“King can do no wrong” – Observation by Bombay HC in the case of Mantra Industries Limited Vs NFAC at Para 9 stayed
“King can do no wrong” – Observation by Bombay HC in the case of Mantra Industries Limited VsNFAC at Para 9 stayed
“Rex non-potest peccare” is a Latin legal maxim which means that ‘the king can do no wrong’. It is also called as doctrine of Sovereign Immunity or Crown Immunity. The principle is just to say that a king cannot be held liable for acts of misconduct or personal negligence and neither can he be held liable for acts of his servants.
This is re-established in the recent observation in the SLP filed against the Bombay High Court observation in the Mantra Industries Limited Vs National Faceless Assessment Centre & Ors. In a SLP, Supreme Court stays High Court observation declaring faceless assessment as non est u/s 144B(9) in view of repeal of section 144B(9) W.R.E.F. 0104.2021 by FA-2022.
It may be recalled that the Bombay High court in the case of Mantra Industries Ltd. v. National Faceless Assessment Centre (NFAC or NeAC) [2021] has at Para 9 observed as under:
“9. Respondents are put to notice, and Mr. Sharma to circulate this order right from the Revenue Secretary to everybody in the Finance Ministry, that if such orders are continued to be passed, this Court will be constrained to impose substantial costs on the concerned Assessing Officer to be recovered from his/her salary and also direct the department to place such judicial orders in the career records of such Assessing Officer”.
The copy of the order of Bombay High Court is accessible at
Supreme court has stayed the operation of para 9 with following remarks:
“In the meantime, the observations made by the High Court in para 9 of the impugned judgment and order are ordered to be stayed.”
The key observation by the Hon’ble SC is as under:
Supreme Court
-NATIONAL FACELESS ASSESSMENT CENTRE
(FORMERLY KNOWN AS NATIONAL E ASSESSMENT CENTRE) & ORS.
VS
MANTRA INDUSTRIES LIMITED
Special Leave to Appeal (C) No(s). 4906/2022-FACELESS ASSMENT – 144 B SUB CLAUSE 9
It is submitted that, as such, sub-section (9) of Section 144B of the Act has been deleted with effect from 01.04.2021 and the provision to declare the assessment as non est if such assessment is not made in accordance with the procedure laid down under Section 144B of the Act has been deleted.
It is submitted that therefore the aforesaid ground shall not be made available to the assessee.
It is submitted that therefore the assessment order would continue and the assessee, if aggrieved, was required to prefer an Appeal before the CIT(A). It is further submitted that, even the observations made by the High Court in the impugned order made, in para 9, are also not warranted, in the facts and circumstances of the case, more particularly, when the entire procedure before assessment was followed and thereafter even the legislature also deleted the provision of sub-section (9) of Section 144B of the Act retrospectively with effect from 01.04.2021.
Issue notice, returnable on 04.05.2021. Dasti, in addition, is permitted.
“In the meantime, the observations made by the High Court in para 9 of the impugned judgment and order are ordered to be stayed.”
The copy of the Supreme Court order as discussed above is as under:
ITEM NO.13 COURT NO.12 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 4906/2022
(Arising out of impugned final judgment and order dated 11-10-2021 in WP No. 1625/2021 passed by the High Court Of Judicature At Bombay)
NATIONAL FACELESS ASSESSMENT CENTRE (FORMERLY KNOWN AS NATIONAL E ASSESSMENT CENTRE) & ORS. Petitioner(s)
VERSUS
MANTRA INDUSTRIES LIMITED Respondent(s)
(FOR ADMISSION and I.R.)
Date : 11-04-2022 This petition was called on for hearing today.
CORAM : HON’BLE MR. JUSTICE M.R. SHAH
HON’BLE MRS. JUSTICE B.V. NAGARATHNA
For Petitioner(s) Mr. Balbir Singh, ASG
Ms. Gargi Khanna, Adv.
Ms. Praveena Gautam, Adv.
Mr. Shyam Gopal, Adv.
Ms. Chinmayee Chandra, Adv.
Mr. Raj Bahadur Yadav, AOR
For Respondent(s)
UPON hearing the counsel the Court made the following
O R D E R
Mr. Balbir Singh, learned ASG, has vehemently submitted that, against the assessment order, the High Court ought not to have entertained the Writ Petition and ought to have relegated the original writ petitioner to avail statutory remedy of appeal before the CIT(A). It is further submitted that one of the grounds on which the High Court has set aside the assessment order was sub section (9) of Section 144B of the Income Tax Act, 1961, (for short “the Act’) which, at the relevant time, provided that any assessment made shall be non est, if such assessment is not made in accordance with the procedure laid down under the said Section. It is submitted that, as such, sub-section (9) of Section 144B of the Act has been deleted with effect from 01.04.2021 and the provision to declare the assessment as non est if such assessment is not made in accordance with the procedure laid down under Section 144B of the Act has been deleted. It is submitted that therefore the aforesaid ground shall not be made available to the assessee. It is submitted that therefore the assessment order would continue and the assessee, if aggrieved, was required to prefer an Appeal before the CIT(A). It is further submitted that, even the observations made by the High Court in the impugned order made, in para 9, are also not warranted, in the facts and circumstances of the case, more particularly, when the entire procedure before assessment was followed and thereafter even the legislature also deleted the provision of sub-section (9) of Section 144B of the Act retrospectively with effect from 01.04.2021.
Issue notice, returnable on 04.05.2021.
Dasti, in addition, is permitted.
In the meantime, the observations made by the High Court in para 9 of the impugned judgment and order are ordered to be stayed.
