Jurisdiction of assessee tied to business location, unless Sec. 124(3) requirements met: HC

Case Details: Biswajaya Dagara v. ACIT - [2023] 148 taxmann.com 18 (Orissa)

Judiciary and Counsel Details

• • Dr S. Muralidhar, CJ. & M.S. Raman, J.
  • Rajjeet Roy, Adv. for the Petitioner.
  • R.S. Chimanka, Sr. Standing Counsel for the Respondent.

Facts of the Case

Assessee-petitioner carried out business activities from Bhubaneswar, Odisha and filed returns for several assessment years from Bhubaneswar. From AY 2011-12 onwards, return he was filing from Kolkata. Later, he received notices from ACIT, Balasore Circle, Balasore. In response, the assessee objected regarding the jurisdiction to Balasore and prayed to transfer the case to Kolkata.

Even after such objection, the jurisdiction remained in Balasore as the Competent Authority believed the assessee was a company’s director assessed in the Balasore Circle.

Aggrieved by the order, a writ petition was filed to the Orissa High Court.

High Court Held

The Court held that merely because the assessee was a director of a company assessed in the Balasore Circle would not automatically transfer the jurisdiction of the Petitioner from Kolkata to Balasore. The transfer of jurisdiction could not occur without complying with the mandatory requirement of section 124(3) of the IT Act.

Section 124 speaks of a vested right of an assessee to have his assessment made at the principal place of his business and in the case of any objection relating thereto, to have the same determined at the hands of a high authority like the Commissioner.

The Department did not provide a convincing explanation for transferring the jurisdiction to the Balasore Circle, especially when the petitioner had already relocated to Kolkata and submitted tax returns from there.

Therefore, the petitioner will remain within the jurisdiction of the relevant Income-tax Circle at Kolkata where he had been filing his returns. This order would not preclude the Department from proceeding in accordance with the law if it proposed to transfer the jurisdiction of the petitioner to any other circle.

List of Cases Reviewed

• • Devidas v. Union of India [1993] 200 ITR 697 (Bom) (para 7) followed.

List of Cases Referred to

• • Devidas v. Union of India [1993] 200 ITR 697 (Bom) (para7).