Incident Tracker

KMG Wires Pvt Ltd v. National Faceless Assessment Centre, WP(L) 24366/2025 (2025:BHC-OS:19789-DB)

other

In India, the Bombay High Court (6 October 2025) quashed a faceless income-tax assessment raising demand on about Rs 27.91 crore because the assessing officer relied on non-existent, AI-generated precedents and ignored the taxpayer's evidence. The court warned quasi-judicial authorities not to blindly trust AI output and remanded the matter for fresh assessment.

Date of decision/order

2025-10-06

Court

High Court of Judicature at Bombay

Jurisdiction

INDIA

AI tool

generative AI (unspecified)

Conduct

A faceless income-tax assessment order raising demand on about Rs 27.91 crore relied on non-existent, AI-generated case law and ignored the taxpayer's replies, breaching natural justice. The High Court held that quasi-judicial authorities must cross-verify AI output rather than rely on it blindly.

Consequence

See outcome