2022 (12) TMI 1093 - HC - Income Tax

Jurisdiction to initiate Reopening of assessment - validity of order under Section 148A(d) - Petitioner also challenges the order passed by the CIT (International Taxation 2), Mumbai, in purported exercise of powers under Section 127 - Notices u/s 148 A(b) and the consequent notice u/s 148 of the Act are challenged on the ground that the said order and notice could be sustained only, if the initial notice under Section 148 A(b) of the Act had been issued by the concerned A.O. at Delhi. HELD THAT - In the present case, it is stated that while notice under Section 148 A(b) of the Act was issued by the officer at Bombay, the order under Section 148A(d) as also the notice 148 of the Act were issued by the A.O. at Delhi, which thus cannot be upheld. Prima facie, we are satisfied with the argument of Mr. Mistri, learned Senior Counsel that a part of cause of action has accrued to the Petitioner within the territorial jurisdiction of this Court, inasmuch as the initial notice under Section 148 A(b) of the Act was issued by the A.O. in Mumbai and that this Court would have the jurisdiction to entertain the present writ petition, more so when this Court had proceeded to exercise jurisdiction in the case of the Petitioner while entertaining a challenge to the initial notice under Section 148 of the Act, issued under the unamended provisions of Section 148 of the Act as it existed before 01st April, 2021. Issue notice to Respondent Nos. 2, 4 and 5, returnable on 13 th January, 2023. Objections be fled within six weeks from today. There shall be ad-interim relief in terms of prayer clause d of the petition.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961, order under Section 148A(d), notice under Section 148A(b), and order under Section 127 of the Act.

Analysis:

1. Challenge to Notice under Section 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 28th July, 2022, under Section 148 of the Income Tax Act, 1961. The petitioner had previously challenged a similar notice in a different petition which was quashed. Subsequently, a notice under Section 148A(b) was issued on 02nd June, 2022, which led to objections based on jurisdiction. The Commissioner of Income Tax passed an order transferring the case to another jurisdiction, which is also challenged in the present petition.

2. Challenge to Order under Section 148A(d):
The order under Section 148A(d) was passed by the Assessing Officer (A.O.) at Delhi after the case was transferred from Mumbai. The petitioner contests the validity of this order, arguing that it cannot be upheld due to jurisdictional issues arising from the initial notice being issued by a different office.

3. Challenge to Notice under Section 148A(b):
The notice under Section 148A(b) was issued by the Deputy Commissioner of Income Tax in Mumbai, leading to objections regarding jurisdiction. The petitioner argues that subsequent orders and notices, including the one under Section 148 of the Act, cannot be sustained due to the initial notice being without jurisdiction.

4. Challenge to Order under Section 127 of the Act:
The order dated 08th July, 2022, passed by the Commissioner of Income Tax, transferring the case to a different jurisdiction, is also contested by the petitioner on the grounds of lack of opportunity for being heard.

5. Jurisdictional Considerations:
The petitioner's counsel argued that a part of the cause of action accrued within the territorial jurisdiction of the Bombay High Court due to the initial notice being issued in Mumbai. The court acknowledged this argument and accepted jurisdiction based on the location of the initial notice issuance. The court found merit in the petitioner's argument regarding jurisdiction and issued notices to relevant respondents for further proceedings.

In conclusion, the judgment addresses multiple challenges to notices, orders, and jurisdictional issues under the Income Tax Act, 1961. The court accepted jurisdiction based on the location of the initial notice issuance and found merit in the petitioner's arguments regarding jurisdictional concerns. The case involves a complex interplay of legal provisions and procedural aspects related to income tax assessments and jurisdictional transfers, highlighting the importance of adhering to legal procedures and principles in tax matters.