GVK Energy Limited V. The National Faceless Assessment Center, Income-tax Department, New Delhi, India and The Deputy Commissioner of Income Tax, Circle - 2 (1), Room No. 514, 5th Floor, Signature Towers, Sy No. 6(p) of Kondapur, Sy. No. 3/(P)-or . . xothCorda, Oop. Botanical Gardens-seritingampatty (lVI), Ranga Reddy District, Hyderabad, Telangana- 500084 and The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National e-Assessment Centre, Delhi

WP/26291/2024

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GVK Energy Limited filed a writ petition against the National Faceless Assessment Center and other respondents challenging the validity of a notice and subsequent orders issued for re-assessment under Section 148 of the Income Tax Act, 1961. The petitioner argued that the re-assessment process was modified by the Finance Act, 2021, which the respondents failed to adhere to, rendering the notice and orders illegal and without jurisdiction. The court referenced a common order from a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar issues and found in favor of the petitioners, setting aside the notices and orders on procedural grounds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798556 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 24-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA
• Assessee Lawyers: K PRABHABATI
• Keywords: Finance Act 2021; Income Tax; Jurisdiction; Re-assessment; Writ of Mandamus
• Section: 147; 148; 148A

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY,THE TWENTY FOURTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 26291 0F 2024 [34111 ...PETITIONER Between: GVK Energy Limited, having its^registered offi\"g at 156 -159, paigah House, sardar Patel Road. Begum[et,sec-underabad, Teianqana. represented bv its Autnoflsed Person. Sanjeev Kumar Singh. S/o. Late-S/o. Late Madan Gooal srngn.. a.ged about.61 years, R/o. Flat No. 209. Shreya Towers, Sree Ven'sai Pro1ect. Kompally, Hyderabad - 5000.14 AND 1 The National Faceless Assessment Center, Income-tax Department, New Delhi, lndia 2 The Dqputy Commissioner of lncome Tax, Circle - 2 (1), Room No. 514, Sth Floor, Signatlrre Towers, Sy No. 6(p) of Kondapur, Sy. ruo. JZlejoi -- [o-r!1gu$a, Onp Botanicat Gardens-seritingampatty (rUl. Ranga'RtOOy urslnct, Hyderabad. I elangana- 500084. 3 The Additional, /Joint/Deputy/Assistant commissioner of lncome Taxllncome Tax Officer, National e-Assessment Centre, Delhi. ...RESPONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court mJy be pleased to issue a writ, order or direction more particularly in the nature of a writ of lvlandamus declaring the order passed by Respondent No.2 under section 14BA(d) dated 2710812024 bearing DtN No. trBA/AST/F/i4BA/2o24- 2511068033137(1) and the consequent notice dated 27t0812024 bearing DIN No. ITBA/AST/S/148 -112024t2st106s039468(1) issued u/s 148 of the ALt for the Assessment Year 2018-19, as being void, illegal, arbitrary and without jurisdiction and consequently set aside the same , : i PRESENT NO: 1 OF 2024 Petition under Section '151 CPC praying that in the clrcumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the issuance of notice dated 27 -08-2024 bearing DIN No. ITBA/AST/S/148 112024- 2511068039468(1) issued u/s. 148 of the Act for the Assessment Year 2018-19 Counsel for the Petitioner: SRl. K PRABHABATI Counsel for the Respondents: MS. J. SUNITHA SC FOR INCOME TAX The Court made the following: ORDER i THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION No.26291 OF 2024 ORDER: (per Hon'ble Justice Sujoy Paul) Heard Ms. K. Prabhabati, learned counsel for the petitioner(s) and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for the respondent(s). 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act,2O2l, 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, 196 1 cannot sustain judicial scrutiny. Since notice is bad in law, the consequential orders are also bad in law. 3. During the coursc of hearing, learned counsel for the parties agreed that curtains on this issue are linally drawn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023. I I 2 4. This Court in the said order dated 74.09.2023 in W.P.No.25903 ot 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- DepartEent upon treatiug the notices issued for reassessment being under Section 148A, the subsequent ptoceediogs was mandatorily tequiied to be uudertaken under the substituted provisions as laid down under the FioaDce Act, 2021. Ia the absence of which, we are constraiaed to hold that the procedure adopted by the respo[dent-DepartEent 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 case of Ashish Agarwal, supra- 36. For all the aforesaid reasons, the impugaed notices issued and the proceedings drawn by the respotrdent-Department is neither tenable, nor sustainable. The lrotices 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 gettilg quashed, the coasequeDtial orders passed by the respondent Departmeat pursuaqt to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashiag the consequential order is on the principles that when the iritiation of the proceedings itself was procedurally wrong, the subsequent orde.s also gets nullifiied automaticaLly. 37. The preliminary objection raised by the petitioner is sustaioed and all these writ petitioas stands allowed on this very jurisdictio[al issue. Since the impugned aotices and orders are gettirg quashed olt the poitt ofjurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner shich stands reserved to be raised and contended itt an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercisiog the powers under Article 142 of the Constitutior of India, permitted the Rewenue to proceed u[der the substituted provisions, and this Court aUowing the petitions only on the procedural flaqr', the right cooferred on the Revenue t ould remain leserved to proceed further if they so want from the 3 stage of the ordei of the Suprerne Court in the case of Ashish Agarual, supra. 39. No order as to cgsts.\" 5. In vie'*, 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 stald 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. SD/- N. SRIHARI ASSISTANT TEG,JSTRAR SECTION OFFICER 1. The National Faceless Assessment Center, lncome-tax Department, New Delhi. lndia 2. The Deputy Commissioner of lncome Tax, Circle - 211),.Room,No 514' sth Floor, Sign-ature Towers. Sy. No. 6(P) of Kondapur,.Sy No:3/(P)-or . . xothCorda. Oop. Botanical'Gardens. Serilingampally (lVI), Ranga Reddy Drstrici. Hyderabad, Telangana- 500084. 3. The Additional, /JoinuDeputy/Assista nt commissioner of lncome Tax/lncome Tax Officer. National e-Assessment Centre. Delhi. 4 One CC to SRl. K PRABHABATI Advocate IOPUC] 5. One CC to MS. J. SUNITHA SC FOR INCOME TAX [OPUC] Two CD Copies //TRUE COPY// To, Ct KKS LS q,- I I I HIGH COURT DATED:2410912024 ORDER WP.No.26291 ot 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS $ csP(c' t l nE S f.,t I6 . ,?- J 2 g [[T zul tr\" I o^ "