Mamid Raju, s/o. Pakiraiah, Occ. Agriculture, aged 58 years and Rahul Timmakara, S/o. Baraiah, Aged years, occ Doctor V. Union of India, Ministry of Finance, Rep. by The Principal Chief Commissioner, Telangana and The Income Tax Officer, Ward-1, Kothagudem, Bhadradri Kothagudem District

WP/15545/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners challenging the assessment orders and demand notices issued by the Income Tax Department for the assessment year 2015-16. The petitioners argued that the notices were issued without following the proper legal procedure as mandated by the Finance Act, 2021, and were thus violative of their fundamental rights under Article 14 of the Constitution. The respondents, representing the Union of India and the Income Tax Department, defended the validity of the notices. However, the court, referencing a previous judgment in W.P.No.25903 of 2022, found in favor of the petitioners, quashing the notices and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 703280 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 25-06-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Finance Act, 2021, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; B SAPNA REDDY
• Assessee Lawyers: E HARI BABU
• Keywords: Assessment Order; Fundamental rights; Jurisdiction; Natural Justice; Reassessment Process; Writ petition
• Section: 147; 148; 144B; 148A

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY FIFTH DAY OF JUNE TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS: 15545 15s48 15591 & 15687 0F 2024 W.P.NO: 15545 OF 2024 Between: lvlamidi Raju, s/o. Pakiraiah, Occ. Agriculture, aged 58 years rlo.1-2-210 Rekapalii (v), Vara Ramachandra Puraml (m) Bhadradri Kothaguciem District, Telangana ...PETraoNER AND 1. Unlon of lndia, lvlinistry of Finance, Rep. by The Principal Chief Commissioner, Telangana. 2. The Income Tax Officer, Ward-1, Kothagudem, Bhadradri Kothagudem District. ...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 issue a writ, order or direction more particularly in the nature of Certiorari declaring impugned assessment order passed by the 2nd Respondent against the Petitioner for the A.Y. 2015-16 uls.147 r.w.s 1448 vide DIN No. iTBA/AST/S/1 1412023-2411002743658(1) and Notice of demand Dt. 161312024 as illegal, wholly without jurisdiction, violative of natural justice and fundamental rights of the Petitioner under Article 14 and consequently quash the same, restrain the Respondents from further action in pursuance to the impugned assessment order. IA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the crrcumstances stated in the affrdavit f led in support of the petition, the High Court m;ry be pteased to restrain the Respondents from taking further actron in pursuanc€r to the impugned assessment rtrder for the A.Y. 2016-17 uls. 147 r.w.s .144B vide DIN No. lrBA/AST/s/1 1412023-2411062744148(j) and Notrce of demand Dt i6t3t2o24 passed by the 2nd Respondent against the Petitioner. Counsel for the Petitioner: SRI E.HARI BABU Counsel for the Respondent No.1: SRI B.MUKHERJEE FOR SRI GADI PRAVEEN KUMAR Dy. SOL|C|TOR GEN. OF tNDtA Counsel for the Respondent No.2: M/s. B.SAPNA REDDy, JUNTOR SC FOR SRI J.V.PRASAD, SENIOR SC FOR ITD W.P.NO: 15548 OF 2024 Betwee n: Mamid Ra;u C.c Agricuiiure. s,o. Pakira;ah Rekapalli (v), !'..:r RamachanCra Puraml (m) Bir Telang ana aged 53 ',ears rlo.1-2- 210 ad rad rr Kc.hagudem District. AND ...PET|T|ONER 1. Union of lndia, Nlinistry of Finance, Rep. by The principal Chief Commissioner, Telangana. 2. The lnr;ome Tax Officer, lVard-1, Kothagudem. Bhadradri Kothagudem District. .,.RESPONDENTS Petition under Afticle 226 of the constitution of lndia praying that in the circumstances stated rn the affidavit frled therewith, the High Court may be pleased to i:isue a writ, order or direction more particularly in the nature of certiorari der;laring impugned assessment order passed by the 2nd Respondent against the Petitioner for the A.Y. 2Oi5-16 uls. 147 r.w.s 1448 vide DIN No. lrBA/AST/s/1 1412023- 2411062743698(1) AND Norice of demand Dt. 1613t2o24 as illegal, wl-rolly without jurisdiction, violative of natural justice and fundamental rights of the l)etitioner under Article 14 and consequently quash the same. restrain the Respondents fronr further action in pursuance to the impugned assessment order. ----;-4 ,a lA NO: 'l 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 restrain the Respondents from taking further action in pursuance to the impugned assessment order passed u/s. 147 r.w.s 1448 vide DIN No. lrBA/AST/s/1 1412023- 24lio6zt43698(1) & Notice of demand Dr. 1613t2024. Counsel for the Petitioner: SRI E.HARI BABU Counsel for the Respondent No.1: SRI B.MUKHERJEE FOR SRI GADI PRAVEEN KUMAR Dy. SOLTCITOR GEN. OF tNDtA Counsel for the Respondent No.2: M/s. B.SApNA REDDy, JUNIOR SC FOR SRI J.V.PRASAD, SENIOR SC FOR ITD W.P.NO:15591 OF 2024 Betwee n: Heavy Water Plant 4,4 Employees Cconsumer Co_operative Society Ltd., Asrvapuram, Bhadradri Kotha!udem District, Rep ev li, -S..r\"iul/ 5ri Tagaram Sucarshan praveen Ravikumar s/o s'udarshan'aceo si nlo-o+ ilz. Door No 50, Nag:1una, HVVp(l l7 Colony, As,,,ripiram, aniOraCri KothagrCem Drsirict, Teljnqana, 5071 16. AND ...PETITIONER '1 . U_nion of lndla, IVinistry of Finance, Rep by the principar chref commissioner of lncome Tax, Telanqana state. 2. lncome Tax officer, ward-'1 , Kothagudem, Bhadradri Kothagudem District. ...RESPONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit fited therewith, the High court may be pleased to issue a wrt, order or direction more particularly in the nature of certiorari declaring impugned assessment order and demand notice Dt. 4t312o24 passed by the 2nd Respondent against the petitioner for the A.y. 2015-16 vide DIN No. lrBA/ASTiS/14712023-2411061923089 (1) as iilegat, wholly without jurisdiction, violative of natural justice and fundamental rights of the petitioner under Article 14 and consequenfly quash the same, restrain the Respondents from further action in pursuance to the impugned assessment order. lA NO: 1 OF 2024 Petitio'r under section 15'1 cpc praying that in the circumstances stated rn the affidavit filed in support of the petition, the High court nray be preased to restrain the Flespondents from taking further action in pursuancc to the impugned assessment order and demand notice Dt. 41312024 for the A.y. 2o1s-16 vide DrN No ITBA/AS-r/91 472023-24li 061923089 (1 ). Counsel for the Petitioner: SRI E.HARI BABU Counsel for the Respondent No.1: SRI B.MUKHERJEE FOR SRI cADl PRAVEEN KUMAR Dy. SOLICITOR GEN. OF tNDtA Counsel for the Respondent No.2: M/s. B.SApNA REDDy, JUNIOR SC FOR SRI J.V.PRASAD, SENIOR SC FOR ITD W.P.NO: 15687 oF 2024 Between: Rahul l'limmaka'raara. S/o. Baraiah, Aged years, occ Doctor, Rro 14-1-94, opp. St3H Road'. New paton\"ha, ahailadri K;ih;'s;;; d.i ttrr|,s.\"i AND ..,PET|T|ONER 1. Union of lndia, fu1inistry of Finance, Rep. by The principal Chief ^ Commissioner,Telangana. 2. The Income Tax officer, ward r Kothagudem Bhadradri Kothagudem. ...RESPONDENTS Petition under Articre 226 of the constitution of India praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to isr;ue a writ, order or direction more particurarry in the nature of certiorari declaring impugned assessment order and demand notice Dt. 1Br3r2o24 passed by the 2nd Respondent against the petrtioner for the A. y. 2015_16 vide DIN No. lrBr /AST/S/'i4712023 -24r1062877147(1) as iilegar, whoily without jurisdiction, vi.lative of naturar justice and fundamentar rights of the petitioner under Articre 'l '4 and consequenfly quash the same, resrrain the Respondents from further action in pursuance to the impugned assessment order. lA NO: 1 OF 2024 Petition under Section 15'1 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to restrarn the Respondents from taking further action in pursuance to the impugned assessment order for the A.Y. 2015-16 vide DIN No. ITBA/ASTlsl147l2O23- 241 1 06287 7 1 47 (1 ) Dt. 1 81312024. Counsel for the Petitioner: SRI E.HARI BABU Counsel for the Respondent No.1: SRI B.MUKHERJEE FOR SRI GADI PRAVEEN KUMAR Dy. SOLICITOR GEN. OF INDIA Counsel for the Respondent No.2: M/s. B.SAPNA REDDY, JUNIOR SC FOR SRI J.V.PRASAD, SENIOR SC FOR ITD The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI Jt'STICE NAMAVARAPU RAJESHUIAR RAO WRIT ,PETITION NOS.15545 15544 15591 & 15687 0F 2024 COMMON ORDER (per Hon'ble SP,J) S ri tr. Hari Babu, Iearned counsel appears for the petitioners, Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appears for the respondents Centra-l Government ald Ms.B.Sap,na Reddy, learned Junior Standing Counsel represenl-ing Sri 'J.V.Prasad, learned Senior Standing Counsel for Income 'lax Department, appears for the respondents-lncome Tax DepeLrtment. 2. Flegard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogouLsly heard and decided by this common order' 3. It is common ground. taken by the learned counsel for the petilioner(s) that in furtherance of Finance Act, 202 1 , re- assessment process stood modified but the respondents have not taken ceire of it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial scrutiny' Since notices are bad in law, the consequential orders are also bad in law. 7 a 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 may be disposed of in terms of the Common Order dated 14.O9.2023 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 Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Oepartment is neither tenable, nor sustainable. 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 oblection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue. Since the impugned notices and orders are getting quashed on the 3 point of jurisdiction, we are not inclined to proceed 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 Ag:rrwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted 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 reserved 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 vier.t' of the consensus arrived, the impugned 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.3B of the order dated 14.O9.2023 tn W.P.No.25903 of 2022. I 7 The Writ Petitions are allowed. No costs. Interlocutory applica.:ions, if any pending, shali also stand closed //TRUE COPY// CH. NAGABHUSHAMBA ASSISTANT REGISTRAR ll'' -'- SECTION OFFICER SD/. P To The Principal Chief Commissioner' Union of lndia' t '4inistry of Finance' +f;'silqj'Jn:\" rar officer, ward-1, Kothasudem' Bhadradri Kothasudem Districl. 5'i.i'cc to SRI E.HARI BABU, Advocate [oPUC] ^.- one cc to SRI GADI PRAGENi KUtvARlbv sortctroR GEN oF INDIA toPU(;l 5;\"\"i'i to sRt J V.PRASAD, sc FoR lrD [oPUC] Two CD CoPies 1 2 3 4 5 6 PSK. KKS F| c , HIGH COURT DATED:,2510612024 1ll5 g1- I . lE ltT ?[v4 ' I COMMON ORDER WP.Nos.15545,15548,15591 & 15687 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS. c.. * 1(,r'-t ' "