Court In The Case Of Red Chilli International Sales v. Income Tax Officer

1 IN THE HIGH COURT OF MADHYA PRADESHAT INDOREBEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE PRAKASH CHANDRA GUPTAON THE 6[th] OF FEBRUARY, 2023 WRIT PETITION No. 2779 of 2023 BETWEEN:- M/S TUSHTI TRADING COMPANY LIMITED THROUGHMANOJ GARG S/O SHRI JAGDISH KUMAR GARG R/O4/54, PRESS COMPLEX A.B. ROAD, INDORE (MADHYAPRADESH) .....PETITIONER (SHRI SUMIT NEEMA, SR. ADVOCATE WITH SHRI GAGAN TIWARI,LEARNED COUNSEL FOR THE PETITIONER . ) AND 1.CENTRAL BOARD OF DIRECT TAXES THROUGHI T S CHAIRMAN MINISTRY OF FINANCEDEPARTMENT OF REVENUE NORTH BLOCK,NEW DELHI - 110002I T S CHAIRMAN MINISTRY OF FINANCEDEPARTMENT OF REVENUE NORTH BLOCK,NEW DELHI - 110002 2.PRINCIPAL CHIEF COMMISSIONER OF INCOMETAX 1 INCOME TAX DEPARTMENT AAYAKARBHAWAN, 48, ARERA HILLS, HOSHANGABADROAD, BHOPAL (MADHYA PRADESH)TAX 1 INCOME TAX DEPARTMENT AAYAKARBHAWAN, 48, ARERA HILLS, HOSHANGABADROAD, BHOPAL (MADHYA PRADESH) 3.PRINCIPAL COMMISSIONER OF INCOME TAX 1INCOME TAX DEPARTMENT AAYAKAR BHAWAN,CGO COMPLEX, INDORE (MADHYA PRADESH)INCOME TAX DEPARTMENT AAYAKAR BHAWAN,CGO COMPLEX, INDORE (MADHYA PRADESH) 4.THE ASSISTANT COMMISSIONER OF INCOMETAX 4 (1) ROOM NOA. 109, I FLOOR, AAYKARBHAWAN, 48, ARERA HILLS, HOSHANGABADROAD, BHOPAL (MADHYA PRADESH)TAX 4 (1) ROOM NOA. 109, I FLOOR, AAYKARBHAWAN, 48, ARERA HILLS, HOSHANGABADROAD, BHOPAL (MADHYA PRADESH) 5.NATIONAL FACELESS ASSESSMENT CENTRE,DELHI (EARLIER NATIONAL E ASSESSMENTCENTRE, DELHI) ASSESSMENTUNIT/VERIFICATION UNIT / TECHNICAL UNIT /DELHI (EARLIER NATIONAL E ASSESSMENTCENTRE, DELHI) ASSESSMENTUNIT/VERIFICATION UNIT / TECHNICAL UNIT / REVIEW UNIT INCOME TAX DEPARTMENT TAX,2ND FLOOR, JAWAHARLAL NEHRU STADIUMNEW DELHI (DELHI) .....RESPONDENTS (MS VEENA MANDLIK, LEARNED COUNSEL FOR THE RESPONDENT . ) This petition coming on for admission this day, JUSTICE SUSHRUT ARVIND DHARMADHIKARI passed the following: ORDER Heard on the question of admission and interim relief. The petitioner has challenged the impugned order dated 31.03.2022 u/S148A(d) of the Income Tax Act, 1961(for short 'the Act ' hereinafter), re-assessment notice dated 31.03.2022 u/S 148 of the Act and notice dated17.03.2022 u/S 148A(b) of the Act passed by the respondent no.4. 2. The brief facts of the case are that the impugned show cause notice dated 17.03.2022 u/S 148A(b) of the Act by way of which re-assessmentproceeding is initiated u/S 147/148 of the Act is absolutely bereft of anyinformation which could effectively show that the income chargeable to tax forthe assessment year 2018-19 has escaped assessment within the meaning ofSection 147 of the Act and secondly, that the notice u/S 148A(d) of the Act donot show any live link between any information qua formation of belief,therefore the impugned re-assessment is illegal, perverse and contrary to theDepartment circular F. No. 299/10/2022 Dir(Inv.III)/611 dated 01.08.2022 and22.08.2022. 3. Learned counsel for the petitioner relied on the judgment of the Apex Court in the case of Red Chilli International Sales Vs. Income Tax Officer & Anr reported in 2023 Livelaw (SC) 16to contend that the writ petition can be entertained to examine if conditions for issuance of notice u/S 148 of the Acthave been satisfied. 4. Learned counsel for the Income Tax Department Ms. Veena Mandlikraised preliminary objections as to the maintainability of the writ petition on theground of territorial jurisdiction on the following grounds: i) Since the PAN A.O. was located outside the territorial jurisdiction ofthe Indore Bench, the entire assessment , re-assessment and adjudication hasbeen done by the ACIT/DCIT, Bhopal Commissionerate, Bhopal, therefore thispetition is not maintainable before this Bench. However, petitioner shall haveliberty to approach the appropriate Bench i.e. the main Seat at Jabalpur. & Anr reported in 2023 Livelaw (SC) 16to contend that the writ petition can be entertained to examine if conditions for issuance of notice u/S 148 of the Acthave been satisfied. 4. Learned counsel for the Income Tax Department Ms. Veena Mandlikraised preliminary objections as to the maintainability of the writ petition on theground of territorial jurisdiction on the following grounds: i) Since the PAN A.O. was located outside the territorial jurisdiction ofthe Indore Bench, the entire assessment , re-assessment and adjudication hasbeen done by the ACIT/DCIT, Bhopal Commissionerate, Bhopal, therefore thispetition is not maintainable before this Bench. However, petitioner shall haveliberty to approach the appropriate Bench i.e. the main Seat at Jabalpur. II) The situs of the jurisdictional Assessing Officer/PAN AO would bedeterminative of the jurisdiction of the High Court for the purpose ofentertaining writ petitions under Article 226 of the Constitution of India. III) Applying the doctrine of forum non conveniens, this Court shouldreject the present writ petition for the reason that the assessee having chosen notto change his PAN jurisdiction, which he is otherwise entitled under the Act, itcan be presumed that his PAN jurisdiction is convenient to him as it isconvenient for the revenue. IV) The faceless assessment regime does not dilute in any manner, theprinciple that the situs of the PAN AO determines the jurisdiction of the HighCourt. On the contrary, an analysis of Section 144B(i), (iv),(vi),(vii), (xiv) &(xvi) would demonstrate that the National Faceless Assessment Centre is only acentral authority, which issues notices to facilitate the assessment proceedingswhich is done and prepared in a coordinated manner by faceless assessmentofficer (FAO) in the original assessment unit with the assistance of the technicalunit and verification unit. Finally the assessment order is finalized and communicated through National Faceless Assessment Centre in Delhi. V) In tax matters, a consistent view has been that the most convenientmanner for the assessee is where is his PAN is located. This is for the reasonthat he has a choice to even relocate his PAN by making suitable applicationunder Section 139A(5)(d) r/W applicable rules and failing to do so leads to apresumption that the location of the PAN/situs of the JAO is convenient to theassessee and he has estopped from arguing otherwise at this stage. 5. Gujarat High Court in the case of Bhavendra Hasmukhlal Patadia Vs. Union of India Through Secretary in W.P.C No. 4820 of 2022 videorder dated 27.04.2022 refused to entertain the writ petition filed by theassessee as the PAN of the assessee was lying in Cuttuck, Orrisa and the orderwas also passed by the Officer in Cuttuck. 6. In the present case, it is seen that the return of income for theassessment year 2018-19 alongwith computation of income has been filled up atBhopal, notice issued u/S 148A(b) of the Act dated 07.03.2022, copy of theorder dated 31.03.2022 u/S 148A(d) of the Act as also the notice u/S 148 of theAct have been issued by the DCIT/ACIT (1), Bhopal. Thus, just because oneor two notice/letters came to be issued to the petitioner at his address atIndore, by itself, will not confer jurisdiction to the Indore Bench of the HighCourt of M.P, more particularly, when the petitioner is being assessed to taxconsistently at Bhopal. The petitioner has a PAN card issued from Bhopal. Theimpugned notices u/S 148 of the Act, and the final assessment order have alsobeen issued from Bhopal. 7 . The judgment passed in the case of Red Chilli InternationalSales(supra) relied upon by the learned counsel for the petitioner would not be of any assistance to the petitioner, since the question of alternative remedy wasexamined, but in the present case, the objection with regard to question ofterritorial jurisdiction has been raised. 7 . The judgment passed in the case of Red Chilli InternationalSales(supra) relied upon by the learned counsel for the petitioner would not be of any assistance to the petitioner, since the question of alternative remedy wasexamined, but in the present case, the objection with regard to question ofterritorial jurisdiction has been raised. 8. In view whereof, we are not inclined to entertain this writ petition andrelegate the petitioner to file appropriate writ petition before the Principal Seat atJabalpur. 9. Accordingly, this petition is disposed of with the aforesaid liberty. sh (S. A. DHARMADHIKARI)(PRAKASH CHANDRA GUPTA)JUDGEJUDGE