Facts of the Case

Alankit Insurance Brokers Limited, along with several group entities and individuals, filed writ petitions before the Delhi High Court challenging income-tax proceedings initiated pursuant to search and investigation actions conducted by the Department. Following the search, jurisdiction over the petitioners’ cases was transferred to the Central Circle, and notices initiating assessment and related proceedings were issued by the Deputy Commissioner of Income Tax, Central Circle-28, Delhi.

The petitioners sought quashing of these notices and proceedings, contending that they were initiated without proper jurisdiction and in violation of statutory provisions. The matter formed part of a large batch of connected petitions arising from the same investigative action.

 Issues Involved

  1. Whether the transfer of jurisdiction to Central Circle authorities after search/investigation was legally valid.
  2. Whether notices initiating assessment proceedings were issued in accordance with the Income Tax Act, 1961.
  3. Whether the petitioners could invoke writ jurisdiction to challenge proceedings at the notice stage.
  4. Whether procedural requirements and statutory safeguards were complied with by the Department.

Petitioner’s Arguments

  • The petitioners contended that the impugned notices were issued without lawful jurisdiction.
  • It was argued that statutory preconditions for initiating assessment proceedings had not been fulfilled.
  • The transfer of jurisdiction and subsequent actions were alleged to be arbitrary and violative of principles of natural justice.
  • The petitioners sought judicial intervention to restrain the Department from continuing the proceedings.

Respondent’s Arguments (Revenue)

  • The Revenue submitted that the proceedings were initiated pursuant to lawful search and investigation operations.
  • Jurisdiction of the Central Circle authorities was validly assumed under the statutory framework.
  • The Department contended that all procedural requirements had been complied with before issuing the notices.
  • It was further argued that the petitioners had adequate alternative remedies under the Income Tax Act and that writ jurisdiction should not be exercised at the preliminary stage.

 Court Order / Findings

  • Transfer of jurisdiction to Central Circle authorities following search actions was legally permissible.
  • The notices initiating assessment proceedings were issued within the statutory framework.
  • No patent illegality or jurisdictional error was demonstrated warranting interference under Article 226.
  • Disputed issues could be appropriately adjudicated during assessment proceedings and through statutory appellate remedies.

  Important Clarification

  • Courts generally refrain from quashing notices at the threshold where statutory remedies are available.
  • Post-search proceedings conducted by Central Circle authorities are ordinarily valid if supported by law.
  • Writ jurisdiction will be exercised only in cases of clear lack of jurisdiction, procedural illegality, or violation of natural justice.
  • Taxpayers are expected to contest factual and legal issues through the assessment and appellate mechanism under the Act.

Link to download the order –  https://www.mytaxexpert.co.in/uploads/1772270343_ALANKITINSURANCEBROKERSLIMITEDVsDEPUTYCOMMISSIONEROFINCOMETAXCENTRALCIRCLE28DELHI.pdf  

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