Court sets aside order citing lack of jurisdiction under Section 251, orders fresh proceedings.

The High Court found the impugned order unsustainable due to the Assessing Officer's lack of jurisdiction under Section 251 and the violation of principles of natural justice. The Court allowed the petition, setting aside the order, and directed the Assessing Officer to pass a fresh order after providing due notice to the assessee and ensuring compliance with the principles of natural justice.

---

---

Issues:
Challenge to order under Section 251 of Income Tax Act, 1961 without jurisdiction and violation of principles of natural justice.

Analysis:

Issue 1: Jurisdiction under Section 251
The petition challenges an order dated 24 February 2014 passed by the first respondent purportedly in exercise of power under Section 251 of the Income Tax Act, 1961. The Assessing Officer had determined that a net tax of Rs.1.75 crores is payable by the assessee inclusive of interest under Sections 234B and 220(2). The petitioner argued that the Assessing Officer usurped the jurisdiction of the CIT (A) by exercising power under Section 251, which defines the powers of the Commissioner (Appeals). The petitioner contended that once the CIT (A) disposed of the appeal under Section 250, the Assessing Officer had no jurisdiction to act under Section 251. The High Court observed that Section 251 does not define the power of the Assessing Officer, and the Assessing Officer had assumed jurisdiction under a provision clearly not attracted. Even if the Assessing Officer was to give effect to the CIT (A)'s order by passing a fresh assessment under Section 143(3), he had to comply with the principles of natural justice.

Issue 2: Violation of Principles of Natural Justice
The impugned order dated 24 February 2014 indicated that the Assessing Officer had received a communication from the ITO, New Delhi, based on which he passed the order without hearing the assessee or disclosing the contents of the communication. The High Court noted that the Assessing Officer acted in haste, passing the order without providing the assessee an opportunity to controvert the material and in clear breach of the principles of natural justice. The Court held that even if the order was treated as under Section 143(3), there was a violation of natural justice, making the order unsustainable. The Court allowed the petition, setting aside the order dated 24 February 2014, and directed the Assessing Officer to pass a fresh order in compliance with the law and principles of natural justice.

In conclusion, the High Court found the impugned order unsustainable due to the Assessing Officer's lack of jurisdiction under Section 251 and the violation of principles of natural justice. The Court allowed the petition, setting aside the order, and directed the Assessing Officer to pass a fresh order after providing due notice to the assessee and ensuring compliance with the principles of natural justice.

---