Apparla Raghunath V. Union of India, Ministry of Finance and The Principal Commissioner of Income Tax - IV, Hyderabad and The National Faceless Assessment Centre, Income Tax Department

WP/18653/2024

AI Insights

The case involves Apparla Raghunath, the petitioner, challenging the legality of a notice and order issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner argued that the notice was issued without adhering to the modified re-assessment procedure established by the Finance Act, 2021, and thus was illegal and arbitrary. The respondents included various entities from the Union of India and the Income Tax Department. The court referenced a common order from a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar issues and found the procedures followed by the Income Tax Department to be illegal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803984 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B KAVITA YADAV; B SAPNA REDDY
• Assessee Lawyers: P SOMA REDDY
• Keywords: Income Tax; Jurisdiction; Natural Justice; Re-assessment; Writ petition
• Section: 148; 148A(d)

Judgement Text

"t 3411 l HIGH'COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE EIGHTEENTH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HoNoURABLE SRI LusTIcTTXTvTAVARAPU RAJ ESHWAR RAo WRIT PETITION NO: 18653 OF 2024 Between: AND 1 Apparla Raghunath, S/o: Apparla Narasimha, Aged. 5g years, Occ. Business, R/..o. '12-1-668/19/1 , Shanti .Nagar, Near'n&a Sirfiai, fVo.th [rriguG, Lallaguda S.0, Secunderabad, Hyderabad, 5000{7, fetan{ina,inOit- -----' ...PETITIONER Union of.lndia, IVlinistry of Finance Rep. by its Secretary, 166-8 North Block, New Delhi - 110 001 . Sai Sankar Kocharla, Ward 15(I), Hyderabad I T Tower, AC Guards, Masab Tank, Hyderabad, Telangana, 5d004 The Principal Commissioner of lncome Tax - lV, Hvderabad lncome Tax Towers, AC Guards, fVasab Tank, Hyderabad, Telingana 500004 The National Faceless Assessment Centre, lncome Tax Department t 4inistry of Finance Govt. of India, New Delhi. 2 4 ...RESPONDENTS Petition under Article 226 of rhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to prayed that this Hon'ble court may be pleased to i.lssue a writ, order or Direction more particularly, one, in the nature of writ of fvandamus, declaring the order passed by the Respondent No.2 in passing the Order dated 25.o4.2022u1s. 148A(d) and Notice issued by the Respondent No.2 under section 148 of the lncome Tax Act, 1961 dated 25.O4.2O22as illegal, arbitrary, bad in law, void ab initio, violative of the principles of natural justice and being violative of Articles 14,19 and 265 of the constitution of lndia and consequently, ii.set aside the Order dated 25.04.2O22u1s. 148A(d) and Notice issued by the Respondent No.2 under section 148 of the lncome Tax Act, 1961 datecl 25.04.2022calling for the return of incomr: of the Petitioner for AY 2O18-19 and any consequent proceedings as lacking in iurisdiction. iii.and/ or pass Counsel for the Petitioner: SRI P. SOMA SHEKAR REDDY Counsel for the Respondent No.1 :MS. B. KAVITA YADAV, SC FOR CENTRAL GOVERNMENT Counsel for the Respondent No.2 to 4: MS' B' SAPNA REDDY, SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE IYAMAVARAPU RAJESHWAR RAO WRIT PETITION No.18653 OF 2o24 ORDER: (per Hon'ble Justice Sujoy Paul) Heard Sri P. Soma Shekar Reddy, learned counsel for the petitioner(s), Ms. B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for the respondents-Income Tax Department and Ms. B. Kavita Yadav, learned Standing Counsel for Central Government, for the respondents-Centra-l Government. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, re- assessment process stood modifred but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicia-I scrutiny. Since notice is bad in law, the consequential orders are also bad in law. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.P.No.259O3 of 2022 and other connected matters, decided by common order i I , z dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.0!r.2023 4. This Court in the said order dated L4.O9.2023 in W.P.No.25903 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now wery clear that the procedure to be followed by the tesPoadeat- Departmeat upo[ treatiag the notices issued fot teassessment being under Section 148A, the subsequeat ptoceedings was Eandatorily required to be undertakeu ulder the substituted provisions as laid down under the Finance Act,2021. In the absence of which, we are coEstraioed to hold that the procedure adopted by the respondeqt-Department is in cont.aventior to the statute i.e- the f.iaance Act, 2021, at the first instance. SecoEdly, it is also in direct contravention to the directives issued by the Hon'ble SupreEe Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issu€d aad the proceedings draso by the respoadeut-Department is aeither teDable, ror sustainable. The notices so issued ald the procedure adopted beitrg per se iIIegaI, deserves to be a[d are accordingly set aside/quashed. As a consequence, all the impugned orders gettitrg quashed, the corsequeDtial orders passed by the respoEdert DepartEeEt pursuant to the notices issued under Sectior 147 aEd 148 would also get quashed and It is ordered accordiagly. The reasoa we are quashiag the cousequeEtial order is oD the priEciples that shen the iDitiatiou of the proceediags itself was procedurally wrong, thc subsequent orders also gets nullilied automatically. 37. The preliDrinary objcctioE raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. SiEce thc iErpugned notices aad orders are gettiEg quashed on the poitrt ofjurisdiction, we are not inclined to ptoceed fuither and decide the other issues raised by the petitioner which stands reserved to be raised and co[tended in en appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish AgarEal, supra, as a one-time measure exercising thc powers under Article 142 of the Constitutioo of India., lr 7 ) To, TJ GJP fd c - perEitted the Rgvenuc to proceed under the substituted Provisiols, a[d this Court allotring the petitious oaly on the procedural flew, the right coafened on the Reweaue would remain reserved to proceed further if they so want froE the stagc of the order of the SupreEe Court irl the case of Ashish Agarwal, supra. 39. llo order as to costs-. 5. In view of the consensus arrived, the impugned Show Cause notice arrd consequential orders passed in this writ petition are set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance Mith law as per paragraph No.38 of the order dated 14.09.2O23 in W.P.No.259O3 of 2022. 6. The Writ Petition is allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/- V. HARI PRASAD ASSISTANT REGISTAAR //TRUE COPY/I < ,/ t/ SECTION OFFICER 1 . The Secretary, Union of lndia, fi/inistry of Finance 166-8 North Block, New Delhi - 1 10 001 . 2. Sai Sankar Kocharla, Ward 1 5(1 ), Hyderabad I T Tower, AC Guards, Masab Tank, Hyderabad, Telangana, 50004 3. The Priricipal Commissioner of lncome Tax - lV, Hyderabad lncome Tax Towers, AC Guards, I /asab Tank, Hyderabad, Telangana 500004 4. The National Faceless Assessment Centre, lncome Tax Department tvlinistry of Finance Govt. of lndia, New Delhi. 5. One CC to Sri P. Soma Shekar Reddy, Advocate [OPUC] 6. One CC to Ms. Kavita Yadav(Sr. SC for CENTRL GOVT) Advocatg tOfUCl 7. One CC to I /s. B. Sapna Reddy, SC for Income Tax Department[OPuc B. Two CD Copies HIGH COURT DATED:1 810712024 ORDER WP.No.18653 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS 0r q c r, 'l 74 t:ri'I 1ir:r' , :::: . ' i rr- ::r'- *'-,: :. i-i:.: _ ;i.i_\" 1 . "