High Court quashes improper tax notice, criticizes authorities for jurisdictional errors.

The High Court quashes the impugned notice dated 30.03.2012, finding that the corrigendum order, passed without notice to the petitioner, lacked legal standing. The Court criticizes the tax authorities for attempting to circumvent jurisdictional issues, emphasizing the importance of following legal procedures in tax assessments. The Revenue is ordered to pay costs to the petitioner, and directions are given to prevent similar incidents in the future.

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Issues:
Challenge to notice issued by Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961 following a transfer of assessment powers from Mumbai to Pune. Justification of issuing a corrigendum order behind the back of the petitioner and subsequent issuance of an impugned notice. Validity of the corrigendum order dated 27.03.2012 and its impact on the impugned notice dated 30.03.2012. Jurisdictional issues arising from the transfer of assessment powers and subsequent actions by the tax authorities.

Analysis:
The writ petition challenges a notice dated 30.03.2012 issued by the Assistant Commissioner of Income Tax-10(1) Mumbai under Section 148 of the Income Tax Act, 1961. The petitioner argues that after the transfer of assessment powers from ACIT-10(1) Mumbai to DCIT, Circle-1(2) Pune on 22.11.2011 by the CIT-10 Mumbai, the ACIT-10(1) Mumbai lacked jurisdiction to issue the impugned notice. The petitioner contends that the notice is without jurisdiction and should be quashed and set aside due to the transfer of powers to Pune, rendering ACIT-10(1) Mumbai incompetent to reassess the petitioner.

The respondent, DCIT-10(1) Mumbai, in an affidavit-in-reply, claims that a corrigendum order dated 27.03.2012 temporarily withdrew the earlier transfer order for administrative convenience. However, it is revealed that the corrigendum order was passed without notice to the petitioner, not served upon the petitioner, and was only tendered during the court hearing. The Revenue's counsel admitted the lack of notice and service of the corrigendum order to the petitioner, raising questions about the validity of subsequent actions based on it.

The High Court condemns the conduct of both ACIT-10(1) Mumbai and CIT-10 Mumbai, stating that the request for a corrigendum order to circumvent jurisdictional issues was an abuse of the legal process. The Court criticizes the actions of ACIT-10(1) Mumbai for attempting to bypass the law and CIT-10 Mumbai for succumbing to unjust demands. The Court emphasizes that the corrigendum order, passed without notice or hearing to the petitioner, lacks legal standing, and the impugned notice based on it cannot be sustained.

Ultimately, the High Court quashes the impugned notice dated 30.03.2012, citing the legally non-existent corrigendum order as the basis for the notice. The Court orders the Revenue to pay costs to the petitioner and directs the CCIT-VI Mumbai to take remedial steps to prevent such incidents in the future. The judgment highlights the importance of adhering to legal procedures and condemns attempts to circumvent jurisdictional issues in tax assessments.

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