2015 (1) TMI 1019 - HC - Income Tax

DTAA - Cyprus ought not to have been declared as notified jurisdictional area by the notification dated 1.11.2013 in view of international treaty between Government of India and Government of Cyprus - Held that - While exercising the writ jurisdiction under Article 226 of the Constitution of India, this Court ordinarily should not proceed to look into as to whether informations sought by the Indian Authorities were ever declined by the Government of Cyprus or Government of Cyprus is ready and willing to supply the informations sought by the Indian Authorities. Moreover, there seems to be no valid reason to disbelieve the satisfaction so recorded by the Indian Authorities. Consequently, petitions fail for relief No. (a). In the present writ petitions, petitioner is also challenging revised certificate dated 12.12.2014 passed by the Income Tax Authorities. Undisputedly, Income Tax Authorities are competent under Section 154 of the Income Tax Act to revise earlier orders passed, even suo moto, if any illegality or irregularity is observed therein, at the subsequent stage. Undisputedly, all orders passed under Section 154 of the Act can be assailed in statutory appeals.Since, alternative remedy of statutory appeal is available to the petitioner to challenge the revised certificate dated 12.12.2014, therefore, not inclined to invoke my writ jurisdiction under Article 226 of the Constitution of India. W.P. dismissed.

Summary

Issues:
1. Challenge to the notification declaring Cyprus as a notified jurisdictional area.
2. Challenge to the revised certificate passed by the Income Tax Authorities.

Analysis:
1. Challenge to Notification Declaring Cyprus as Notified Jurisdictional Area:
The petitioner contested the notification dated 1.11.2013, asserting that Cyprus should not have been designated as a notified jurisdictional area due to an international treaty between India and Cyprus. The petitioner argued that under Article 28 of the Treaty, the contracting states are obligated to exchange necessary information for tax purposes. The petitioner claimed that Cyprus was willing to cooperate and provide information sought by Indian authorities, contrary to the notification's assertion. However, the court noted that the notification was based on Cyprus's failure to provide requested information under the Exchange of Information Agreement. The court held that it should not question whether Cyprus denied information or was willing to cooperate, and there was no reason to doubt the satisfaction of Indian authorities. Consequently, the petitions challenging the notification were dismissed.

2. Challenge to Revised Certificate by Income Tax Authorities:
The petitioner also challenged a revised certificate issued by the Income Tax Authorities on 12.12.2014. The court acknowledged the authority of the Income Tax Authorities to revise orders under Section 154 of the Income Tax Act if irregularities are observed. It was highlighted that all orders under Section 154 can be challenged through statutory appeals. As the petitioner had the option to pursue a statutory appeal against the revised certificate, the court declined to exercise its writ jurisdiction under Article 226 of the Constitution of India. The petitioner was advised to approach the appellate forum within ten days. The Income Tax Department assured that any appeals filed would be handled promptly and in accordance with the law. Consequently, all writ petitions challenging the revised certificate were dismissed.

In conclusion, the High Court dismissed all writ petitions challenging the notification declaring Cyprus as a notified jurisdictional area and the revised certificate issued by the Income Tax Authorities. The court emphasized the availability of statutory appeals as the appropriate remedy for challenging such decisions and directed the parties to follow the legal procedures for further redressal.