Kodali Shanthi V. Union of India and Principal Chief Commissioner of Income Tax, Telangana and Office of the Income Tax officer Ward 1, Suryapet, Telangana and Assessment Unit, The National Faceless Assessment Centre

WP/22067/2024

AI Insights

The case involves Kodali Shanthi, the petitioner, challenging the legality of an assessment order and subsequent demand for tax issued by the Income Tax Department. The petitioner argued that the reassessment process followed by the respondents did not adhere to the modified procedures established by the Finance Act, 2021. The High Court examined the procedural compliance of the reassessment notices and orders with the statutory requirements and relevant Supreme Court directives. The court found that the procedures adopted by the respondents were in contravention of the law, leading to the quashing of the notices and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803972 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 19-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal case
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; SAPNA REDDY
• Assessee Lawyers: M KUMAR
• Keywords: Assessment Order; Finance Act 2021; Income Tax; Procedural Law; Re-assessment; Writ of Mandamus
• Section: 147; 148; 144; 149; 156; 226

Judgement Text

"[ 3411 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE NINETEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 22067 OF 2024 Between: AND 1 Kodali Shanthi, D/o. Katragadda Jayanth Kumar, aged about 40 years, Occupation: Private Employee, R/o. SPNR Homes, Road No.22, Neknahpur, Puppalaguda, Ranga Reddy- 5C0089. TelanEana. ...PETITIONER The Union of lndia, Rep by its Secreiary tc the Governrnent Department of Revenue Ministry of finance lncome tax department, New Delhi l lO 001 The Principal Chief Commissioner of lncome Tax, Telangana lT towers AC guards Masab tank Hyderabad 500 028 3. Office of the lncome Tax officer Ward 1, Suryapet, Telangana. 4. Assessment Unit, The National Faceless Assessment Centre lncome tax Department, Ministry of finance Room No 401, 2ndfloor, E-Ramp Jawaharlal Nehru stadium Delhi 110 003 ...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 pleased to issue an order or direction more particularly one in the nature of writ of II/ANDAMUS By declaring that the impugned Assessment Order dated 1510312024 with DIN and Order No. ITBA/ASTtS/147t2023-24l1062665466(1) for the AY.20l6-1 7 passed by the Respondent No 4 uls 147 RWS 144 of the lncome Tax Act as illegal, arbitrary, violative of Art.14, 21 and 300-4 of the Constitution of lndia and violative of provisions of sec 1484 and 1 49 of the Act and also contrary to the circular issued by CBDT Notification No 1Bl2O22 dated 29t312O22 under E-Assessment of lncome Escaping Assessment Scheme 2O22 and Consequentially to set aside the Assessment Order dated iSlO3l2OZ4 with DIN and Order No. ITBA/ASTlsl14712023-2411062665466(/) for the Ay.2016-17, (1) uls 147 RWS 144 of the lncome Tax Act and all proceedings pursuant thereto 2 r including Notice of demand u/s 156 of the Act dated 15103120:14 demanding to pay tax of Rs. 51 ,67,6781- lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circurmstances stated in the affidavit filed in support of the petition, the High Court may be pleased to STAY all further proceedings including recovery pursuant to the Assessment order dated 15103t2024 with DtN and order No. ITBA/AISTtst14712023 - 2411062665466(1)for the AY.2016 - '1 7 passed by the Respondenr No 4 uls 147 RWS 144 RWS 144 B of the lncome Tax Act and notice of dema nd u/s .1 56 of the Act dated 15-03-2024 demanding payment of tax of Rs: S1,62,6781 within 30 days. Counsel for the Petitioner: SRI M. ANAND KUMAR Counsel for the Respondent No.1 & 4: SRI B. MUKHERJEE REP. FOR SRI GADI PRAVEEN KUMAR, Dy. SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.2 & 3: Ms. SAPNA REDDY, JR SC FOR INCOME TAX The Court made the following: ORDER / THE HOITOURABI,E SRI JUSTICE SUJOY PAUL AND THD HOITOURAALE SRI JUSTICE NA.TIAVARAPU RAJESHWAR RAO qIRIT PETITION No. 2067 0F 2024 ORDER: (per Hon'ble Justice Supg paul) Heard Sri M.Anand Kumar, learned counsel lor the petitioner, Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of lndia appearing for respondent Nos.l and 4 ald Ms.Sapna Rcddy, learned Junior Standing Counsel lor lncome Tax Department appearing for respondent Nos.2 and 3. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Financc Act. 2O2 1, 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 la'itr, the conscque ntial orders are also bad in law. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are lrnally drarn,n by this Court in a batch of writ petitions, W.P.No.259O3 of 2022 -and other connected matters, decided by common order 2 w@ '':* .' dated 14.09.2C.23. The parlies agreed that this matter maJ bc disposed of in rr.rnts of thc Common Order dated 14.O9.2023. 4. This (t,rurt in tl-re said order dated 14.O9.?.O23 in W.P.No.2590.7 ot'2022, held as under: '35. ln vies/ of the aforesaid dlscusslols, lt is by norr vcry clear that the proccduae to be fouoEed by the respondeDt_ Department upon treatiot the notices issued for reassessment being under Sectton l4gA, thG cubsequert proceedirgs was mandatorily required to be utrdertaken under the substituted provisions as laid dblco u[det the FiEarrce Act, 2021. Itr t]e absence of which, we are consttained to hotd that tlre procedure adopted by the reslroEdeEt-DeparttaeEt is itr coEtravcntion to the statute i.e. the FiEaEce Act,2O2l, at the first instaqce. Seco[dly, it ls also io dircct coatraventioD to the directives issued by tle Hon,ble SupreEe Court in the case of Ashish Agarwal, supra. 36. For att thc aforesaid reasoDs, the iEputlcd aotices issued aad the proceedhgs drasn by the respoadeat-DepartheDt is oeither tenable, nor sustai[able: ThG aotices so issued and the procedure adopted beiag pet se illegal, deserees to be alld are accordingly set aside/quashed. As a coEsequeEce, rU the impugEed orders getting quashcd, the corseque[tlal oaderc passed by the respondeot DepartEeDt pursua-Et to the noticcs issued under Section 142 aEd l4g would atso get quashed and it is ordered accordingly, Thc reaso! we ere quashlug the consequeatial order is on the priactples fiat when the initiation of the proceedings itself t as. procedumlly Eront, the subsequcnt orders also gets aullified autoEatically, 37. The pretiminar.y objectioa raised by the petitioner is sustai[ed and all these Erit petitio[s stands altoped oD this very jurisdictioEal issue. Silce the i.Epug[ed ootices and orders arc getting quashed on the poiut ofjurisdicfior, Ee are aot rncliDed to proceed further end decide the other issues raised by the petitiotrer rEhich stands reserwed to be ralsed atrd coDtcndcd iE aI| appropdate proceedings. 38. Since the Hoo'ble SupteEe Court had, iD the case of Ashish Aearwal, suprar as a oEe-tiEe Eeasure exercising the Powers under Article 142 of the CoEstituuoE of India, I 3 permitted the Reve[ue to Proceed uodet the substituted provisioEs, atrd this Court auowiat the PetrtioEs only on the procedural ftaw, the right corferred oa tte ReveDue would reEairl resereed to proceed further if they so want from the state of the order of t[e suPrerDe Couit i[ the case of Ashish AgErsal' 6uPra. 39. t(o ordel as to costs.\" 9. In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this n'rit petition are set aside. Liberty is reseryed 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 O9'2O23 in W.P.No.259O3 of 2022- 6. The writ petition is allowed' No costs lnterlocutory applications, if any pending, shall also stand closed SD/.N.CHANDRA SEKH ASSISTANT REGI //TRUE COPY// SECTION OFFICER RAO RAR to'',. ,n\" Secretary to the Government Department of Revenue Ministry of finance lncome tax departmei-tl inJ union of.lndia' New Delhi 1 10 00 1 ? rhp Princioal Chiet #;;;;.-;;;; oi rncofr\" Tax' Telangana lT towers AC - orrtOt fr,ti.ab tank Hyderabad 500 028 - 3 6?i; ;ii;tnc-ome t'ai otticer Ward 1' Suryapet' Telansana' ; X;;;\".;;;;,i unlt, rn.-Giioiii racetes! A.si;gssment centre lncome tax Deoartment, Vini.t.v\"oiii,iJni, n\".n.' rl\" +bi, 2ndfloor' E-Ramp Jawaharlal Nehru stadium Delhi 110 003 s fi;'cc 6 5nr nr. nrlnr'tokuMRR'ldv-ocate^foPUCl 6 5;; 6c i; M\". snpr'rX'nEooV' {l,.99lor lNCbt ilE rAX toPUCl 7 one cc to sRl cnciiFnn-r7e?ru iiuvnn' Dv sollclroR GENERAL oF INDIA [oPUC] 8. TYo CD CoPies ,--BN KKS , - N -7 HIGH COURT DATE D:1 91082024 ORDER WP.No.22067 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS / ,.---t:= - '.. r i,-15 S r-:.'(: : 0 ti iiiv 2u{ i..)' 1\", ir i. ). . ,',1rclrt o "