Primary Agriculture Co-Operative Society Limited V. Office of The Income Tax officer

WP/10572/2024

AI Insights

The case involves the Firuty Agriculture Co-Operative Society Limited, which challenged the reassessment notice issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961. The petitioner argued that the reassessment process was not in accordance with the modified procedures established by the Finance Act, 2021. The respondents included various authorities from the Income Tax Department and the Central Board of Direct Taxes. 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 amended law. The court's decision to set aside the notice and orders was based on the procedural flaws identified in the issuance of the notice and the subsequent proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 764424 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Article 226 of the Constitution of India, Section 147 of the Income Tax Act, 1961, Section 148A of the Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD; B MUKHERJEE
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Assessment Year 2019-20; Income Tax; Jurisdictional issue; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 148A; 226

Judgement Text

" [ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY ,THE TWENTY THIRD DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SR] JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETI TION NO: 10572 OF 2024 Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High cou( 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 3rd (National Faceless E-Assessment centre) completed the assessment U/S 147 read with Between: ------Ftiruty Agriculture Co-Operative Society L1mit9d, Pandavapg,.Rep' B-y its b\"li\"ii.v in\" Society, Kdsula Rajendar,-S/0. Kasula Pedda.Rajanna,.Aged AOort +tr years, RyO 4 191 Pandavapur , Kaddam Kaddam, Adilabad 504106, Telangana, lndia Assessment Year. 2019-20 ...PETITIONER AND 1. Office of The lncome Tax officer, Ward 1' Nirmal/,Telangana State' i. ihu prin.ipii cr,ier Commissioner of lncome Tax, -Telangan' 9lq ^'P' - HyOeiroiOilf to*et., AC Guards, Masab Tank, Hyderabad - 500 028' Telangana. s. rhe Niiional Faceless Assessment center, lncome Tax Department, New Delhi. +. ine Central Board of Direct Taxes, Represented by its Chairman, Delcartment of Revenue, Ministry of Finance, Government of lndia, secretariat tsulldlngs, New Delhi - 110 001 . S. ine Union of lndia, Represented by its Secretary tq !h9^ Government' -' Oepartment of Revenue, Ministry of Finbnce, New Delhi - 110 001 ' ...RESPONDENTS section 1448 of the lncome-tax ITBA/AST/S/1 47 12023-241 1061 B1 8049(1 ) Act Date of 01-03-2024, DIN for the Assessment Year 2019-20 determining the total income of Rs' 2,05'24,0811aS arbitrary, illegal, bad in law' without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 1g(1)(g) and 265 of the constitution of i t I 1 t 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: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. 1&2: SRI J. V. PRASAD (sc FoR rNcoME TAX) Counsel for the Respondent Nos.3to5: SRI B. MUKHERJEE REP SRI GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA i The Court made the following: ORDER -7 THE fiONOURABLE SRI JUSTICI SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUI{ARAMJI WRIT PETITION No.1O572 OF 20124 ORDER: (per Hon'ble SP,J) Heard Sri Thanneru Chaitanya Kumar, learned counsel for the petitioner; Sri J.V.Prasad, learned Standing Counsel for Income Tax Department for respondent Nos.l and 2 and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India for respondent Nos.3 to 5' 2. The ground taken by the learned counsel for the petitioner is that in furtherance of Finance Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 1961 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 frnally drawn by . tlris Court in a batch of writ petitions, W.P.No.259O3 of 2022 and other connected matters, decided by common order dated 2 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9.2023. 4 This Court in the said order dated 14.O9.2023 in W.P.No.25903 of 2022, held as under: \"35. In 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 undea Section 1rt8A, 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 constralned 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 di.ect 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 accoadingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequenlial 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 yery 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 .aised by the petitioner which stands reserved to be raised and contended in an appropaiate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measute 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 3 reserved to proceed further if they so want from the stage of th€ 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 a-re set aside. Liberty is reserved to botlt 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 in W.P.No.25903 of 2022. 6. The writ petition is allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. //TRUE COPYII To, SD/. K.SREERAMA MURTHY ASSISTANT REFISTRAR I ' r-- sEciloN Srrtcen 1. Office of The lncome Tax officer, Ward 1, Nirmal/,Telangana State. 2. The Principal Chief Commissioner of lncome Tax, Telang.ana ,!9.A.i,- Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. 3. The Nitional Faceless Assessment Center, lncome Tax Department, New Delhi. 4. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretarial Buildings' New Delhi - 110 001. 5. The Union of lndia, Represented by its Secretary to the Government, DeDartment of Revenue, Ministry of Finance, New Delhi - 110 001. 6. On'e CC to SRl. THANNERU CHAITANYA KUMAR, Advocate [OPUC] 7. One CC to SRI. GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF tNDrA [OPUC] B. One Cb to SHt. J. V. PRASAD (SC FOR INCOME TAX) [OPUC] 9. Two CD Copies BM GJP $ t! tl HIGH COURT DATED:2310412024 ORDER i WP.No.10572 ot 2024 F :i r r c ( L) e c T A .S € t * ? D . o 0 ' <' l ) ) J [ 6 JUl.l ?02{ / ALLOWING THE WRITPETITION WITHOUT COSTS ('!bP* C. ?, "