Coming down heavily on two senior Income Tax officials, the Bombay High Court has imposed cost of Rs 10,000 on the city's I-T department for issuing notice to Fiat India Automobiles Ltd even after the power to assess the company's returns was transferred to the Pune I-T division.
A division bench of Justices J P Devadhar and M S Sanklecha was recently hearing a petition filed by Fiat India Automobiles Limited challenging a notice dated March 30 issued by the assistant commissioner of I-T for reopening assessment of returns filed in the year 2005-06.
According to the petitioner, in November 2011 the I-T commissioner had transferred power to assess the petitioner company from the assistant commissioner in Mumbai to his counterpart in Pune as the company had shifted its office there.
Hence the March 30 notice issued by Virendra Singh, assistant commissioner, I-T is not maintainable and should be quashed and set aside.
The I-T department in its defence argued that the March 30 notice was issued after a corrigendum order dated March 27 was issued by I-T commissioner S K Abrol, temporarily suspending the November 2011 transfer of power order.
The court was not convinced with the argument and held that conduct of Abrol and Singh was in gross abuse of law.
"In our opinion, the conduct of Abrol and Singh is highly deplorable. Once the power to assess or reassess was transferred from one division to another it was totally improper on the part of the assistant commissioner to request the commissioner to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request, in our opinion, was in gross abuse of the process of law," the court said.
Rapping the commissioner for not pulling up the assistant commissioner for such a request, the court said, "The commissioner ought not to have succumbed to the unjust demands and instead ought to have admonished the assistant commissioner for such unjust demands."
Observing that it strongly condemns such conduct by senior officials, the court quashed and set aside the March 30 notice and imposed cost of Rs 10,000 on the department to be paid to the petitioner company.
"It will be open to the department to collect the cost of Rs 10,000 to be paid to the petitioner from Singh and Abrol," the court said.
