Skip to main content

A show cause notice issued by an Authority lacking jurisdiction is invalid

In M/s Indira Industries vs. PCIT, the assessee filed a return for the year 2012-2013 under Section 139 of Income Tax Act, 1961. Subsequently, the revenue issued a notice to the assessee under Section 148 of IT Act. The revenue wanted to open a re-assessment for the said year, on the grounds that the interest on loan amount shown to be paid to the bank was diverted by the assessee to its partners. The assessee challenged the re-assessment contending that the notice was issued after expiry of 2 years, which was not permissible.

The High Court considered the submissions made on behalf of the parties and perused Section 148 of the IT Act. The Court noted that read with Section 263(2), a notice of re-assessment under Section 148 could have been issued only within a time period of two years from the date of the scrutinization of the original assessment. Holding the said notice to be a show cause notice, the High Court observed, principles and grounds available for assailing a show cause notice are well settled. It the authority issuing the show cause notice lacks jurisdiction and if it is clearly barred by law, it renders the show cause notice invalid in law. The Court held that the show cause notice issued in this case was issued beyond the statutory period of two years which was clearly barred by law. Accordingly, the writ appeal was allowed. 

Comments

Post a Comment

Most viewed this month

Dishonour of cheques - Jurisdiction and cause of action explained

In a landmark judgment, Hon'ble Supreme Court went to some length to define the cause of action and jurisdiction of cases under Section 138 of the Negotiable Instruments Act. While deciding in 2014 STPL(Web) 499 SC 1, Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr., the Hon'ble court said, one of the main issues faced by the court (a) from which stage do we consider a offence under Section 138 to have been caused (b) Where would the jurisdiction of the court lie if the cheque was drawn in city A and presented dishonored in City B ? After discussion on various past decisions, the Hon'ble court finally affirmed, " To sum up: (i) An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. (...
Post a Comment
Read more

How to know if a temple/mandir is Public or Private?

In Shri Ram Mandir Indore v. State of Madhya Pradesh, the appellant had contended before the Supreme Court that the Ram Mandir in question is a private temple established by predecessor Gurus and that the properties had been given to the suit temple as Inam and Ram Das was not a mere pujari but the Mahant of the said temple entitled to manage and administer the temple and the suit properties. The appeal was against the judgment of the Madhya Pradesh High Court which had declared the temple as public and the suit property vested in the Deity; and Ram Das and then Bajrang Das are only pujaris and not Mahant-Manager of the temple. The Supreme Court agreeing with the High Court noted the following points :- 1) In 2013, Madhya Pradesh Government published a Directory containing names of all public temples in District Ujjain updating till 31.12.2012, wherein the said temple has been shown as a public temple and Bajrang Das and Ram Das are only shown to be the pujaris. 2)...
Post a Comment
Read more

Loss of earning capacity, and not percentage of disability, must decide compensation, says HC

While computing compensation claims of accident victims, the victim's loss of earning capacity shall outweigh the percentage/extent of his disability, the Madras high court has felt. Justice R Mahadevan, enhancing the compensation payable to an injured driver by Rs 2 lakh, said: "In cases for compensation, it is not the disability, which is partial or total, alone that matters, it is the loss in earning capacity as a result of accident that is to be considered." R Murali, driver of a mixed concrete vehicle, met with an accident in January 2009 and suffered injuries in hip, right leg and ankle. He claimed loss of 100% earning capacity and sought appropriate compensation along with 12% interest rate. However, as the disability certificate issued by a doctor pegged the percentage of his disability at 60%, the deputy commissioner of labour-II, awarded Rs 3.12 lakh as compensation, by fixing the monthly income at Rs 4,000. Aggrieved by the poor package, Murali filed the...
Post a Comment
Read more