PCIT Vs Rohit Baid (Supreme Court of India)
Summary: The Supreme Court dismissed the Revenue’s Special Leave Petition against the Calcutta High Court’s decision in PCIT Vs Rohit Baid. After hearing the Additional Solicitor General appearing for the petitioner, the Court stated that it was not inclined to interfere with the impugned High Court order and disposed of pending applications. The supplied Supreme Court order contains no further reasons. The substantive reasoning concerning the validity of the assessment is contained in the related High Court judgment and should be attributed to that Court.
Read HC Judgment in this case: Section 143(2) Notice by Non-Jurisdictional AO Cannot Sustain Assessment: Calcutta HC
The High Court proceedings arose from the Revenue’s appeal under Section 260A against the ITAT Kolkata, B-Bench order dated 12 September 2024 in ITA/15/Kol/2024 for AY 2015–16. The Tribunal had held the assessment dated 28 March 2022 under Section 147 read with Section 144B invalid. The Revenue contended that Section 120 read with CBDT Instruction No. 1/2011 dated 31 January 2011 provided for equitable distribution of work rather than rigid jurisdictional limits. It maintained that ITO, Ward 36(1), Kolkata, having PAN jurisdiction over the assessee, had validly issued the Section 148 notice and that the subsequent faceless assessment was lawful. Although served with notice, the assessee was not represented before the High Court.
The High Court found the controversy covered in favour of the assessee by Principal Commissioner of Income Tax-11, Kolkata Vs Nopany & Sons, ITAT/58/2017, decided on 4 February 2022. It reproduced that decision’s reasoning on the requirement that notice under Section 143(2) be issued by the Assessing Officer having jurisdiction within the prescribed period. In Nopany & Sons, neither of the officers having jurisdiction before and after the transfer of the assessment file had issued the required notice within time, while the notice relied upon by the Revenue had been issued by an officer who lacked jurisdiction. Those factual details, including the discussion of AY 2007–08 and the assessee’s objection dated 16 November 2009, belong to the quoted precedent, not to Rohit Baid’s AY 2015–16 assessment.
The reproduced reasoning relied on Assistant Commissioner of Income Tax Vs Hotel Blue Moon, [2010] 321 ITR 362 (SC), which held that omission to issue the mandatory notice is not merely a procedural irregularity and cannot be cured. It also discussed Commissioner of Income Tax Vs Gitsons Engineering Company, [2015] 370 ITR 87 (Madras High Court), on the mandatory character of the notice requirement, and CIT & Another Vs Mukesh Kumar Agarwal, [2012] 345 ITR 29 (Allahabad High Court), on the jurisdictional consequence of non-issuance. The High Court additionally referred to PCIT Vs Cosmat Traders (P) Ltd., [2023] 146 taxmann.com 207 (Calcutta High Court).
The quotation from Nopany & Sons also addressed the Revenue’s reliance on Section 292BB, including the absence of a valid notice from the competent officer and the objection raised during those proceedings. Following the cited authorities, the High Court held that the issue was fully covered against the Revenue, dismissed its appeal, answered the substantial question of law against it and closed the connected application. The Supreme Court subsequently declined interference by dismissing the SLP; the supplied order does not contain an independent determination of the statutory issues.
Cases Discussed
- PCIT Vs Cosmat Traders (P) Ltd., [2023] 146 taxmann.com 207 (Calcutta High Court) — Cited by the High Court as a further decision covering the issue against the Revenue.
- Principal Commissioner of Income Tax-11, Kolkata Vs Nopany & Sons, ITAT/58/2017, decided on 4 February 2022 (Calcutta High Court) — Followed; its reasoning on mandatory notice, jurisdiction and Section 292BB was reproduced.
- Commissioner of Income Tax Vs Gitsons Engineering Company, [2015] 370 ITR 87 (Madras High Court) — Discussed within the reproduced precedent for the mandatory nature of timely notice under Section 143(2).
- CIT & Another Vs Mukesh Kumar Agarwal, [2012] 345 ITR 29 (Allahabad High Court) — Cited within the reproduced precedent concerning the absence of jurisdiction to proceed without the required Section 143(2) notice.
- Assistant Commissioner of Income Tax Vs Hotel Blue Moon, [2010] 321 ITR 362 (Supreme Court of India) — Relied upon for the principle that omission to issue the mandatory notice is not a curable procedural irregularity.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Having heard Mr. S. Dwarakanath, learned Additional Solicitor General appearing for the petitioner, we are not inclined to interfere with the impugned order passed by the High Court.
2. Accordingly, the Special Leave Petition is dismissed.
3. Pending application(s), if any, shall stand disposed of.
