Epson India Private Limited v. The Assistant Commissioner of Income-tax, Circle-2(1)(2), Bengaluru / The Assistant Commissioner of Income-tax, Transfer Pricing-1(2)(1), Bengaluru
[Citation -2019-LL-0909-96]

Citation 2019-LL-0909-96
Appellant Name Epson India Private Limited
Respondent Name The Assistant Commissioner of Income-tax, Circle-2(1)(2), Bengaluru / The Assistant Commissioner of Income-tax, Transfer Pricing-1(2)(1), Bengaluru
Court HIGH COURT OF KARNATAKA
Relevant Act Income-tax
Date of Order 09/09/2019
Judgment View Judgment
Keyword Tags initiation of reassessment proceedings • territorial jurisdiction • non-application of mind • escaped assessment • issuance of notice • transfer pricing
Bot Summary: The learned counsel for petitioner submitted that time and again courts have held that if reasons to believe with reference to materials are not available, the same amounts to without jurisdiction. The definition of jurisdiction as defined in the judicial dictionary is as under: -5- Jurisdiction means the legal authority to administer justice according to the means, the law has provided subject to the limitation imposed by the law upon the judicial authority. A court s power to decide a case to issue a decree; the constitutional grant of federal-question jurisdiction. The section refers to the lack of inherent jurisdiction in the Court and not to its territorial jurisdiction. Given -8- such jurisdiction, we must be careful to distinguish exercise of jurisdiction from existence of jurisdiction, for fundamentally different are the consequences of failure to comply with statutory requirements in the assumption and in the exercise of jurisdiction. The authority to decide a cause at all, and not the decision rendered therein, is what makes up jurisdiction, and when there is jurisdiction of the person and subject-matter, the decision of all other questions arising in the case is but an exercise of that jurisdiction. The distinction between cases where jurisdiction is assumed by a Court where there is a absolute want of it and those where the Court in the exercise of its jurisdiction acts wrongly is of fundamental importance.


IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 9TH DAY OF SEPTEMBER 2019 BEFORE HON BLE MR.JUSTICE P. B. BAJANTHRI WRIT PETITION NO.15970 OF 2019 (T-IT) BETWEEN: M/S. EPSON INDIA PRIVATE LIMITED, 12TH FLOOR, MILLENIA TOWER A, NO.1, MURPHY ROAD, ULSOOR, BENGALURU-560 008. (REPRESENTED BY ITS SENIOR VIDE PRESIDENT SRI. MR. T. SUKUMAR, S/O. SRI. THIRUNAVUKKARASU, AGED ABOUT 58 YEARS) PETITIONER (BY SRI. CHYTHANYA K. K., ADVOCATE) AND: 1. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2(1)(2), ROOM NO.218, 2ND FLOOR, BMTC BUILDING, 80 FT. ROAD, KORAMANGALA, BENGALURU-560 095. 2. ASSISTANT COMMISSIONER OF INCOME TAX, TRANSFER PRICING -1(2)(1), ROOM NO.329, 3RD FLOOR, BMTC BUILDING, 80 FT. ROAD, KORAMANGALA, BENGALURU-560 095. ... RESPONDENTS (BY SRI. E. I. SANMATHI, ADVOCATE FOR SRI. JEEVAN J. NEERALGI, ADVOCATE) -2- THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH AS FAR AS PETITIONER IS CONCERNED IMPUGNED NOTICE ISSUED BY R-1 UNDER SECTION 148 OF IT ACT, DATED 15.09.2017, ENCLOSED AS ANNEXURE-A. THIS WRIT PETITION IS COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, COURT MADE FOLLOWING: ORDER In instant petition, petitioner has sought for following reliefs: a) Quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise, impugned notice bearing No.ITBA/AST/S/148/2017- 18/1006343705(1) issued by first respondent under Section 148 of IT act, dated 15.09.2017, enclosed as Annexure-A; b) Quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise, impugned notice bearing No.AACE7858F/ACIT-C2(1)(2) /143(2)/2018-19 issued by first respondent under Section 143(2), dated 05.09.2018, enclosed as Annexure-B; c) Quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise, impugned order overruling objection bearing F.No.148/ AAACE7858F/DCIT-C-2(1)(2)/2018-19 passed by first respondent enclosed as Annexure-C; -3- d) Quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise, impugned notice bearing F.No./TPO-1(1)(2)/2018-19 issued by second respondent under Section 92CA, dated 23.10.2018, enclosed as Annexure-D. 2. Annexures to D are notices issued under Section 148 and 143(2) of Income Tax Act, 1961. Annexure-C is stated to have been overruling objections of petitioner and Annexure-D relates to issuance of notice under Section 92CA. On bare perusal of impugned notices read with Annexure-C, it is crystal clear that it is not final re-assessment order. Certain procedures have been adopted by Deputy Commissioner, Income Tax. Paragraphs 3 and 4 of Annexure-C dated 28.02.2019, reads as under: 3. Accordingly, undersigned is of considered opinion that there is relevant material for forming reasonable belief that income has escaped assessment and, therefore, initiation of reassessment proceedings by issue of notice under Section 148 of Act is in order. This communication should be considered as speaking order as per directions of Hon ble Supreme Court in -4- case of GKN Driveshafts (India) Ltd. Vs. DCIT (2003) 259 ITR (19) SC. 4. During course of reassessment proceedings you will be afforded adequate opportunity to explain your case and resultant order will be passed on objective appraisal of evidences available. 3. learned counsel for petitioner submitted that time and again courts have held that if reasons to believe with reference to materials are not available, same amounts to without jurisdiction. petitioner has not pointed out that very statutory provision do not empower Deputy Commissioner of Income Tax to proceed with, so as to contend that he has no jurisdiction to interfere with issuance of show-cause notices. Supreme Court in number of cases has examined under what circumstances show-cause notice could be interfered. Therefore, writ is maintainable. definition of jurisdiction as defined in judicial dictionary is as under: -5- Jurisdiction means legal authority to administer justice according to means, law has provided subject to limitation imposed by law upon judicial authority. Government s general power to exercise authority over all persons and things within its territory; esp. State s power to create interests that will be recognized under common-law principles as valid in other states. court s power to decide case to issue decree; constitutional grant of federal-question jurisdiction. 4. Judgment delivered by Court not competent to deliver it is void Distinction between total want of jurisdiction and erroneous exercise of jurisdiction . It is fundamental principle well established that decree passed by Court without jurisdiction is nullity, and that invalidity could be set up whenever and by whoever it is sought to be enforced or relied upon even at stage of execution and even in collateral proceedings. defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of subject matter of action, strikes at very -6- authority of Court to pass any decree and such defect cannot be cured even by consent of parties. 5. words not competent in Section 44 of Evidence Act refer to Court acting without jurisdiction. section refers to lack of inherent jurisdiction in Court and not to its territorial jurisdiction. In Article 46 of Sir James Stephen s Digest of Law of Evidence, corresponding rule of English law is stated to be that whenever judgment is offered as evidence, party against whom it is so offered may prove that Court which gave it had no jurisdiction. competency of Court and its jurisdiction are thus synonymous terms. judgment or decree passed without jurisdiction is nullity; and when decree is void and nullity, it is duty not only of Court which passed it to ignore it but of every Court to which it is presented. There must, -7- however, be manifest lack of jurisdiction in Court to render its decree or judgment void. 6. Jurisdiction may be defined to be power of Court to hear and determine cause, to adjudicate or exercise any judicial power in relation to it. Such jurisdiction naturally divides itself under three broad heads, namely, with reference to: (i) subject- matter (ii) parties, and (iii) particular question which calls for decision. 7. Question of jurisdiction may consequently arise in one of three ways, that is, either in relation to subject-matter, or in relation to parties, or in relation to question submitted for decision of Court. This classification into territorial jurisdiction, pecuniary jurisdiction and jurisdiction of subject- matter is obviously of fundamental character. Given -8- such jurisdiction, we must be careful to distinguish exercise of jurisdiction from existence of jurisdiction, for fundamentally different are consequences of failure to comply with statutory requirements in assumption and in exercise of jurisdiction. 8. authority to decide cause at all, and not decision rendered therein, is what makes up jurisdiction, and when there is jurisdiction of person and subject-matter, decision of all other questions arising in case is but exercise of that jurisdiction. distinction between cases where jurisdiction is assumed by Court where there is absolute want of it and those where Court in exercise of its jurisdiction acts wrongly is of fundamental importance. In former case decision is void and nullity, whereas in latter case it is merely voidable, and has due effect, unless set aside by appropriate proceedings. It cannot be said that wherever decision is wrong in -9- law or violates rule of procedure, Court must be held incompetent to deliver it. It has never been and could not be held that Court which erroneously decreed suit which it should have dismissed as time barred or as barred by rule of res judicata acts without jurisdiction and is not competent to deliver its decree. Even concept of pending proceedings is taken into consideration under act, 1999 or Act, 2003 do not provide for transfer of pending proceedings like arbitration proceedings which was pending till 5.8.2004 like provision in Administration Tribunal Act, 1985, where Government employees litigations were pending before High Court were transferred to respective Administrative Tribunals as and when Tribunal was constituted. 9. In present petition, it is not that Deputy Commission s action is without authority of law to contend he has no jurisdiction to issue notices. - 10 - Therefore, petition is premature for reason that Deputy Commissioner of Income Tax has specifically stated that petitioner would be afforded adequate opportunity to explain his case before passing order on objective appraisal of evidence available. learned counsel for petitioner contends that petitioner s objections stated in para-21.2 of his petition has not been considered before issuing impugned communication dated 28.02.2019. learned counsel for petitioner submitted that it is order. Perusal of last portion of communication shows that petitioner s right has not been affected. What has been stated is that petitioner would be afforded adequate opportunity to explain his case. Therefore, one has to draw inference that it is not order and it is only communication wherein it is specifically stated that during course of reassessment proceedings, petitioner has opportunity to explain his version. contention of petitioner that objections stated in - 11 - para-21.2 have not been appraised by concerned authority. If it is not considered, it is advantage to petitioner in future to take contention that his grievance/objections have not been addressed, which would be non-application of mind, and on that ground itself further proceedings will be treated as void. In other words, present petition is premature. Accordingly, writ petition stands dismissed as premature reserving liberty to petitioner to pursue Deputy Commissioner of Income Tax in terms of Annexure-C and appraise all his contentions. In event of making detail explanation along with documents before Deputy Commissioner of Income Tax pursuant to communication dated 28.02.2019, Deputy Commissioner of Income Tax, Bengaluru is hereby directed to consider each and every contention to be raised by petitioner and pass speaking order after due consideration of each contention, in accordance with law. - 12 - 10. Petition is accordingly dismissed. Sd/- JUDGE RD Epson India Private Limited v. Assistant Commissioner of Income-tax, Circle-2(1)(2), Bengaluru / Assistant Commissioner of Income-tax, Transfer Pricing-1(2)(1), Bengaluru
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