Mohd Abdul Rasheed V. Union of India, Ministry of Finance, Income Tax Department, New Delhi and Office of Commissioner, Income Tax Department, Ministry of Finance, Government of India, New Delhi and Office of the Income Tax Officer, Circle 9(1), Hyderabad, Income Tax Department, IT Tower, AC Guards, Hussain Sagar Tank, Hyderabad and National Faceless Assessment Center, Income Tax Department, Ministry of Finance, Government of India, New Delhi

WP/21142/2024

AI Insights

The case involves Abdul Rasheed, the petitioner, challenging the legality of several notices and orders issued by the Income Tax Department under Sections 148 and 144 of the Income Tax Act, 1961, for the assessment years 2018-2019 and 2019-2020. The petitioner argued that these actions were taken without adhering to the modified procedures established by the Finance Act, 2021. The respondents included various entities of the Income Tax Department. The court referenced a common order in a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had set a precedent on this issue. The court's decision was based on the procedural flaws in the issuance of the notices and the subsequent proceedings, leading to the quashing of all related orders and notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803980 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 05-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• 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; B REDDY
• Assessee Lawyers: MYTRI INDUKURA
• Keywords: Income tax reassessment; Jurisdictional issue; Procedural Flaw; Quashing of orders; Writ of Certiorari
• Section: 147; 148; 144; 151; 149A

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE FIFTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO I ,4ohd Abdul Rasheed. S/o. Mohd Occupation. Business, Fl/o. D No Charminai'. Hyderabad - 50C002. [ 3411 ] Abdul Rauf, Aged about. 28 years, 22-7-37511, Kunche Muragh Khana, Betwee n: ...PETITIONER AND . I Union of lndia. N,linistry of Finance, lncome Tax Depadment, New Delhi - 100 011 2. The Office of Commissioner, lncome Tax Deparlment, Ministry of Finance, Government of lndia, New Delhi - 100 0'l 'l . 3. Office of the lncome Tax Offrcer, Circle 9('1 ), Hyderabad, lncome Tax Department, lT Tower, AC Guards, l ilasab Tank, Hyderabad - 500 004. 4. The National Faceless Assessment Center, lncome Tax Department, Ministry of Finance, Government of India, New Delhi - 100 01 1 . ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or direction or order more particularly in the nature of a writ of certiorari calling for the records and quashing the (i) lmpugned Order dated 26.04.2022 bearing DIN and Notice No. ITBA/AST/F/I48A12022- 2311042852269(1) for the Assessment Year 2O1B - 2019, issued by the 3'd Respondent under Section 14BA(d) of the lncome Tax Act, 1961 (ii) lmpugned Notice dated 26.04.2022 bearing DIN and Notice No. ITBA/AST/S/1 48_112022- 23t1042859115(1) for the Assessment Year 2018 - 2019, issued by the 3'd Respondent under Section 148 of the lncome Tax Act, 1961 and consequently WRIT PETITION NO:21142 OF 2024 quashing the (iii) lmpugned Order dated 28.12.2023 bearing DIN and Notice No.ITBAiAST/SI14712023-24/1059145560(1) for the Assessment year 2018 - 2019, issued by the Respondents under section 14T read with Section 144 of the lncome Tax Act, 1961 as being illegal and in violation of applicable law and consequently set-aside all consequent/subseguent notices/o rd ers/pe na lties and further restrain the Respondents from making any assessment, reassessment or re-computation or otherwise proceeding against the petitioner on the basis of the aforementioned lmpugned Order and Notice dated 26.O4.2022 and 28.12.2023. 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 the operation of lmpugned order dated 28.12.2023 bearing DIN and Notice No.lrBA/AST/sl14712023-24/1059145s60 (1) for the Assessment year 2018 - 2019, issued by the Respondents under Section 147 read with section 144 of the lncome Tax Act, 1 961 in the interest of .justice. lA NO: 3 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 suspend all further proceedings pursuant to the lmpugned order dated 28.12.2o23 bearing DIN and Notice No. trBA/AST/s/14tt2o2J- 24t1osg14ss60(1) for the Rsseisment Year 20iB - 201g, issueo oy the Respondents under Section 147 read with section 144 of the lncome Tax Act, 1961 in the interest of justice . Counsel for the Petitioner: M/SMyTRl INDUKURU Counsel for the Respondent No,1: SRI B. MUKHERJEE, REpRESENTING FOR SRI GADI PRAVEEN KUMAR Dy. SOLICTTOR GEN. OF tNDtA Counsel for the Respondent Nos.2 to 4: MS. B. SAPNA REDDy, SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER ,l- 7 lA NO: 2 OF 2024 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESTIWAR RAO WRIT PETITION No.2lL42 OF 2024 ORDER: (per Hon'bte Justice Sujoy Paul) Heard Ms.Mytri Indukuru, learned counsel for the petitioner(s), Sri B. Mukheqiee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.1 and Ms. B. Sapna Reddy, learned Junior Standing Counsel lor 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, ^02 1, 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 2 dated 14.09.2023.The parties agreed that this marter may be disposed of in terms of the Common Order dated, 14.O9.2023. 4. This Court in the said order dated 14.Og.2O23 W.P.No.259O3 of 2022, held as under: '35. In view of the aforesaid discussions, it is by now very clear that the procedure to be foLlowed by the respo dent- Depa-rtEent upotr treatiEg the notices issued for teassessment being under Section 149A, the subsequent proceedings was mandatorily required to be undertakea under the substituted provisions as laid down uEder the FiDaEce Act, 2c/21. to |ne absence of which, we are constraitted to hold that the procedure adopted by the respondent_Department is in contravertior to the statute i.e. the Finance Act, 2O21, at the lirst ilstance. Secoadly, it is also in direct contravention to the directivea issued by the Hon,ble Supreme Court in the case ofAshish Agarwal, supra. 36. For all the aforesaid reasoas, the impugted lotices issued aad the proceedings drawn by the respondetrt_Depaitment is neither tenable, nor sustainable. The Eotices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a cousequence, all the impugned orders gettiEg quashed, the coasequettial orders passed by the respondeEt Department pursuant to th€ Dotices issued under Section l4Z aod l4g would also get quashed and it is ordered accordingly. The reason we are quashing the coraequeatial order is on the priociples that when the iDitiatioa of the proceeditrgs itself was procedurally wrong, the sqbsequent orders also gets nullified automatically. 37. The preliEinary objection raised by the petitioner is sustaitred aad all these writ petitions stands allowed oo this very jurisdictiooal issue. Siace the impugned notices and orders are getting quashed on the poiat ofjurisdiction, we are Eot inclined to proceed further aad decide the other issues taised by the petitioner which stands reserved to be raised aad eontended in an appropriate proceedings. 38. Since the tlon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one_time Eleasure exercising the p-oc,ers under Article 142 of the Co[stitution of India, IN 3 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 allowed. No costs' Interlocutory applications, if any pending, shall also stand closed' SD/.V.KAVITHA ASSIS TANT REGISTRAR //TRUE COPY// SECTION OFFICER To, Union of lndia, Ministry of Finance, lncome Tax Depariment, New Delhi . 100 ?ll on'* of Commissionel, lngoqrg]llDepartment' Ministry of Finance' c'\"\"\"\"I\".\"\"t \"1 india, New-Delhi - 100 011' office of the lncome rr* c'#i\".li iii\"ru strL HvOerabad lncome Tax Deoartment, lr rower, o\" cllib!\"'vi'*u i.\"ir Hvlgrabad - 500 004' if g,ffisJ%: ?::I\"#n'\"?iffi [:$\"?\"3:\"ilf:1[ F,i' - D e p a rt m e n t M i n i s t ry 6n. CC to M/s. Mytri lndukuru' Advocate [u.r u '^l one CC to Sri Gadi e,u'\"\"Xii'*'i oy soiicito' cen of lndia IOPUCI one CC to Ms B s'pnu *\"ioi\"5bJtjr. rnco*\" Tax DepartmeritloPucl 1. 2 3 4 5 6 7 I TJ GJP Two CD CoPies cRg --7 p€rmitted the Revenue to proceed undet the substituted provisions, and this Court aUowing the Petitions only on th€ 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 SuPleme Cou.t in the case of Ashish Agarwal, supra. 39. No order as to costs.\" I I HIGH COURT DATED:0510812024 ORDER WP.No.21142 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS ({ 1tlE S74 f(: o ( lo t) 1 6 til alzl I v,ar o-{N "