Kvori Oremin Limited V. Union of India, Ministry of Finance and Income Tax Officer, Circle-2(1) Hyderabad and The Principal Commissioner of Income Tax - II, Hyderabad and The National Faceless Assessment Centre, Income Tax Department

WP/22572/2024

AI Insights

The case involves Kvori Oremin Limited, which challenged the notices and subsequent orders issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, for the assessment year 2014-15. The petitioner argued that the reassessment process was not in compliance with the modified procedures set forth by the Finance Act, 2021. The respondents included various officials from the Ministry of Finance and the Income Tax Department. The court referenced a common order from a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar issues regarding the procedural compliance of reassessment notices under the amended law.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 807406 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 20-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarpal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; J SUNITHA
• Assessee Lawyers: P SOMASHEKAR REDDY
• Keywords: Finance Act 2021; Natural Justice; Notice under section 148; Reassessment Process; Writ of Mandamus; Articles 14, 11, 265
• Section: 148; 265

Judgement Text

"I [3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTIETH 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:22572OF 2024 Between: AND 1 Kvori Oremin Limited, Office at. Flat No. 101, GRC Residency, Lgt.t11! Eiiiau\",-pnjse-tt, Madhapur, Hitech City Hyderabad' Telangana, 500081 Rep. By its Managing Director, [,4r. l, lshoo Narang ..,PETITIONER Union of lndia, l;1inistry of Finance Rep. by its Secretary, 166-B North Block' New Delhi - 1 10 001. lncome Tax Officer, Circle-2(1) Hyderabad Signature Towers, Kondapur, Opp eotanicat gardens, Serilingampally R.R. District, Hyderabad, 500084' 3' The Principal Commissioner of lncome Tax - ll, Hyderlhall Signature Towers, - K;;da;u;,\"Opp. eotanlcat gardens, Serilingampaly R.R. District, Hyderabad' 500084. 4. The National Faceless Assessment centre, lncome Tax Depa(ment Ministry of Finance Govt. of lndia, New Delhi. ...RESPONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to i. lssue a writ, order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No'2 in issuing the Notice under section 148 of the lncome Tax Act, 196'l dated 311O7 t2022 as illegal, arbitrary, bad in law, void ab initio, violative of the principles of natural .iustice and being violative of Articles 14,1 I and 265 of the constitution of lndia and consequently, ii. Set aside the Notice issued by the RespondentNo.2underSectionl4BofthelncomeTaxAct,l96ldated 2 311o712022 calling for the return of income of the petitioner for Ay 2o14-1s and consequent proceedings as lacking in jurisdiction. Counsel for the Petitioner: SRI P. SOMA SHEKAR REDDy Counsel forthe Respondent No.1: SRt B. MUKHERJEE, REpRESENTING FOR SRI cADl PRAVEEN KUMAR Dy. SOLTCTToR GEN. OF tNDtA Counsel for the Respondent Nos.2 to 4: MS. J. SUNITHA, SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER ,I --7 ( THD HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJEST{WAR RAO WRIT PETITION No.22572 OF 2o24 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri P. Soma Shekar Reddy, learned counsel for the petitioner(s), Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor Genera,l of India, for respondent No.1 and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for respondent Nos.2 to 4. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2O21, 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 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 / 2 dated 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order d,ated 14.O9.2O23. 4. This Court in the said order dated 14.O9.2023 in W.P.No.259O3 of 2022, held as under: '35. Ia view of the aforeseid discussions, it is by now very clear that the procedur.e to be followed by the respondent- DepartmeEt upon treatilrg thc notices issued for reassessment beirg uEder Section l4gA, the subsequ€lt proceedings was aardatorily required to be uldertaketr under the substituted provisions es laid down uEder the FiEaace Act,2O2l. In the abseuce of which, we are coastrailed to hold that the Procedure adopted by the respondent_Departtnent is in cont avertioD to the statute i.e. thc Firance Act, 2021, at the fll6t iasttnce. Secoadly, lt is also id direct coatravention to the di.ectives issued by the Hon,ble SupreDe Court in the case ofAshish Agarpal, supfa. 36. For all the aforesaid reasotrs, the iorpugaed Dotices issued and the proceediags drawa by the respondeBt-DepartmeEt is neither tenable, not austaitrable. The aotices so issued and the procedure adopted being per se iuegal, deserves to be and are accoidingly set aside/quashed. As a coasequence, all the impugned orders gettiag quashed, th€ coasequential orders passed by the respondent Departtneat purauant to thc notices issued under Sectlo! l4Z and l.lg would also get quashed atld it is order€d accordfurgly. The teasoa we are quaahing the coaaequential order is on the priEciples that when the ilittatio! of the ptoceediags itsetf was procedu.ally w.oEg, the aubsequent orders also gets aullified autotlatically. 37. The preliEiaary objectioa raised by the petitioner is sustained and aII these erit petitioas staDds allowed on this very jurisdictioaal isaue. Sioce the funpugaed notices atld oiders are getting quashed otr the point ofjurisdiction, we are rot incliled to proceed furthe. and decide the other issues raised by the petitioner which stands reserved to be raised arrd contettded in an appropdate proceediags- 38. Since the tlon'ble SupreEe court had, in the case of Ashish Agangal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of India, 3 l permitted the Reveaue to proceed under the substituted ptovisioas, aad this Court allowirg the petitioas oaly olt the procedu.al flas, the right colrferred on the Revenue would reErain reserved to proceed further if they so wart froE the stage of the order of the Supteme Court il the case of Ashish Agarrral, supra. 39. Ito 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 in W.P.No.259O3,of 2022. 6. The Writ Petition is a-llowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/. T. JAYASREE ASSISTANT REGIS R //TRUE COPY// To, SECTION OFFICER fhg Secretqry, Union of lndia, Ministry of Finance .166-8 North Block, New Delhi - 1 10 001 . lncome Tax Officer, Circle-2(1) Hyderabad Signature Towers, Kondapur, Opp. Botanical gardens, Serilingampally R.R. Distriat, Hyderabad, 500094. The Principal Commissioner of lncome Tax - ll, Hyderabad Signature Towers, [9I9gprr, Opp. Botanicat gardens, Serilingampa[y R.R. District, Hyderabad,' 500084 The National Faceless Assessment Centre, lncome Tax Department Ministry of Finance Govt. of lndia, New Delhi. One CC to Sri P. Soma Shekar Reddy, Advocate [OpUC] Qn\" QQ to 4s J. Sunitha, SC for tncohe Tax Depdrtmentiopucl One CC to Sri Gadi Praveen Kumar Dy. Solicitor Gen. of tnOia 1OeUC1 Two CD Copies 1. 2. 3. 4 5 o 7 o TJ GJP- o / / I HIGH COURT DATED:2010812024 ORDER WP.No.22572 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS .1..Q<4.. 1[ 0gTm o ( z o -) a Ert .s C o lr r4 S E H 1 3 o a -l W ll lt tl t "