ACIT Vs S.K. Industries (Supreme Court of India)
The supplied Supreme Court material records that the Court did not find any good ground and reason to condone the delay or interfere with the impugned order. The application for condonation of delay and the special leave petition were therefore dismissed. The Supreme Court material further states that any pending application stood disposed of. The supplied material does not state any further Supreme Court reasoning or identify a separate substantive issue decided by the Supreme Court.
Read HC Judgment in this case: Delhi HC Quashes Assessment for Failure to Issue Timely Section 143(2) Notice
The underlying proceedings arose from an assessment order dated 31st March, 2016 passed by the Income Tax Department under Sections 144/143(3) of the Income Tax Act, 1961. S.K. Industries, through its partner, challenged that assessment before the Delhi High Court principally on the ground that the Assessing Officer having jurisdiction over the assessee had not issued notice under Section 143(2) within the prescribed time.
The supplied High Court judgment records that, on 28th March, 2010, the Commissioner of Income Tax (Central), New Delhi transferred the petitioner’s jurisdiction under Section 127 from the AO of Circle VIII to the AO of Circle 8(1), New Delhi. The assessee filed its return of income on 29th September, 2013 in the office of the AO of Circle 8(1), declaring a loss. On 3rd September, 2014, ACIT, Circle 31(1), described as Respondent No. 2, issued notice under Section 143(2), although that AO had no jurisdiction over the assessee. The jurisdictional AO, Respondent No. 1, subsequently issued notice under Section 142(1) on 21st July, 2015 for furnishing details for AY 2013-14.
On 27th July, 2015, the petitioner requested Respondent No. 1 to ignore the proceedings initiated by the Section 142(1) notice because the petitioner had not received notice under Section 143(2) from Respondent No. 1 within the prescribed time, stated in the judgment as up to 30th September, 2014. Another notice was issued by Respondent No. 2 on 8th September, 2015. The petitioner responded on 23rd March, 2016, again pointing out that the notices were beyond 30th September, 2014 and requesting that the assessment proceedings be dropped. The petitioner also referred to the Court’s order dated 5th May, 2015 in WP(C) No. 664/2015, which, according to the supplied judgment, had quashed an assessment order on the same ground that the concerned AO had not issued notice within the time limit under Section 143(2).
Respondent No. 1 nevertheless continued the proceedings and passed an ex parte assessment order on 31st March, 2016. Before the Delhi High Court, the Revenue submitted that the case had been selected by departmental software through Computer Aided Scrutiny Selection without human intervention, that the petitioner’s PAN fell within the jurisdiction of Respondent No. 2, and that the petitioner ought to have questioned Respondent No. 2’s jurisdiction immediately after receiving the Section 143(2) notice, referring to Section 124(3)(a) of the Act.
The petitioner submitted that Section 124(3)(a) did not arise on the stated facts because the petitioner was not obliged to file a return with Respondent No. 2 under Section 139(1). The High Court then held that the AO having jurisdiction, Respondent No. 1, ought to have issued notice under Section 143(2)(a) within the prescribed time limit of 30th September, 2014 in order to proceed with the assessment. The Court also noted that a similar mistake involving an AO without jurisdiction had occurred earlier and stated that there was no occasion for the Revenue to repeat the same mistake and expect that it would be condoned.
The Delhi High Court accordingly held that the assessment order dated 31st March, 2016 was unsustainable in law because the AO having jurisdiction over the assessee had not issued notice under Section 143(2)(a) within the prescribed time, on or before 30th September, 2014. The assessment order was set aside, the writ petition was allowed, no order as to costs was made, and the application was disposed of.
The supplied Supreme Court material then records the appellate outcome: the Supreme Court found no good ground and reason to condone the delay and also no good ground and reason to interfere with the impugned order. It therefore dismissed both the application for condonation of delay and the special leave petition. On the supplied material, the Supreme Court did not separately restate or expand the High Court’s reasoning. Accordingly, the precise effect stated by the supplied material is that the challenge by way of the special leave petition did not result in interference with the impugned High Court order, which had set aside the assessment.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
We do not find any good ground and reason to condone the delay and also interfere with the impugned order and hence, the
application for condonation of delay and the special leave petition are dismissed.
Pending application, if any, stand disposed of.
