- (1.) This Petition under Article 226 of the Constitution of India challenges the Assessment Order dated 25th March, 2013 passed by Respondent No.1 [Dy. Commissioner of Income Tax (OSD-II), Mumbai] in relation to A.Y. 2005-06. This Assessment Order was passed under section 144 read with section 147 of the Income Tax Act, 1961 (for short, "the Act"). By this Assessment Order, Respondent No.1 has inter alia held that a sum of Rs.575.39 crores is the capital gains in the hands of the Petitioner arising out of a transfer of a capital asset in India. Accordingly, a demand of Rs.697.94 crores has been raised on the Petitioner as and by way of captial gains tax which is inclusive of interest etc under different provisions of the Act.
(2.) In this Petition, rule was issued on 23rd June, 2014 and interim relief in terms of prayer clause (d) was granted. Thereafter, a request was made on behalf of the Revenue that the Writ Petition be taken up out of turn as the total tax impact in the present proceedings was a very large sum. In this view of the matter, this Writ Petition is taken up for hearing and final disposal.
(3.) The two principal grounds of challenge to the impugned Assessment Order are that:- (i) none of the notices [viz. under sections 148, 142(1) or 143(2) of the Act] were ever served on the Petitioner which is a company incorporated under the laws in Bermuda. Since service of these notices was mandatory before any Assessment Order could be passed under section 144 of the Act, the impugned Assessment Order is wholly without jurisdiction; and (ii) that in any event, the notice issued under section 148 of the Act and which finally led to the Assessment Order being passed under section 144 of the Act, was wholly without jurisdiction as Respondent No.1 could not have any reason to believe that income chargeable to tax had escaped assessment. This argument is canvassed on the basis that admittedly the Petitioner is not a transferor of any capital asset in India and hence there was no question of levying any capital gains tax on the Petitioner.;