"The sky-lotus is fragrant, because it has lotusness in it like a natural lotus", commits the fallacy (hetvābhāsa) of:

The argument commits the hetvabhasa of asiddha, the unproved reason.

Its subject, the sky-lotus, does not exist anywhere in reality.

When the locus on which the reason must reside is itself unreal, the reason has no established abode.

A reason lacking a real locus is unproved, which is the ashrayasiddha variety of asiddha.

So the defect lies in the non-existence of the subject, an unestablished reason.