Bal Reddy Kandhi V. Income Tax Officer Ward 1

WP/25304/2024

AI Insights

The case involves Bal Reddy Kandhi, the petitioner, challenging the assessment order and subsequent notices issued by the Income Tax Department for the assessment year 2016-17. The petitioner argued that the reassessment process was not conducted in accordance with the modified procedures set by the Finance Act, 2021, leading to illegal notices and orders. The respondents included various officials from the Income Tax Department. The court referenced a similar batch of writ petitions (W.P.No.25903 of 2022) where it had previously ruled on the procedural requirements for reassessment under the Finance Act, 2021. The court's decision was based on the principles of natural justice and adherence to statutory procedures.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752797 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income-tax Act, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Assessment Order; Income Tax; Limitation; Natural Justice; Writ of Mandamus
• Section: 147; 144; 149; 148A; 226

Judgement Text

"t34111 Between: Bal Reddy Kandhi, S/o Yadireddy, Aged about 56 years, Occ.Agriculture, 1- 8211 , Varkatpally, Valigonda, Nalgonda, Telangana-508,1 12. HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY,THE EIGHTEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT WRIT PETITION NO: 25304 OF 2024 ...PETITIONER AND 1 lncome Tax Officer Ward 1, Suryapet, lncome Tax Office, Krishna Nagar Colony, Suryapet, Telangana-5082'l 3. 2. The Principal Chief Commissioner of lncome Tax AP and TS, 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. National Faceless Assessment Centre, Delhi, The Assessment Unit, lncome Tax Department, National Faceless Assessmenl Centre, Delhi, Ministry of Finance, Room No. 4O1 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-'1 10003. 4. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 4O1,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003 ...RESPONDENTS Petition under Article 226 of Ihe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction, more particularly one in the nature of Writ of Mandamus, declaring the Assessment Order dt. 2010312024 passed by the 1st respondenl uls 147 r.w.s'l44 of the lncome-tax Act for A.Y. 2016-17 vide DIN No. ITBA/ASTlsl14712023-2411062968969(1 ),which is passed as a consequence of the order passed u/s 14BA(d) dt. 28103/2023 vide DIN No. ITBtuAST/F/1 48A12022-231 I 05 1 499449(1 ) and the notice u/s 1 48 dl. 2810312023 vide DIN No.ITBA/AST/S1148 112022-2311051505584(1), issued by the JAO (1st respondent) instead of FA0(3rd respondent), as void, illegal, and contrary to the provisions of lncome{ax Act and contrary to the Principles of Natural Justice, apart from being barred by limitation as prescribed u/s '149 of the Act THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO !.- lA NO: 1 OF 2024 Petition under section 15'1 cPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings pursuant to the Assessment order dt. 20103/2024 passed by the'1 strespondent u/s 147 r.w.s144 of the lncome-tax Act for A.y. 2016-17 vide DIN No. ITBA/AST/S/14712023-2411062968969(1), and may pass such other order(s) as the Hon'ble court deems fit and proper in the interests of substantial justice, as otheruvise the Petitioner would be put to irreparable loss and severe injury. Counsel for the Petitioner: SRl. DUNDU SASHANK MANMOHAN Counsel for the Respondents: SRI BOKARO SAPNA REDDy (Jr. SC FOR lNcoME TAX) The Court made the following: ORDER ,/. THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI .IUSTICE NAMAVARAPU RAJESI{WAR RAO WRIT PETITION No.253O4 OF 2024 ORDER: (per Hon'ble Justice Sujoy Paul) Heard Sri Dundu Sashank Manmohan, learned counsel for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for the respondents. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, re- assessment process stood modilied but the respondents have not taken care of it ald therefore notice issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial 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.25903 of 2022 dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023. and other connected matters, decided by common order 2 4. This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: '35. In view of the aforesaid discussioBs, it is by now very ctear that the procedure to be fouoeed by the respondent- Departmetrt upon treatiag the notices issued for reassessr[elrt beiug under Section 148A, the subaequent Proceedlnga was mandatorily required to be undettake! under the substituted provislons as laid down under the Firance Act, 2021. Ilr the absence of which, we are constrained to hold that the procedure adopted by the respondeat-DepattEent is in contravention to the statute i.e. the Finaace Act, 2O2l' at the frrst instance. SecoEdly, it is also ia direct coDtraveDtion to the directives issued by the Hon'ble Supteae Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the p.oceedings drawn by the respondent-Departmelt is treither teaable, nor sustailable. The notices so lssued and the procedure adopted beiag pet se illegal, deserves to be and sre accordiugly set aside/quashed. As a consequelce, all the impugned orders gettiag quashed, the consequeDtial orders passed by the respondeat DepartEent pursuart to the notices issued under Sectiou 147 alld 148 lPould also get quashed alrd it is ordered accotdingly. The reason we are quashing the consequential order is ou the Prilciples that when the initiation of the proceediugs itself was ptocedurally wrong, the subsequent orders also gets DuUilied automatically. 37. The preliminary objection raised by the Petitloner is sustaired and all these wdt petitions stands allowed on this very jurisdictioaal issue. Since the impugned trotices and ordets are getting quashed on the point ofjurisdiction, se are not inclined to proceed further and decide the other issues raised by the petitioael which stands reserved to be raised aBd contended in an appropriate proceedings. 38. Since the Hoa'bte Supreme court had, in the caae of Ashish Agarwat, supra, as a ole-time measur€ exercising the powers under Article 142 of the coastitutiou of India, permitted the Revenue to proceed under the substituted prowisions, and this court allowitrg th€ petitions only on the procedurat Ilaw, the right couferred otr the Revenue would 3 To, remaiE reserved to -proceed furthet if they so want ftom the stage of the orde. of the Supreme Court in tbe 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 ald to proceed in accordalce with law as per paragraph No.3B of the order dated 14.09.2023 in 6. The Writ Petition is allowed. No costs. Interlocutory applications, if aly pending, shall also stald closed. SD/- N. CHANDRA SE AR RAO ASSISTANT EGISTRAR //TRUE COPY// SE N OFFICER 1. lncome Tax Officer Ward 1, Suryapet, lncome Tax Office, Krishna Nagar Colony, Suryapet, Telangana-50821 3. 2. The Principal Chief Commissioner of lncome Tax AP and TS, 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. National Faceless Assessment Centre, Delhi, The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, I 4inistry of Finance, Room No. 401 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003. 4- The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 401 ,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003 5. One CC to SRl. DUNDU SASHANK IMANIUOHAN Advocate [OPUCj 6. One CC to SRl. BOKARO SAPNA REDDY (Jr. SC FOR INCOI/E TAX) loPUCl 7. Two CD Copies KKS GJP 'tX/ W.P.No.25903 of 2022. I i HIGH COURT DATE D: 1 810912024 ORDER WP.No.25304 of 2024 oR lHE S14 r4. 0 B iAI 2025 (, o .t a).i.t P4 fr-:HI1 !1. ALLOWING THE WRIT PETITION WITHOUT COSTS - nie) q0r' t \"f ,,|[^t' / I I I "