Kasukurthi Rajesh V. National Faceless Assessment Center, Income Tax Department, New Delhi, India and Deputy Commissioner of Income Tax Officer, Circle 2(1), Hyderabad and The Assessment Unit, Income Tax Department, Ministry of Finance, Government of India, New Delhi

WP/24751/2024

AI Insights

The case involves Kasukurthi Rajesh, the petitioner, challenging the validity of a reassessment order and related notices issued by the Income Tax Department. The petitioner argued that the reassessment process did not adhere to the modified procedures required by the Finance Act, 2021, leading to the issuance of notices under Section 148 of the Income Tax Act, 1961, which were claimed to be illegal and without jurisdiction. The respondents included the National Faceless Assessment Center and other income tax authorities. The court referenced a previous common order in W.P.No.25903 of 2022, which had addressed similar procedural issues, leading to the decision to quash the notices and orders in this case as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 688143 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 09-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Section 148A(d) of the Income Tax Act, 1961, Section 148 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; B SAPNA REDDY; B MUKHERJEE
• Assessee Lawyers: M NAGA DEEPAK
• Keywords: Arbitrary; Finance Act 2021; Illegal; Income Tax; Reassessment order; Without jurisdiction; Writ of Mandamus; Violate of Article 14
• Section: 147; 148; 148A(d)

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) IVONDAY, THE NINTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTIGE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 24751 OF 2024 Between: AND 1. Kasukurthi Rajesh, S/o. K. Jagan lt4ohan Rao, Aged about 37 Years, PJo H No.i-r-S7lz,'P and T Co-lony, Street No.i, Habsiguda, Hyderabad, Telangana. ...PETITIONER The National Faceless Assessment Center, lncometax Department, New Delhi, lndia. Deputy Commissioner of lncome Tax Officer, Circle 2(1), Hyderabad' The Assessment Unit, lncome Tax Department Ministry of Finance, Government of lndia, New Delhi. ...RESPONDENTS 2 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 pleaSed tO ISSUe a writ, order or direction, more particularly in the nature of writ of mandamus declaring order dated 07 to4l2o22 under section 148A(d) bearing DIN and Notice No. ITBAiAST/Fi1 48A12022-231 1042634047 (1), the consequent notice dated 07lo4l2o22 u/s. 148 bearing ITBA/AST/S/148-112022- 23t1042646911(1) and the reassessment order dated 1110312024 bearing ITBA/AST/S/14 7 t2023-2411062413984(1), as being void, illegal, arbitrary, without jurisdiction, violate of Article 14 of the constitution of lndia and consequently set L aside the same 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 including collection of tax pursuant to reassessment o rd er d ated 1 1 I 03 I 202 4 bea ri n g I TBA/AST I S I 1 47 I 2023-2 4 I 1 062 41 398 4(1 ). Counsel for the Petitioner: SRI M.NAGA DEEPAK Counsel for the Respondent No.1 & 2: M/s. J.SUNITHA / M/s. B.SAPNA REDDY, Jr. SC FOR INCOME TAX Counsel for the Respondent No.3: SRI B.MUKHERJEE, REP. FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA The Court made the following: ORDER ti r THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAI,ESHWAR RAO WRIT PETITION No.24 751 OF 2024 ORDER: (per Hon'ble Justice SujoA Paul) Heard Sri M.Naga Deepak, learned counsel for the petitioner(s), Ms' J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for respondent Nos' 1 and 2 and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, Iearned DePuty Solicitor General of India' for respondent No.3. 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, 1961 cannot sustain judicial scrutiny. Since notice is bad in law' the consequential orders are also bad in iaw' 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'25903 of 2022 and other connected matters, decided by common order I 2 dated 14.09.2023. The parties agreed that this matter maJ/ 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.25903 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now very clear that the procedure to be fouowed by the respondent- Department upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undcrtaken under the substituted provisions as laid down under the Finance Act, 2O2 . ln tlr.e absence of which, we are coastrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute l.e. the Finerce Act,2O2l, ^i the first instance. secondly, it is also in direct contravention to the dir€ctives issued by the Hon,ble Supreme Court in the case of Ashish Agarwal, supra. 36. For aU the aforesaid reasons, the impugned notices issued and the proceeditrgs drawn by the respondent-Departrrent is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illcgal, deserves to be and are accordingly set aslde/qua6hed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent DepartEent pursuant to the notices issued under Section 147 and 148 would elso 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 procecdings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. The preliminary objecfion raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which steflds reserwed to be raised a[d contended in an appropriate proceedings. 3E. Since the Hon,ble Supreme Court had, in the case of Ashish Agarwal, suptat as a one-time measure exercising the powers under Article I42 of the Constitutton of India, i r ) 3 pcrmitted the Revenue to Proceed under the substituted ptoviaions' and this Court auowinE the PGtitions oDty on the procedurel flas, the right conferted on the Revenue would retuain reserved to Proceed further if they so waDt from the stage of the order of the SupreEe Court ia the case of Ashlsh Agarwal, supra' 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 accordalce with law as per paragraph No'38 of the order dated 14 O9'2O23 in W.P.No.25903 of 2022. 6. The Writ Petition is aliowed. No costs. Interlocutory applications, if any p , shall a-lso stand closed. ending S //TRUE COPY// D/- N. CHANDRA SEKHAR RAO ASSISTA REGISTRAR SECTION OFFICER 1. The National Faceless Assessment Center' lncome-tax Department' New Delhi, lndia. 2. The Deputy Commissioner of lncome Tax Officer' Circle 2(1)' Hyderabad' l The Assessment Unit, lncome Tax Department Ministry of Finance' - Government of lndia, New Delhi' 4. One CC to SRI M.NAGA DEEPAK, Advocate [OPUC] 5. One CC to lr//s J SUNITHA, Jr' SC FOR INCOIVE TAX IOPUC] 6. ONC CC tO M/S. B.SAPNA REDDY, JT. SC FOR INCOI ,4E TAX [OPUC] 7. One CC to SRI GADI PRAVEEN KUIMAR' DEPUTY.SOLICITOR GENERIAL ' 5'ijr'iolnln-iiii cowt toiihltlii,ibt i\"Lahs'n\" at Hvderabad IoPUC] To, 8. BSR GJP Two CD CoPies t HIGH COURT DATED: 0910912024 ORDER WP.No.24751 o12024 ALLOWING THE WRIT PETITION, WITHOUT COSTS c HE..jr4 o f. c U 2 7 iicll 202t ,+ ,/ I t1 o-- 1,L) r- "