M/s. Sri Balaji Constructions and Smt. Naga Malleswari Sakhamuri V. Assessment Unit, Income Tax Department, National e-Assessment Center, New Delhi and The Income Tax Officer, Ward 1, Sangareddy and The Principal Commissioner Of Income Tax 2 Hyderabad and The Income Tax Officer, Ganesh Temple Main Road, Kothagudem and The Principal Chief Commissioner, Room No 922 9th Floor B Block I T Towers, Hyderabad

WP/11460/2024

AI Insights

The case involves M/s. Sri Balaji Constructions and Smt. Naga Malleswari Sakhamuri, who filed writ petitions against the Income Tax Department challenging the reassessment notices issued for various assessment years. The petitioners argued that the notices were arbitrary, illegal, and violated principles of natural justice and constitutional rights. The court examined the procedural adherence of the Income Tax Department in issuing these notices, particularly in light of the amendments brought by the Finance Act, 2021, and the Supreme Court's ruling in Ashish Agarwal. The court concluded that the Department failed to follow the correct procedure, leading to the quashing of the notices and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 814622 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Income Tax Department
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; B SAPNA REDDY
• Assessee Lawyers: A V A SIVA KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 144; 14; 144B; 148A; 265; 19(1)(g)

Judgement Text

"t II, ll il nlcHlbouRT FoR THE srATE oF TELANGANA il ll AT HYDERABAD X Ht (Speciat original Jurisdiction) l' f, MONDAY, THE TWENTY NINTH DAY OF APRIL $ TWOTHOUSANDANDTWENTYFOUR $,, il ill pREsENr ! til ft trE \"o\"'\",-, sRrJUSrcE suJoy 'AUL il lr AND ,i IHEIHoN'BLE sRt JUSTIcE N. TUKARAMJT ,lr fl WRIT PETITION NOS: 11440. 11445 & 11460 OF 2024 rl , il wp ruo, 'nato or zoit r---------------- [ 3403 ] i Between: i I I i fl eruo $ r. I't, ilis i I rl I { I I ,l Petition under ,t tl circumstances stated M/s. Sri Balaji l,Constructions, 6-79/99 ITW Signode C_olony, Ameenpur, Sangareddy - 5O2 032, Telangana Represented-by its y'artndr,Mr. Gkebdy Ravinder Reddy6S/o. Gireddy Anantha Reddy i:. ...PET|T|ONER Ii iu Assessment Unft, tncome Tax Department, National e-Assessment Center, New Delhi, Room No.- 4O1,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110'003. The lncome Tax Officer, Ward 1, Sangareddy, lncome Tax Office, Veerabhadra ldQar, New Bus Stand Sangarbddy - S02 0O1, Tehngana The Principal Commissioner Of lncome Tax 2 Hyderabad, Signature Towers 9pposite Botanical Gardens Sy No Q P of Kond6pur Sy No 37 p of Kothaguda Serilingampally Mandal Hyderabad Ranga Reddy i' ii. ...RESPONDENTS ii Arlicle 226 of the Constitution of lndia prayang that in the ir !iin the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring the order passed by the 1st Respondent, u/s 147 r/w Sec. i 1448 rlw Sec. 144 of the lncome Tax Act, 1961, dated 2O.O3.2O24, bearing DlN.- I ITBA/AST/S/147t2123!24fi63044102(1), for the Assessment year 2019 - 20, as i arbitrary, illegal, bad in law, void-ab-initio, violative of the principles of naturat i justice apart from being violative of Articles 14, 19(1 Xg) and 265 of the i Constitution of lndialr and Sec. 148A of the lncom€ Tax Act, 1 961 , and ,i consequently set asidd the same in the interests of justice rlr t': T { I : t ! I I I I I I I I i r lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in su'fiport of the petition, the High Court may be pleased to stay I all further proceedingi; including any recovery, pursuant to the notice issued by the 1st Respondent, u/s 147 rtw Sec. 1448 r/w Sec. 144 of the lncome Tax Act, 1961 , dated 20.03.2024, bearing DIN - ITBA/ASTtsl147l2O23- 2411063044702(1), for the Assessment Ydar 2O1g - 20, pending disposal of the above Writ Petition Counsel for the Petitibner: SRI A. V. A. SIVA KARTIKEYA l; Gounsel for Respondbnts: Ms. J. SUNITHA, COUNSEL FOR Ms. SUNDARI R PiSUPATI SENIOR SC FOR INCOME TAX DEPARTMENT WP NO: 112145 OF 2024 Between: M/s. Sri l' Balajii.Constructrons, 6-79/99 ITW Signode Colony, Ameenpur, ted by its Partner, Mr. Gireddy ...PETITIONER Sanqareddy - 5O2 O32. Telangana Represen Ravinder Reddy;,S/o. Gireddy Anantha Reddy AND I 1. Assessment Unit, lncome Tax Department, National e-Assessment Center, New Delhi, Room No.. 4O1 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003 2. The lncome Tax Officer Ward 1, The lncome Tax Officer Ward 1 Sangareddy lncome Tax Office Veerabhadra Nagar New Bus Stand Sangareddy 3. The Principal Commrssioner, Hyderabad Signature Towers Opposite Botanical Gardens Kothaguda Serilingampally Mandal Hydera?1tr\"o*o=\"r. Petition under Article 226 of lhe Constitution of lndia praying that in the i circumstances stated i in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring the order passed by the 1st Respondent' u/s 147 r/w Sec. 144B of the lncome Tax Act, 1961, dated 07.O3.2024, bearing DlN.. ITBA/AST/S/14712O23-24t1O62195245(1), for the Assessment Year 2018 - 19, as arbitrary, illegal, bad in law, void-ab-initio, violative of the principles of natural justice apart from being violatrve of Articles t 4, 1 9(1 )(g) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961 , and consequently set aside the same in the interests of lustice I il ! I I I I I I / lA NO: 1 OF 2024 Petition under the affidavit filed in s t, Section 151 CPC prayiflg that in the circumstances stated in ubport of the petition, the High Court may be pleased to stay lr,. all further proceeding$i including any recovery, pursuant to the notice issued by the 1st Respondent, ti/s 147 1w Sec. 144Ei of the lncome Tax Act, 1961, dated rl 07.03.2324, bearing fiDlN.. ITBtuAST/S/14712023- 2411062195245(1)' for the Il' Assessment Year 2O1b - 19, pending disposal of the above Writ Petition I Counsel for the Petiti6ner: SRI A. V. A. SIVA KARTIKEYA du 'Counsel for Respon nts: Ms. J. SUNITHA, COUNSEL FOR Ms. SUNDARI R PISUPATI SENIOR SC FOR INCOME TAX DEPARTMENT WP NO: 11460 OF 2024 ;: : I ! ! I I lt il 1l :i 'l ,] Between: Smt. Naga Malleswari Sakhamuri, Wio. [4t. S-. Venkateswara Ra^o, aged 55 vears. Oic. House Wife, Rto.6-1-210114, Flat No' 304, 3rd Floor, Subprabhat Aparlments, Gollagudem, New Paloncha - 5O7 115, Telangana. ..'PETITIONER AND i; rl 1. Assessment Unit, lncome Tax Department, National e-Assessment Center, New Delhi, Room No.. 4O1 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. 2. The lncome Tax Officer, Ganesh Temple Main Road, Kothagudem 5. The Principal Chief Commissioner, Room No 922 9th Floor B Block I T Towers 10-2- 3 AC Guards HYderabad iir -..RESPoNDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated i'in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction. declaring that the order passed by {he 1st Respondent, uls 147 r/w sec. 144 rlw Sec. 1 448 of i'th. ln\"o.\" Tax Act, 1961 , dated 22.03.2024, bearing DIN and Notice No.. ITBtuAST tsl14712023-2411063198267(1), for the Assessment Year 2016 - 17 as arbitrary, illegal, barred by limitation, bad in law, void-ab-initio, violative of the princip'les of natural justice, apart from being violative of Articles 1a, 19(r )(g) and 265 of the Constitution of lndia and Sec 148A of the lncome Tax Act, 1961 , and to consequently set aside the same in the interests of justice 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 rnay be pleased to stay ir :ll /4 all further proceedi the '1 st Responden 1961 , dated 22.03 cluding any recovery, pursuant to the order passed by ltj i! IF ngsr tn t, u/s 1 ..2024, Hi 1 24t 1 0631 s8267 ( 1 ), f\"ii 'above Writ Petition; fri Counsel for the Petiti6 47 rlw Sec. 144 rlw Sec. 1448 of the lncome Tax Act, bearing DIN and Notice No.. |TBA/AST/S/141t2O23_ ner: SRI A. V. A. S|VA KART|KEYA nts: Ms. B. SAPNA REDDY, COUNSEL FOR SRI J. V. PRASAD SENIOR SC FOR INCOME TAX DEPARTMENT lowing: COMMON ORDER the Assessment Year 2016 - 17, pending disposal of the Counsel for Respon ti dd l+ {i HI HI The Court made the f8t !t nt lf ffi Hi II I ill il ii !i li ilr Ei tl i I I 1 ,t t t I 1 L j I l I I i I I I i i i I ! I I t I t i t I 1 1 I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THT HONOURABLE SRI JUSTICE N. TUI(ARAMJI WRIT PETITION NOs.1144O. 11445 & 11460 0F 20/24 COMMON ORDER: (per Hon'ble Justie $!og paul) Sri A.V.A. Siva Kartikeya, learned counsel appea-rs for the petitioner(s), Ms. J. Sunitha, learned Junior Standing Counsel representing Ms.Sundari R.pisupati, learned Senior Standing Counsel for the respondents_Income Tax Department in W.P.Nos.l1440 & 1t445 of 2024 and, Ms. B. Sapna Reddy, learned counsel representing Sri J.V. prasad, learned Standing Counsel for the respondents-Income Tax Department in W.P.No.11460 of 2024. 2. Regard being had ro the similarity of the question involved, on the joint request of the parties, the matters are analogously heard ald decided by this common order. 3. It is common ground taken by the leamed counsel for the petitioner(s) that in furtherance of Finance Act, 2021, re_ assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section r4g of the Income Tax Act, 196 I cannot sustain judiciat scrutiny. Since notices are bad in law, the consequential orders are also bad in law. 2 4. 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 dated 14.O9 .2023. The parties agreed that this matter ma.1, be disposed of in terms of the Common Order dated 14.09 .2023 . 5 This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. ln the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashash Agarwal, suPra. 36. For all the aforesaid .easons, the impugned notices issued and the proce€dings drawn by the respondent-Department is neither tenable, nor sustiihable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and 148 would also 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 proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. The preliminary objection raised by the petationer is sustained and all these writ petitions stands allowed on this very iurisdictionat issue. Since the impugned notices and orders are getting quashed on the 1 I i 3 point of iurisdiction, we are not inclined to proc€ed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the. Hon'ble Supreme Court had, in the case of Ashish Agaawal, supra, as a one-time measu.e exercising the powers under Article 142 of the Constitution of lndia, pemitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserued to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" 6 In view of the consensus arrived, the impugled Show Cause notices and consequential orders passed in this batch of writ petitions 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 14.09.2023 in W.P.No.259O3 o{ 2022. 7. The writ petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/.P.CH.NAGABHUSHA BA ASSISTANT REG]S //TRUE COPY' SECTION OFFICER tl $ { $ I I i 'l t t I I To, ii The Assessment Unit, ln\"o*. Tax Department' National e-Assessment C;;i\";, Nil ilrhi ioorn No - 401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, New Delhi - 110 O03. ih;i;;*;irrbm\".r, ward 1, Sangareddv, lncome^Tax Office' vi-;6ti'utiuai, tlrgir, New Bus Stand Sangargddv - s02 001, Telangana itJ F\"-ii.ipJ coilniissioner of tncome Tax 2 Hyderabad, signature_Towers. oooositeBotanicalGardensSyNo6PofKondapurSyNo3TPofKothaguda S6iilinoamoallv Mandal Hvderabad Ranga Red0y ih; i;6;5 ilx officer. Ganesh Temple lvlain Road' Kothagudem . - iil; i;fi;i;;icniei Commissioner, Room No e22 9th Floor B Block I T Towers 10-2- 3 AC Guards HYderabad One CC to Sri ArV A Siva Kartikeya Advocate I-oPUU j 6;; CC io rtri. Sunaari R Pisupaii, Senror S-C fol lncome Tax-[QP!c] 5; Ca i\" Sii Llv iiasao. SC for lncome Tax Department (OPUC) Two CD Copieslii 1. 2. 3. 4. 5. 6. 7. 8. 9. BC M M lll :l .; e { l il I 'i I I I I i .l ,t I { I rt ,t It ;t J. fl I 'l ri I 1 I I l HIGH COURT DATED: 2910412024 COMMON ORDER ALLOWING THE WRIT PETITIONS ,i ,i + I -rl I i 'i NOS: 11440,11445 & 11460 OF 2024 lji li rii ( i 8 JUN zUI 14 S E r H 1 t c ( q 2 ) q-O t oE c T WITHOUT COSTS li lr, lll l it ) "