TDS: AO in place of payment has no jurisdiction if assessee assessed outside

 

Indian Newspaper Society vs. ITO (TDS) (Bombay High Court)

TDS: AO in place of payment has no jurisdiction if assessee assessed outside

The assessee, based & assessed in Delhi, was allotted land by MMRDA at Bandra Kurla Complex, Mumbai, on lease for 80 years. The lease premium of Rs.88.52 crores was paid without deduction of tax at source. The ITO (TDS) Mumbai passed an order u/s 201 in which he held that the assessee had defaulted in not deducting TDS u/s 194-I on the lease premium. The assessee filed a Writ Petition to challenge the jurisdiction of the ITO (TDS) Mumbai. HELD upholding the plea:

The assessee was assessed at New Delhi. Its PAN & TAN were allotted by the AO at New Delhi. All returns including the TDS returns were filed at New Delhi. Accordingly, there was complete absence of jurisdiction on the part of the AO at Mumbai to proceed against the assessee.

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Compilations of case law: General Topics: JURISDICTION

JURISDICTION

Law to be applied is that in force in the Assessment Year unless otherwise provided expressly or by necessary implications.
Reliance Jute & Industries Ltd Vs CIT (SC) 120 ITR 921

For wealth-tax cases, law as it stood on first day of assessment year is applicable
CWT Vs S.A.P. Annamalai (Mad) 141 ITR 578

Penalty to be levied based on law as on date of committing default.
CIT Vs Onkar Saran and Sons (SC) 195 ITR 1
CIT Vs Gopi Ram Mulakh Raj (P & H) 178 ITR 680
CWT Vs Bhagwan Prasad Kanoi (Cal) 184 ITR 95
CIT Vs A. Mohd. Abdul Khader (Mad) 260 ITR 650

Proceedings for imposition of penalty can be initiated only after an assessment order has been made – who has the authority to impose penalty at that point of time, should remain the authority finally to impose penalty also.
Varkey Chacko Vs CIT (SC) 203 ITR 885.
CIT Vs Kausalya & others (Bom) 216 ITR 660

Circulars dated 4.10.69 and 18.9.72 on the same subject – A.Y. 1971-72 - Circular dated 04.10.69 is law applicable on the 1st day of AY – irrespective of accounting year followed.
CIT Vs Prasad Production P. Ltd. (Mad) 179 ITR 147
CIT Vs Jyoti Pictures (AP) 169 ITR 412

CBDT is not competent to give directions regarding the exercise of any judicial power by its subordinate authorities
J.K. Synthetics Ltd and Ors. Vs CBDT & Ors. (SC) 83 ITR 335

As per the address given on the return filed by assessee himself, jurisdiction over the case vests with an Assessing Officer – Notice u/s 143(2) issued by him but no objection raised against jurisdiction u/s 124(3) – Assessment valid
Ram Bhaj & Sons (P.) Ltd. Vs ITO (ITAT, Asr) 102 ITD 93

Assessment proceedings are quasi judicial in nature. While making assessments, ITO is solely to be guided by provisions of law and not instructions of CBDT.
Raja V.V.R.K. Yachendra Kumar Rajah of Venkatagiri Vs ITO & Anr. (AP) 70 ITR 772

Circulars cannot over-ride provisions of act – Circular giving concession can be withdrawn prospectively
State Bank of Travancore Vs CIT (SC) 158 ITR 102
Kerala Financial Corporation Vs CIT (SC) 210 ITR 129

Circular which is contrary to provisions of law is not binding on IT Offices.
Ambika Constructions Vs ITO & Ors. (Patna) 234 ITR 716
Delhi Flour Mills Co. Ltd. Vs CIT (Del) 95 ITR 151

Circulars issued by Company Law Board – Not binding on IT authorities
Stumpp, Schule and Somappa Ltd Vs CIT (Kar) 190 ITR 152

Circular issued by CBDT not binding on Court
CIT Vs Abhishek Industries Ltd. (P&H) 286 ITR 1
For AY 73-74, IAC was vested with jurisdiction to exercise his powers conferred upon him u/s 271(1)( c) irrespective of the fact that the order in question was passed after coming into force of the amendment taking away this right from IAC.
CIT Vs Kashi Prasad & Sons ( All ) 222 ITR 626

Tribunal setting aside assessment and remitting matter to ITO – ITO has jurisdiction to consider entire matters afresh.
CIT Vs D. Veerappan (Mad) 215 ITR 533
Nenmal Champalal Sha & Ors Vs CIT (Bom) 238 ITR 266
CIT Vs Highway Constructions Co.(P) Ltd (Gau) 223 ITR 498
Saheli Synthetics (P) Ltd. Vs ACIT (ITAT, Ahd) 57 ITD 65

There is no inherent right of appeal – It is to be specifically conferred by the statute providing for an appeal.
Caltex Ore Refining (India) Ltd. Vs CIT (Bom) 202 ITR 375.

High Court having jurisdiction over ITO who made the assessment can hear a reference arising out of the ITO's orders
CIT Vs Madanlal and Co. (Kar) 202 ITR 360
CIT Vs Parke Davis Ltd. (AP) 239 ITR 820
Suresh Desai & Associates Vs CIT (Del) 230 ITR 912

Letters addressed by CBDT to State Government –cannot be treated as Circular
CIT Vs Kerala Financial Corpn. Ltd,. (Ker) 155 ITR 246

Order transferring a file cancelled by High Court – Before High Court order, new Assessing Officer passed assessment orders – Not invalid – To be set-aside and remand to the Assessing Officer having jurisdiction.
ACIT Vs Shravan Mahipat Hedau (HUF) (ITAT, Amritsar) 62 ITD 70

Transfer of case from one Assessing Officer to another – Order u/s 127 necessary.
All India Children Care & Educational Dev. Society Vs JCIT (ITAT, All) 87 ITD 209

A wrong reference to the power under which an order is made does not per se vitiate the order if there is some other power under which the order could lawfully be made. The validity of the impugned order has to be tested by reference to the question whether the ITO had any power at all to make an order of this nature. If the power is otherwise established, the fact that the source of power has been incorrectly described would not make the order invalid.
VR.C.RM. Adaikkappa Chettiar Vs CIT (Mad) 78 ITR 285
R.P. Kandaswami & others Vs CIT (Mad) 49 ITR 344

If subsequent amendment enlarges time limit while period of limitation prescribed under old law has not expired, subsequent law will govern the proceedings.
Gujarat Forging (P) Ltd. Vs ITO (ITAT, Ahd) 56 ITD 208

Lack of jurisdiction will vitiate the proceedings rendering them and the orders passed therein as nullity.
Budlina Swain & others v. Gopinath Deb & Ors. AIR 1999 SC 2089

Existence of alternate remedy – Not a bar for writ
CIT Vs Foramer France (SC) 264 ITR 566
Carried on business at Delhi – Head Office at Delhi – Territorial jurisdiction vests with Assessing Officer at Delhi - Assessee challenged jurisdiction at Ghaziabad and requested CCIT, Kanpur to transfer file –specific order by CCIT, Kanpur is not necessary – Transfer order issued by CCIT, Delhi is valid. Since Assessing Officer at Delhi has territorial jurisdiction, 148 notice issued prior to file transfer order is valid.
Amulya General Trading & Agencies Ltd. Vs ACIT (ITAT, Del) 65 ITD 329.

Tribunal passing order u/s 260(1) to give effect to opinion of High Court – Subsequent decision of Full Bench of the same High Court in case of another assessee taking a different view – Tribunal has no power to implement decision of Full Bench.
Sasidhara Shenoy & Bros. Vs DCIT (Ker) 241 ITR 333.

Notification will come into operation as soon as it is published in official gazette.
Union of India Vs. Ganesh Das Bhojraj (SC) 244 ITR 691.
CIT Vs Haripal Singh (P&H) 224 ITR 147

Decision regarding territorial jurisdiction of High Court in New India Assu

Decision regarding territorial jurisdiction of High Court in New India Assurance Co. Ltd. v. UOI [AIR 2010 Delhi 43 (FB)] referred to a Larger Bench

Income-tax : Statement of law with regard to `cause of action', `sole cause of action', `forum conveniens' and `the imposition of limitation for exercise of jurisdiction under Article 226 and discretionary exercise of power' have been too broadly stated in all encompassing manner by Full Bench of High Court of Delhi in said case (supra) and, therefore, said decision requires to be reconsidered by a Larger Bench [Article 26 of the Constitution of India - Writ - Maintainability of] - [2011] 10 taxmann.com 120 (Delhi)