Territorial jurisdiction objection must be decided first; assessment proceedings stayed until the competent authority rules on jurisdiction.

Assessment proceedings could not proceed until the petitioner's territorial jurisdiction objection was first decided. The HC directed the competent authority to determine the jurisdictional grievance expeditiously under Section 124(2), Section 124(3) and Section 124(4) of the Income-tax Act, 1961, and ordered that the assessment proceedings remain stayed until that decision is taken. The operative principle is that a raised jurisdictional objection must be addressed at the threshold before the assessment is continued.

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Issues: Whether the assessment proceedings could continue without deciding the objection to territorial jurisdiction, and whether the competent authority should first determine the jurisdictional grievance raised by the petitioner.

Outcome: The writ petition was disposed of with a direction to the competent authority to decide the jurisdictional objection expeditiously under Section 124(2), Section 124(3), and Section 124(4) of the Income-tax Act, 1961, and the assessment proceedings were to remain stayed until such decision.

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