2020 (2) TMI 736 - HC - Income Tax

Authority and jurisdiction of the concerned Income Tax Officer (TDS) - HELD THAT - The impugned notices dated 10th April 1997 and 26th May, 1997 have been issued without jurisdiction and authority of law. The concerned officer being the respondent no.1 had no jurisdiction whatsoever at that relevant point of time to issue such notices. Such notices are accordingly quashed and set aside. Even though the said notices impugned in this proceeding are quashed and set aside, the same would not preclude the Income Tax Authorities to take appropriate steps in accordance with law to initiate appropriate proceedings in respect of the disputes that were urged and formed the subject matter of the impugned notices. For the purposes of limitation, in case such proceedings are initiated and steps are taken accordingly, the concerned assessee being the petitioner is precluded from raising the plea of the limitation and for the purposes of limitation, the relevant date would be the date of this order. Revenue Authorities would also be entitled to rely upon the principles enshrined in Section 14 of Limitation Act, 1963 in this regard

Summary

Issues: Challenge against jurisdiction of Income Tax Officer (TDS) to issue requisition notices in 1997.

The judgment delivered by Ravi Krishan Kapur J. of the Calcutta High Court addressed the challenge raised by the petitioner against the jurisdiction of the Income Tax Officer (TDS) to initiate requisition notices in 1997. The petitioner contended that the respondent no.1, the Income Tax Officer (TDS), lacked the authority to issue the impugned notices dated 10th April, 1997, and 26th May, 1997. The petitioner had obtained an interim stay order on the notices in June 1997. The petitioner's senior advocate, Mr. Khaitan, relied on a precedent involving CESC Limited & Anr. vs. Income Tax Officer (TDS) to support the argument that the concerned TDS Officer lacked jurisdiction. Subsequently, the Department clarified that the jurisdiction was vested with the respondent no.1 for the first time following a Circular.

Upon hearing the arguments from both parties, the Court concluded that the impugned notices issued in 1997 were devoid of jurisdiction and authority of law. The respondent no.1 did not possess the necessary jurisdiction at the time of issuing the notices. Consequently, the Court quashed and set aside the notices dated 10th April 1997 and 26th May 1997. However, the judgment clarified that the annulment of the notices did not prevent the Income Tax Authorities from taking appropriate legal actions in accordance with the law regarding the disputes raised in the impugned notices. The petitioner was barred from raising the plea of limitation if such proceedings were initiated, with the relevant date being the date of the Court's order. Additionally, the Revenue Authorities were permitted to utilize the provisions of Section 14 of the Limitation Act, 1963 for this purpose.

In conclusion, the Court allowed WP No.1092 of 1997, providing clear directions regarding the quashing of the impugned notices, the initiation of further proceedings by the Income Tax Authorities, and the application of limitation principles in such cases.