Mohd Mahaboob Ali V. The Union of India and Office of The Income Tax Officer Ward 2(1), Hyderabad

WP/24037/2024

AI Insights

The case involves Mohd Mahaboob Ali, the petitioner, challenging the notices and orders issued by the Income Tax Department for the assessment year 2018-19, which determined his total income at Rs. 1,08,66,734. The petitioner argued that these were arbitrary, illegal, and violated principles of natural justice, among other legal provisions. 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 similar issues regarding the procedural validity of reassessment notices under the Finance Act, 2021. The court's decision in this case followed the precedent set in the earlier batch, leading to the quashing of the notices and orders against the petitioner.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803956 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 03-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• 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
• Assessee Lawyers: SARANG AFZULPURKAR
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Re-assessment; Writ of Mandamus
• Section: 147; 148; 144; 151; 156

Judgement Text

"I 'i [ 3411 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE THIRD DAY OF SEPTEIVIBER TWO THOUSAND AND TWENry FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRlT PETITION NO: 24037 OF 2024 Between: Mohd Mahaboob Ali, S/o. Late Mohammed lVlaroof Ali, Aged about 65 -years, Occuoation. Business. R/o. H No 7-249151 104/A, Dost Noor Mohd Colony, Sanath Nagai, Hyderabad 500018 Telangana, lndia. PAN. ASIPM026lF Assessment Year. 201 3-19. ...PETITIONER AND 1 The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Mirtistry of Finance, New Delhi - 1'10 001 . 2. Office of The lncome Tax Officer Ward 2(1), Hyderabad Signature Towers, Sv.No.6(P) of Kondapur, Sy.37(P) of Kothaguda, Opp Botanical Gardens, Sertingainbatly (M), R.R.District, Hyderabad, Telangana, 500084 Telangana State. ...RESPONDENTS Petition under Article 226 ol the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue writ, order or direction more particularly one in the nature of Writ of Mandamus or any other appropriate Writ, Order, or Direction, declaring the order passed by the lncome Tax Authorities the Respondent No. 2 herein for assessment UIS 147 read with Section 144 of lhe lncome Tax Act, 1961 vide DIN and Notice No. dated 27-02-2024 ITBA/AST/S/ 14712023-24 /1061626299(1) and 12.08.2024 vide DIN and Notice No. ITBtuPNL/Ft27OAt2O24-25l 1067531838(1) for the assessment year 2018 -19 determining the total income of the Petitioner at Rs. 1,08,66,734l- as arbitrary, illegal, bad in law, without jurisdiction, 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. 14BA of the lncome Tax Act, 'l 961, and consequently set aside the same. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circurrstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the order Under Section 147 read with Section 144 of the lncome Tax Act, '196 1 vide DIN and Notice No. dated 27-02-2024 |TBA/AST/S/'147t2O23- 2411061626299(1) and 12.08.2024 vide DtN and Notice No. lTBNPNLlFl270Al2024- 2511067531838(1) for the assessment year 2018-.19 determining the total income of Rs. 1,08,66,7341- and order and Demand notice u/s 1 56 of the lncome Tax act 1 961 , vide D lN and Notice No. ITBA/AST/S/1 5612023 2411061626338(1) Dt.27-02-2024 for the assessment year 2018-19notice Under Section 148 Dt. 22-04-2022 in |TBA/AST/ St14B-1t2022- 23 I 1 042827 035( 1 )for the Assessment Yea r 20'1 8- 1 9. Counsel for the Petitioner : SRI SARANG AFZULPURKAR counser ror the Respondent No'1 '3[i3X5,X=ff=tiii*r*o*. Dy.so.cEN Counsel for the Respondent No.2 : Ms.J.SUNITHA, Jr.SC for lT Dept. The Court made the following: ORDER t THE HONOURABLE SRI .TUSTICE SUJOY PAI,L AlTD THE IIONOURABLE SRI JUSTICE NAMAVARAPU RA\"'ESIIWAR RAO WRIT PETITION No,24O37 Ot 2o24 ORDER: (per Hon'ble Justice SujoV paul) Heard Sri Sarang Afzulpurkar, learned counsel for the petitioner(s), Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No. 1 and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for respondent No.2. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 1961 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 hnally drawn by this Court in a batch of writ petitions, W.P.No.259O3 of 2O22 and other connected matters, decided by common order 2 dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9t .2023. 4 . This Court in the said order dated 14.09 .2t)23 tn W.P.No.259O3 ot 2022, held as under: t'35. In view of the aforesaid discussioas, it is by Eo[, very cleal that the procedute to be follolred by the respoadeit- Department upoE treating the notices issued for reassessmeat being under Secuor 148A, the subsequent proceedings was maEdatorily required to be u[dettakel utlder the substituted provislons as lald down uadet the Fira[ce Act, 2021. In the sbsesce of which, lre are coastrai[ed to hold that the procedure adopted by the respotrdent-Department is fur coatraveutio[ to the statute i.e. the Finance Act,2O2l, at the fir$t instatrce. Secondly, lt is also iD dltect co[trave[tioa to the directives issued by the llo!'6le Supre,ne Court in the case of Ashish Agarsal, supra. 36. Foa aU the afotesaid ieasors, t.he lrapuglred notices issued and the proceediags drarn by the .eapoadelt-Departmert is neither tenable, aor sustainable. The lotices so issued and the procedure adopted being per se illegal, desewes to be and are accordilgly set aside/quashed. As a corsequence, all the implrgned olders gettlng quashed, the coqsequeatial orders passed by tle respondent Department pulsualt to tte lotices issued unde! Sectlon L47 and 148 would also get quaEhed aad it is ordered accordingly. The reasoa we are quashhg the consequential order is oD the princlples that wLen the iDitiation of the proceedirgs itaelf q,as procedurally wrong, the subsequent orders also gets [ullifiied autoEaucally. 37, The prelimiaary objection.aised by the petitioner is sustaioed arld all these writ petltions starods allosed on t-his very jurisdictional issue. Shce the iepugned Dotices aDd orders are gettiDg quashed o, the point ofjur'isdicuo!, we are aot i4cliaed to proceeal further aud decide the other lssues raised by the petitioEer which stalds reserved to be raised and contended i[ a[ appropriate proceedings. 38. Since the Ilotr'ble SupreEe Court had, iu the case of Ashish Agarwal, supra, as a one-tl&e measute exercisilg the powers urlder Artlcle 142 of the Colstitution of India, 3 To, peraitted the Revenue to proceed under the substituted provisiors, and ttis Court allorring tbe petitioas only on the ptocedutal flaw, the right coaferred oE the Revenue would remaia resereed to proceed further if tiey so waat frocr the stage of ttre order of tte Supreqe Court ln the case of Ashish Agatsal, 6upaa. 39. l{o order as to costs-, 5. In view of the consensus arrived, the impugned Show Cause notice ald consequential orders passed in this writ petition are set aside. Liberty is reserved to both the parties to take respective stand ald to proceed in accordance with 1aw as per paragraph No.38 of the order dated 14.O9.2O23 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/- P. PADMANABHA REDDY ASSISTAN EGISTRAR //TRUE COPY// SE ON OFFICER Two CD Copies BSK GJP 1-TheSecretarvtotheGovernment'DepartmentofRevenue'Unionoflndia' Ministry of Firiance, New Delhi - 110 001. z i'n\"lii6om\" Tax oificer wiio ztij, Hvaerabad Signature Towers' sy No 6(P) - \"i'Xonaiour. Sv.37(P) oikoti'iSiuiia. bpp. Botanidal Gardens, Serlingampally aMi, R R.blairi.i, Hyderabad, Telangtna, 500084 Telangana€tate' 3 bne cc to sRl SARANG AFZULPURKAR, Advocjrte IUPUUI ;. il; cc io rr,rs.L.surlr*iA,'lisc roii-tttcQnire rnx brpr' lopuc] - .. . 5. ffi 6C i6 Snic-AOi piAVeEN- KUMAR, (Deputy.Solicitor General of lndia)' - HiS-h Corrt t* tf,u State of Telangana at Hyderabad [OPUC] b I HIGH COURT DATED:0310912024 -- i I I I I I 'l 0 ,i,i ' ORDER WP.No.24037 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS "