2003 (3) TMI 14 - HC - Income Tax

Notice issued for transfer of Income Tax proceeding - Income-tax Officer without there being any rhyme or reason condemned the tax advisers and advocates by saying that these persons are adopting tactics to divert attention from the principal question and by raising frivolous pleas causing obstruction in the judicial process - prejudice of respondent No.4 (ITO) is apparent when he in his communication dated March 24 2003 recorded that he assumed that even after receipt of chart the petitioner will not give any explanation Thus transfer of proceeding was justified

Summary

Issues:
1. Validity of notice under section 148 of the Income-tax Act, 1961.
2. Jurisdiction of the officer issuing the notice.
3. Prejudice and bias exhibited by respondent No.4.
4. Right of the petitioner to know the reasons for issuance of the notice.
5. Conduct of the Income-tax Officer in dealing with the petitioner's objections.
6. Request for the Additional Commissioner of Income-tax to decide the issue of jurisdiction.
7. Stay of further proceedings before respondent No.4.

Validity of Notice under Section 148:
The petitioner received a notice under section 142 of the Income-tax Act, 1961, asking to appear on a specific date regarding a notice under section 148 issued in 2001. The petitioner raised objections regarding the validity of the notice and jurisdiction of the officer. Despite the petitioner's objections, respondent No.4 proceeded with the matter, leading to further correspondence and delays.

Prejudice and Bias of Respondent No.4:
Respondent No.4 exhibited bias and prejudice against the petitioner, tax advisors, and advocates, accusing them of causing delays and obstruction in the legal process. The communication from respondent No.4 suggested a pre-determined stance and unwarranted annoyance towards the petitioner's objections and requests for information.

Right to Know Reasons for Issuance of Notice:
The petitioner requested the reasons recorded by the Assistant Director of Income-tax for issuing the notice under section 148, emphasizing the importance of understanding the basis for the notice. However, respondent No.4 arrogantly denied the petitioner's right to know the reasons and suggested seeking recourse in the Supreme Court for resolution.

Conduct of the Income-tax Officer:
The Income-tax Officer's conduct, as reflected in the communications, displayed a lack of judicial composure and impartiality. The officer's language and actions indicated a predetermined decision and unwarranted annoyance towards the petitioner's objections and requests, undermining the fair and unbiased handling of the case.

Request for Additional Commissioner's Intervention:
Given the bias and prejudice displayed by respondent No.4, the petitioner sought the intervention of the Additional Commissioner of Income-tax to decide the jurisdiction issue independently. The petitioner highlighted the need for a fair assessment of the objections without facing the preconceived notions of respondent No.4.

Stay of Further Proceedings:
In light of the issues raised regarding the conduct and bias of respondent No.4, the court issued a notice to the Income-tax Officer in question and stayed further proceedings before respondent No.4. This step aimed to address the perceived prejudice and ensure a fair and impartial resolution of the matter.

This detailed analysis of the judgment highlights the key issues surrounding the validity of the notice, bias exhibited by respondent No.4, the petitioner's right to information, and the need for fair treatment in dealing with objections and jurisdiction matters. The court's intervention through issuing notices and staying further proceedings reflects a commitment to upholding principles of justice and fairness in the legal process.