Bombay High Court
Fiat India Automobiles Limited vs Virendra Singh on 16 October, 2012
Bench: J.P. Devadhar, M.S. Sanklecha
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
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 ]
Tax-10(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 : 16th October, 2012.
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ORAL JUDGMENT (PER J.P.DEVADHAR,J.) :
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 Tax-10(1) Mumbai under
Section 148 of the Income Tax Act, 1961 ('the
Act').
3 The basic argument of the Petitioner is
that once the CIT-10 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 ACIT-10(1) Mumbai to
DCIT, Circle-1(2) Pune, then the ACIT-10(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.
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4 The relevant facts are that on shifting
the registered office of the Petitioner from Mumbai
to Pune, the Petitioner in June-July,2009 had
applied for transfer of assessment records from
Mumbai to Pune. After, exchange of several
letters, the CIT-10 Mumbai by his order dated
22.11.2011 transferred the powers to assess the
petitioner from ACIT-10(1) Mumbai to DCIT, Circle-
1(2) Pune. Thus, from 22.11.2011 ACIT-10(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 2009-2010.
6 However, the ACIT-10(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
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A.Y. 2005-06. 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 ACIT-10(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 ACIT-
10(1) is divested by the order of the CIT-10 Mumbai
dated 22.11.2011, the ACIT-10(1) Mumbai would cease
to have power to assess or reassess the petitioner
and hence, the impugned notice issued by ACIT-10(1)
Mumbai being without jurisdiction is liable to be
quashed and set aside.
7 In the affidavit-in-reply filed by the
DCIT-10(1) Mumbai dated 8.10.2012 it is stated
that by a corrigendum order dated 27.03.2012, the
CIT-10 Mumbai has temporarily withdrawn/cancelled
the earlier transfer order dated 22.11.2011 for the
sake of administrative convenience and therefore,
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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 CIT-10 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 affidavit-in-reply. It is
only during the course of hearing the Counsel for
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the revenue admitted the lapse and tendered a copy
of the letter dated 20.03.2012 addressed by ACIT-
10(1) Mumbai to CIT-10 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 ACIT-10(1) to CIT-(10) Mumbai reads thus:-
To
The Commissioner of Income Tax-10,
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/2011-
12 dated 22.11.2011-reg.
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. 2005-06 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 Tax-10(1),
Mumbai.
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11 The corrigendum order dated 27/3/2012
passed by CIT-10 Mumbai reads thus:-
" :CORRIGENDUM ORDER:
The Order No.C.I.T./Juris.127/Transfer/
2011-12 dated 22.11.2011 in the case of M/s. Fiat
India Automobile Ltd. (PAN AAACF1716D) is
temporarily withdrawn for the sake of
administrative convenience.
A fresh order is being issued separately.
Sd/-
(SABJEEV K. ABROL)
Commissioner of Income Tax-10,
Mumbai. "
The question therefore to be considered
is, when the CIT-10 Mumbai has transferred the
jurisdiction to assess/reassess the petitioner from
ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune under
Section 127 of the Act after hearing the petitioner
on 22.11.2011, whether the CIT-10 Mumbai at the
instance of ACIT-10(1) Mumbai is justified in
issuing a corrigendum order on 27.03.2012 behind
the back of the petitioner & whether the ACIT-10(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
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27.03.2012 which is passed without issuing a notice
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 CIT-10 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 ACIT-10(1)
Mumbai as well as CIT-10 Mumbai is highly
deplorable. Once the jurisdiction to assess the
petitioner was transferred by the CIT-10 Mumbai
from ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune by
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order dated 22.11.2011 it was totally improper on
the part of ACIT-10(1) Mumbai to request the CIT-
10, Mumbai to pass a corrigendum order with a view
to circumvent the jurisdictional issue. Making
such a request on the part of ACIT-10(1) Mumbai to
the CIT-10 Mumbai in our opinion, was in gross
abuse of the process of law. If there was any time
barring issue, the ACIT-10(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 ACIT-10(1) Mumbai to indulge in circumventing
the provisions of law and we strongly condemn the
conduct of ACIT-10(1) Mumbai in that behalf.
Instead of bringing to book the persons who
circumvent the provisions of law, the ACIT-10(1)
Mumbai has himself indulged in circumventing the
provisions of law which is totally disgraceful.
15 In any event, the CIT-10 Mumbai ought not
to have succumbed to the unjust demands of ACIT-
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10(1) and instead ought to have admonished the
ACIT-10(1) for making such unjust request. The CIT-
10 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
CIT-10 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 CIT-10 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 CIT-
10 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
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petitioner for the first time today in Court.
17 In these circumstances, we quash and set
aside the impugned notice dated 30.03.2012 issued
by the ACIT-10(1) Mumbai based on the corrigendum
order dated 27.03.2012 passed allegedly by the CIT-
10 Mumbai at the behest of ACIT-10(1) Mumbai and in
gross abuse of the process of law. Apart from the
fact that the CIT-10 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
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passed by CIT-10 Mumbai. This fact further
supports the contentions of the petitioner that the
alleged corrigendum order has been passed by the
CIT-10 Mumbai in collusion with ACIT-10(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 ACIT-10(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
CCIT-VI Mumbai agrees that the impugned actions of
CIT-10 Mumbai and ACIT-10(1) Mumbai are patently
unjustified and not as per law but has expressed
his helplessness in the matter. We expect that
CCIT-VI 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
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paid by the revenue to the petitioner under this
order. The Registry is directed to forward a copy
of this order to the CCIT-VI, Mumbai and also to
the CBDT, New Delhi.
(M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.)
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