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2026 (4) TMI 197
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....d 14.06.2017 and 23.10.2017 under Section 142, and the petitioner craves indulgence of this Court exercising power under Articles 226 and 227 of the Constitution of India for grant of following relief(s): "In the context aforesaid it is most humbly prayed that Your Lordships may after hearing the counsel for the petitioner be pleased to: (i) Call for the records; (ii) And further Your Lordships may be pleased to issue rule nisi calling upon the opposite party to show cause as to why the order of reassessment passed under Section 147/144 of Income Tax Act for the assessment year 2012-13 passed by opposite party No.1 under Annexure-5 & the Demand Notice Under Annexure-5/A to the Writ Petition shall not be quashed; (iii) And further Your Lordships may be pleased to issue rule nisi calling upon the opposite parties to show cause as to why the order of attachment dated 21.05.2025 issued by the opposite party No.3 under Annexure-4 shall not be quashed, (iv) And if the opposite parties fail to show cause or show insufficient cause then the rule may be made absolute; (v) And further Your Lordships may be pleased to pass such other order....
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....y matter being listed today, on receipt of written instruction from the Department, Sri Avinash Kedia, learned Junior Standing Counsel for the Income Tax Department appeared and was ready with the matter to advance arguments. 3.3. Heard Sri Sidhartha Ray, learned Senior Advocate assisted by Sri Kshirod Kumar Sahoo, learned Advocate for the petitioner and Sri Avinash Kedia, learned Junior Standing Counsel representing the opposite parties. 3.4. Hearing being concluded, the matter stood reserved for preparation and pronouncement of Judgment/Order. Arguments and submissions: 4. Sri Sidhartha Ray, learned Senior Advocate being assisted by Sri Kshirod Kumar Sahoo, learned Advocate urged that the mandatory requirement of Section 148 implying service of notice on the petitioner contemplating initiation of proceeding for assessment under Section 147 read with Section 144 being not complied with, the Assessment Order dated 14.11.2017 suffers from patent infirmity rendering the entire proceeding vitiated. 4.1. It is vociferously argued that without completing the assessment process under Section 143 (as there was no communication in this respect), no assessment could have been....
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....abati Cashew is a Proprietorship concern of Shri Sunil Kumar Sahoo, having account No.028405004208 with Bhubaneswar, Nayapalli Branch. The account was opened on 30.06.2011. Date of incorporation was 14 March 1984. There are 11 linked accounts under PAN-ATOPS6509F held by the customer. Alert had been generated due to large value cash transactions in currents accounts. As per the due diligence conducted by the bank official customer is into cashew business and exporter of this product. Transaction pattern shows that account get credits by the cash, clearing and get debits by the RTGS, transfer, self paid cheque. Total deposits between 02.07.2011 to 08.10.2011 is amounted to Rs.104 lakhs out of which Rs.78 lakh is by cash and total debit is amounted to Rs.104 lakh. Cash deposited from different branches and on 26.07.2011 Rs.17 lakh remitted through RTGS in own name. Customers another account also showing the same transaction pattern that is cash transaction in a new account is a short period leads to suspicion hence reported. 2. The additional linked bank accounts as detailed under have been found in the CTR database of FIU-IND in which substantial cash transactions have been....
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....urnished by the learned Junior Standing Counsel during the course of hearing reveals the following facts: Notice under Section 148 dated 29.03.2017 Despatch on 29.03.2017 vide dispatch No. 11536 --- --- Notice under Section 142(1) dated 14.06.2017 Despatch on 16.06.2017 vide dispatch No. 2065 --- Annexure-A Notice under Section 142(1) dated 23.10.2017 Despatch on 26.10.2017 vide despatch No. 8319 Speed post No. EO941011095IN (postal delivery report placed on record) Annexure-B Assessment Order along with Demand Notice under Section 156 dated 14.11.2017 Despatch on 14.11.2017 vide despatch No.9637 Speed post No. EO941014159IN Annexure-C 6.4. Aforesaid instruction as provided by the Income Tax Department would make it abundantly clear that though despatch number is assigned with respect to despatch of Notice dated 29.03.2017 under Section 148, it could not be demonstrated the mode of despatch and date of service on the petitioner. However, the zimni order indicates "issue" of notice under Section 148 on 29.03.2017. 6.5. Indubitably from the arguments of counsel for both sides it is discernible that since the Notice under Section 1....
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....revision, which is chargeable to tax and has escaped assessment. Explanation 1.- Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.- For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction....
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....o to sub-section (2) of Section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of Section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of Section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of Section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.- For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second p....
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....ed" beyond the periods specified therein. 6.8. The use of the word "shall" in the aforesaid provisions would denote that it is mandatory in nature. 6.9. In Bank of India Vrs. Sri Nangli Rice Mills (P) Ltd., (2025) 9 SCC 225 it is observed as follows: "115.This Court in Delhi Airtech Services (P) Ltd. Vrs. State of U.P. (2011) 9 SCC 354 held that the general rule of interpretation requires that the word "shall" be read as "must". It observed that the term "shall" only be read as "may" where doing so would achieve the ends of legislative intent behind the substantive provision and the scheme of the entire statute in question. The relevant observations read as under: '122. The distinction between mandatory and directory provisions is a well-accepted norm of interpretation. The general rule of interpretation would require the word to be given its own meaning and the word "shall" would be read as "must" unless it was essential to read it as "may" to achieve the ends of legislative intent and understand the language of the provisions. It is difficult to lay down any universal rule, but wherever the word "shall" is used in a substantive statute, it normally would i....
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....the same would be construed as directory.' ***" 6.10. The following observation with respect to 'shall' and 'may' appearing in C. Bright Vrs. The District Collector, (2020) 7 SCR 997 deserves to be quoted: "7. A well settled rule of interpretation of the statutes is that the use of the word 'shall' in a statute, does not necessarily mean that in every case it is mandatory that unless the words of the statute are literally followed, the proceeding or the outcome of the proceeding, would be invalid. It is not always correct to say that if the word 'may' has been used, the statute is only permissive or directory in the sense that non-compliance with those provisions will not render the proceeding invalid [State of U.P. Vrs. Manbodhan Lal Srivastava, AIR 1957 SC 912] and that when a statute uses the word 'shall', prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute [State of U.P. Vrs. Babu Ram Upadhya, AIR 1961 SC 751]. The principle of literal construction of the statute alone in all circumstances without examining the context and scheme of the statute may not serve the purp....
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....d State exchequer. Such statutory provision cannot be said to be mere directory but it is mandatory. Moreover, for interpretation or the construction of statute, it should be read as a whole to find out the purposive interpretation as observed by the Hon'ble Supreme Court." 6.12. Presence of the word "shall" in the provisions of the IT Act referred to above would indicate that the "service on the assessee" in Section 148 and "shall be issued" in Section 149 are necessary concomitant facets and both the sections are required to be read in harmony. 6.13. In Franklin Templeton Trustee Services Private Limited Vrs. Amruta Garg, (2021) 6 SCC 736, it has been held as under: "17. The concept of "absurdity" in the context of interpretation of statutes is construed to include any result which is unworkable, impracticable, illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief [See Bennion on Statutory Interpretation, 5th Edn., p. 969.]. Logic referred to herein is not formal or syllogistic logic, but acceptance that enacted law would not set a standard which is palpably unjust, unfair, unreasonable or does not make any sense. [Bennion....
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....the Court to strive to so interpret the statute as to promote or advance the object and purpose of the enactment. For this purpose, where necessary, the Court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the court would be justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment. Ascertainment of legislative intent is the basic rule of statutory construction." 6.15. In Sultana Begum Vrs. Prem Chand Jain, (1997) 1 SCC 373, the following principles relating to harmonious construction has been propounded: "15. On a conspectus of the case-law indicated above, the following principles are clearly discernible: (1) It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. (2) The provisions of one section of a statute cannot be ....
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.... must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See R.S. Raghunath Vrs. State of Karnataka, (1992) 1 SCC 335 = AIR 1992 SC 81.) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum Vrs. Prem Chand Jain, (1997) 1 SCC 373 = AIR 1997 SC 1006.) 20. Whenever it is possible to do so, it must be done to construe the provisions which appear to conflict so that they harmonise. It should not be lightly assumed that Parliament had given with one hand what it took away with the other. 21. The provisions of one section of the statute cannot be used to defeat those of another unless it is impossible to effect reconciliation between them. Thus a construction that reduces one of the provisions to a "useless lumber" or "dead letter" is not a harmonised construction. To harmonise is not to destroy." 6.17. Upon harmonious construction of the provisions of the IT Act so far as is necessary,....
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....Instruction No.7/2014. iv. Reason for selection: In cases under scrutiny for verification of AIR/CIB/26AS data, the Assessing Officer has to intimate the reason for selection of case for scrutiny to the assessee concerned. 3. As far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year- one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in Limited Scrutiny or 'Complete Scrutiny' through notices issued under Section 143(2) of the Income-tax Act 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In Limited Scrutiny cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under Section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the Limited Scrutiny issues. c. These cases shall be completed expeditiously in a limit....
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....by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make Rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or transmitted to the person therein named." 6.20. It is submitted by Sri Sidhartha Ray, learned Senior Advocate that by virtue of the Central Verification Scheme, 2019 vide Ministry of Finance (Department of Revenue), Central Board of Direct Taxes in Notification bearing No. 5/2019/F. No.370142/22/2017-TPL (SO 550(E), dated 30.01.2019 promulgated mechanism for "issue and service of notice" in exercise of power conferred under Section 133C of the IT Act. Thus, he submitted that the manner prescribed under Section 282 as it existed pri....
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....rvations: "2. The High Court has quashed the notice by accepting the assessee's contention that the action of the Income Tax Officer was barred by limitation prescribed by the Act. There is no dispute that the notice in this case under Section 147(b) of the Act was issued by registered post on March 31, 1970, and was received by the assessee on April 3, 1970. To the facts of the case, Section 147(b) of the Act applies. The two relevant provisions are in Sections 148 and 149 of the Act which provide: '148. (1) Before making the assessment, reassessment or recomputation under Section 147, the Income Tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. (2) *** 149. (1) No notice under Section 148 shall be issued, (a) *** (b) in cases falling under clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2....
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.... shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of limitation as March 31, 1970, was the last day of that period. Service under the new Act is not a condition precedent to conferment of jurisdiction in the Income Tax Officer to deal with the matter but it is a condition precedent to making of the order of assessment. The High Court in our opinion lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Debi Vrs. ITO, AIR 1964 SC 1742 = (1964) 7 SCR 539. As the Income Tax Officer had issued notice within limitations, the appeal is allowed and the order of the High Court is vacated. The Income Tax Officer shall now proceed to complete the assessment after complying with the requirements of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs." 6.23. In CIT Vrs. Major Tikka Khushwant Singh, (1995) 212 ITR 650 (SC) it has been observed as follows: "1. The point of law involved for decision in this appeal is already settled by the....
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....Court in the two judgments cited above are to be understood as reminders that whenever a case is set up by the assessee that there has been no valid or proper service of the notice issued under Section 143(2) of the Act, be it for the purpose of regular assessment under Section 143(3) of the Act or for the purpose of a block assessment under Chapter XIV-B or for the purpose of an assessment under Section 153A, such a plea has to be examined thoroughly and in-depth by taking a practical and reasonable view of the matter, not inconsistent with the statutory provisions, keeping in mind the basic principle that the liability to pay tax, which is founded on the charging provisions of the statute, is not to be nullified on specious or unjustified pleas taken by the assessee." 6.25. In Chatturam Vrs. CIT, (1947) 15 ITR 302 = 1947 SCC OnLine FC 9 = AIR 1947 FC 32 it was laid down as follows: "It was next contended that in the present case notices under Section 22(1) and (2) of the Income-tax Act (1922) were already issued before the Notification of 26th May, 1940. The notices were the foundation of the jurisdiction of the Income-tax Officer. At that time the Finance Act of 1940....
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.... taxes, was not unmindful of the fact that it is the duty of the subject to whom a notice is given to render a return in order to enable the Crown to make an assessment upon him; but the charge is made in consequence of the Act, upon the subject; the assessment is only for the purpose of quantifying it.' He quoted with approval the following passage from the judgment of Sargant, L.J., in the case of Williams: 'I cannot see that the non-assessment prevents the incidence of the liability, though the amount of the deduction is not ascertained until assessment. The liability is imposed by the charging section, namely, Section 38 (of the English Act) the words of which are clear. The subsequent provisions as to assessment and so on are machinery only. They enable the liability to be quantified, and when quantified to be enforced against the subject, but the liability is definitely and finally created by the charging section and all the materials for ascertaining it are available immediately.' In Attorney-General Vrs. Aramayo and Others, (1925) 9 Tax Cas. 445, it was held by the whole Court that there may be a waiver as to the machinery of taxation which inures....
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....or instruction to do something" and has the expression like "notice to quit", "till further notice".' Chamber's 20th Century Dictionary, 1993 (p. 1154) 'intimation; announcement; information; warning; a writing, placard etc. conveying an intimation or warning; time allowed for preparation, etc.' Chamber's Dictionary vide Allied Chambers (India) Ltd., Reprint 1994, 1995 (p. 1154) 'intimation; announcement; a formal announcement made by one of the parties to a contract of his or her intention to terminate that contract; information, especially about a future event; warning; a writing; placard, board etc. conveying an intimation or warning; time allowed for preparation; cognizance; observation; heed; mention; a dramatic or artistic review; civility or respectful treatment; a notion etc.' Law Lexicon Dictionary- A Legal Dictionary of Legal Terms and Phrases Judicially Defined, 4th Edn., Vol. II, 1989 (p. 226) 'A person is said to have notice of a fact, when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.' The ....
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....sessee under those provisions, he should be given a reasonable opportunity of being heard. In fact, those sections do not speak of any notice. But Rule 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee. The period of 30 days prescribed in Rule 32 is not mandatory. The rule itself says that 'ordinarily' not less than 30 days' notice should be given. Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants. It may be noted that when the assessees received the notices in question, they appeared before the assessing authority, but they did not object to the validity of those notices. They asked for time for submitting their explanation. The time asked for was given. Therefore, the fact that only nine days were given to them for submitting explanation could not have in any manner prejudiced them. So far as the mistake in the notice as regards the assessment year is concerned, the assessees kept silent about that circumstance till 1958. It was only when they were sure that the period of limitation prescribed by Section 11-A had expired, t....
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....fresh. As has been noted, before the Assistant Commissioner the counsel for the respondent had contended that the ex parte order should have been set aside because no notice had been received. When principles of natural justice are stated to have been violated it is open to the Appellate Authority, in appropriate cases, to set aside the order and require the assessing officer to decide the cases de novo. This is precisely what was directed by the Assistant Commissioner and the Tribunal, in our opinion, was clearly in error in taking a contrary view.' This view is clearly applicable to the facts of the present case. 22. The emerging principles are: (i) Non-issue of notice or mistake in the issue of notice or defective service of notice does not affect the jurisdiction of the assessing officer, if otherwise reasonable opportunity of being heard has been given. (ii) Issue of notice as prescribed in the Rules constitutes a part of reasonable opportunity of being heard. (iii) If prejudice has been caused by non-issue or invalid service of notice the proceeding would be vitiated. But irregular service of notice would not render the proceedings....
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.... None of the two pleas was raised by the appellants in their pleadings. None of the two was urged before O.E.A. Collector. Therefore, there was no occasion to consider those pleas. Still we may make it clear that none of the two pleas could have been a ground for recalling the order which was otherwise within the jurisdiction conferred on the O.E.A. Collector...' 19. In the present case, arguendo if the assessee was unaware, in the first instance regarding the issuance of assessment orders against it, at least when the revenue filed a writ petition (W.P. No. 25943/2011) complaining about Canara Bank's proposal to auction the assessee's properties, it had impleaded the assessee too. In the pleadings, there was a specific mention about the assessment orders, them having become final, and why those demands had to be given primacy as revenue dues, over and above the bank's dues. The assessee was served in those writ proceedings; however, it did not dispute the revenue's contention. This, in the opinion of the court is a telling aspect, as it highlights the assessee's conduct in deliberately choosing to keep quiet, even when it could have raised a grievance." 6.28. Sri S....
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....an also be said to be within his knowledge. At this juncture reference to Order V, Rule 9 of the Code of Civil Procedure, 1908 may not be inept: "9. Delivery of summons by Court.- (1) Where the defendant resides within the jurisdiction of the Court in which the suit is instituted, or has an agent resident within that jurisdiction who is empowered to accept the service of the summons, the summons shall, unless the Court otherwise directs, be delivered or sent either to the proper officer to be served by him or one of his subordinates or to such courier services as are approved by the Court. (2) The proper officer may be an officer of a Court other than that in which the suit is instituted, and, where he is such an officer, the summons may be sent to him in such manner as the Court may direct. (3) The services of summons may be made by delivering or transmitting a copy thereof by registered post acknowledgment due, addressed to the defendant or his agent empowered to accept the service or by speed post or by such courier services as are approved by the High Court or by the Court referred to in sub-rule (1) or by any other means of transmission of d....
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....n. Only contention of the petitioner as reflected in the writ petition was neither notice under Section 148 nor the Assessment Order under Section 147 was ever served. 6.33. In order to perceive the veracity of such contention, minute reading of pleading of writ petition would reveal that it had the knowledge of Assessment Order prior to initiation of proceeding for attachment. In paragraph 3.4 of the writ petition it has been candidly stated thus: "That the Assessing Officer subsequently initiated the penalty proceeding by issuing a show cause on the petitioner and the petitioner appeared in the penalty proceeding and the Assessing Officer passed an order levying penalty under Section 271-C of the IT Act on 13.04.2018. However the petitioner was never served any notice in the reassessment proceeding initiated under Section 147 of the IT Act for the assessment year 2012-13." 6.34. In 2018 itself as it appears from the above narration of fact, the petitioner had the knowledge about Assessment Order being passed. It can safely be said that it is not a case of time-barred assessment; nevertheless, it is a case of non-service of statutory notice on the petitioner. The do....
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....s: "41. The term 'jurisdiction' is a term of art; it is an expression used in a variety of senses and draws colour from its context. Therefore, to confine the term 'jurisdiction' to its conventional and narrow meaning would be contrary to the well settled interpretation of the term. The expression 'jurisdiction', as stated in Halsbury's Laws of England, Volume 10, paragraph 314, is as follows: '314. Meaning of 'jurisdiction': By 'jurisdiction' is meant the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter or commission under which the court is constituted, and may be extended or restricted by similar means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the claims and matters of which the particular court has cognisance, or as to the area over which the jurisdiction extends, or it may partake of both these characteristics.' 42. In American Jurisprudence, Volume 32A, paragraph 581, it is s....
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....ions of jurisdiction. It is well settled that a plea of limitation or a plea of res judicata is a plea of law which concerns the jurisdiction of the court which tries the proceedings. A finding on these pleas in favour of the party raising them would oust the jurisdiction of the court, and so, an erroneous decision on these pleas can be said to be concerned with questions of jurisdiction which fall within the purview of Section 115 of the Code. But an erroneous decision on a question of law reached by the subordinate court which has no relation to questions of jurisdiction of that court, cannot be corrected by the High Court under Section 115.' 46. In the case of Manick Chandra Nandy Vrs. Debdas Nandy, (1986) 1 SCC 512, this Court, while considering the nature and scope of High Court's revisional jurisdiction in a case where a plea was raised that the application under Order IX Rule 13 was barred by limitation, held that a plea of limitation concerns the jurisdiction of the court which tries a proceeding for a finding on this plea in favour of the party raising it would oust the jurisdiction of the court. In the case of National Thermal Power Corpn. Ltd. Vrs. Siemens Atkei....
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....r in not determining the said question, particularly, when in the absence of any finding of fact that such short-levy of excise duty related to any positive act on the part of the appellant by way of fraud, collusion, wilful misstatement or suppression of facts, the extended period of limitation could not have been invoked and in that view of the matter no show-cause notice in terms of Rule 10 could have been issued.' 49. In the case of Kamlesh Babu Vrs. Lajpat Rai Sharma, (2008) 12 SCC 577, the matter came to this Court when the trial court dismissed the suit on issues other than the issue of limitation. The Bench held: '23. The reasoning behind the said proposition is that certain questions relating to the jurisdiction of a court, including limitation, goes to the very root of the court's jurisdiction to entertain and decide a matter, as otherwise, the decision rendered without jurisdiction will be a nullity. However, we are not required to elaborate on the said proposition, inasmuch as in the instant case such a plea had been raised and decided by the trial court but was not reversed by the first appellate court or the High Court while reversing the decision of....
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....rrant adjudication. 19. Thus, with the intention to put the aforesaid practice to rest, the State Legislature introduced Section 9A by the amendment Act of 1969 requiring the Court to decide the issue of jurisdiction at the time of granting or vacating the interim relief. In other words, the legislature inserted Section 9A to ensure that a suit which is not maintainable for want of jurisdiction of the concerned Court, ought not be tried on merits without first determining the question of maintainability of the suit as to jurisdiction of the Court, approached by the plaintiff, as a preliminary issue. 20. The provision contemplates that when an issue of jurisdiction is raised, the said issue should be decided at first as expeditiously as possible, and not be adjourned to a later date. The primary reason is that if the Court comes to finding that it does not have jurisdiction vested in it in law, then no further enquiry is needed and saves a lot of valuable judicial time. 21. A perusal of the Statement of Object and Reasons of the Amendment Act would clarify that Section 9A talks of maintainability only on the question of inherent jurisdiction and does not c....
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....e would not deter the Assessing Officer from exercising power under Section 148. The learned Junior Standing Counsel on written instruction could demonstrate that the Notice dated 29.03.2017 was issued after recording reason to believe that there was escapement of income and such notice was despatched. However, he could not throw light on the mode of despatch. Yet, it could be shown that a Notice dated 23.10.2017 under Section 142(1) was issued for production of books of account, etc. by Speed Post with delivery report. Therefore, it is obvious that the petitioner-assessee was aware of assessment proceedings, namely proceeding under Section 148, was pending on the date of service of such Notice under Section 142(1). The petitioner, however, chose not to participate by producing such evidence as required by the Assessing Officer. Furthermore, the fact of participation in the year 2018 in course of the penalty proceeding under Section 271C of the IT Act has been admitted by the petitioner. Since the mode of service of statutory notice could not be established by the opposite parties, the Assessment Order dated 14.11.2017 is liable to be set aside for violation of principles of natura....
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....ficiency is found out. Where the defect or deficiency as found affects the jurisdiction as in the case of absence of notice, protection under third proviso is not available. Merely because the Tribunal sets aside the order of assessment under Section 23 for absence of notice, the third proviso cannot give protection to Revenue. Accordingly, as on April 16, 1974, completion of assessment has become barred by limitation and there was no scope for any assessment." 8.3. In the present case, as the initiation of proceeding under Section 148 by issue of Notice dated 29.03.2017 and passing the Assessment Order dated 14.11.2017 under Section 147 read with Section 144 of the Income Tax Act, 1961 with respect to assessment year 2012-13 is not hit by limitation under Section 149, on appreciating that statutory notice being not served on the petitioner as required under Section 148 of the IT Act before assessment under Section 147, it would be apposite to set aside the Assessment Order and remit the matter to the Assessing Officer to serve notice under Section 148. 8.4. In Radha Krishan Industries Vrs. State of Himachal Pradesh, (2021) 3 SCR 406 the parameters for approaching a writ Cour....
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....the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.' At the same time, it was observed that the licensees are not precluded from seeking to enforce the statutory provisions governing the contract. It must, however, be remembered that we are dealing with parties to a contract, which is a business transaction, no doubt governed by statutory provisions. [Reference may also be made to the decision of this Court in Asstt. Excise Commr. Vrs. Issac Peter, (1994) 4 SCC 104.] While examining complaints of violation of statutory rules and conditions, it must be remembered that violation of each and every provision does not furnish a ground for the court to interfere. The provision may be a directory one or a mandatory one. In the case of directory provisions, substantial compliance would be enough. Unless it is established that violation of a directory provision has resulted in loss and/or prejudice to the party, no interference is warranted. Even in the case of violation of a mandatory provision, interference does not follow as a matter of course. A mandatory provision conceived in the interest of a party can be waived by that party, wherea....
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....isdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, but has assumed it otherwise than in the mode prescribed by law, is not a nullity. Lt may be liable to be questioned in those very proceedings, but subject to that it is good, and not open to collateral attack. Therefore even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under Section 10(1) that would be a mere irregularity in the assumption of jurisdiction and the order of assessment passed in those proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that Section 10(1) had not been followed. This must a fortiori be so when the appellant has itself submitted to jurisdiction and made a return. We accordingly agree with the learned Judges that even if the registration of the appellant as a dealer under Section 8 is bad that has no effect on the validity of the proceedings taken against it under the Act and the assessment of tax made t....
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....ecree must be patent on its face in order to enable the executing court to take cognisance of such a nullity based on want of jurisdiction. The Court further held that a distinction exists between a decree passed by a court having no jurisdiction and consequently being a nullity and not executable and a decree of the court which is merely illegal or not passed in accordance with the procedure laid down by law. A decree suffering from illegality or irregularity of procedure, cannot be termed inexecutable. 18. In view of the above, in the present case, apart from the fact that on a plain reading of Section 29(8)(b) of the Act, it is manifestly clear that fresh assessment for the assessment year 1995-96, framed pursuant to the order passed by the appellate authority on 8th June, 2000, was well within the prescribed time, even otherwise, in the light of the afore-stated settled law, the assessments orders in question could not be held to be null and void on account of the stated irregularities committed by the assessing officer during the course of assessment proceedings. In our opinion, therefore, despite scathing observations by the Division Bench on the conduct of the Asses....
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....ot be stated to be null and void. It may be stated at the cost of repetition that Notice dated 23.10.2017 under Section 142(1) despatched by Speed Post, which was stated to have been delivered at the addressee, would clinch the issue with regard to knowledge of proceeding. This case, thus, attracts vice of principles of natural justice warranting interference in the Assessment Order dated 14.11.2017 (Annexure-5) by exercise of power under Article 226 of the Constitution of India. 8.10. Under the above premises, the Assessment Order dated 14.11.2017 passed under Section 147 read with Section 144 of the IT Act (Annexure-5) and the consequential Demand Notice dated 14.11.2017 under Section 156 of the IT Act (Annexure-5A) are set aside. 8.11. The matter is, therefore, remanded to the Assessing Officer for fresh assessment upon affording opportunity of hearing and production of documents/evidence by the petitioner. For availing such opportunity, the petitioner is directed to appear before the Assessing Officer within a period of three weeks from date and upon such appearance, the Assessing Officer shall serve Notice under Section 148 on him. 8.12. Upon consideration of material....