Facts of the Case

The petitions, including that of Alankit Finsec Limited, arose from income-tax proceedings initiated following search and investigation actions, after which jurisdiction over the petitioners was transferred to the Central Circle. Various notices and assessment proceedings were subsequently issued by the Deputy Commissioner of Income Tax, Central Circle-28, Delhi.

The petitioners challenged the legality of these proceedings, contending that the initiation of reassessment and related actions lacked jurisdiction and violated statutory requirements. Multiple connected matters involving group entities and individuals were heard together by the Delhi High Court.

Issues Involved

  1. Whether the Income Tax Department validly exercised jurisdiction after transfer of cases to the Central Circle pursuant to search/investigation.
  2. Whether notices initiating reassessment or assessment proceedings were legally sustainable.
  3. Whether procedural requirements under the Income Tax Act were complied with before initiating such proceedings.

 Petitioner’s Arguments

  • The petitioners contended that the impugned notices and proceedings were without jurisdiction and contrary to statutory provisions.
  • It was argued that the prerequisites for initiating reassessment or post-search proceedings were not satisfied.
  • The petitioners also asserted that the transfer to the Central Circle and subsequent actions resulted in arbitrary exercise of power and violation of due process.

 Respondent’s Arguments (Revenue)

  • The Revenue submitted that the proceedings were initiated in accordance with law following search/investigation actions.
  • Jurisdiction of the Central Circle authorities was validly assumed under the statutory framework.
  • It was contended that all procedural safeguards were duly followed and that the Department was empowered to proceed with assessments based on material gathered during the search.

Court Order / Findings

  • Transfer of jurisdiction to the Central Circle pursuant to search/investigation was lawful.
  • The impugned notices were issued within the framework of statutory powers.
  • The petitioners failed to demonstrate any jurisdictional error warranting interference in writ jurisdiction.
  • Assessment proceedings could validly continue in accordance with law.

Important Clarification

  • The ruling emphasizes that courts will ordinarily not interfere at the notice stage where statutory remedies are available.
  • Jurisdiction assumed by Central Circle authorities after search actions will generally be upheld if supported by statutory provisions.
  • Challenges to reassessment proceedings must demonstrate clear illegality, lack of jurisdiction, or violation of natural justice.

Link to download the order –  https://www.mytaxexpert.co.in/uploads/1772270186_ALANKITFINSECLIMITEDVsDY.COMMISSIONEROFINCOMETAXCENTRALCIRCLE28DELHI.pdf 

 

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