Aruna Vanqala V. Union of India, Ministry of Finance and Income Tax Officer, Ward 15(1), Hyderabad and The Principal Commissioner of Income Tax-IV, Hyderabad and The National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Govt. of India

WP/9880/2024

AI Insights

The case involves Aruna Vanqala, the petitioner, challenging the legality of an order and notice issued by the Income Tax Officer under Sections 148A(d) and 148 of the Income Tax Act, 1961. The petitioner argued that these were illegal, arbitrary, and violated principles of natural justice and constitutional rights under Articles 14, 19, and 265. The court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on the procedural requirements for reassessment notices under the substituted provisions of the Finance Act, 2021. The court found that the Department had not adhered to these mandatory procedures, leading to the quashing of the notices and orders in question.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 807454 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Income Tax; Natural Justice; Procedural Flaw; Reassessment; Writ of Mandamus; Articles 14, 19, 265
• Section: 148; 148A(d); 226

Judgement Text

"q [ 3403 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) THURSDAY, THE EIGHTEENTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITI ON NO:9880 0F 2024 Between: Aruna Vanqala, D/o. Late V. Lakshmi Narsimha Reddy, Aged about 63 years' ij;' il;i;\"\";;, nlo. Frot No 19-71-45, Brindavan colonv, Extn, ECIL Post' Kapra, Hyderabad 500062. ...PETITIONER AND l.Unionoflndia,MinistryofFinanceRep.byitsSecretary,'166-8NorthBlock' New Delhi - 110 001. 2. Income Tax Officer, Ward15(1) Hyderabad lT Towers, Masab Tank, Hyderabad, Telangana - 500004. 3. The Princioal Commissioner of lncome Tax- lV, Hyderabad, lT Towers' Masab Tahk, Hyderabad, Telangana - 500004. 4. The National Faceless ASSeSSment Centre, lncome Tax Department Ministry of Finance Govt. of lndia, New Delhi. -,-.. ...RESPONOENTS PetitionunderArticle226oftheConstitutionoflndiaprayingthatinthe circumstances stated in the affidavit filed therewith, the High court may be pleased to i. lssue a writ, order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No 2 in passing the Order dated 2710312023 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, 1961 also dated 271O3t2023 as 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, i. set aside the order dated 2710312023 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section '148 of the lncome Tax Act, 1961 daled 27t0312o23 calling for the return of income of the li ) I 14.Og.2023. The parties agreed that this matter ma1'be disposed of in terms of the Common Order dated 14 'O9 '2023' 4 This Court in the said order dated l4'O9'2O23 in W.P.No.25903 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A' the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act' 2021. ln the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance' Secondly' it is also in direct contravention to the direqtrE6 issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra' 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable' nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed' As a consequence, all the impugned orders getting quashed' the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automaticallY. 37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue' Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings' 38. Since the Hon'ble supreme court had, in the case of Ashish Agarwal' supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" 5 In view of the consensus arrived, the impugned Show Cause notice and 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 with law as per paragraph No.38 of the order dated 14.O9.2023 in W.P.No.25903 of 2022. 6 The writ petition is allowed. No costs. Interlocutory applications, if alry pending, shall also stand closed. SD/. K. AM //TRUE COPY// ASSISTANT R IS AR To, SECTIO FFICER 1 The Secreta-ry, Union of lndia, Ministry of Finance 166_8 North Block, New Delhi - 110 001. 2. income Tax Officer, Ward.l5(1) Hyderabad lT Towers, Masab Tank, Hyderabad, Telanqana - 5OO0O4.' 3. The Principal Commissioner of lncome Tax_ lV, Hyderabad, lT Towers, _ !!\"r?P Tank, Hyderabad, Tetangana _ 5O00Or.' ' 4 The National Faceress Assessmlnt centre, income Tax Department Ministry of Finance Govt. of lndia, New Delhi. 5. One CC to SRt P. SOMA S.HEKAR REDDY, Advocate [OpUC] g gne Qg to SRt J.V. pRAslprg.B,._sgr_on'rNbovE-r.nx t-opuct z p19 Qc to SRt GAD| PRAVEEN KUMAR, ov. 5o[icrrbn.oer.refrnr_ on rNDrA IOPUC] 8. Two CD Copies BN E**l\"r. l HIGH COURT DATED:1810412024 ORDER WP.No.9880 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS /a1 ,/.1,s. ,/.'t ll : n 1-, J --,:::-:=- .HE Sj i4 7{: o 0 t'tAY zmt '.. ().._ :.,. , _ ::.- ''____'-:-__-r\": - -J "