WRIT PETITION NO.8657 OF 2012 - Section 148 of Income Tax Act,1961

WRIT PETITION NO.8657 OF 2012

Fiat India Automobiles Limited ] B/19, MIDC, Ranjangaon, Shirur, ] Pune – 412210. ]

..Petitioner versus

1. Virendra Singh, ] Assistant Commissioner of Income ] Tax10(1), Mumbai, having his office ] at 455, Aayakar Bhavan, M.K.Road, ] Mumbai – 400 20. ]
2. S.K.Abrol, Commissioner of Income ] Tax 10, Mumbai, having his office at ] 574, Aayakar Bhavan, M.K.Road, ] Mumbai – 400 020. ]
3. Union of India,] Through the Secretary, ] Ministry of Finance, ] Government of India, North Block, ] New Delhi – 110 001. ]

..Respondents

Mr.P.J.Pardiwala, Senior Counsel with Niraj Seth

with Atul K. Jasani for the Petitioner.

Mr. Arvind Pinto for the Respondent.

.............

CORAM : J.P. DEVADHAR & M.S.SANKLECHA, JJ.

DATE : 16^th October, 2012.

1 Rule, returnable forthwith. By consent the petition is taken up for final hearing.

2 This writ petition is filed to challenge the notice dated 30.03.2012 issued by the Assistant

Commissioner		of	Income		Tax10(1)			Mumbai		under
Section	148	of	the	Income		Tax	Act,		1961	('the
Act').

3 The basic argument of the Petitioner is that once the CIT10 Mumbai in exercise of the powers vested in him under Section 127(2) of the Act has transferred the power to assess the Petitioner on 22.11.2011 from ACIT10(1) Mumbai to DCIT, Circle1(2) Pune, then the ACIT10(1) would have no jurisdiction to issue the impugned notice dated 30.03.2012 and therefore, the said notice dated 30.03.2012 is liable to be quashed and set aside.

the registered office of the Petitioner from Mumbai to Pune, the Petitioner in JuneJuly,2009 had applied for transfer of assessment records from Mumbai to Pune. After, exchange of several letters, the CIT10 Mumbai by his order dated 22.11.2011 transferred the powers to assess the petitioner from ACIT10(1) Mumbai to DCIT, Circle1(2) Pune. Thus, from 22.11.2011 ACIT10(1) Mumbai did not have any power to assess or reassess the petitioner.

5 It is not in dispute that on transfer of the jurisdiction from Mumbai to Pune, the Additional CIT, (TP)Pune has assumed jurisdiction and accordingly issued a notice dated 29.03.2012 to the Petitioner under Section 92CA of the Act relating to Assessment year 20092010.

6 However, the ACIT10(1) Mumbai has issued the impugned notice on 30.03.2012 under Section 148 of the Act with a view to reopen the assessment for

A.Y. 200506. The assessee by its letter dated

24.04.2012 objected to the impugned notice by specifically stating that pursuant to the order of CIT dated 22.11.2011, the ACIT10(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed interalia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT10(1) is divested by the order of the CIT10 Mumbai dated 22.11.2011, the ACIT10(1) Mumbai would cease to have power to assess or reassess the petitioner and hence, the impugned notice issued by ACIT10(1) Mumbai being without jurisdiction is liable to be quashed and set aside.

7 In the affidavitinreply filed by the DCIT10(1) Mumbai dated 8.10.2012 it is stated that by a corrigendum order dated 27.03.2012, the CIT10 Mumbai has temporarily withdrawn/cancelled the earlier transfer order dated 22.11.2011 for the sake of administrative convenience and therefore,

the notice dated 30.03.2012 would be valid. It is the case of the petitioner that neither any notice to pass a corrigendum order was issued to the petitioner nor the alleged corrigendum order dated 27.03.2012 has been served upon the petitioner till date.

8 Mr. Pinto, learned Counsel for the Revenue on instruction from CIT10 Mumbai informs us that there is no proof of serving the corrigendum order dated 27.03.2012 upon the petitioner. It is neither the case of the revenue that before passing the corrigendum any notice was issued to the petitioner nor it is the case of the revenue that the corrigendum order was passed after hearing the petitioner.

9 Although in the affidavit in reply the revenue claims to have annexed a copy of the corrigendum order dated 27.03.2012 no such order was infact annexed to the affidavitinreply. It is only during the course of hearing the Counsel for

of the letter dated 20.03.2012 addressed by ACIT

10(1) Mumbai to CIT10 Mumbai as well as the

corrigendum order dated 27.03.2012 to the Court as

also to the Counsel for the Petitioner.

10 The letter dated 20/3/2012 addressed by

the ACIT10(1) to CIT(10) Mumbai reads thus:

To The Commissioner of Income Tax10, Mumbai.

(Through Proper Channel) Sir,

Sub:Order u/s 127(2) in the case of Fiat India Automobiles Ltd.

Ref:No.C.I.T.10/Juris.1237/Transfer/201112 dated 22.11.2011reg.

Kindly refer to the above,

2 Order u/s. 127(2) was passed in the above mentioned case. There is an interlinked matter in the case of Fiat India Pvt. Ltd. The file of Fiat India Automobiles Ltd. For A.Y. 200506 has to be reopened. It is therefore requested that a corrigendum to the order may kindly be passed in order to circumvent any jurisdictional issue.

Yours faithfully, Sd/( Virender Singh ), Asstt. Commissioner of Income Tax10(1), Mumbai.

“ :CORRIGENDUM ORDER: The Order No.C.I.T./Juris.127/Transfer/

201112		dated	22.11.2011		in		the	case	of	M/s.	Fiat
India	Automobile			Ltd.			(PAN	AAACF1		716D)		is
temporarily			withdrawn			for		the		sake		of
administrative			convenience.

A fresh order is being issued separately.

Sd/(SABJEEV K. ABROL) Commissioner of Income Tax10, Mumbai. “

12 The question therefore to be considered is, when the CIT10 Mumbai has transferred the jurisdiction to assess/reassess the petitioner from ACIT10(1) Mumbai to DCIT Circle1(2) Pune under Section 127 of the Act after hearing the petitioner on 22.11.2011, whether the CIT10 Mumbai at the instance of ACIT10(1) Mumbai is justified in issuing a corrigendum order on 27.03.2012 behind the back of the petitioner & whether the ACIT10(1) Mumbai is justified in issuing the impugned notice under Section 148 of the Act dated 30.03.2012 on the basis of the said corrigendum order dated

to the petitioner, without hearing the petitioner and which is uncommunicated to the petitioner.

13 Mr. Pinto, learned Counsel for the Revenue does not dispute that the corrigendum order was passed without issuing notice and without hearing the petitioner and further admits that the said corrigendum order was not served upon the petitioner till date and that he has tendered a copy of the said corrigendum order upon the counsel for the petitioner today in Court. However, he submits that once the corrigendum order was passed by the CIT10 Mumbai on 27.03.2012 the ACIT 10(1) Mumbai was justified in issuing the impugned notice dated 30.03.2012.

14 In our opinion, the conduct of ACIT10(1) Mumbai as well as CIT10 Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT10 Mumbai from ACIT10(1) Mumbai to DCIT Circle1(2) Pune by

the part of ACIT10(1) Mumbai to request the CIT10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT10(1) Mumbai to the CIT10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT10(1) Mumbai has himself indulged in circumventing the provisions of law which is totally disgraceful.

15 In any event, the CIT10 Mumbai ought not to have succumbed to the unjust demands of ACIT

ACIT10(1) for making such unjust request. The CIT10 Mumbai ought to have known that there is no provision under the Act which empowers the CIT to temporarily withdraw the order passed by him under Section 127(2) of the Act for the sake of administrative convenience or otherwise. If the CIT10 Mumbai was honestly of the opinion that the order passed under Section 127(2) of the Act was required to be recalled for any valid reasons, then, the CIT10 Mumbai ought to have issued notice to that effect to the petitioner and after hearing the petitioner ought to have passed any order as he deemed fit and serve the same to the petitioner.

16 In the present case, admittedly, the CIT10 Mumbai has not issued any notice and has not heard the petitioner before passing the Corrigendum order and infact the said corrigendum order has not been communicated to the petitioner before issuing the impugned notice dated 30.03.2012 and admittedly the alleged corrigendum order is served upon the

17 In these circumstances, we quash and set aside the impugned notice dated 30.03.2012 issued by the ACIT10(1) Mumbai based on the corrigendum order dated 27.03.2012 passed allegedly by the CIT10 Mumbai at the behest of ACIT10(1) Mumbai and in gross abuse of the process of law. Apart from the fact that the CIT10 Mumbai had no jurisdiction to temporarily suspend an order passed under Section 127(2) of the Act, in the fact of the present case, the impugned corrigendum order passed behind the back of the petitioner without issuing any notice to the petitioner, without hearing the petitioner and admittedly uncommunicated to the petitioner till date, would have no legal existence and therefore the impugned notice dated 30.03.2012 based on the legally non existent corrigendum order dated 27.03.2012 cannot be sustained. Moreover, in the alleged corrigendum order dated 27.03.2012 it is stated that a fresh order would be issued separately, but, till date no fresh order has been

supports the contentions of the petitioner that the alleged corrigendum order has been passed by the CIT10 Mumbai in collusion with ACIT10(1) Mumbai with a view to circumvent the provisions of law which is wholly impermissible in law.

18 In the result, the writ petition is allowed by quashing the impugned notice dated 30.03.2012 issued by ACIT10(1) Mumbai with costs quantified at Rs.10,000/to be paid by the revenue to the petitioner within a period of eight weeks from today. It is brought to our notice that the CCITVI Mumbai agrees that the impugned actions of CIT10 Mumbai and ACIT10(1) Mumbai are patently unjustified and not as per law but has expressed his helplessness in the matter. We expect that CCITVI takes immediate remedial steps so that no such incidents occur in the future. We make it clear that it will be open to the revenue to collect the costs of Rs.10,000/from the respondent Nos. 1 and 2 which is required to be

paid by the revenue to the petitioner under this order. The Registry is directed to forward a copy of this order to the CCITVI, Mumbai and also to the CBDT, New Delhi.

(M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.)