Case Law Details

Case Name : Fiat India Automobiles Limited Vs Assistant Commissioner of Income Tax (Bombay High Court)
Appeal Number : Writ Petition No. 8657 OF 2012
Date of Judgement/Order : 16/10/2012
Related Assessment Year :
Courts : All High Courts (4158) Bombay High Court (747)

Conduct of ACIT­10(1) Mumbai as well as CIT­10 Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT­10 Mumbai from ACIT­10(1) Mumbai to DCIT Circle­1(2) Pune by  order dated 22.11.2011 it was totally improper on the part of ACIT­10(1) Mumbai to request the CIT¬10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT­10(1) Mumbai to the CIT­10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT­10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT­10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT­10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT­10(1) Mumbai has himself indulged in circumventing the provisions of law which is totally disgraceful.

HIGH COURT OF JUDICATURE AT BOMBAY

WRIT PETITION NO.8657 OF 2012

Fiat India Automobiles Limited 

versus

Assistant Commissioner of Income Tax

DATE : 16th October, 2012.

ORAL JUDGMENT

(PER J.P.DEVADHAR,J.) :

1 Rule, returnable forthwith. By consent the petition is taken up for final hearing.

2 This writ petition is filed to challenge the notice dated 30.03.2012 issued by the Assistant Commissioner of Income Tax­10(1) Mumbai under Section 148 of the Income Tax Act, 1961 (‘the Act’).

3 The basic argument of the Petitioner is that once the CIT­10 Mumbai in exercise of the powers vested in him under Section 127(2) of the Act has transferred the power to assess the Petitioner on 22.11.2011 from ACIT­10(1) Mumbai to DCIT, Circle­1(2) Pune, then the ACIT­10(1) would have no jurisdiction to issue the impugned notice dated 30.03.2012 and therefore, the said notice dated 30.03.2012 is liable to be quashed and set aside.

4 The relevant facts are that on shifting the registered office of the Petitioner from Mumbai to Pune, the Petitioner in June­July,2009 had applied for transfer of assessment records from Mumbai to Pune. After, exchange of several letters, the CIT­10 Mumbai by his order dated 22.11.2011 transferred the powers to assess the petitioner from ACIT­10(1) Mumbai to DCIT, Circle­1(2) Pune. Thus, from 22.11.2011 ACIT­10(1) Mumbai did not have any power to assess or reassess the petitioner.

5 It is not in dispute that on transfer of the jurisdiction from Mumbai to Pune, the Additional CIT, (TP)Pune has assumed jurisdiction and accordingly issued a notice dated 29.03.2012 to the Petitioner under Section 92CA of the Act relating to Assessment year 2009­2010.

6 However, the ACIT­10(1) Mumbai has issued the impugned notice on 30.03.2012 under Section 148 of the Act with a view to reopen the assessment for A.Y. 2005­06. The assessee by its letter dated 24.04.2012 objected to the impugned notice by specifically stating that pursuant to the order of CIT dated 22.11.2011, the ACIT­10(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed interalia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT¬10(1) is divested by the order of the CIT­10 Mumbai dated 22.11.2011, the ACIT­10(1) Mumbai would cease to have power to assess or reassess the petitioner and hence, the impugned notice issued by ACIT­10(1) Mumbai being without jurisdiction is liable to be quashed and set aside.

7 In the affidavit­in­reply filed by the DCIT­10(1) Mumbai dated 8.10.2012 it is stated that by a corrigendum order dated 27.03.2012, the CIT­10 Mumbai has temporarily withdrawn/cancelled the earlier transfer order dated 22.11.2011 for the sake of administrative convenience and therefore,  the notice dated 30.03.2012 would be valid. It is the case of the petitioner that neither any notice to pass a corrigendum order was issued to the petitioner nor the alleged corrigendum order dated 27.03.2012 has been served upon the petitioner till date.

8 Mr. Pinto, learned Counsel for the Revenue on instruction from CIT­10 Mumbai informs us that there is no proof of serving the corrigendum order dated 27.03.2012 upon the petitioner. It is neither the case of the revenue that before passing the corrigendum any notice was issued to the petitioner nor it is the case of the revenue that the corrigendum order was passed after hearing the petitioner.

9 Although in the affidavit in reply the revenue claims to have annexed a copy of the corrigendum order dated 27.03.2012 no such order was infact annexed to the affidavit­in­reply. It is only during the course of hearing the Counsel for  the revenue admitted the lapse and tendered a copy of the letter dated 20.03.2012 addressed by ACIT¬10(1) Mumbai to CIT­10 Mumbai as well as the corrigendum order dated 27.03.2012 to the Court as also to the Counsel for the Petitioner.

10 The letter dated 20/3/2012 addressed by the ACIT­10(1) to CIT­(10) Mumbai reads thus:

To

The Commissioner of Income Tax ­10, Mumbai.

(Through Proper Channel)

Sir,

Sub:Order u/s 127(2) in the case of Fiat India Automobiles Ltd.

Ref :No.C. I .T.­10/Juris. 1237/Transfer/2011¬12 dated 22.11.2011­reg.

Kindly refer to the above,

2 Order u/s. 127(2) was passed in the above mentioned case. There is an interlinked matter in the case of Fiat India Pvt. Ltd. The file of Fiat India Automobiles Ltd. For A.Y. 2005­06 has to be reopened. It is therefore requested that a corrigendum to the order may kindly be passed in order to circumvent any jurisdictional issue.

Yours faithfully,

Sd/

( Virender Singh ),

Asstt. Commissioner of Income Tax­10(1),

Mumbai.

11 The corrigendum order dated 27/3/2012 passed by CIT­10 Mumbai reads thus:

“ :CORRIGENDUM ORDER:

The Order No.C.I.T./Juris. 127/Transfer/ 2011­12 dated 22.11.2011 in the case of M/s. Fiat India Automobile Ltd. (PAN AAACF1716D) is temporarily withdrawn for the sake of administrative convenience.

A fresh order is being issued separately.

Sd/

(SABJEEV K. ABROL) Commissioner of Income Tax­10, Mumbai. “

12 The question therefore to be considered is, when the CIT­10 Mumbai has transferred the jurisdiction to assess/reassess the petitioner from ACIT­10(1) Mumbai to DCIT Circle­1(2) Pune under Section 127 of the Act after hearing the petitioner on 22.11.2011, whether the CIT­10 Mumbai at the instance of ACIT­10(1) Mumbai is justified in issuing a corrigendum order on 27.03.2012 behind the back of the petitioner & whether the ACIT­10(1) Mumbai is justified in issuing the impugned notice under Section 148 of the Act dated 30.03.2012 on the basis of the said corrigendum order dated  27.03.2012 which is passed without issuing a notice to the petitioner, without hearing the petitioner and which is uncommunicated to the petitioner.

13 Mr. Pinto, learned Counsel for the Revenue does not dispute that the corrigendum order was passed without issuing notice and without hearing the petitioner and further admits that the said corrigendum order was not served upon the petitioner till date and that he has tendered a copy of the said corrigendum order upon the counsel for the petitioner today in Court. However, he submits that once the corrigendum order was passed by the CIT­10 Mumbai on 27.03.2012 the ACIT ­10(1) Mumbai was justified in issuing the impugned notice dated 30.03.2012.

14 In our opinion, the conduct of ACIT­10(1) Mumbai as well as CIT­10 Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT­10 Mumbai from ACIT­10(1) Mumbai to DCIT Circle­1(2) Pune by  order dated 22.11.2011 it was totally improper on the part of ACIT­10(1) Mumbai to request the CIT¬10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT­10(1) Mumbai to the CIT­10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT­10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT­10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT­10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT­10(1) Mumbai has himself indulged in circumventing the provisions of law which is totally disgraceful.

15 In any event, the CIT­10 Mumbai ought not  to have succumbed to the unjust demands of ACIT 10(1) and instead ought to have admonished the ACIT­10(1) for making such unjust request. The CIT¬10 Mumbai ought to have known that there is no provision under the Act which empowers the CIT to temporarily withdraw the order passed by him under Section 127(2) of the Act for the sake of administrative convenience or otherwise. If the CIT­10 Mumbai was honestly of the opinion that the order passed under Section 127(2) of the Act was required to be recalled for any valid reasons, then, the CIT­10 Mumbai ought to have issued notice to that effect to the petitioner and after hearing the petitioner ought to have passed any order as he deemed fit and serve the same to the petitioner.

16 In the present case, admittedly, the CIT¬10 Mumbai has not issued any notice and has not heard the petitioner before passing the Corrigendum order and infact the said corrigendum order has not been communicated to the petitioner before issuing the impugned notice dated 30.03.2012 and admittedly the alleged corrigendum order is served upon the  petitioner for the first time today in Court.

17 In these circumstances, we quash and set aside the impugned notice dated 30.03.2012 issued by the ACIT­10(1) Mumbai based on the corrigendum order dated 27.03.2012 passed allegedly by the CIT¬10 Mumbai at the behest of ACIT­10(1) Mumbai and in gross abuse of the process of law. Apart from the fact that the CIT­10 Mumbai had no jurisdiction to temporarily suspend an order passed under Section 127(2) of the Act, in the fact of the present case, the impugned corrigendum order passed behind the back of the petitioner without issuing any notice to the petitioner, without hearing the petitioner and admittedly uncommunicated to the petitioner till date, would have no legal existence and therefore the impugned notice dated 30.03.2012 based on the legally non existent corrigendum order dated 27.03.2012 cannot be sustained. Moreover, in the alleged corrigendum order dated 27.03.2012 it is stated that a fresh order would be issued separately, but, till date no fresh order has been passed by CIT­10 Mumbai. This fact further supports the contentions of the petitioner that the alleged corrigendum order has been passed by the CIT­10 Mumbai in collusion with ACIT­10(1) Mumbai with a view to circumvent the provisions of law which is wholly impermissible in law.

18 In the result, the writ petition is allowed by quashing the impugned notice dated 30.03.2012 issued by ACIT­10(1) Mumbai with costs quantified at Rs.10,000/­ to be paid by the revenue to the petitioner within a period of eight weeks from today. It is brought to our notice that the CCIT­VI Mumbai agrees that the impugned actions of CIT­10 Mumbai and ACIT­10(1) Mumbai are patently unjustified and not as per law but has expressed his helplessness in the matter. We expect that CCIT­VI takes immediate remedial steps so that no such incidents occur in the future. We make it clear that it will be open to the revenue to collect the costs of Rs.10,000/­ from the respondent Nos. 1 and 2 which is required to be paid by the revenue to the petitioner under this order. The Registry is directed to forward a copy of this order to the CCIT­VI, Mumbai and also to the CBDT, New Delhi.

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