Synopsis – The show-cause notice sent to Kapil Sibal on March 11 regarding the ongoing assessment proceedings against him was stayed by the Delhi High Court on Thursday. The court gave notice on Sibal’s petition and ordered the I-T officials to submit a counter-affidavit.
The bench ruled that Sibal’s objections to the start of the proceedings would be resolved first by the officer in question.
The court also stated that Sibal will receive a copy of the officer’s spoken order regarding his chosen objections.
Senior Advocate P. Chidamabaram, who appeared on behalf of Sibal, claimed that the authorities appeared to be eager to wrap up the case. He added that a search had been done in May 2018 and that the notice had been given to Sibal in May 2021.
The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju stated, “After hearing the learned counsels of the parties, we are of the view that it would require some amount of deliberation since the impugned notice has been challenged on jurisdiction as well as on the breach of principles of natural justice.”
The Income Tax Department was prohibited from proceeding with the show-cause notice sent to senior lawyer and Rajya Sabha member Kapil Sibal regarding the assessment proceedings that are still pending against him by the Delhi High Court on Thursday (23rd March 2023), which was presided over by the division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju. The court ordered the income tax authorities to respond to Kapil Sibal’s appeal with documentation.
Under Section 153C of the Income Tax Act of 1961, Sibal has challenged the IT division’s notification on the A.Y. (assessment year) 2013 that was sent out. Senior attorney P Chidambaram defended Kapil Sibal and maintained that the Global Window Group search had occurred in May 2018 and that Sibal had got the notification required by Section 153C of the Act six years later, in May 2021.
When ordering the Income Tax authorities not to act on the show-cause notice, the Division Bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju noted that since the impugned notice had been contested on jurisdictional grounds as well as for violating natural justice principles, it would necessitate some thought.
The High Court set the case for further hearing on September 14 and ordered the IT authorities to submit a counter affidavit.
The Bench instructed the responsible officer to first address Sibal’s objections to the start of the proceedings before directing him to notify the petitioner of the date, location, and time of the hearing.
The Bench further instructed the officer to issue a verbal directive on the objections put forth by Sibal and to give him a copy of it.
Sibal has submitted six petitions in opposition to the notice touching AY 2013 sent by the IT department under Section 153C of the Income Tax Act of 1961.
Senior Advocate P. Chidamabaram, who was representing Sibal, claimed that the authorities appear to be ‘very’ eager to wrap up the assessment proceedings.
The Senior Advocate argued that a search involving World Window Group was carried out in May 2018 and that, in the case of Sibal, a notice under Section 153C of the Act was given on May 17, 2021, six years later.
On June 16, 2021, the petitioner filed his return. On November 3, 2021, a request was made for a copy of the satisfaction note and the justifications or supporting documentation used to issue the notice under Section 153C. The petitioner reaffirmed this request on March 1, 2023, according to Chidamabaram.
The High Court noted that Sibal received the satisfaction note on March 9 and documents or reasons were sent to him on March 10.
It also took note of the records, which revealed that on March 11, one day later, a show-cause notice was issued regarding the petitioner in accordance with Section 142 (1) of the Act. It was observed that the petitioner had submitted his objections to the start of the proceedings under Section 153C of the Act.
On March 20, the objections were submitted. The officer, according to information provided to the court, scheduled a hearing with a show-cause notice for March 22 rather than dealing with the objections.
Furthermore, in compliance with the aforementioned notice, the petitioner submitted his returns on June 16, 2021. A request for a copy of the satisfaction note and any reasoning or supporting materials used to issue the Section 153C notice was made on November 3, 2021. On March 1, 2023, the petitioner resubmitted this request. The bench acknowledged that some consideration would be required because the impugned notice has been challenged on jurisdictional grounds as well as for breaking natural justice principles.
According to the bench’s additional ruling, the compliance officer will continue to respond to the show cause notice that is due on March 11, 2023.
On September 14, the court set a follow-up session and ordered the officer in question to start by responding to Kapil Sibal’s complaint.
