Jade Realtors V. Union of India, Ministry of Finance, Department of Revenue and Assessment Unit, Income Tax Department, The National Faceless Assessment Center

WP/10855/2025

AI Insights

The case involves Jade Realtors, a partnership firm, challenging an assessment order and subsequent demand notice issued by the Income Tax Department under the Income Tax Act, 1961. The petitioner argued that the assessment order was passed in violation of the established SOP, which requires a minimum of seven days for responding to a final show cause notice. The petitioner also contested the relevance of the statutory provision cited in the assessment order. The court found that the procedural requirements were not followed, particularly the SOP for response time, leading to the decision to set aside the assessment order and remit the matter back for re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 692237 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-04-2025
• Assessment Year: misc
• Other Referred Cases: W.P.No.11712 of 2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GADI PRAVEEN KUMAR
• Assessee Lawyers: NAJEEB AHMED
• Keywords: Assessment Order; Natural Justice; Show cause notice; Writ of Certiorari
• Section: 143(3); 1448; 156

Judgement Text

"13447 | HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY NINTH DAY OF APRIL - TWO THOUSAND AND TWENTY FIVE PRESENT THE HONQURABLE SRlJUSTICE P.SAM KOSHY AND THE HONOURA9LE SRIJUSTICE NARSING RAO NANDIKONDA WRIT P TITIO NO: 10855 OF 2025 Between: Jade Realtqrs, A partnership firm, Having ito Principal Place of Business at 1O-5-2t 11 8, Maheshwari Complex, Mbsab Tank, Hyderabad - 500028' Represented by its partner, Mr. Najeeb 41med. ANE ...PETITIONER 1. Union of lndiq, Minis!ry of Finance, Dgp4rtmept of Revenue, Rpp. Oy its Secretary (Revenqe), North Block - Nqw Delhi - I 10001 - 2. Assessnient Unit, lnbome Tax Dgparlment. The National Faceless Assessment eenter, Ministry of Einance, Government of lndia, New Delhi - 1Q0 01 1 Petition un{er A(isle 226 o.r thecenstitutien of lndia #;THT: : circumstanqes stated in the affidaYit filqd therewith, the High Court may be pleased to issue a writ or direotion 9[ Qrder r119re particularly in the nalure gf a Writ of Certiorari, 6gllinq for !!e reeords and qyqt6;.t the (i) lmPugnpQ Order dated 26to3th125, pearilg- DlN. ITRA/AS.Tt st143 3)t?Q24=2111Q7s065.q09(1) for the Assessment ear 8023. 2024 pessPd by the Zld Rqspondent qnder Section 143(3) read with gectipn 1448 of the lncamq Tax Act, 196't , and (ii) the consegqent n-otice gf delang dated 26fi312025 bearing PIN iild Notice No. ITBA/AST/ St) 5612924 2511075065447( ) for the Assessment Yevi 2023 2Q24 passed [y thq Znd Respgr-rdeqt under Sectign 156 qf thq Incgme Tax Act, 1961, aE being illegal, arbitr4ry, ln excess of the said Respondent's jurisdiction and in violation of established Principles of NaturaI Justice. lA NO: 2 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filgd in suppart of the petition, thg High Cotrrt may be pleased to slay all further Prqceedings pglsua6t to (i) lmpLlgned Order laled 21rc3n025, bearing DlN. ITBA/ASTtst143(3)12024:25/1975065355(1) fqr.thB Assessment Year 2023 - 2024 passed py thq 2nd Bgspgndent Under: Sgation 143(Q) read with Section 1448 of the lncome Tax Act, '!961, and (ii) thq consqquent notiQg of demand date-d 26tO3t?Q25 bqaring plN 4nd fiotice Na ITBfUASTIS/1Q8.t2024-25t1075065447(1) fgr the Asse$smen! Year 2023 - 2024 passed by the 2nd Rerpondent under Section 156 of the lnCome Tax Act, 'l961. IA NO: OF 25 Petitiqq Undqr Seq(ion 151 QeC praying that in the cirgumstqnqes stated in the affidavit filgd in suppgrt of thg pgtitigQ, the uigh Court may be'pleased tg suspenq thg qperqlion gf (i) lmpqqnSd Or{9r dated ?A10AQ025, bearing DlN. iTBA/ASr/q{ M3(U12024-.25l 107590535i(1) for the Assqsemsrl Y.ear 2023 - 20?4 passed hy the 2nd Eespqndent undei Seotion 143(Q1 road wirh Sectian 1448 of lhe Income Tay Act, 1961, and (ii) thg qqnsequent notica of demand dated 26t03t?Q25 bearins plN and Netiag Np. |TB4/ASTIS/1q0t2A24.25t1Q75aA5447(1) for the AsseQ -sment Year 2023 - 2024 passed 8y tfip 2nd Reqpqndenl undqr Section 156 of the Inpome Tax Act, 1961. Counsel for the Pelitionpr; S$l RAJA$OPALAN.B FOE M/s. MYTRI INDUKURU Qouns4l fo1 t|p ReFponflent t!o.1: QRf cApi PRAVEEry KUn4AR, Deputy Soliclter Qgneral pf In{ia Counsq! foq ltre Responflqnt t{o.21 tl!{e. .t.$!!trHA, JUNIOR qc FQR ITQ The Court made the follqwing; ORDER THE HONOURABLE SRIJUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA W.P.No.l0855 oF 20zs ORDER: (per Hon'ble Sri Jusrice p.Sam Koshyl Heard Mr. Rajagopalan R, leamed counsel representing Ms. Mytri Indukuru, learned counsel lor the petitioner and Ms. J.Sunitha, leamed Junior Standing Counsel for the Income Tax Department for the respondents. perused the record. 2. The impugned order under challenge in the present writ petition is to the assessment order passed under Section 143(3) of the Income Tax Act, 1961 (for short .the Act,) dated 26.03.2025. 3. One of the primary grounds the leamed counsel for the petitioner has raised is that before impugned order of assessment was passed, final show cause notice was issued on 2I.03.2025 and the petitioner was asked to submit reply in less than three days time i.e., by 24.03.2025. According to the learnecl counsel for the petitioner, the department itself has issued a Standard Operating Procedure (SOP) vide Circular dated 03.08.2022, whereby upon issuance of final show cause notice, a minimum of seven days time 2 is required to be given to the assessee to respond to the show cause notice. However, in the instant case, there appears to be a deviation from the said SOP dated 03.08.2922 and the petitioner was granted only three days time in responding to the final show cause notice. Thus, the impugned order is violative of the said Circular dated, 03.08.2022 4. The second ground that the petitioner had raised was that in the impugned order, the authorities concemed referred to the provision of Section 45 of the Act, which, in the opinion of the petitioner, was not the relevant provision under which the assessment has been done and there seems to be some other statutory provision that seems to have been referred by the authority while passing the order of assessment. However, the said ground does not seem to have been raised by the petitioner while submitting their reply to the show cause notice dated,21.03.2025. Though the petitioner was issued with a show cause notice on 21 .03.2025 asking them to submit their response within three days by 24.03.2025, since it was a weekend when the notice was issued the petitioner entered appearance before the authorities and submitted their tentative reply on 26.03.2025. It seems the said // / 3 I reply was not considered by the authorities and straight away' they proceeded to pass the impugned order on the same day i'e'' 26.03.2025. 5. Recently, this Bench on24'04'2025 had an occasion to deal with a similar issue in W.P'No'11712 ol 2025 wherein the assessment order of similar nature was interdicted by this Bench only on the ground seven days notice as is required under Circular dated 03.08.20 22 was not followed' In the instant case also' there does not seem to be any justifiable ground brought to the notice of the Bench for deviating the SOP dated 03'08'2022 so far as granting of seven days time to respond to the final show cause notice is concemed. 6. Therefore, we are of the considered opinion that the instant writ petition also deserves to be atlowed in terms of the order passed in W.P.No.l 1712 of 2025' 7. We, therefore, set aside the impugned order (Annexure P-2) dated 26.03.2025 and remit the matter back to the authorities concemed. Since the petitioner is admitting of having received the notice dated 21.03.2025 and have also submitted his reply to it on I 4 26.03.2025, hence u'e direct the respondent Assessing Officer to take appropriate decision after granting another opportunitv to the petitioner to submit their reply, if at all if they have any, within a further period seven days starting from today. There shall be no further requirement ol- issuing notice to the petitioner in this regard. The petitioner. if they want, may submit their supplementary reply to the final show cause notice dated 21.03.2025 by 06.05.202-5 and thereafter the Assessing Officer may pass appropriate orclers on merits in accordance with law. 8. The writ pctition, accordingly, stands allowed and disposed of. It would be the responsibility of the petitioner to upload the order passed in the instant writ petition on the portal of the respondents immediately on receipt of the copy of the order. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. The Secretary (Revenue) Revenue, NOrth Block - N SD/.MOHD. ISMAIL DEPUry REGISTRAR //TRUE COPYII SECTION OFFICER Union of lndia, Ministry f Finance, Department of ew Delhi - 110Q01 To 1 2 5 6 PSK. BS 4 Assessment Unit, lncomb Tax Department, The National Faceless Assessment Center, Ministry of Finanie, Governmqnt of lndia, New Delhi - 100 01 1 One CC to M/s l tlYTRl INDUKURU, Advocate IOPUCI One CC to SRI GADI PRAVEEN KUMAR, Deputy Solicitor General of lndia IOPUC] One CC to M/s J $UNITHA, JUNIOR SC FOR ITD [QPUCI Two CD Copies W HIGH COURT DATED:2910412025 ORDER WP.No.10855 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS 1H?: t)* 0 5 iilrY tffi i ,,.., 0 .C (') - "