2022 (9) TMI 1546 - HC - Income Tax

Delhi High Court jurisdiction to decide the legality and validity of a notice issued u/s 148 - as argued there is no order passed u/s 127 transferring jurisdiction to Respondent No.1 in Mumbai - Respondents submits that this Court has no territorial jurisdiction to decide the legality and validity of a notice issued by Respondent No.1 under Section 148 of the Act, especially in view of the fact that the initial notice under Section 148 of the Act had been challenged by the Petitioner by way of writ petition before the Bombay High Court. HELD THAT - In the opinion of this Court, since the Petitioner had initially approached the Bombay High Court, the averments in the said writ petition would have a material bearing. Accordingly, the Petitioner is directed to place on record a copy of the writ petition filed by it in Mumbai High Court challenging the notice issued under Section 148 of the Act dated 30th June, 2021, within a week.

Summary

Issues:
Challenge to show cause notice dated 02nd June, 2022 under Section 148A(b) of the Income Tax Act, 1961, validity of order dated 28th July, 2022 under Section 148A(d) of the Act, jurisdictional transfer under Section 127 of the Act, territorial jurisdiction of the High Court, writ petition filed before the Bombay High Court.

Analysis:

The High Court dealt with a writ petition challenging a show cause notice issued under Section 148A(b) of the Income Tax Act, 1961, an order passed under Section 148A(d) of the Act, and a notice issued under Section 148 of the Act for the Assessment Year 2014-15. The Petitioner contended that the show cause notice issued by Respondent No.1 was without jurisdiction and invalid as there was no order transferring jurisdiction to Respondent No.1 in Mumbai. However, Respondents produced an order under Section 127 of the Act transferring the case to Delhi, which was taken on record. The Court noted that the jurisdictional transfer had taken place, and the Petitioner was directed to submit a copy of the writ petition filed in the Bombay High Court challenging the initial notice under Section 148 of the Act.

The Court observed that since the Petitioner had initially approached the Bombay High Court challenging the notice, the averments in the Bombay High Court writ petition would be relevant. Therefore, the High Court directed the Petitioner to submit a copy of the Bombay High Court writ petition within a week. The Respondents argued that the High Court lacked territorial jurisdiction to decide the legality of the notice issued under Section 148 of the Act, especially since the initial notice had been challenged before the Bombay High Court. The case was listed for further hearing on 27th September, 2022.

In conclusion, the judgment focused on determining the jurisdictional aspects of the case, particularly regarding the transfer of jurisdiction under Section 127 of the Income Tax Act, 1961. The High Court emphasized the importance of jurisdictional clarity and directed the Petitioner to provide relevant documents from the Bombay High Court case. The issue of territorial jurisdiction and the impact of prior legal actions on the current proceedings were central to the Court's analysis, highlighting the need for procedural adherence and legal clarity in tax matters.