Jurisdictional error raised by appellant not addressed: Calcutta HC Stays Section 148 Notice

Girdhar Gopal Dalmia Vs Union of India & Ors. (Calcutta High Court)

The Calcutta High Court’s ruling in the case of Girdhar Gopal Dalmia Vs Union of India addresses an intra-Court appeal challenging an order issued under section 148A(d) of the Income Tax Act for the 2019-2020 assessment year. The appellant contended that the orders and notices issued on March 3 and April 12, 2023, breached the requirements of section 144B and violated natural justice principles by not allowing a personal hearing. The single Bench of the High Court found merit in the claim of a violation of natural justice, leading to a remand of the case for a fresh order. However, the jurisdictional error raised by the appellant was not initially adjudicated, which the appellant argued should have been addressed. The Court has stayed the impugned proceedings and notices until the appeal is resolved, directing the department to file an affidavit addressing the jurisdictional and procedural issues raised. The case is scheduled for further consideration on November 24, 202

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. This intra-Court appeal by the writ petitioner is directed against an order dated 2^nd August, 2023 in W.P.A. 17312 of 2023. The said writ petition was filed by the appellant challenging an order passed under section 148A(d) of the Income Tax Act, 1961 (for brevity ‘the Act’) dated 12^th April, 2023 pursuant to the assessment year 2019­-2020 and the consequential notice issued under section 148 of the Act.

2. Mr. S.N. Mookherjee, learned senior advocate appearing for the appellant contended that in the writ petition, the appellant had principally canvassed two legal issues, first of which being questioning the jurisdiction of the authority to pass the order dated 12^th April, 2023 impugned in the writ petition. It is submitted that the notices dated 3^rd March, 2023 and 12^th April, 2023 are in utter violation of the notification dated 28^th March, 2022 as the purported proceedings, notices and orders do not abide by the requirements of section 144B of the Act.

3. The second submission was that the order was in violation of the principles of natural justice inasmuch as the appellant was not granted opportunity of personal hearing, as required to be done. It is submitted that the learned single Bench did not consider the jurisdictional issue as regards the violation of the notification dated 29^th March, 2023 inasmuch as the authority did not abide by the requirements of section 144B of the Act but disposed of the writ petition holding that there was violation of principles of natural justice and the matter was remanded back to the assessing officer to pass a fresh order after affording an opportunity of personal hearing to the writ petitioner.

4. It is the submission of the learned senior advocate appearing for the appellant that the first of the principal submissions made in the writ petition was as regards the jurisdictional error in passing the order impugned in the writ petition, which ought to have been adjudicated in the writ petition and the writ petition was disposed of without calling for affidavits. In support of his contention, the learned senior advocate placed reliance on the decision of the High Court of Telengana in W.P. 25903 of 2022 dated 14^th September, 2023, wherein the jurisdictional issue was considered and a final decision was rendered in favour of the assessee.

5. Reliance is also placed on an interim order granted by the High Court of Judicature at Bombay in Writ Petition (L) No. 11036 of 2023 dated 2^nd May, 2023, wherein the Court considered a similar issue and granted an interim relief on the prima facie ground that the jurisdictional assessing officer had no jurisdiction to issue the notice and the notice ought to have been issued in a faceless manner in terms of section 151A of the Act.

6. Prithu Dudhoria, learned senior standing counsel appearing for the respondents submitted that there is a subsequent notification dated 20^th February, 2023, which aspect has to be considered and if the same is considered, the proceedings initiated by the respondent/ assessing officer is well within the scope of the Act and there is no jurisdictional error.

7. Since the jurisdictional error goes to the root of the matter, it is but appropriate that such an issue is decided by the Court. For such purpose, an affidavit would be required to be filed by the department as the matter cannot be disposed of based on oral submissions. Therefore, we are of the view that the respondents/department should file their affidavit setting out all contentions, which are available to them under law as well as on facts, after which the Court will consider as to the contentions raised by the appellant in this appeal along with the grounds, which were canvassed in the writ petition.

8. In the light of the above, the impugned proceedings initiated by the assessing officer shall remain stayed including the latest notice issued dated 18^th September, 2023 fixing the date of personal hearing on 25^th September, 2023 (today) at 3.00 pm. till disposal of the appeal. Accordingly, I.A. No. CAN 1 of 2023 is disposed of.

9. The respondents/department are directed to file their affidavit within two weeks from date; reply, thereto, if any, may be filed within two weeks thereafter.

10. List the matter on 24^th November, 2023.