2023 (9) TMI 1555 - HC - Income Tax

Validity of order passed u/s 148A(d) - challenge to jurisdiction of the authority to pass the order challenged and in violation of the principles of natural justice inasmuch as the appellant was not granted opportunity of personal hearing - HELD THAT - Since the jurisdictional error goes to the root of the matter, it is but appropriate that such an issue is decided by the Court. For such purpose, an affidavit would be required to be filed by the department as the matter cannot be disposed of based on oral submissions. Therefore, we are of the view that the respondents/department should file their affidavit setting out all contentions, which are available to them under law as well as on facts, after which the Court will consider as to the contentions raised by the appellant in this appeal along with the grounds, which were canvassed in the writ petition. The impugned proceedings initiated by the assessing officer shall remain stayed including the latest notice issued dated 18th September, 2023 fixing the date of personal hearing on 25th September, 2023 (today) at 3.00 pm. till disposal of the appeal.

Summary

Issues: Jurisdictional error in passing the order under the Income Tax Act, 1961 and violation of principles of natural justice.

In this case, the appellant filed a writ petition challenging an order passed under section 148A(d) of the Income Tax Act, 1961, dated 12th April, 2023, for the assessment year 2019-2020, and the consequential notice issued under section 148 of the Act. The appellant raised two main legal issues in the writ petition. Firstly, questioning the jurisdiction of the authority to pass the order, citing violation of the notification dated 28th March, 2022, and non-compliance with section 144B of the Act. Secondly, the appellant argued that the order violated the principles of natural justice as no opportunity of personal hearing was granted. The single Bench remanded the matter back to the assessing officer for a fresh order with a personal hearing opportunity, without addressing the jurisdictional issue. The appellant contended that the jurisdictional error should have been adjudicated in the writ petition itself, citing a similar decision by the High Court of Telengana. An interim order by the High Court of Bombay was also referenced, supporting the appellant's argument regarding jurisdictional issues.

The respondents argued that a subsequent notification dated 20th February, 2023, validated the proceedings initiated by the assessing officer, asserting that there was no jurisdictional error. The Court acknowledged that the jurisdictional error was crucial and needed to be resolved. It directed the respondents to file an affidavit within two weeks setting out all contentions under law and facts. The Court stayed the proceedings initiated by the assessing officer, including the latest notice fixing a personal hearing date, until the appeal's disposal. The Court scheduled the next hearing for 24th November, 2023, emphasizing the importance of resolving the jurisdictional issue raised by the appellant.