Facts of the Case

Alankit Insurance Brokers Limited was among numerous petitioners who approached the Delhi High Court through writ petitions 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 on the ground that the proceedings were without jurisdiction and contrary to statutory provisions. The case formed part of a large batch of connected matters arising out of the same search action and investigative process.

Issues Involved

  1. Whether the transfer of jurisdiction to Central Circle authorities after search/investigation was valid in law.
  2. Whether the notices initiating assessment proceedings were legally sustainable.
  3. Whether the petitioners could challenge such proceedings directly under writ jurisdiction at the notice stage.
  4. Whether statutory requirements and procedural safeguards had been complied with.

 Petitioner’s Arguments

  • The petitioners contended that the impugned notices were issued without proper jurisdiction.
  • It was argued that the mandatory statutory preconditions for initiating assessment proceedings had not been satisfied.
  • The transfer of cases to the Central Circle and subsequent actions were alleged to be arbitrary and violative of principles of natural justice.
  • The petitioners requested the Court to quash the notices and restrain further 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 Income Tax Act, 1961.
  • It was contended that all procedural requirements had been duly complied with.
  • The Department further argued that the petitioners had adequate alternative remedies under the Act and that writ jurisdiction should not be invoked prematurely. 

 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 defect was demonstrated warranting interference under Article 226 of the Constitution.
  • Disputed issues could be effectively addressed during assessment proceedings and through statutory appellate remedies.

Important Clarification

  • Courts generally do not quash income-tax notices at the threshold where alternate statutory remedies are available.
  • Post-search proceedings conducted by Central Circle authorities are ordinarily valid if supported by statutory provisions.
  • Writ jurisdiction is exercised only in cases of clear lack of jurisdiction, procedural illegality, or violation of natural justice.
  • Taxpayers are expected to raise factual and legal objections during assessment and appellate proceedings under the Act.

Link to download the order –  https://www.mytaxexpert.co.in/uploads/1772270433_ALANKITINSURANCEBROKERSLIMITEDVsDY.COMMISSIONEROFINCOMETAXCENTRALCIRCLE28DELHI.pdf 

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