2024 (5) TMI 455 - HC - Income Tax

Impact of CBDT Notifications on Tax Assessment Jurisdiction and Centralization Under Review; Decision Pending in 2024.

The case involves the interpretation of notifications issued by the CBDT and the Additional Commissioner of Income Tax, focusing on the jurisdiction of ... Jurisdiction transfer through Centralization order - as argued case of the petitioner would clearly fall within the jurisdiction of the prescribed Deputy Commissioner of Income Tax as per the extracts of the notification dated 22 October 2014 and the subsequent notification promulgated under the pen of the Additional Commissioner of Income Tax dated 15 November 2014 - whether the notification dated 15 November 2014 would have the effect of reversing centralization? - HELD THAT:- We are faced with a case where the petitioner’s assessment is stated to have been centralized and pursuant to which assessments right from Assessment Years 2008-09 to 2015-16 were being made by the AO posted in the Central Circle-16. Question whether the notification dated 15 November 2014 would have the effect of reversing centralization have to be examined, bearing in mind the Explanation appended to Section 127 of the Income Tax Act, 1961 [‘Act’] as well as the Note set out in the notification of 22 October 2014 which says that 'Income-tax authorities referred to in column (2) of the schedule annexed to this notification shall not exercise powers and perform functions, which have specifically been assigned through separate notification(s), to an Income-tax authority having designation other than those mentioned in column (2) below.' Let the matters be called again on 03.04.2024. Issues: The issues involved in the judgment are the reliance on Central Board of Direct Taxes notifications, jurisdiction of the Deputy Commissioner of Income Tax, centralization of assessments by the Assessing Officer in Central Circle-16, and the effect of the notification dated 15 November 2014 on centralization.Central Board of Direct Taxes Notifications: The respondent relied on notifications issued by the Central Board of Direct Taxes, specifically the one dated 22 October 2014 and another notification by the Additional Commissioner of Income Tax dated 15 November 2014. The case revolves around the interpretation and application of these notifications in the context of the petitioner's situation.Jurisdiction of Deputy Commissioner of Income Tax: The respondent argued that the petitioner's case falls within the jurisdiction of the prescribed Deputy Commissioner of Income Tax as per the details provided in the counter affidavit. This raises the question of whether the petitioner's assessment should indeed be under the Deputy Commissioner's jurisdiction as claimed by the respondent.Centralization of Assessments: The petitioner's income assessments from Assessment Years 2008-09 to 2015-16 were centralized and conducted by the Assessing Officer in Central Circle-16, now Central Circle-20. This centralization of assessments by the Assessing Officer is a key point of contention in the case, as highlighted in the writ petition and the details provided in the counter affidavit.Effect of Notification on Centralization: A critical issue to be examined is whether the notification dated 15 November 2014 would impact the centralization of assessments conducted by the Assessing Officer. This assessment involves considering the Explanation appended to Section 127 of the Income Tax Act, 1961, along with the relevant provisions in the notifications of October 2014. The question of whether this notification would reverse the centralization process is central to the case.The judgment involves a detailed analysis of the notifications issued by the Central Board of Direct Taxes and the Additional Commissioner of Income Tax, the jurisdictional aspects concerning the Deputy Commissioner of Income Tax, the history of centralized assessments by the Assessing Officer in Central Circle-16, and the potential impact of the November 2014 notification on the centralization process. The case is adjourned to be called again on 03.04.2024 for further proceedings.