2021 (5) TMI 496 - HC - Income Tax

Scheme of faceless assessment - Maintainability of petition - Jurisdiction of High court - Return of income selected for scrutiny and notice under Section 143(2) of the Act was issued - the time given to the petitioner to show cause was virtually of three days only - Principle of natural justice - HELD THAT - As enquired from the counsel for the respondents once the respondents have introduced the scheme of faceless assessment through the respondent no. 1 National Faceless Assessment Centre at Delhi, how can the respondents object to the jurisdiction of this Court being invoked, irrespective of the locate/situate of the assessee. Attention of the counsel for the respondents is drawn to Kusum Inglots Alloys Ltd. Vs. Union of India 2004 (4) TMI 342 - SUPREME COURT where it was held that petition under Article 226 of the Constitution of India against an order or a finding of a Court or Tribunal or executive authority situated at Delhi, is maintainable at Delhi, though this Court, in exercise of discretion under Article 226 of the Constitution of India and invoking the doctrine of forum non conveniens, may refuse to entertain the same and ask the petitioner to approach the appropriate Court. It was further held that when the original authority is constituted at one place and the appellate authority is constituted at another, a writ petition would be maintainable at both the places. It was yet further held that as the order of the appellate authority (in that case) constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate, having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority. In the recent judgment in Maharashtra Chess Association Vs. Union of India 2019 (7) TMI 1755 - SUPREME COURT also, the argument that the jurisdiction under Article 226 of the High Court of Bombay stood ousted because of the parties having agreed to the jurisdiction of the Courts at Chennai, was rejected and it was held that once the High Court of Bombay had jurisdiction, merely because another High Court also had jurisdiction and the parties had agreed to the jurisdiction of that High Court, was only a factor to be considered in the exercise of discretion, whether to entertain the writ petition in that High Court or not. It is deemed appropriate that rather than this Bench, which does not have taxation matters on its roster, hearing and deciding the said question, the matter be considered by the Roster Bench dealing with taxation matters, so that there is a consistency of opinion inasmuch as the question is likely to arise in many cases and if we proceed and take a view and the Roster Bench is of a different view, the need for referring the matter to a larger Bench, delaying the disposal of the matter, may arise. Subject to the orders of Hon ble the Chief Justice, list this petition before the Roster Bench, on 17th May, 2021.

Summary

Issues:
Challenge to assessment order for the assessment year 2018-19 under Article 226 of the Constitution of India, Jurisdiction of the High Court in faceless assessment cases, Maintainability of the petition before the Delhi High Court, Applicability of precedents on jurisdiction in writ petitions.

Analysis:
The judgment concerns a writ petition challenging an assessment order for the assessment year 2018-19 under Article 226 of the Constitution of India. The petitioner, a charitable society registered under Section 12A and Section 80G of the Income Tax Act, filed the return of income claiming exemption under Sections 11 and 12 of the Act. The petitioner was issued a notice under Section 143(2) for scrutiny, and subsequently, a notice to show cause by a specific date. Due to the Covid-19 pandemic, the petitioner requested an adjournment but the assessment order was passed before a response could be submitted. Instead of appealing the order, the petitioner filed a writ petition challenging the assessment.

The issue of jurisdiction arose as the counsel for the respondents contended that since the petitioner was an assessee in Chandigarh, the petition before the Delhi High Court was not maintainable. However, the Court referred to precedents emphasizing that the location of the assessee does not affect the jurisdiction of the Court in faceless assessment cases. Citing cases like Kusum Inglots & Alloys Ltd. Vs. Union of India and Cement Workers’ Mandal Vs. Global Cements Limited, the Court highlighted that a writ petition can be maintainable at multiple locations when authorities are situated in different places. The Court also referred to the recent judgment in Maharashtra Chess Association Vs. Union of India, emphasizing that jurisdiction under Article 226 is not ousted based on parties agreeing to the jurisdiction of another Court.

To ensure consistency and avoid conflicting views, the Court decided that the matter should be considered by the Roster Bench dealing with taxation matters. This decision aimed to prevent delays in case disposal and potential referral to a larger Bench. The Court scheduled the petition to be listed before the Roster Bench on a specific date, subject to the orders of the Chief Justice. This approach was deemed appropriate to maintain uniformity in opinion on the jurisdictional issue likely to arise in similar cases.

In conclusion, the judgment addresses the challenge to the assessment order, jurisdiction of the High Court in faceless assessment cases, maintainability of the petition, and the applicability of precedents on jurisdiction in writ petitions. The decision to refer the matter to the Roster Bench reflects the Court's commitment to ensuring consistency and efficiency in handling such cases.