Mohammed Jawad Mehdi V. Assessment Unit, Income Tax Department, National e-Assessment Centre, New Delhi and Assistant Commissioner of Income Tax, Circle-9(1), IT Towers, AC Guards, Masab Tank, Hyderabad and Principal Commissioner of Income Tax, Hyderabad - 4, Block-A Income Tax Towers, A.C Guards, Masab Tank, Hyderabad

WP/23824/2024

AI Insights

The case involved Mohammed Jawad Mehdi, the petitioner, challenging the legality of a notice and subsequent orders issued by the Income Tax Department under Section 148A(d) of the Income Tax Act, 1961, for the assessment year 2020-21. The petitioner argued that the notice was arbitrary, illegal, and violated principles of natural justice, as well as specific articles of the Constitution of India and sections of the Income Tax Act. 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 requirements post the Finance Act, 2021. The court found that the procedures adopted by the Income Tax Department did not comply with the statutory requirements and the Supreme Court's directives, leading to the quashing of the notice and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 810926 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: A MANOHAR
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Reassessment; Writ of Mandamus
• Section: 148A(d); 226; 151 CPC

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY,THE SECOND DAY OF SEPTEIVIBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WR]T PETITION NO:23824OF 2024 Between: Mohat'rtmedJawadMehdi,s/o.JamsheedAlitr/ehdi,Age'42Years'^Add16- 2-241D, Akbarbagh, Malakpet Colony, Amberpet, Hyderabad - 5uuuJb' ...PETITIONER AND 1. Assessment Unit, lncome Tax Department, National e-Assessment centre, Ne* Oetf,i, Room No. 401, 2nd Floor, E-Ramp Jawaharlal Nehru Stadium' New Delhi-1 10003. 2. fh; Asiistani Commissioner of lncome Tax, Circle-9(1), lT Towers' AC Guards, Masab Tank, Hyderabad, Telangana-500004' e. fnJ FrihCipai Cgmmissibner of lncome.Tax, Hyderabad - 4, Block-A lncome - fai fowers, A.C Guards, lvlasab Tank, Hyderabad, Telangana-500004 ...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 of Mandamus or any other appropriate writ, order or Direction, declaring that the order passed by the 2nd Respondent, u/s 148A(d)of the lncome Tax Act, 1961, dated 3110312024 bearing DIN and Notice No.ITBA/AST/F 1148At2023-2411063787204 for the Assessment Year 2020-21 as arbitrary, illegal, bad in law, void-ab-initio. violative of the principles of natural justice, apart from being violative of Articles 1a' 19(1)(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 may be pleased to stay all further proceedings, including any recovery, pursuant to the order passed by the 2nd rr-,spondent under section 148A (d) of the lncome Tax Act, 1961 dated 31tO312O24 bearing DIN and Notice No. ITBA ASrr1148Al2O23' 24t1063787'204(1 ) for the assessment year 2020-21, pending disposal of the above Writ petition Counsel for the Petitioner: SRI A. KIRAN MANOHAR Counsel forthe Respondents: Ms. BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAX) The Court made the following: ORDER i i I I I I I l I i --=-7 i t 1 I THE HONOURABLE SRJ JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION No.23824 oF 2024 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri A.Kiran Manohar, learned counsel for the petitioner(s) and Ms. B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for the respondents. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finalce Act, 2O2l , re- assessment process stood modihed but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 196 1 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 dated 14.09.2023.The parties agreed that this matter may be disposed of in terms of the Common Order daled 14.O9 .2023 ' I \"?.i. 2 4. Tlris Court in the said order dated 14.0().2023 in W.P.No 25903 of 2022, held as under: '35. In view of the aforesaid dlscussions, it is by noe, very clear that the procedure to be followed by the respondent- Department upoa treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be uudcrtaker under the substituted provisions as laid down uader the FiEance Act,2O2l. In 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,2O2l, at the flrst instance. Secondly, it is also in direct contraventiou to the dircctives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra. 36. For all the aforesqid reasons, the iEpugned trotices issued aod the proceedings drawn by the respondent-Departhent is Deither tenable, nor sustainabl€. The Eotices so issued and the procedure adopted being per ae illcgal, deserves to be and are accordingly set aside/quashed. As a coasequence, alt the impugned orders getting quashed, the cotrsequeatial orders passed by the respondent DepartEreDt pursuant to the notices issued under Section 147 atrd 148 rould also get quashed and it is ordered accordingly, The reason we are quashiag the consequential order ls oD the priEciples that when the initiation of the proccedings ttself was procedurally q,rong, the subsequent orders also gets nullilied automatically. 37. The preliminary objection raised by the petitioDer is sustained and all thcse writ petitlons stands alloFed on this very jurisdictional lssue. Since the irnpugDed notices atrd orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed further aEd decide the other issues raised by the petitioDer which staads reserved to be rirised and contended in an appropriate proceeding6. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwat, supra, as a one-tiEe measute exercising the powers undet Article 142 of the CoEstitutioa of India' permitteo the Revetrue t :ff;i\":\"i\"L,::: ::f ':'J::: pro.ri\"ion\", and this cou allowus u \"\" ao. Revenue t,,oul'l pro.\"a\"'ar fla{' the right c( 3 ) remain reserved to Proceed further if they so want from the stage of the ordet of the SuPreEe Court in the case of Ashish Agarwat, supra. 39. No 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 1aw as per paragraph No.38 of the order dated l4'09'2023 tn W.P.No.25903 of 2022. 6. The Writ Petition is allowed. No costs' Interlocutory applications, if any pending, shall also stand closed SD/. K.SREERAMA MURTHY ASSISTAN REG RAR //TRUE COPY// SECTION OFFICER To, BSR BM 1 . The Assessment Unit, lncome Tax Department, National e-Assessment centre. New oerrri, noori\"r'lol ao i, 7n[ ]n\"'' E-Ramp Jawaharlal Nehru Stadium, New Delhi-1 10003' 2 The Assistant CommissiJXEi Ot tn\"o'\" Tax' C-ircle-9(1)' lT Towers' AC ' G r-, A;:'lvi;'., u linti,-nvo\"rabad, Telanga na-500004' 3 ;#'iftl;;l c\"r.ii.i6\"Ei\"rl\"id'\" ri-' Hvderabad - 4' Block-A lncome rax Towers, n.c cuaros,'ili';;6'il;li' uvoe15oao' relangana-500004 o b?G'cti\"-dCin. krnnii H'rAtronnR' Aitv9c1t9 [oPtrcl 5. one cc to Ms. BoKARdLiF'i'l'XCEij'di(J' ScFon tucotur rnx) toPUCl 6. Two CD CoPies HIGH COURT DATED: 0210912024 ORDER WP.No.23824 af 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS i(, lr ,t ' .. a 19 t]| 20a il I ,/ "