Notice Quashed: Lack of Jurisdiction Renders Tax Proceedings Void Under Income-tax Act.

The HC allowed the writ petition, quashing the notice dated September 11, 2013, issued by the Deputy Commissioner of Income-tax, Range-II, Lucknow, due to lack of jurisdiction. The court found procedural non-compliance under section 124 of the Income-tax Act, rendering the entire proceedings and demand ab initio illegal. The court underscored the necessity of adhering to statutory procedures and jurisdictional boundaries.

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Issues Involved:
1. Maintainability of the writ petition against the show-cause notice.
2. Jurisdiction of the Deputy Commissioner of Income-tax, Range-II, Lucknow to issue notice under section 143(2) of the Income-tax Act, 1961.
3. Compliance with the procedural requirements under section 124 of the Income-tax Act, 1961.
4. Validity of the proceedings and demand created by the Deputy Commissioner of Income-tax, Range-II, Lucknow.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:
The court addressed the preliminary objection raised by the Revenue regarding the maintainability of the writ petition against the show-cause notice. Citing precedents such as Whirlpool Corporation v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corporation Ltd., the court reiterated that the rule of exclusion of writ jurisdiction due to the availability of an alternative remedy is discretionary and not compulsory. The court emphasized that writ jurisdiction could be invoked in cases involving the enforcement of fundamental rights, failure of natural justice principles, or actions wholly without jurisdiction. The court concluded that the writ petition was maintainable as the petitioner's case involved questions of jurisdiction and procedural adherence under the Income-tax Act.

2. Jurisdiction of the Deputy Commissioner of Income-tax, Range-II, Lucknow:
The petitioner challenged the jurisdiction of the Deputy Commissioner of Income-tax, Range-II, Lucknow, to issue a notice under section 143(2) of the Income-tax Act, 1961. The petitioner argued that after shifting his principal place of business to New Delhi, the jurisdiction should lie with the assessing authority in New Delhi. The court examined section 124 of the Income-tax Act, which outlines the jurisdiction of assessing officers based on the principal place of business or residence. The court found that the petitioner had duly informed the authorities about the change in his principal place of business and had filed returns in New Delhi. Therefore, the Deputy Commissioner of Income-tax, Range-II, Lucknow, lacked jurisdiction to issue the notice.

3. Compliance with Procedural Requirements under Section 124:
The court scrutinized the procedural compliance under section 124 of the Income-tax Act. It noted that upon receiving the petitioner's objection to the jurisdiction, the assessing officer should have referred the matter for determination under section 124(2) before proceeding further. The court observed that the Deputy Commissioner of Income-tax, Range-II, Lucknow, failed to refer the jurisdictional dispute to the Chief Commissioner or Commissioner, thereby violating the statutory procedure. This non-compliance rendered the subsequent proceedings and the issuance of the notice under section 143(2) invalid.

4. Validity of the Proceedings and Demand Created:
The court found that the issuance of the notice dated September 11, 2013, by the Deputy Commissioner of Income-tax, Range-II, Lucknow, was palpably without jurisdiction. The court noted that the notice initially included the petitioner's New Delhi address, which was later altered to a Lucknow address, indicating a deliberate attempt to create jurisdiction. The court held that the entire proceedings, including the demand created, were ab initio illegal, without jurisdiction, and in violation of section 143(1)(a) of the Income-tax Act. Consequently, the court quashed the impugned notice and any consequential orders.

Conclusion:
The writ petition was allowed, and the impugned notice dated September 11, 2013, was quashed. The court held that the Deputy Commissioner of Income-tax, Range-II, Lucknow, exceeded his jurisdiction, rendering the entire proceedings invalid. The court emphasized the importance of adhering to statutory procedures and jurisdictional boundaries under the Income-tax Act.

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