Jain Vijaykumar, V. Income Tax Officer

WP/25308/2024

AI Insights

The case involves two writ petitions filed by Jain Vilaykumar and Ritesh Kumar against the Income Tax Department, challenging the validity of assessment orders and notices issued for the assessment years 2016-17 and 2014-15, respectively. The petitioners argued that the notices issued under Section 148 and the subsequent assessment orders were illegal and violated the principles of natural justice. The court referenced a previous judgment in W.P.No.25903 of 2022, which had set a precedent on the procedural flaws in the reassessment process under the Finance Act, 2021. Both parties agreed to resolve the matter based on this precedent, leading to the quashing of the notices and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 770899 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Aganral vs. Income Tax Department
• Laws Referred To: Income Tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B REDDY
• Assessee Lawyers: PARIKSHITH KUTUR
• Keywords: Assessment Order; Faceless assessment; Natural Justice; Reassessment Process; Writ of Mandamus
• Section: 147; 148; 144B; 148A; 226

Judgement Text

"134111 THE HONOURABLE SRI JUSTICE SUJOY PAUL rHE HoNouRABLE sRr rr.r,\"lt?rovARApu RAJESHwAR RAo HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY,THE EIGHTEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENry FOUR PRESENT WRIT PETITION NO's:25308 AND 25316 0F 2024 W.P. No:2 53080F 2024 Between: AND 1. 2. J. !.ain Vilaykumar, S/o Jain Shainik Raj, Aged about 43 years, Occ. Business, Rlo 15-9-44, Maharaj Gunj, Hyderabad, fErrng-rn-a-_ {OdOp ...PETITIONER lncome T_ax Officer, Ward 9(1) ]1y-qe-rab!d, Aaykar Bhawan, Opp. LB Stadium, Basheerbagh Hyderab'ad- sobo-o+ feianolii\"-' I he .Pflnctpat Chief Commissioler of lncome Tax,-Ap and TS, 1oth Floor, C- Block, l T.Towers, 10-2-3, A.C.Guards, ttvOeia'O}j _sbOtOn Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministrv of Finance noom - wo. aOi, InO Ff oor.- -e-nrirp, Jawaharlal Nehru Stidium, Delhi- 1 1000-j ...RESPONDENTS Petition under Articre 226 of the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to issue a writ, order or direction, more particurarry one in the nature of writ of Mandamus, decraring the Assessment order dated 21t03r2024 passed by the 3rd Respondent u/s 14r rtw section 144 g of the rncome Tax Act for A.y. 2016-17 vide DrN No rrBA/AST/sr14712023-241106310s729(1) and the notice u/s 148 dated 3oro3r2o23 vide DrN No. rrBtuAST/s/14a_1r2022- 2311051697713(1), issued by the JAo (1'r Respondent) instead of FAo (3.d Respondent) as void, ilegar and contrary to the principres of Naturar Justice t 7 IA NO: oF 2024 1 Petrtion under section 151 cpc praying that rn the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay all further proceedings pursuant to the Assessment order dated 21/03/2024 passed by the 3'd Respondent u/s 147 rtw section 144 B of the rncome Tax Act for A.Y 2016-17 vide DtN No |TBA/AST/S /147/2023_24/1063i05729(1) Counsel for the petitioner: SRI. PAR|KSHITH KUTUR Counsel forthe Respondents: Ms. B. SAPNA REDDY, JT SC FoR tNcoME TAx DEPARTMENT W.P.No:25316 0F 2024 Between: AND 't 2 3 Innani Ritesh Kumar. S/o. Ram. Nivas lnani Aged about 32 years, Occ. Eusrness, Rto 21_4_3ss, cnarmanai 'Fit;i,;;; fiyil,;rd_ b00064 ...PETITIONER *::ufr .\",rilfffi U+tlifry\"ifrlt#-,\"\".. \" T^ :::, :: Assessment Unit. Nationat . Facetess ,A.;;;;;\";i\"Antre, tncome Tax ,\",\"#j[,IE?,* \"1,\"1,8,,7o,.?,{,'dlfi ffi, ;|i\"fl \" iG:' 6 i ino F I o o i - -E -i,,ff ...RESPONDENTS Petition under Articte 226 of the Constitution of lndia prayinq that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ order or direction, more particurarry one in the nature of writ of Mandamus' declaring the Assessment order dated 1g.05.2023 passed by the 3rd respondentuts 147 r/w section 1448 of the rncome TaxAct for A.y.2014_ 15 vide DrN No.rrBtuAST/s r/147t2023-24r1052995508(1) and the notice u/s 148 dated 27 .07 .2022 , issued by the JAO (1s, Respondent) instead of FAO (3d Respondent) as void, illegal and contrary to the principles of Natural JLlshce {, . -? IANO:1OF2 024 Petition under section 15 r cpc prayrng that in the circumstances stated rn the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings pursuant to the Assessment order dated 19.05.2023 passed by the 3rd respondent u/s 141 rtw section 14413 of the lncome Tax Act f ot A.Y 2014-15 vide DtN No tTBtuAST/S tt147 t2023_ Z4tlOS2ggSSOB(1) Counsel for the Petitioner: SRl. PARIKSHITH KUTUR Gounsel for the Respondents: Ms. B. SAPNA REDDY, Jr SC FOR INCOME TAX DEPARTMENT The Court made the following: COMMON ORDER (. $ THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRJ JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.253OA AND 25316 OF 2024 COMMON ORDER (per Hon'ble SP,J) Sri K. Parikshith, learned counsel, appears for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Starding Counsei for Income Tax Department, appears for the respondents 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Finance Act, 2021, re- assessment process stood modified but the respondetrts have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. 4 During the course of hearing, Iearned counsel for the parties agreed that curtains on this issue are final1y drawn by this Court in a batch of writ petitions, W.P.No.259O3 of 2022 4, and other connected matters, decided by common order dated 2 14.Og.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated l4'O9 '2023 ' 5. This Court in the said order dated l4'O9'2O23 in W.P.No.259O3 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-Department 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 Acl, 202'1, 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 Aganral' 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 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 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 obiection raised by the petitioner is susta'ned and all these writ petitions stands allowed on this very 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 raised by the petitioner which stands reserved to be raised and contended in an apPropriate proceedings' 38. Since the l-l,on'ble Supreme Court had, in the case of Ashish Agalwal, supta, as a one'time measure exercising the powers under Article 142 of the Constitution of ln&a, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conf€rred on the 3 Revenue wourd remain'*\"ff : j: r:.,\"\" :1 J:T:l J\":?;'Jll; from the stage of the order of Agarwal, suPra' 39. No order as to costs \" w 6. ln vieu' of the consenslls arrived' the impugned Show cause notices ancr consequentiar orders passed in this batch of writ petitions are set aside' Liberty is reserved to both the parties to take respective stand and to proceed in accordanct: with law as per paragraph No'38 of the order dated 14'09 '2023 in W.P.No.25903 of 2022' 7. The Writ Petitions are allowed' No costs lnterlocutory applications' if any pending' shall also stand closed' ASsSPlhlloRt%'rytk ,,TR,E coPY\" secrro3/orrrcea To, u.aarab2d. Aaykar Bhawan, oPP' LB iBrffi trffi .3-$,6r1\";qtr_:,*:ffi *ru;; ;'nfltll{ t:{ii.f, ffii-i!'fi&\":\"f'\" t33uPL* NcoME rAx t BE\"o'nXiui.lrtoPucl 6. Two CD Coples BM LS 1l -----7i I I HIGH COURT DATED:1810912024 COMMON ORDER WP.No's.25308 AND 25316 ot 2024 ALLOWING BOTH THE WRITPETITIONS WITHOUT COSTS ttw i I c['l 2Ui{ :I i-. ri ',-..i:.. _ -.i:i' - - - -:--r _- :-: ;\" - -: ./ \"/ i7' 1. .'do[ a () #, "