Jahangeer Ali and Vasantha Ramcharla V. Assessment Unit, Income Tax Department, National e-Assessment Center, New Delhi and The Income Tax Officer, Ward 7(1), Hyderabad and The Principal Commissioner of Income Tax 1, Hyderabad

WP/17052/2024

AI Insights

The case involves two writ petitions filed by Jahangeer Ali and Vasantha Ramcharla against the Income Tax Department, challenging the legality of reassessment notices and subsequent orders for the assessment years 2018-19 and 2015-16, respectively. The petitioners argued that the notices were issued without adhering to the modified reassessment procedures mandated by the Finance Act, 2021, and were thus illegal and void ab initio. The court referenced a previous judgment (W.P.No.25903 of 2022) which had set a precedent on this issue, leading to the quashing of the notices and orders in these petitions as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798588 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 04-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY; J SUNITHA
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Reassessment; Writ of Mandamus
• Section: 148; 144; 148A; 265; 226; 141

Judgement Text

"134111 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) THURSDAY, THE FOURI'H DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS:17047 & 17052 0F 2024 W.P-NO:1704 7 0F 2024 Between: Yl. SVSO_ Jahangeer Ali, S/o. Mr. Wajicl AIi, R/o- 11-5-154, Flat No. 501, pent House, R'e 500 004, Telangana AND d 63 years, Occ- Business ills R6sidency, UVOeriOiJ l ...PETITIONER age dH 1. Asselsment Unit, lncome Tax Dqpartment, National e_Assessment Center, New Delhi, Room No.- 401 ,2nd Floor, E_Ramp, .lawaf,aitif fVef,;r''Siu\"ii;;, NewDelhi - 110 2. The lncome Tax Officer, Ward 7(1), Hyderabad. Siqnature Towers. Oooosite Botanicat cardens, Sy. No.- 6(p) ot Kondapur, sv fto JTf pl \"i(;tdil;; Serilingampatty Mandat, Hydeia6ad - 50u 0s4. ninsa neOiv'Di.iii\"i,-\"-\"*' Telangana. 3. The Principal Cornmissioner of lncome Tax _ 1, Hyderabad, LT. Towers, AC Guards. [ 4asab Tank, Hyderabad - 500 004, fetangani. . .*ar-\"O*a\"1\" Petition under Article 226 of the constrtution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring the order passed by the 1st Respondent, uls 141 r/w sec. 1448 of the lncome Tax Act, 196i , cjated 2glo2l2o24, bearing DlN._ lrBA/AST/si14712023- 2411061636449(i), for the Assessment year 2018 - 19 as arbitrary, illegal, bad,in law, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 1a, t9(1Xg) and 265 of the Constitution of lndia, and Sec. 148A of the lncome Tax Act, 196.1 , and consequently set aside the same rn the interests of justice. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in r;upport of the petition, the High Court may be pleased to stay all further proceedings, including any recovery, pursuant to the n,rtice issued by the 1st Respondent u/s 147 rlw Sec. 1448 of the Income Tax A:t, 1961, dated 28.O2.2024, bearinr; DlN.- ITBA/ASIlsll4712023-241106163E;449(1), for the Assessment Year 2C18 - 19, pending disposal of the above Writ Pe-ition. Counsel for the Petitioner: SRI A.V.A.SIVA KARTIKEYA Counsel for the Respondents: M/s. B.SAPNA REDDY, JUNIOR SC FOR ITD W.P.NO: 17052 OF 2024 Between: Vasantha Rarncharla, D/o. 4,4r. l /allareddy Vanga, aged {i8 years, Occ. Agriculturist, R/o. 1-B-5-A2, Taranagar, Sedingampally, Rarrgareddy - 500 0'19, Telangana ...PETITIONER AND '1 . Assessment U nit, lncome Tax Department, National e-Assessrnent Center. New Delhi, Room No.401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 1 10 003. 2. The lncome Tax Officer, Ward B(1), Hyderabad, Signature Tou,ers, Sy. No.. 6(P) of Kondapur, Sy. No.37(P) of Kothaguda, Opposite Botanical Gardens, Serilingampally [Vandal, Ranga Reddy District, Hyderabad - 500 084, Telangana. 3. The Principal Chief Commissioner of lncome Tax, Anohra Pradesh and Telangana, Hyderabad Room No. 922,91h Floor, Block, l.T.Torvers, 10-2-3, AC Guards, Hyderabad - 500 004, Telangana. ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit frled therewith, thr: High Court may be pleased to issue a Writ of lvlandamus or any other appropriate Writ, Order or Direction, declaring that the order passed by the 1st Respondent uls 147 r/w Sec. 144 rlw Sec. 1448 of the lncome Tax Act, 1961, dated 1?-.O3.2024, bearing DIN and Notice No. ITBA/ASTlsll4712023-2411062498622(1), for the Assessment Year 2015 - '16, as arbitrary, illegal, bad in law, void-atr-in jtio, violative of the principles of natural justice, apart from being violative of Articles 1,1, 19(1)(g) and 265 of the Ccnstitutron of lndia and Sec 14{JA of the lncome Tax Act, '1961 , and to consequently set aside the same in the interests of justice. Petition under Section 151 CPC praying lhat 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 any recovery, pursuant to the order passed by the 1st Respondent, u/s 147 rlw Sec, 144 r/w Sec. 1448 of the Income Tax Act, '196'1 , dated 12.O3.2024. bearing DIN and Notice No. ITBA/AST/S/14712flr23- 2411062498622(1), for the Assessment Year 2015 - 16, pending disposal of the above Writ Petition. Counsel for the Petitioner: SRI A.V.A.SIVA KARTIKEYA Counsel for the Respondents: M/s. J.SUNITHA, JUNIOR SC FOR INCOME TAX The Court made the following: COMMON ORDER lA NO: 1 OF 2024 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA'IF'SHWAR RAO WRIT PETITION NOS.17()47 & L7052 0F 2024 COMMON ORDER (per l{on'ble SP,J) Sri A.!.A. Siva Kartikeya, learned counsel aF)pears for the petitioners. Ms.B.Sapna Reddy, learned Junior Standing Counsel for Inc:ome Tax Department appears for the respondents in W.P.No. 17017 of 2024 and Ms. J.Sunitha, learnr:d Junior Standing Counsel for Income Tax Department appears for the respondents ir-r W.P.No.17O52 of 2024. 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously he,ard and decided by this common order' 3. It is crtmmon grr.rund taken by the leerned counsel for the petitioner(s) that in furtherance of Finant:e Act, 2O2l , re- assessment process stood modified but the resprondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 1961 cannot sustain judiciat scrutiny' Since notices are bad in law, the consequentirel ordel-s are also bad in lau,. 4 . During the course of hearing, learnerl coun:;e1 for the parties agreed that curtains on this issue are finalll drawn by - 7 this Court in a batch of u,rit petitions, W.p.No.259O 3 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. 5 This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: \"35. ln view of the aforesaid 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 Couft in the case of Ashish Aganval, s upra. 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- 37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional 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 raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. I 3 6 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers Llnder 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.\" In vierv of the consensus arrived, the impug;ned Show The Mrrit Petitions are allowed. No costs. Interlocutory Cause notices and consequential orders passe,l in this batch of writ petitions irre set aside. Liberty is reserved to both [he 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. 7 To applications, il any pending, shall also stand closed. SD/- C. PRAVEEN KUMAR ASSISTANT REGISTRAR //TRUE COPY// ''i '' SECTION OFFICER 1. Assessment Unit, lncome Tax Departrnerlt' National e-Assessrnent Center' ' ir]ililii i: Rooni No.- +or, zi JFT\"\"i, r-Ra.p, Jawararlal Nehru Stadium, NewDelhi - 1'0 2. The lncome Tax Officer, Ward 7(1), Hyderabad' Signerture Tor'arers' Opposite ' B;ir;;;;i'Gr,.,i\"n., 5v. N,j':'qp)oik6n''lnp\"' sv \"No 37(f ),f Kothasuda' \"\"'''\"\"\"m;;i[vlno'rr, il-voeiauao - 500 084' R'ansa Reddv i)istrict' Telanqana. 3. +#PYt;ipal lommissioner of lncome lq'-l' ,Hvderabad' I l Towers' AC \" Gr;;';, M:;au ranr. Hvderabad.- 500 004 Telangatta 4.ThelncomeTaxofficer,,WardB(1),Hyclerabad,SignatureTowers,_Sy..No.. - oii;r'\"iX',liarpijr,5v. N\".iTiFiotkothag'o',9.pqo'te Botanical Gardens' E[,iri\"'g;;prl.lJvian'oar, nan'gi R\"oov Dislrict' Hvderrbad - 5r)0 084 Telanqana. 5 il;PYilffial Chief Commissioner of lncome.Tax'Anrlhra Prarlesh and - i;i,;;;;; HraJrruia R;;; N;- s22'sth Floor' Block' l r rcwers' 10-2-3' AC GJards, l-vderabad - 500 004 Telangana 6 o;JCc' i; s n.i n.V.n-s tvn KARrI KEYA, Adv-o-cqle^ toq! ql^ - . ^- ;. 6;; cc io M,i. B.sAPNA REDDY, JUNIoR sc F^oR lrD [oPUCi B. 5;; cc i; M;;. J.SuNtrHn, JUNIoR sc FoR lrD IoPUC] 9. Two CD CoPies PSK. GJP fitt.c.. L HIGH COURT DATED:0410712024 COMMON ORDER WP.Nos.17047 & 17052 of 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. qisl,,-,.' I I ,'|; 11 iii ,Til| a ,., -aa.'a.-a -' -.a .-? )/t /,:: tr "