Karunakar Reddy Kunta V. The Assistant Commissioner of Income Tax

WP/24816/2024

AI Insights

The case involves Karunakar Reddy Kunta, the petitioner, challenging the legality of the income tax assessment orders issued by the Assistant Commissioner of Income Tax, Circle 9(1), Hyderabad, along with the Central Board of Direct Taxes and the Principal Chief Commissioner of Income Tax, Andhra Pradesh and Telangana, as respondents. The petitioner argued that the reassessment process followed by the respondents did not comply with the modified procedures set forth by the Finance Act, 2021, particularly concerning notices issued under Sections 147 and 148 of the Income Tax Act, 1961. The court's decision was influenced by a precedent set in a previous batch of writ petitions, where it was held that the procedure for reassessment must strictly adhere to the substituted provisions under the Finance Act, 2021.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 765676 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Article 226 of the Constitution of India, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY; DOMINIC FERNANDES
• Assessee Lawyers: SRINIVAS GANGISHETTI
• Keywords: Assessment Order; Income Tax; Procedural Law; Re-assessment; Writ of Mandamus
• Section: 147; 148; 149; 151; 148A

Judgement Text

"I 3411 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT . THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITIO N NO: 24816 OF 2024 Between: Karunakar Reddy Kunta, S/o. Sanga Seldy^. Kunta .Age^ 5,5 y-e?,[s' Occ: Business, Villa t to- 95, Prestige Park R/o Gundla Pochampally' Kompally, K.V.Rangareddy, Telangana - 500 100. ,..PETITIONER AND 1 . The Assistant Commissioner of lncome Tax, Circle f - 9(1)' l'T Towers, A.C.Guards, Masab Tank. Hyderabad - 500 004. 2. The Cenkal Board of Direct Taxes, Rep. by its Chairman, Department of Revenue,MinistryofFinance'Governmentoflndia'Secretar.attsUlldlngs' New Delhi - 'l 10 001. 3. The Principal Chief Commissioner of lncome Tax, Andhra Pradesh and Telangana Hyderabad- 500 004 ...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 pbased to issue a Writ. order or orders, direction or more part'rcular{y one in nature of writ of Mandamus declaring that the order passed uls 147 ilw ser. 144 rtw 144(b) of the lncome Tax Act 196'l on 21-02-2024 by the '1\"t respondent with DIN No. ITBA/AST/S/14712023- 2411061253675(1) for the Assessrnent Year 2018- 19 pursuant to the notice dl.2g-03-2022, the order u/s 148A(d) dL.27-O4-2O22 and notice issued u/s 1 48 dt. 27 -04-2022 as illegal, bad in Law, void abinipio, unfair arbitrary, apart from being violatrve of provisions of sec. 148 A and Sec. 149 of the Act and also contrary to the circular issued by the CBDT and provisions of sec. 151 0f the Act and violatron of Article 14 0f the constitution of lndia and / consequently set-a-side the Assessment Order passed by the 1't respondent / daled.21-02-2024 and all consequential proceedings pursuant there to lA NO: 1 OF 2024 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 subsequent to the order passed by the 1'r respondent with DIN No. ITBA/AST/S/'14712023-2411061253675(1) for the Assessment Year 2018- 19, including any recovery pending disposal of the Writ Petttion Counsel for the Petitioner: SRI SRINIVAS GANGISHETTI Counsel for the Respondent Nos.1 and 3: MS. BOKARO SAPNA REDDY (Jr. SC FOR lNcoME TAx) Counsel for the Respondent No.2: SRI DOMINIC FERNANDES, sc FoR cBlc IoPUC] The Court made the following: ORDER THE HOI{OI'RA.BLE SRI JUSTICE SUJOY PAUL AND THE HONOI'RABLE SRI JUSTICE NAMAVARAPU RA\"'ESIIWAR RAO WRIT PETITION No.24a15 OF 2o24 ORDER: (per Hon'ble Justice Sujoy Paul) Heard Sri G. Srinivas, learned counsel for the petitioner(s), Ms. B. Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for respondent Nos. 1 & 3 and Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, for respondent No.2. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, re- assessment process stood modihed but the respondents have not taken care of it ald therefore notice issued under Section 148 of the Income Tax Act, 196 I cannot sustain judicial scrutiny. Since notice is bad in lan', the consequential orders are also bad in law. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.P.No.259O3 of 2022 and other connected matters, decided by common order ) dated 14.O9.2O23. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.09.2023 4. This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: \"35. lo view of the aforesrid dlscusslona, it is by noe very clear that the proccdure to be folloscd by the rcspondeEt- DepartEcnt upoa trertlEg the aotlces lssucd fot rcasseasEent being uoder SectloE l.lEA, thc aubacqucnt proceedlEgs was Eandatorily required to be uBdcrtaleB urder the substituted proeisioEs as l,aid doF! under thc Flnaacc Act,2O2l. lo the absetrce of whlch, wc are coustralned to hold that the procedure adoptcd by thc reapoDdert-DepartEert is in contraventioD to the strtcte l.e. tbe Fiaqace Act, 2O21, et the Iirst instance. Secondly, lt i6 also ia dircct contravention to the directives l$ucd by the Hotr'ble SnpreEe Court in the case of Ashish Agarsel, sEpn. 36. For alt the qforcsald rc.aoa8, the lmpug:ned notices iasued and the proceedingE drasr by thc reepoadeat-Dcpaitment is neither tetrable, Eor sustalE8blc. Thc noticea ao issued and the procedure sdopted betlg per se lllegal, deserves to be aud are accordingly set aslde/qurahed. A8 q co!6equeEce, all the impugoed ordera gettlag qlrashcd, the coEaequcntial ordcrs passed by the respoEdeEt DepcrtEelt purauant to th€ notices issued under sectioE 147 rrd 148 would abo get quashed and it is ordered accordiEgly. Thc rcason wc are quashint the consequential order is oa the prlnclples that when the initiation of the procecdlEgs ltself eas Procedurally wrong, the subseque[t orderE 8Lo gets aullllicd autoEatically. 37. The prelimirary obJcctlon raised by the petitioner is sustained and all these wrlt petitioa6 stends allorPed on this very jurisdictiotral ieeue. Slnce the lEpugEed uotices and ordcrs are getting qua8hed on the point ofJurisdiction, qre are not inclined to proceed further and decide the other issues raised by the petitioDcr shlch Btands reserved to be raised and contended in aE approprlate proceediags- 38. Since the Hon'ble Suprcme Court had, ln the case of Ashish Agarwal, supra, aa E olre-tirne meeBure cxercising (he powers under Article 142 of the Constitution of India, 3 I pcrEitted the Rcvcnue to Proceed under the sub8tituted proviiiona, end thls Court elloEing the PeutioDs only on the procedural llaw, the right coaferred on the ReveEue would reEaia re6ervcd to Procecd frirther if they 60 seEt ftoDr the atage of the order of the SuPteEe Court iE the case of Ashiah Agarral, sugra. 39. No order as to costs.\" 5. In -view 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 stand and to proceed in accordance with law as per paragraph No.38 of the order dated 14'O9'2023 it W.P.No.25903 of 2022. 6. The Writ Petition is allowed. No costs lnterlocutory applications, if any pending' shall also stand closed' SD/- K. AMMAJI ASSISTANT EGISTRAR //TRUE COPY'/ SECTION OFFICER To, The Assistant Commissioner of lncome Tax' C^ircle f - 9(1)' l T Towers' n C.6u\"'idi, tlasab Tank, Hvderabad - 500 0-04 ?nz dt \"iffi',i,-ine Gntiii'e-;id oioi,\"\"t Taxes. Deoartment of Revenue' Ministry of Finance, co*ri#\"ni'6dno\"irlsb.i\"iiriat Buiuings, l.lew Delhi - 110 001. The Principal Chief Commissioner of lncome Tax' Andhra Pradesh and telanoand HYderabad- 500 004' o\"n3 ic' 6' dri S-rin ivi\" Ga ngishetti, Advoca-te [o P u c I one cc to Ms. Bokaro d;#iilii iii-sc-i91q\"gme rax) toPucl . il; dc ii sii oominc r\",handes, Sc ror cBlcloPucl . Two CD CoPies 1/ 1 2 4 q b 7 TJ GJP J !l t HIGH COURT DATED: 1 0 l0gl2024 ORDER WP.No.24816 ot 2024 ALLOWING THE WRIT PETITION WITHOUT GOSTS l tlC Sl{/ ( ( (t o 1 i or[ 212+ ( t.t Dlc ? /,/t tr/L* "