Bandi Siva Gopal Reddy V. Union Of India, Rep by Secretary (Finance) Ministry of Finance, New Delhi and The Income Tax Officer - Ward 14(1), Hyderabad and The Principal Chief Commissioner of Income Tax, Andhra Pradesh and Telangana and Assessment Unit, Income Tax Department, National e-Assessment Center, New Delhi

WP/18069/2024

AI Insights

The case involves Bandi Siva Gopal Reddy, the petitioner, who challenged the reassessment order under Section 147 read with Section 144 of the Income Tax Act, 1961, claiming it was barred by limitation and violated Section 149 of the Act. The reassessment was initiated for the assessment year 2017-18, alleging that income chargeable to tax had escaped assessment. The petitioner argued that the income assessed was below Rs. 50 lakhs, thus subject to a three-year limitation period for reopening the assessment, as amended in 2021. The respondents contended that the writ petition was not maintainable and the appropriate remedy was an appeal under Section 246A of the Act. The court found that the writ petition was not the appropriate remedy, given the availability of an alternative appellate remedy.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 801752 (HC-AMARAVATI)
• Appeal Type: Others
• Pronouncement Date: 01-10-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: BETHAPALLI SURYANARAYANA; VIJAY KUMAR PUNNA
• Assessee Lawyers: M NIKITHA
• Keywords: Agricultural income; Income Tax; Limitation; Reassessment; Unexplained money; Writ of Mandamus
• Section: 147; 148; 144; 142(1); 69A; 149; 151; 226

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) TUESDAY, THE FIRST DAY OF OCTOBER TWO THOUSAND AND TWENTY FOUR 1 PRESENT THE HONOURABLE SRI JUSTICE G.NARENDAR AND THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAV/^ WRIT PETITION NO: 18069 OF 2024 ' Between: Band! Siva Gopal Reddy, S/o Bandi Naga Linga Reddy, Hindu, aged about 48 years, 3-77A, Patha Ambapuram, Gurazala Mandal, Guntur-522 415 ...PETITIONER AND 1. Union Of India, Rep by Secretary (Finance) Ministry of Finance, New Delhi 2. The Income Tax Officer - Ward 14(1), Hyderabad, Income Tax Towers, A C,Guards, Masab Tank, Hyderabad - 500 004, Telangana 3. The Principal Chief Commissioner of Income Tax,, Andhra Pradesh and Telangana Room No. 922 9th Floor, B Block, I.T.Towers, 10-2-3, AC Guards, Hyderabad - 500 004, 4. Assessment Unit, Income Tax Department, National e-Assessment Center, New Delhi Room No. 401,2nd Floor Ramp, Jawaharlal Nehru Stadium, New Delhi 110 003. ...RESPONDENTS^ Petition under Article 226 of the Constitution of India 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 a. To declare the action of the respondents in reopening by issuing Notice No. ITBA/AST/S/148/20 19- 20/1025661734(1 )dated 24.02.2020 Show Cause Notice T No.ITBA/AST/F/147(SCN)/2021-22/1035356824(1) Assessment Order No.ITBA/AST/S/147/2021- 22/1035941865(1) dated 27.09.2021, consequential Demand Notice No.ITBA/AST/S/156/2021- 22/1035941899(1) dated 27.09.2021 and Order dated 29.09.2021 as illegal, arbitrary and violative of Section 149 of the Income Tax Act, as amended in the year 2021 and set-aside the same b. To quash the Notice No. dated 07.09.2021 ITBA/AST/S/148/2019-20/1025661734(1) dated 24.02.2020 Show Cause Notice No. ITBA/AST/F/147(SCN)/2021- 22/1035356824(1) dated Assessment Order dated 27.09.2021, No. ITBA/AST/S/156/2021- 07.09.2021 22/1035941865(1) NoticeDemandconsequential 22/1035941899(1) dated 27.09.2021 Order dated 29.09.2021 No. ITBA/AST/S/147/2021- and lA NO: 2 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to receive additional documents viz (1) Crop/Gold Loan statements (2) Agriculture Income Certificate dated 29.08.2023 (3) Pattadar Passbook, etc. pending disposal of the above writ petition. -- lA NO: 1 OF 2024 ^ Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct Respondents to grant stay of all further proceedings in Assessment Order No.lTBA/A T/S/147/2021-22/1035941865(1) 27.09.2021 passed under Section 147 r/w Section 144 of the Income Tax Act and the consequential Demand Notice No. ITBA/AST/S/156/2021- 22/1035941899(1) dated 27.09.2021 for Rs.61,47,790/- pending disposal of the above writ petition. dated k' Counsel for the Petitioner: M/s. M. NIKITHA ^ Counsel for the Respondent No.1: SRI BETHAPALLI SURYANARAYANA (CENTRAL GOVT COUNSEL) Counsel for the Respondent Nos.2 to 4: SRI VIJAY KUMAR PUNNA The Court made the following: ORDER 1 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI THE HONOURABLE SRI JUSTICE G.NARENDAR THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION NO: 18069 of 2024 ORDER: {perHon’ble Smt. Justice Kiranmayee Mandava) The writ petition is directed against the order of assessment passed under Section 147 r/w Section 144 of the Income Tax Act, 1961 (for short ‘the Act’), dated 24.02.2020. It is stated by the petitioner that he is an agriculturist he and his family members holds an extent of Ac.32.345 cents of land. Apart from income from the said lands he has no other source of income. It is stated that during the relevant period the petitioner had availed overdraft facility from bank for agricultural purpose. The said amounts were deposited into the bank accounts as and when the funds were required for agricultural operations. And he never filed his returns of income. It is contended that the assessment proceedings were initiated by issuance of notice under Section 142(1) of the Act dated 09.03.2018 and 12.03.2018 requiring the petitioner to file his return of income and thereafter the assessment was concluded. It is contended that the Assessing Officer initiated reassessment 2. proceedings for the assessment year 2017-18 under the provisions of Section 147 of the Act, by issuance of notice under Section 148 of the Act on the ground that the income chargeable to tax has escaped assessment for the assessment year 2017-18, calling upon the petitioner to file his return of 2 income within 30 days from the date of the notice. The notice under Section 148 of the Act was followed by notices under Section 142(1) of the Act requiring the assessee to produce books of accounts, etc. The Assessing Officer thereafter issued a show cause notice dated 07.09.2021, proposing to make the addition of Rs.39,01,160/-, the cash deposits made in the bank accounts, as unexplained money under Section 69A of the Act. To the show cause notice, the assessee submitted his reply dated 15.09.2021, stating that the source for the cash deposit was his income from agriculture. It is further stated that he had obtained an overdraft facility for agricultural purposes, and to repay the loans, the income generated from his agricultural holding was deposited during the relevant period, happened to be the demonetization period. The assessment under Section 147 r/w Section 144 of the Act made, determining the tax liability at Rs.61,47,790/-. was Challenging the said assessment order passed under Section 144 of the Act, the instant writ petition is filed. 3. Heard Ms. M.Nikitha, learned counsel for the petitioner and Sri Vijay Kumar Punna, learned senior Standing Counsel for Income Tax Department. 4. It is contended by the learned counsel for the petitioner that the income chargeable to tax that has escaped assessment for the relevant assessment year was determined at Rs.39,01,160/-. chargeable to tax which has escaped the assessment even according to the 5. Since the income 3 ?5t department, is less than Rs.50 lakhs, the limitation for reopening the assessment is three years, as amended in the year 2021. Therefore, the notice issued under Section 148 of the Act and the consequential reassessment proceedings are barred by limitation and further contends that the provisions of Section MSA of the Act have not been followed. The learned counsel for the respondents contend that against the order of assessment, the writ petition is not maintainable, and the remedy is filing appeal before the Commissioner of Income Tax (Appeals) under Section 246A of the Act. Thus, he argued that the writ petition is not maintainable. Considered the rival submissions. As noted from the order of 6. assessment dated 27.09.2021, the order is an appealable order under Section 246A of the Act. However, bypassing the said remedy, the petitioner has approached this court by way of the writ petition. To maintain the writ petition, the petitioner relied upon certain amended provisions of the Act, viz.. Section MSA & Section 149. The said provisions relied upon by the petitioner came into effect from 01.04.2021, having a prospective effect, and the same cannot be applied to the notices issued prior to the said date. In the facts of the present case, notice under Section 148 of the Act was issued on 24.02.2020, before the insertion or amendment of the provisions of Section MSA and 149 of the Act, respectively, in the statute book. The applicable provision concerning the period of limitation for issuance of notice under Section 148 of the Act for the relevant period is ; 4 4 Sec.149: Time limit for notice — (1) No notice under section 148 shall be issued for the relevant assessment year- la) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year, (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. ” The income chargeable to tax, which has escaped assessment, is determined by the Assessing Officer as Rs.39,01,160/-. In terms of the above 7. provisions of Section 149 (1) (a) of the Act, the contention of the petitioner that the notice issued under Section 148 of the Act dated 24.02.2020 is barred by limitation is unsustainable, for the reason that four years have not elapsed from the end of the assessment year i.e.,31.03.2018. The petitioner approached this Court after three years of passing the order of assessment. Without going into the merits of the case, since an alternative remedy of appeal is provided under the statute, we deem it appropriate to grant liberty to the petitioner to avail the alternative remedy of appeal before the Commissioner of Income Tax (Appeals) within fifteen days from the date of 5 receipt of the order in the writ petition. Upon the filing of such an appeal, the CIT (Appeals) shall appropriate orders in the appeal in accordance with the law. 8. Pending disposal of the appeal the demand raised in the case is suspended subject to payment of 15% of the demand raised, after giving credit to the amount, if any, paid in respect of the subject demand, within a period of two weeks from the date of receipt of the order. 9. The writ petition is accordingly disposed of. There shall be no order as to costs. As a sequel, pending interlocutory applications, if any, shall stand closed. Sd/- M.RAMESH BABU DEPUTY REGISTRAR //TRUE COPY// OFFICER SE' To 1. The Secretary (Finance) Ministry of Finance, Union of India, New Delhi 2. The Income Tax Officer - Ward 14(1 )„ Hyderabad, Income Tax Towers A C, Guards, Masab Tank, Hyderabad - 500 004, Telangana 3. The Principal Chief Commissioner of Income Tax, Andhra Pradesh and Telangana Room No. 922 9th Floor, B Block, I.T.Towers, 10-2-3, AC Guards, Hyderabad - 500 004, 4. Assessment Unit, Income Tax Department, National e-AssessmenT Center, New Delhi Room No. 401,2nd Floor Ramp, Jawaharlal Nehru Stadium, New Delhi 110 003. 5. One CC to M/s. M. Nikitha, Advocate [OPUC]_ 6. One CC to Sri Bethapalli Suryanarayana (Central Govt. Counsel) [OPUC] 7. One CC to Sri Vijay Kumar Punna, SC for IT[OPUC] 8. Three CD Copies. M HIGH COURT DATED:01/10/2024 ORDER WP.No.18069 of 2024 g 2 ^ nrr 20211 m -3^ DISPOSING OF THE W.P. WITHOUT COSTS "