Case Note & Summary
The plaintiff, Sasmita Investments Ltd., filed a suit in the Bombay High Court challenging an order passed by the Appropriate Authority under Chapter XXC of the Income Tax Act, 1961, which had refused to grant a no-objection certificate for a property transaction. The defendants, including the Appropriate Authority and the Union of India, raised preliminary objections that the suit was barred by Section 269UN and Section 293 of the Income Tax Act, 1961. The court framed three preliminary issues under Order XIV Rule 2 of the Code of Civil Procedure, 1908: (1) whether the court's jurisdiction is barred under Section 269UN and/or Section 293; (2) whether the suit is barred by limitation; and (3) whether the suit is maintainable. The court heard arguments on the first issue as a pure question of law. The plaintiff argued that the bar under Section 269UN only applies to matters which the Appropriate Authority is empowered to determine, and that the suit challenges the authority's jurisdiction, not the merits. The defendants contended that the order of the Appropriate Authority is final and conclusive, and the civil court has no jurisdiction to entertain the suit. The court analyzed Section 269UN, which states that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Appropriate Authority is empowered to determine, and that no order of the Appropriate Authority shall be called in question in any court. The court held that the suit directly challenges the order of the Appropriate Authority, which is expressly barred by Section 269UN. The court also noted that Section 293 bars suits against the government for acts done in good faith under the Act. Consequently, the court answered the first preliminary issue in the affirmative, holding that the jurisdiction of the court is barred. The court did not need to answer the other preliminary issues. The suit was dismissed as not maintainable.
Headnote
A) Civil Procedure - Preliminary Issues - Order XIV Rule 2 of Code of Civil Procedure, 1908 - Court framed three preliminary issues regarding jurisdiction and limitation - Held that issue of jurisdiction being a pure question of law can be decided as preliminary issue without recording evidence (Paras 1-4). B) Income Tax - Jurisdiction of Civil Court - Section 269UN of Income Tax Act, 1961 - Bar on jurisdiction - Suit challenging order of Appropriate Authority under Chapter XXC - Held that Section 269UN expressly bars jurisdiction of civil court in respect of matters which the Appropriate Authority is empowered to determine, and the order of the Appropriate Authority is final and conclusive (Paras 5-10). C) Income Tax - Bar on Suits - Section 293 of Income Tax Act, 1961 - Suit against government for anything done in good faith under the Act - Held that Section 293 bars suits against the government for acts done in good faith under the Act, and the Appropriate Authority's order falls within such protection (Paras 11-15).
Issue of Consideration
Whether the jurisdiction of the High Court to try, entertain and dispose of the present suit is barred under Section 269UN and/or Section 293 of the Income Tax Act, 1961.
Final Decision
The court answered the first preliminary issue in the affirmative, holding that the jurisdiction of the court is barred under Section 269UN of the Income Tax Act, 1961. The suit was dismissed as not maintainable.
Law Points
- Jurisdiction of civil court barred under Section 269UN of Income Tax Act
- 1961
- Section 293 of Income Tax Act
- Order XIV Rule 2 of Code of Civil Procedure
- 1908
- Preliminary issues decided first
