AZIZ AHMED SHAIK V. The Income Tax Officer Ward4(1)

WP/24810/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners against the orders issued by the Income Tax Department for the assessment years 2015-16 and 2016-17. The petitions challenged the validity of the reassessment notices and subsequent orders issued under Sections 147 and 148 of the Income Tax Act, 1961, claiming they were arbitrary, illegal, and violative of natural justice and constitutional rights. The court examined whether the reassessment process followed by the Income Tax Department complied with the amended procedural requirements under the Finance Act, 2021. The court's decision was influenced by a previous ruling in W.P.No.25903 of 2022, which set a precedent on the procedural flaws in the reassessment notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752808 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY; GADI KUMAR
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Faceless assessment; Income tax assessment; Jurisdictional issue; Natural Justice; Writ of Mandamus
• Section: 147; 148; 144; 144B; 148A; 265; 226

Judgement Text

"[34111 HIGH COURT FOR THE STAIE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS:24810 24819 AND 24838 0F 2024 W.P.No.24810 ot 2024 Between: .....RESPONDENTS AZIZ AHMED SHAIK, S/o Late Shaik Ahmed, Aged about 60 years, Occupation Business, R/o 2- 3- 603/67- 25lD Palel Nagar , Amberpet, Hyderabad 500013 Telangana, lndia. PAN DXVPS2B04D Assessment Year 2016- 17. .....PETITIONER AND 1. The lncome Tax Officer Ward 4 (1), Hyderabad, lT TOWER, AC Guards, Masab Tank, Hyderabad, Telangana, 500084. 2. The Principal Chief Commissioner of lncome Tax - Telangana qrlq A ?, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. 3. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110 001. 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi. 5. The Union of lndia, Represented by its Secretary to the Government, Departnrent of Revenue, Ministry of Finance, New Delhi -- 'l '10 001 - Petition Under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased t issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E- Assessment centre completed the assessment uts 147 r. w. s 144 read with section 1448 of the lncome Tax Act, 1961 vide DIN and Notice No. dated 0B- 02- 2024 ITBA/ASTtst147t2O23- 2411060670644(1) for the assessment year 2016- 17 determining the total income of Rs. 1,53,05,6151 as arbitrary, illegal, bad in law, without jurisdiction, void- ab- initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 0f the constitution of lndia and sec. 148A of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice' Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel forthe Respondent Nos.1 & 2 : Ms. BOKARO SAPNA REDDY (Jr' SC FOR TNCOME TAX) counsel for the Respondent Nos.3 to 5 : SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA W.P.NO:24819 OF 2024 Between: GEETHA SAJU, Wo. NARAYANAKAIMAL SAJU, Aged ?bqYt 53v.ears' Sccuojtion.gusinbss, Rto.2O-40-10211 Road No6,Venkatasai Nqgqt West VJniSiapur\", Alwal Secunderabad5Og6l5,Hyderabad Telangana, lndia.PAN.BBYPS920BL ...PETITIONER(S) AND 1. The lncome Tax Officer, Ward15(1),Hyderabad/ lT TOWER, AC Guards, Masab Tank, Hyderabad, Telangana, 500084 2. The Principal Chief Commissioner of lncome Tax,.Telangan? 9t19 Ai, Hyderabad, lT Towers, AC Guards; Masab Tank, Hyderabad 500 028' Telangana. 3. The central Board of Direct Taxes, Represented by its chairman, Department of Revenue, Ministry of Finance, Goveinment of lndia, Secretariat Buildings, New Delhi - 110 001. 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi. ' 5. The Union of lndia, Represented by its Secretary to the Government, Department of Revenub, Ministry oi Finance, New Delhi - 110 001 . ...RESPONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased toto issue an appropriate writ, order or direction more particularly one in the nature of writ of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment centre completed the assessment uls 147 r.w.s 144 read with section 1448 of the lncome Tax Act, 1961 vide DIN AND Notice No. dated 22-01 -2024 ITBA/AST/S/1 47 12023-241 1 0599931 87(1 ) for the assessment year 2016-17 determining the total income of Rs. 55,5o,060/-as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 0f the constitution of lndia AND Sec. 14BA of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice' Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 & 2 : Ms' BOKARO SAPNA REDDY (Jr' SC FOR TNCOME TAX) Counsel for the Respondent Nos.3 to 5 : SRI GADI PRAVEEN KUMAR' DEPUTY SOLICITOR GENERAL OF INDIA W.P.NO:248380F 2024 Between: RAGHUVEER REDDY TooMU, S/o' TooMU ANANTHAREDDY, Aged about ;ii;;;;' o.\"ip\"tion. susinesi, 'Rlo. H Ng 3-12448 Rock Town colony , Near i#;;;irr-6l5nv L e rlig-rt iingareddv 5ooo6s Telangana, lndia' PAN' ANBPT4232H Asiessment Year. 201 5-16. ....,PETITIONER AND 1. The Assistant Commissioner of income tax, circle 9(1), Hyderabad I T fOWEn, AC Guards, Masab Tank, Hyderabad, Telangana' 500004' 2. The Principal Chief Commissioner of lncome Tax, T. elanganq a!9Ail - ifi;r;b;[,lr-ro*er., AC Guards, Masab Tank, Hyderabad - 500 028' Telangana. 3. The central Board of Direct Taxes, Represented.by its chairman, Department - 6i n\"*ni\", Ministry of F]nance, Gove'rnment of ln-dia, Secretariat Buildings' New Delhi - 110 001. 4. The National Faceless Assessment center, lncome Tax Department, New Delhi. I 5. The Union of lndia, Represented by its Secretary to the Government, Department of Revenub, Ministry of Finance, New Delhi - 110 001 ' .....RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre completed the assessment U/S 147 r.w.s 144 read with section 144B o'f the lncome Tax Act, 1961 vide DIN and Notice No. dated. 02-02-2024 ITBtuAST/S/1 47 12023-241 1 060429367 (1) tor the assessment year 2015-16 determining the total income of Rs. 55,98,099/-as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec.'148A of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice. Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 & 2 : Ms. BOKARO SAPNA REDDY (Jr. Su FOR INCOME TAX) Counsel for the Respondent Nos.3 to 5 : SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA The Court made the following COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO UTRIT PETITION NOS.24810 .248L9 AND 24438 0F 2o24 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of . Finance Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicial scrutiny' Since notices are bad in law, the consequential orders are also bad in law. 4. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by COMMON ORDER (per Hon'bte SP,J) Sri Thanneru Chaitanya Kumar, learned counsel appears for the petitioner{s), Ms. B. Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appears for respondent Nos. 1 & 2 and Sri B. Mukherl'ee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent Nos.3 to 5. I I 2 this Court in a batch of writ petitions, W.P.No.259O3 of 2022 and other connected matters, decided by common order dated 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated. 14.09.2023. 5 This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be Iollowed by the respondent-Department upon treating the notices issued for reassessment being under Section 1484, 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 Acl, 2021, at the first instance. Secondly, it is also in direct contravention to the directives 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 assued 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 princaples that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. Thspreliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional 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 3 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.\" 6. In view of the consensus arrived, the impugned Show Cause notices arrd consequential orders passed in this batch of writ petitions are set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance w.ith law as per paragraph No.38 of the order dated 14'09'2023 in W.P.No.25903 of 2022. 7 The Writ Petitions are allowed. No costs- Interlocutory applications, if any pending, shal1 also stand closed' To SD/. K. VENKAIAH ASSISTANT REGISTRAR /TTRUE COPY// :, SECTION OFFICER 8IJ\"% to sRl GAD. pnnveen KUMAR' DEPUTY soLlclroR GENERAL oF INDIA Two CD CoPies The Assistant Commisstoner of income tax' circle-9(1)' Hyderabad I T TOWER' AC d\"rA\"t:'i#iliini,-nvoeraoad' relansana' 50099,4---^. imi,::r[tt*.:fids[+:?tfi','1\"%:.':1.!!1ry:]?i!:Gl\"i1i\"\"',::'' The Chairman, Centrat aoaro li'oilJtii'i\"\"' Department of Revenue' Ministry oI iffi;1G;;;',\",ent oi r noi*\"sl''!i\"'''t.:n:;m *:tff:I.t;li ffih qt,ll.- +l: S:::JE'Jiji'l?'3},'\"\"|.??ru;::'i;il;i inj,,, o\"p\"|.t'Jni'oi'i\"u\"nG' ruinr\"t|.v \"i iinrnce. N'ew Delhi - 110 001' il\"\" iffi ' a'{i i Hn u u lu 9 5 1 ;pBIi [,y Hi AH *' * tfft'& r Adv ocate On\" CC to Ms. BOKARO SA 1. 2. 3. 4. 5. A 7. t,. o SA GJP w ) / HIGH COURT DATED:1010912024 COMMON ORDER W.P.Nos.24810, 24819 AND 24838 0F 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. .uqKa[ t 1HE S T4 2 I |l[l/ 202{ o (J (' r -* i'4TC HEo tr-- I I Irr- - "