2009 (12) TMI 11 - HC - Income Tax

Assessing officer's jurisdiction key in tax notice validity; High Court rules on territorial limits

Smt. Mayuri Mittal Versus Union Of India Thru' Secy. Min. Of Finance & Others

The High Court held that the assessing officer in Agra lacked jurisdiction to issue a notice under Section 148 of the Income Tax Act for the assessment ... Notice u/s 148 – Assessment - The petitioner prior to her marriage was residing at Chennai and was filing her returns with DCIT-II, Madras. She filed the returns for the assessment years 1990-1991 to 1998-1999 at Chennai. On 19.2.1990 her marriage was solemnized thereafter she is residing at Agra. - The notice under section 148 has been issued for the assessment year 1998-1999 at Agra. – held that - Section 148 of the Income Tax Act provides that before making assessment, reassessment or computerization under section 147 of the Income Tax Act, the 'assessing officer' shall serve on the assessee a notice requiring him to furnish return of the income. The said power has been given on the assessing officer. Indisputably, in the present case for the assessment year in question, the officer at Chennai was the assessing officer of the petitioner - the very issuance of the notice under section 148 of the Income Tax Act by Agra officers is totally without jurisdiction Issues involved:Jurisdiction of the assessing officer to issue notice under section 148 of the Income Tax Act.Analysis:The petitioner filed a writ petition seeking the quashing of a notice dated 30.3.2005 issued by the Income Tax Officer 1(2), Room No.310, Agra for the assessment year 1998-1999 under section 148 of the Income Tax Act. The petitioner, prior to her marriage, was residing in Chennai and filing returns there. After marriage, she moved to Agra. The impugned notice was issued by the respondent at Agra, challenging which the petition was filed.The counter affidavit confirmed that the petitioner was filing returns in Chennai before her marriage and continued to do so for the relevant assessment year 1998-1999. The respondent at Agra requested the assessing officer in Chennai to transmit the assessment record for that year. The petitioner argued that the notice should have been issued by the assessing officer in Chennai, citing a Punjab and Haryana High Court decision.The department's counsel contended that the notice was valid as tax evasion was detected in Agra. However, the High Court analyzed the provisions of Section 148 of the Income Tax Act, emphasizing that the assessing officer has the power to issue notices. It was established that the officer in Chennai was the assessing officer for the petitioner, and thus, the officer in Agra had no jurisdiction to issue the notice.The Court noted that there was no evidence of the case being transferred from Chennai to Agra and rejected the department's reliance on a previous judgment that was not relevant to the current case. Ultimately, the Court held that the notice issued by the respondent in Agra was without jurisdiction and quashed it, allowing the writ petition.In conclusion, the High Court's judgment focused on the jurisdiction of the assessing officer to issue notices under Section 148 of the Income Tax Act. It clarified that the assessing officer in Agra had no authority to issue the notice for the assessment year in question, as the assessing officer in Chennai was responsible. The decision highlighted the importance of territorial jurisdiction in such matters and emphasized the legal provisions governing the issuance of notices for assessment or reassessment under the Income Tax Act.