BURRA YELLAIAH V. Office of The Income Tax Officer Ward 2

WP/13895/2024

AI Insights

The case involves two writ petitions filed by Burra Yellaiah and Nagaraju Agnoori against the Income Tax Department and other respondents, challenging the reassessment orders for the assessment years 2018-19 and 2015-16 respectively. The petitioners argued that the reassessment notices issued under Section 148 of the Income Tax Act, 1961, were arbitrary, illegal, and violated principles of natural justice and constitutional rights. The court referenced a previous judgment (W.P.No.25903 of 2022) which had set a precedent on the procedural flaws in such reassessments post the Finance Act, 2021. The court agreed with the petitioners that the reassessment notices did not comply with the statutory requirements as laid down in the Finance Act, 2021, and thus quashed the notices and all consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752900 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 06-06-2024
• 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: J SUNITHA; VIJHAY PUNNA; GADI KUMAR
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Assessment; Faceless assessment; Income Tax; Jurisdiction; Natural Justice; Writ of Mandamus
• Section: 147; 148; 144B; 148A; 265; 226

Judgement Text

"I34',t1l HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY,THE SIXTH DAY OF JUNE TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL . AND THE HONOURABLE SRI JUSTTCE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO:13895 AND 13965 0F 2024 W.P.NO:13895 oF 2024 .-PETITIONER Between: BURRA YELLAIAH,.SIg B_UBRA KANAKATAH, Aged abour 44 years, Occ. Business, Rt/o. 1-7-54 Rajanna. Wines, dandni Nagar, V\"rnrf L*0, Karimnagar 50500'l , Telangaria, lndia. Assessment year. Zdl€_$ AND 1. 2. Office of The lncome Tax Officer Ward 2, Karimnagar, Telangana State. The Principa.lCtief Commissioner of lncome Tix - Teta\"nganJ int A.p , Hyderatrad, lT Towers, AC Guards, lvlasab Tank, Hyderab-id-_ SO-O Oig, Telangana. The Central Board of Direct Taxes, Represented by rts Chairman, Department of Revenue, .lyinLslry of Finance, Government of tirOia, Secreta.iat Eiritdi;g;: New Delhi - 1 10 001. The National Faceless Assessment Center, lncome Tax Department, New Delhi. The Union oJ^lndia, Represented by its Secretary to the Government, I-leparlment of Revenue, Ministry of Finbnce, New Delhi - 110 001 3 4 5 ...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 partrcularly one in the nature of writ of lMandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment centre) completed the assessment uls 147 read with section 1448 of the lncome-tax Act Date of order z6lo3t2oz4. DlNlrBA/AST/sl 1 47 12023-241 10633524s3(1) for the Assessmenr year 201 B-19 determining the total income of Rs. 3'1 ,85,9301as arbilrary, rllegal. bad in law, wilhout lurisdiction, void-ab-initio, violative of the principles of natural iustice apart from being violative of Articles 14, 19(1Xg) and 265 of the constitution of lndia and Sec l4SAofthelncomeTaxAct,l96l,andconsequentlysetasidethe same in the interests of justice Counsel for the Petitioner: SRI' THANNERU CHAITANYA KUMAR Counsel for the ResPondent Nos' 1&2: SRI J. SUNITHA SC FOR lT For SUNDARI R PISUPATI (Sr SC for lncome Tax DePt) cou n se I fo r the Res po nde n t N os' 3to 5 :\"s Rl GAD !t#[?t^i[ [XI6Fi * r,u W.P. NO: 13965 0F 2024 Between: AND NAGARAJUAGNooRI,S/oVENKATESHWARLY.AGNooRl,Aged.about38 ,iiii, o.trprlion Businesl, n17o i- sl Nandhipahad , Miryalguda Nalgonda 6oEzoz, ittS;gina. lndia Assessment Year 2015- 16 ...pETtTloNER Office of The lncome Tax Officer Ward 1' Nalgonda' Telanoana State' The Principal cniet commisiion\"f ot in\"o'i\" Tax - Teianoana and A P' Hii\"ijtiilr -ro*ei' ni\"\"C\",jriot, N/|\"iio -r'nt, Hvdera6iad - 500 028' Telanoana. iill'i%ii;l Board of Direcr Taxes, Represenred-by its chairman, De_partment ;i'h;;;;;, N,l,.,iitrv ot rinurrce'-co,ernment of lhdia' Secretariat Buildings' New Delhi - 1 10 001 . fr,'. t riiio\"rr Faceless Assessment Center, lncome Tax Department' New Delhi. if,'\" \" Un,on of India, Represented by its -Secretary to the Government' ou\"pri#Jit olr n\"u\"nr\", Minitt,v of Finbnce, New Delhi - t ].1*O=0,1io*oa*r, Petition under Arlicle 226 of the Constitution of lndia praying that in the 1 3 4 5 circumstancesstatedintheaffidavitfiledtherewith,theHighCourtmaybe pleased to issue an approprrate 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/S147r/WSectionl44.BofthelncomeTaxAct,lg6lvideDlNandNoticeNo. dated 26- 03- 2024 ITBA/AST/Si 14 712023- 2411063413873(1 ) for the assessment year2ol5.16determiningthetotalincomeofRs.50,10,000/-aSarbitrary,illegal, badinlaw,withoutjUriSdictlon,Void-ab-initio,violativeoftheprinciplesofnatural justice apart from being violalive of Articles 14' 19(1)(9) and 265 of the -____.___r!, constitution of lndia and sec. r4BA of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice Counsel for the Petitioner: SRt. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. ,t&2: SRI VIJHAY K pUNNA (sENtoR SC FOR rTD) Counsel for the Respondent Nos 3 to 5. : SRI GADI PRAVEEN KUMAR, DY. SOLICITORGENERAL OF INDIA The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA'IESHWAR RAO WRIT PETITION NOS. 13895 & 13965 oF 2024 coMMON ORDER (per Hon'ble SP,J) Sri Thanneru Chaitanya Kumar' learned counsel appears. for the petitioner(s), Ms' J'sunitha' learned Junior Standing Counsel for Income Tax Department appears for the respondents-Income Tax Department in W'P'No'1389!i of 2024 ' Sri Vijhay K Punna, learned Senior Standing Counsel lbr Income Tax Department appears for the respondents-Income Tax Department in W.P.No.13965 of 2024 and Sri B' I {ukherjee' learned counsel representing Sri Gadi Praveen Kumar' learned Deputy Solicitor General of India appears for the respondents- Central Government in both the writ petitions' 2. Regard being had to the similarity of the question involved, on the joint request of the parties' the matters are analogously heard and decidecl b-v this common order' 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e Act' 2O2l ' 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, 196 i cannot sustain judicizrl scrutiny' 2 Since notices are bad in law, the consequential orders are also bad in law 4. During the course of hearing, leamed 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 dated L4.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9.2O23. 5. 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 aroresaid discussions, it is by now very clear that the procedure to be followed by the respondent_Oepartment 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 directives issued by the Hon'ble Supreme Court in the cas€ 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 14g 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. 3 37. The preliminary obiection raised by the petitioner is sustained and allthesewritpetitionsstandsallowedonthisveryjurisdictionalissue. Since the impugned notices and orders are getting quashed on the point of iurisdiction' 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.\" 6. In view of the consensus arrived, the impugned Show Cause notices and 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 with law as per paragraph No.38 of the order dated 14'09'2023 rn W.P.No.259O3 of 2022. 7. The writ petitions are allorved No costs' Interlocutory applications, if any pending, shall \"'\" =\"t3[$$f,]frXoo\"rrsHAMBA //TRUE COPY// ASSISTANT REG v ISTRAR To, 1. 2. 1 4. 5. tl- 7. 8. SECTION OFFICER The Office of The lncome Tax Offrcer Ward 2' Karimnaoar' Telanoana State' The principat cnief comnii!;;;; ;ilncome_Tax -\"T.lanoanla and A.P., H,[#;\"i:\"ft\"i;;\";., Ai'c\"\"ij'- r\"r\"iu 'rant' Hvdera6ad - 500 028' Telanoana. iili'ciiir'n.,r\", centrat Board of Drrecr Taxes- Represenred bv rts chairman, Deoartment of Revenue, I,i;itil;;'i;u;t; Government of lnbia' Secretariat Buildings, New Delhi - 110 00'1 ' The National Faceless n.i6stt\"nt Center' lncome Tax Department' New Delhi. ifre \"becretarv, Union of lndia, the Government' Department of Revenue' frrf inisirv of Fin'ance, New Delhi - 1 10 001 l5#\"i6;;' s ili rHnr.r ruriu c HATTANYAT(lll['iovo gqtg IqPUC] il; dd i\" sni viJnv x pUur'lA . sFNloR s9 FpS lrD IoPUC] SilE tt*t\"\"SN,rr -Sur.rOaii 'n'prsupnrt (Sr SC tor lnccme Tax Dept) toPUCl g. bne CC to SRI INDIA [oPUC] 1O. Two CD CoPies B f 4 ?r^{^ GADI PRAVEEN KUIVAR, DY. SOLICITOFi GENERAL OF , I 3 I I HIGH COURT DATED:0610612024 COMMON ORDER WP.No's.13895 AND 13965 OF 2024 ALLOWING BOTH THE WRITPETITIONS WITHOUT COSTS .r. ',;r,.'\"; J L' / -- l ) 1 I JUL 2024 o6.S PN TCIreo. {' g I t @l\"q 9 +{,,-q ' { "