The high court bench of Orissa comprising Chief Justice Dr. S. Muralidhar and Justice M.S. Raman observed that under Section 127(2)(a), no transfer of jurisdiction can take place without affording the Assessee a reasonable opportunity of being heard in the matter in case of Vedanta Resources Ltd. Versus ACIT. (W.P.(C) Nos. 6372, 6375, 6377, 6378, and 6395 of 2022)
Facts of the Case:
The petitioner, VRL, claimed that the Department’s website suggested on the “Know Your Jurisdictional AO” page that the petitioner falls under the purview of “Circle International Taxation (1)(1)(1)” with its location in New Delhi. The DCIT’s email address is the one that is shown. The notices to the petitioner could not have been sent by ACIT International Taxes, Bhubaneswar, according to VRL’s argument. The VRL hasn’t been informed of or given any information on any order made pursuant to Section 127 of the Income Tax Act shifting jurisdiction from Delhi to Bhubaneswar. According to VRL, the company has never had a location in Jharsuguda. Clarification: The lower deduction certificate was only requested because the payment was to be received in Jharsuguda, and in any case, no action was taken on the certificate. The reassessment proceedings relate to the AYs 2013–2014 to 2017–2018, although the certificate related to a transaction of 2020. The government argued that because “the Petitioner’s place of activity/operation is at Jharsuguda, Odisha,” ACIT International Taxes, Bhubaneswar, would have jurisdiction over the petitioner. The petitioner argued that the CIT (IT)-I, New Delhi could not have transferred the jurisdiction to his counterpart in Kolkata without an order under Section 127, much less to ACIT International Taxation in Bhubaneswar. The question posed was whether the VRL, a non-resident corporation formed in the UK, falls under the purview of the CIT International Taxes, Bhubaneswar.
Judgment of Case
The Department was unable to convince the Court as to why the ACIT in Bhubaneswar had the authority to exercise jurisdiction over the Petitioner and issue the notices required by Section 148 of the Income Tax Act. The court determined that the notices issued by the ACIT in Bhubaneswar lacked jurisdiction and were therefore unjustifiable in court.
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JUDGEMENT REVIEWED BY HARSHEEN KAUR LUTHRA, RGNUL, PUNJAB
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