M/s. CRESCENT EPC PROJECTS AND TECHNICALSERVICES LIMITED. V. The Deputy Commissioner of Income Tax

WP/12233/2023

AI Insights

The case involves M/s. Crescent EPC Projects and Technical Services Limited, represented by its director, challenging the legality and validity of an order and a consequential notice issued by the Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad, under Sections 148 and 148A(d) of the Income Tax Act, 1951, for the assessment year 2016-2017. The petitioner argued that the notices were void, illegal, arbitrary, and violative of Article 14 of the Constitution of India, as well as being issued without any authority of law and in violation of the principles of natural justice. The court found that the objections raised by the petitioner were dealt with in a mechanical manner and that further verification was required, leading to the setting aside of the impugned order and notice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 692101 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 28-04-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Section 148 of the Income Tax Act, 1951, Section 148A(d) of the Income Tax Act, 1951, Section 148A(b) of the Income Tax Act, 1951, Section 148A(a) of the Income Tax Act, 1951
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY
• Assessee Lawyers: NAGA DEEPAK
• Keywords: Arbitrary; Assessment year 2016-2017; Illegal; Impugned notice; Natural Justice; Violative of Article 14; Void; Writ of Mandamus
• Section: 148; 148A(b); 148A(d); 148A(a)

Judgement Text

"[ 3311 ] Between: HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY EIGHTH DAY OF APRIL TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 12233 OF 2023 AND M/s. Crescent Epc Projects And Technical Services Limited., Having its office at156-159, Paigah House, Sardar Patel Road, Paradise, Secundrabad - 500003, represented by its Director Sri Krishnam Raju Penmetsa, S/o. Satyanarayana Raju Penmetsa, aged about 84 Years, Rl/o. Hyderabad. ...PETITIONER 1. The Deputy Commissioner of lncome Tax, Circle 1(1), Hyderabad. 2. The National Faceless Assessment Center, lncome-tax Department, New Delhi, lndia. ..,RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewlth, the High Court may be pleased to issue a writ, order or direction more particularly in the nature of a writ of mandamus declaring the lmpugned Notice under Section 148 of the Act in DIN and Notice No. ITBA/AST/51148 112023-2411051988871 (1)dated 1O-O4-2O23 aN the Order passed under section '148A(d) of the Act bearing DIN and Notice No.ITBA/AST/F1148N2O23-24i1051988738(1 ), dated 10-04- 2023issued by the Respondent No. 1 for Assessment Yeat 2016-2017 in PAN. AAACU9200F as being void, illegal, arbitrary, violative of Article 14 of the Constitution of lndia, without any authority of law and violative of principles of natural justice. ! lA NO: 1 oF 2023 Petition unde. Section 15i CpC praying that in rhe circLmstances stated in the affidavit fired in ;upport of the petition, the High court m,y be preased to stay the operation of the otice under Section 14g of the Acr in Drhr ;rnd Notice No. DrN and Notice No I-B tASTtS/1481t2023_24t1OS1gBBBt1 (1)d;rt<,d _ O_04-2O23 and the order passed rnder section 14gA(d) of the Act bearin(r DrN and Notice No IrBA/AST/Fr148t J2o23-24l1051988738(1), dated 1o-o4-.zoz3 issued by the Respondent No. 1 fo.Assessment year 2016_2017 in pAN. A/ ACU92OOF Counsel for the peti ioner: SRI NAGA DEEPAK Counsel for the Res rondents: M/s. B.SApNA CEOOV The Court made the bllowing: ORDER I I I I I I I t a ! L E H F I B AND I N I W.P.No.12233 of 2023 ORDER' @cr ttte Hon'bb tte CbieJJztice ulla/ Blzl,an) Fleard ]vlr. Naga Deepalq leamed counsel for rhe petitioner and lvIs. B.Sapna Reddy, learned counsel for the respondents. 2. By fifu this petition under Article 226 of the C-onstitution of India, petitioner has assailed legaliry and validiry of the order dared 10.04.2023 passed by respondent No.1 under Section 148A(d) of rhe Income Tax Act, l95l (briefly ,the Act, hereinafter) for the assessmenr year 2016-201/ as well as rhe consequenrial notice dared 10.04.2023 issued by respondent No.1 under Section 148 of the Act for the said assessmenr )ear. 3. Petfuioner before us is an assessee under the Act. It is a company registered under the Companies Act, 1956 engaged in the business of civil consrrucrion. 4. Notice dated 25.03.2023 was issued by respondent No.l to the pedtioner under Section 148A(b) of rhe Act stating that he had information s uggesting rhar income of the petirioner chargeable to tax 2 for rhe assessnt( nt )ear 2Arc-2017 has escaped assc'sslft'nt within the meaning ot :Se :tion 147 of the Act, the derails ,rf which were mentioned 1fl. :he annexure appended to tlie aforesaid notice. Petitioner wa:, t alled upon to show cause as to why a notice under Section 148 ol tl,e Act should not be issued. 5. It appean thar petitioner had submitted a detaief the Act' 7. (hi[' p,;rs;ing the irr.rpugned order dated 1C.04.202: , we find that responde rt No.l did not even record the substarLc<: oltthe reply submitted bytht petitioner, though he noted that pertit:oner submrtted repli' on C1.04.. Cll which was held to be not accr:ptable ior the tollo\"ring rcas()n i: 3 fr9 ,.ply filed by rhe assessee company has duly been corsidered and found not acceptable for the following reasons: 1 The assessee company objection on rhe ground of time limitation of notice issued mainly raised on old picedure u,/s.l4g which is not relevant now. However, as per \"-errd-\".rt provisions of Section 148A\" procedure as lrid down u/s.la8A(a) & l48A(b) of IT.Act has-been duly followed with prior approval of sp.iifled authoriry taken within time limits and in a prcscribed manner. Hence, this ground of objection is rejecrcd. - 2. Funher, objection raised on the issue of escapement of income, the_ assessee compa[y in its submission failed to explain the reasons with any documentarF evidence as to why there -is no difference berween purchase price and selling price even though there is a time gap of four pan. 8. Thereafter, respondenr No.1 observed that submission of the assessee would require funher verification. 9. If that be so, no conclusion could have been reached by respondent No.1 that present is a fit case for issuance ol notice under Section 148 of the Act for the assessmenr year 2016-17 since respondent No.1 himself was of the view that funher consideration would be required to tal{e a view one wayor rhe orher as ro issuance of notice under Section 148 of the Act. 10. That apart, we find that objection raised by the petitioner was dealt with byrespohdent No.1 in a verymechanical manner. t ! 4 11. That bcirLg the position, ^/e set aside tht' irrupned order dated 10.04.2,12 ) passed by respondent No.1 and ::enrand the matter back to the file .f respondent No.1 to pass a fresh onl:r in :tccordance wirh law aftcr giving an opponunity of personal ht'aring to the Petltloner. 12. Sincc have set aside the imp,ullned order VC' dated 10.04.2C)2- , consequential notice dated 10.04.20113 wouid be of no legal corlse(:lu rnce . 13. 1We rnal.e rt clcar that we have not expresse,J e.n'r o pinion on merit and all c,>n e ntions arc kcpt open. 14. {iit PetLtr,,n is accordingly allowed. No costs. As a se qr cl, misceilancous petitions, petrding i]: a ny, stand closed SD/- N. (:HANDRA SE ASSISiTAN'T REGIS //TRUE COPY// SHCTION FICER AR R To 1. The Deputy tlo nrnissioner of lncome Tax, Circle 1( 1), Hy