply his mind and discharge his onus. Accordingly, the High Court held that there was non-application of mind at both stages i.e. under the IT Act as well as under the BMA. It also observed that the BMA authorities have acted mechanically on receipt of information from the IT authorities The notice issued u/s 10 of the BMA was quashed, with a liberty to the BMA authorities to issue fresh notice in accordance with law.