2002 (9) TMI 21 - HC - Income Tax

Writ petition has been preferred by the petitioner with a prayer that by an appropriate writ, order or direction the notice dated August 21, 2002 issued by respondent No.6 (the Assistant CIT) u/s 158BC, by which the petitioner was requested to prepare a true and correct return of his total income including the undisclosed income in respect of which he as individual is assessable for the block period mentioned in section 158B(a) and further respondent No. 5 (the Deputy Director (Investigation), Income-tax) and respondent No. 6 may be restrained from taking any proceedings under Chapter XIV-B against the petitioner till the question as to who exercises jurisdiction over the petitioner as Assessing Officer is decided by this court Staying the operation of the show cause notice dated August 21,2002, passed by the Assistant Commissioner is not proper unless there is a case of grave injustice - Held that the operation of notice issued by the Assistant CIT is not liable to be stayed

Summary

Issues involved:
1. Jurisdictional conflict between different authorities over the petitioner's assessment.
2. Validity of the notice issued under section 158BC of the Income-tax Act, 1961.
3. Application for stay of the notice dated August 21, 2002.

Jurisdictional Conflict Analysis:
The petitioner raised concerns regarding two authorities claiming jurisdiction over them. While the Deputy Director (Investigation) asserted jurisdiction as an Assessing Officer, the matter was pending before the court. The Assistant Commissioner issued a notice under section 158BC of the Act, prompting the petitioner to seek a stay pending the court's decision on jurisdiction. The court noted that all proceedings would now be handled by the Assistant Commissioner, resolving the jurisdictional conflict.

Validity of Notice under Section 158BC Analysis:
The notice dated August 21, 2002, issued by the Assistant Commissioner under section 158BC was challenged by the petitioner on various grounds, including jurisdiction. The court emphasized the importance of issuing notices in income-tax proceedings to adhere to principles of natural justice. Citing a Supreme Court decision, the court found that the notice was validly issued, allowing the petitioner to present their case before the Assistant Commissioner.

Application for Stay Analysis:
The petitioner sought a stay on the operation of the notice dated August 21, 2002. The court considered the circumstances and concluded that unless there was a case of grave injustice, staying the notice was not warranted. The petitioner could submit their submissions to the Assistant Commissioner, including challenging the validity of the notice. The court rejected the stay application, citing that the petitioner had the opportunity to address their concerns during the proceedings.

Conclusion:
The court rejected the stay applications in multiple writ petitions, including the petitioner's request to stay the notice dated August 21, 2002. It was determined that the proceedings would proceed under the jurisdiction of the Assistant Commissioner, resolving the jurisdictional conflict. The petitioner was advised to present their case before the Assistant Commissioner and address any legal issues during the assessment process.