Court quashes invalid tax notices and orders, citing jurisdiction and limitation issues.

The court quashed and set aside the notices dated 10th January 2014 and 14th February 2014 issued under Section 148 of the Income Tax Act, 1961, as well as the orders rejecting the petitioner's objections. The court concluded that the notices were barred by limitation, issued without proper jurisdiction, and lacked the necessary sanction under Section 151. The petitions were disposed of accordingly.

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Issues Involved:
1. Validity of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Application of Section 150 of the Income Tax Act, 1961.
3. Jurisdiction of the Assessing Officer.
4. Compliance with the provisions of Section 151 of the Income Tax Act, 1961.
5. Reassessment proceedings and limitation period.
6. Protective assessment and jurisdictional requirements.

Detailed Analysis:

1. Validity of the Notice Issued Under Section 148:
The petitioner argued that the notice dated 10th January 2014 was barred by limitation as it was issued beyond the six-year period prescribed under Section 149(1)(b) of the Income Tax Act, 1961. The court agreed, stating, "the notice dated 10th January 2014 impugned in this petition is barred by limitation since it is issued beyond a period of six years from the end of the relevant assessment year."

2. Application of Section 150:
The respondents contended that the notice derived validity under Section 150, which allows for reassessment in consequence of any "finding" or "direction" contained in an order passed by any authority. However, the court held that the observations of the Delhi High Court could not be considered as a "finding" or "direction" under Section 150. The court stated, "none of these statutory requirements are fulfilled and therefore, Section 150 has no application and does not save the impugned notice from being barred by limitation."

3. Jurisdiction of the Assessing Officer:
The petitioner argued that the notice issued by the Assessing Officer at New Delhi was invalid as he did not have jurisdiction over the petitioner, who was assessed in Mumbai. The court supported this view, stating, "the notice issued by the Assessing Officer at New Delhi itself was invalid and of no effect since it was issued by an officer who did not have jurisdiction over petitioner."

4. Compliance with Section 151:
The petitioner contended that the notice issued by the Assessing Officer at Mumbai was invalid as it lacked the necessary sanction under Section 151. The court agreed, noting that "no sanction has been accorded before issuance of notice by the Assessing Officer at Mumbai." Furthermore, the court emphasized that the sanction accorded by the Additional Commissioner of Income Tax for the notice issued by the Assessing Officer at New Delhi was also invalid, rendering the notice "bad in law and without jurisdiction."

5. Reassessment Proceedings and Limitation Period:
The court observed that the reassessment proceedings initiated by the Assessing Officer at New Delhi were invalid due to lack of jurisdiction and improper sanction. Consequently, the subsequent notice issued by the Assessing Officer at Mumbai was also deemed invalid as it was issued beyond the six-year limitation period. The court stated, "the notice issued by the Assessing Officer at Mumbai was independent of the notice issued by the Assessing Officer at New Delhi and, therefore, the validity thereof has to be decided independently."

6. Protective Assessment and Jurisdictional Requirements:
The court held that the Revenue's attempt to make a protective assessment by reopening the assessment was impermissible. The court cited the case of DHFL Venture Capital Fund v. Income Tax Officer, stating, "where the Assessing Officer sought to make protective assessment by reopening an assessment on the ground that a contingency may arise in future resulting in escapement of income that would be wholly impermissible and would amount to rewriting of the statutory provision."

Conclusion:
The court quashed and set aside the notices dated 10th January 2014 and 14th February 2014 issued under Section 148 of the Income Tax Act, 1961, as well as the orders rejecting the petitioner's objections. The court concluded that the notices were barred by limitation, issued without proper jurisdiction, and lacked the necessary sanction under Section 151. The petitions were disposed of accordingly.

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