Case Law Details
DCIT Vs Kalinga Institute of Industrial Technology (Supreme Court of India)
Summary: The dispute arose from the assessment for Assessment Year 2014-15, in which the assessee challenged the assessment order dated 30.12.2016, the consequential demand under Section 156 of the Income Tax Act amounting to ₹24,96,42,960, and the notice issued under Section 143(2), alleging that they were without jurisdiction and violative of the principles of natural justice.
Before the High Court, the Joint Commissioner of Income Tax (OSD) (Exemption), Bhubaneswar, filed an affidavit stating that jurisdiction over the assessee was vested with the Commissioner of Income Tax (OSD) (Exemption). On the basis of the affidavit, the High Court held that the notice under Section 143(2) issued by the Assistant Commissioner of Income Tax, Corporate Circle-1(2), Bhubaneswar, was without jurisdiction. However, the High Court declined to examine the validity of the assessment order and the demand notice, observing that those orders were appealable. It accordingly quashed the notice under Section 143(2) and granted liberty to the competent authority to issue an appropriate notice in accordance with law.
The Revenue challenged the High Court’s decision before the Supreme Court.
The Supreme Court observed that the High Court had set aside the assessment on the ground that the jurisdictional officer had not adjudicated upon the returns after jurisdiction had changed. However, the record showed that the assessee had participated in the assessment proceedings pursuant to the notice issued under Section 142(1) and had not questioned the jurisdiction of the Assessing Officer. The Court noted that Section 124(3)(a) of the Income Tax Act bars an assessee from questioning the jurisdiction of the Assessing Officer if such objection is not raised within 30 days of receipt of the notice under Section 142(1).
In view of these facts, the Supreme Court held that the circumstances of the case did not justify the order passed by the High Court. At the same time, it noted that the High Court had granted liberty to the competent authority to issue an appropriate notice.
The Supreme Court clarified that the Assessing Officer would be free to complete the assessment, in case the assessment order had not already been issued, within 60 days. It further directed that, in such an event, the assessee would not be entitled to raise the issue of limitation. Accordingly, the Special Leave Petition filed by the Revenue was allowed in the above terms.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
The impugned order set asides the assessment for AY 2014-2015 on the ground that the jurisdictional officer had not adjudicated upon the returns. The jurisdiction had been changed after the returns were filed. However, the records also reveals that the assessee had participated pursuant to the notice issued under Section 142 (1) and had not questioned the jurisdiction of the assessing officer. Section 124(3)(a) of the Income Tax Act precludes the assessee from questioning the jurisdiction of the assessing officer, if he does not do so within 30 days of receipt of notice under Section 142 (1).
In the present case, the facts did not warrant the order made by the High Court. At the same time, this Court notices that the High Court had granted liberty to the concerned authority to issue appropriate notice.
It is clarified, therefore, that the assessing officer is free to complete the assessment (in case the assessment order has not been issued) within the next 60 days. In such event, the question of limitation shall not be raised by the assessee.
The special leave petition is allowed in the above terms.
Pending application, if any, are disposed of.
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