2011 (11) TMI 99 - HC - Income Tax

Jurisdiction of AO - Assessee in defaule u/s 201(1) - Failure to deduct TDS on on the payment of lease premium to MMRDA under Section 194-I - Held that - The Petitioner is assessed at New Delhi. The PAN and TAN numbers are allotted to the Petitioner under Sections 139A and 203A by the Assessing Officer at New Delhi. All returns including the TDS returns have been filed at New Delhi. The Assessing Officer recorded the submissions of the Petitioner which advert to these facts and the contention based thereon that the jurisdiction would lie with the Income Tax Authorities at New Delhi. This was brushed aside only on the ground that the assessment was getting time barred on 31 March 2011 and it was now not possible to transfer the case papers to the Authorities at New Delhi. This, with respect, could be no ground whatsoever valid in law to pass an order under Section 201/201(1A) when there was complete absence of jurisdiction on the part of the Assessing Officer at Mumbai. - Assessment order set aside - decided in favor of assessee.

Summary

Issues:
Challenge to legality of order holding petitioner as Assessee in default under Income Tax Act for failure to deduct TDS on lease premium payment to MMRDA.

Analysis:
The petitioner, a company registered under the Companies Act, challenged an order by the Assessing Officer holding them in default for not deducting TDS on lease premium payment to MMRDA. The petitioner operates from New Delhi, with PAN and TAN issued by the Assessing Officer in New Delhi. They claimed exemption under Section 11 and challenged the jurisdiction of the Assessing Officer in Mumbai. The petitioner's contention was that since they filed returns in New Delhi and were assessed there, the Mumbai Assessing Officer lacked jurisdiction. The Revenue argued that the Mumbai Assessing Officer acted due to the limitation period expiring soon.

The High Court found that all facts were undisputed, with the petitioner being assessed in New Delhi and all returns filed there. The Assessing Officer in Mumbai proceeded with the order due to time constraints, despite the lack of jurisdiction. The Court held that passing an order under Section 201/201(1A) without proper jurisdiction was invalid in law. Consequently, the impugned order dated 29 March 2011 was set aside solely on the grounds of lack of jurisdiction. The Court clarified that this decision did not prevent the Competent Authority in New Delhi from taking appropriate legal actions.

In conclusion, the High Court ruled in favor of the petitioner, setting aside the order due to lack of jurisdiction. The Competent Authority in New Delhi was directed to proceed with the case as per the law. The ruling was made absolute with no costs imposed.