Gangadhar Reddy Somala V. The Union of India, Ministry of Finance, Department of Revenue and National Faceless Assessment Centre and Assistant Commissioner of Income Tax, Circle- 5(1)

WP/21526/2024

AI Insights

The case involves Gangadhar Reddy Somala, the petitioner, who challenged a penalty order issued by the Income Tax Department for the assessment year 2016-17. The petitioner had previously succeeded in a writ petition (W.P.No.16465 of 2023) where the court ruled that the reassessment was not conducted following the amended faceless scheme provisions. Despite this ruling, the Income Tax Department issued the penalty order without adhering to the mandatory faceless procedure. The petitioner filed another writ petition (W.P.No.21526 of 2024) to challenge this penalty, leading to the current decision where the court set aside the penalty order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 820508 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 08-08-2024
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; B REDDY
• Assessee Lawyers: KAILASH P S S
• Keywords: Faceless scheme; Penalty order; Reassessment; Writ of Certiorari
• Section: 271(1)(c)

Judgement Text

"[ 3411 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO Eetwee n: [t4. Gangadhar Reddy Somala, S/o Pulla Redd years, Occ: Pvt. Employee, 4th Floor, MIG 59, D Hyderabad, Te!angana-S00072 y Somala, Aged about 33 harmareddy Colony, KPHB, ...PETITIONER AND 1 The linicn ci lnciia l.!ir:,sri.; ai Frx3n;e. Deoai'irn3ni cf Revenue, 15, Saidarjung Road, New Deini - 1 1000'1 represenied by its Secretary, Nerv Delhi. Assessment Unit, National Faceless Assessment Centre, [/ayur Bhawan, Connaught Lane, Barakhamba, New Delhi. Delhi-1'10001 Rep by its Assessing Officer Assistant Commissioner of lncome Tax, Circle- 5(1), Room No.224, I.T.Towers, A.C.Guards, Hyderabad-500004. ...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 a Writ, Order or Direction, more particularly in the nature of a Writ of Certiorari to call for the records of order of penalty dated 23.02.2A24 with DIN ITBA/PNL/F/271(1)(c)12023-24i 1061395805(1) issued by the 2nd Respondent under section 271(1 (cl of the lncome Tax Act, 1961. for assessment year 2016-17, and quash the same. 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 stay all further proceedings including recovery proceedings pursuant to the 2 3 THURSDAY, THE EIGHTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR WRIT PETITION NO:21526 OF 2024 lA NO: 2 OF 2024 // impugned penalty order dated 23.02.2024 with DrN rrBA/pNL/F/27 1(1)(c)t2o23- 2411061 3S5805(1 ) issued by the 2nd respondent. Counsel for the Petitioner: SRI KAILASH NATH p.S.S., Counsel for the Respondent No.1 & 2: SRI B. MUKHERJEE REp. FOR SRI GADI PRAVEEN KUMAR, Dy. SOL|CITOR GENERAL OF tND|A counsel forthe Respondent No.3: Ms. B. SApNA REDDY, JR. sc FoR TNCoME TAx The Court made the following: ORDER I I THE HONOURABLE SRI WSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA.'ESHWAR RAO WRIT PETITION No.21526 of2024 ORDER (per Hon'ble SP,J) Sri Kailash Nath P.S.S., Iearned counsel, apPears for the petitioner, Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appears for the respondent(s)-Central Government and Ms.B. Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)-Income Tax Department' 2. Witi the consent finallY heard- 3. This is second visit of the petitioner to this Court' Earlier, when the petitioner was subjected to reassessment, he filed W.P.No.16465 of 2023, which was decided by order dated O3.O1.2O24. This Court allowed the said writ petition on the ground that the respondents have failed to follow the amended provision (faceless scheme) and decided the matter under un- amended provision which is not sustainable- Liberty was reserved to the respondents to proceed against the petitioner' The respondents, without taking note of this order, have passed the impugned penalty order dated 23-02-2024, without following the / , I 7 mandatory faceless procedure. For the suune reason, the irnpugned penalty order is liable to be set aside. 4. Learned Junior Standing Counsel for Income Tax Department fairly submits that the impugned penalty order runs contrary to the aforesaid mandatory procedure and therefore, the same may be set aside by reserving liberty to the Department to pass a fresh order in accordance with law. 5. In view of consensus arrived at, the impugned penalty order dated 23.02.2024 is set aside by reserving the libert5r as prayed for. 6. Accordingly, the Writ Petition is allowed- No costs. Interlocutory applications, if any pending, shall also stand closed. //TRUE COPY// SD/. T. JAYASREE ASSISTANT REGI9TRAR i,/ SECTION OFFICER To, 1. The Secretary, The Union of lndia, Ministry of Finance, Department of Revenue, 15, Safdarjung Road, New Delhi - 110001 2. The Assessing Officer, Assessment Unit, National Faceless Assessment Centre, tvlayui Bhawan, Connaught Lane, Barakhamba, New Delhi, Delhi- 1 1000'r 3. Assistant Commissioner of lncome Tax, Circle- 5(1), Room No.224, l.T. Towers. A.C.Guards, Hyderabad-500004. 4. One CC to SRI KAILASH NATH P.S.S., Advocate IOPUC] 5. One CC to SRI GADI PRAVEEN KUMAR, Dy SOLICITOR GENERAL OF rNDrA [OPUC] 6. One CC to trrts-. B. SAPNA REDDY, JR, SC FOR INCOME TAX [OPUC] 7. Two CD Copies BN KKS frlC.. I HIGH COURT DATED:0810812024 ORDER WP.No.21 526 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS (.. + c 71 ti-r 202{ (i o ? o z+ ql'^-'' .? "