Mr. Narsimha Rao Akula and Srihari Sudagani and Mr. Mallesh Narala V. Union of India, Ministry of Finance and Income Tax Officer, Ward 1, Suryapet and The Principal Commissioner Of Income Tax 1 and The National Faceless Assessment Centre, Income Tax Department

WP/8350/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners against the Union of India and other respondents, challenging the notices and orders issued under Sections 148 and 148A(d) of the Income Tax Act, 1961, for various assessment years. The petitioners argued that these notices and orders were illegal, arbitrary, and lacked jurisdiction, violating the principles of natural justice and several articles of the Constitution of India. The court examined the procedural changes introduced by the Finance Act, 2021, and found that the respondents did not adhere to these changes, leading to the quashing of the notices and orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 804135 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-04-2024
• 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; VIJAY PUNNA
• Assessee Lawyers: POLKAMPALLY KUMAR RAO
• Keywords: Income Tax; Jurisdiction; Natural Justice; Void ab initio; Writ of Mandamus
• Section: 148; 149; 148A(d)

Judgement Text

"n irl [ 3403 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SECOND DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NOS: 8350 . 8369 AND 8383 0F 2024 w.P.No.8350 OF 2024 Union of lndia, Ministry of Finance Rep. by its Secretary, 166-8 North Block' New Delhi - 110 001 . lncome Tax officer, Ward 1, Suryapet' lT Tower office Krishna Nagar Colony Suryapet Hyderabad Telangana - 508213 The Principal Commissioner Of lncome Tax 1, lT Towers, Masab Tank' Hyderabad, Telangana- 500004 The National Faceless Assessment Centre, lncome Tax Department Ministry of Finance Govt. of lndia, New Delhi ...RESPONDENTS Between: Mr. Narsimha Rao Akula, s/o. Kistaiah Akula aged about 65 years, 9cc.-B^usiness ivo.\"5-#, nuigiri stition, errongir, Nalgondal Telangana, lndia 508'1 16 PAN- ATNPA6250G ...PETITIONER AND 1. 2 3 4 Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to i.lssue a writ, order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No'2 in passingtheorderdated2glo4l2o22uls.l4sA(d)andNoticeissuedbythe Respondent No.2 under Section ',l48 of the lncome Tax Act, 1961 also dated 2gto4t2o22 as illegal, arbitrary, bad in law, void ab initio, violative of the principles of natural justice and being violative of Articles 14,19 and 265 of the constitution of lndia and consequently Set aside the order dated 29.04.2022 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, '1961 dated 2910412022 calling for the return of income of the Petitioner for AY ) 2O't5-16 and any consequent proceedings as lacking in jurisdiction. W.P.NO: 8369 OF 2024 i Between: Srihari Sudagani, S/o Narayana Sudagani Aged 54 years, R/o 2-46, New Gundlapally, Yadagirigutta Nalagonda, 5081 15 PAN CSRPS7956N ...PETITIONER AND 'l Union of lndia, Ministry of Finance Rep- by its Secretary, '166-8 North Block, New Delhi - 1'10 001 lncome Tax Officer, Ward 1 Suryapet,l.T Tower, Ac Guards, Masab Tank, Hyderabad, Telangana, 500004 The Principal Commissioner of lncome Tax-|, lncome Tax Towers, Masab Tank, Hyderabad, Telangana The National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Govt. of lndia, New Delhi ...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 i.lssue a Writ, Order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No.2 in passing the Order dated 29.03.2023 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, 1961dated 29.O3.2023 as lacking in jurisdiction, illegal, arbitrary, bad in law, void ab initio, and being violative of the provisions of lncome Tax Act 1961, specifically Section 149 of the lncome Tax Act, 1961 and Articles 14,19 and 265 of the Constitution of lndia and consequently. ii.Set aside the proceedings initiated under '148A vide Order dated 29.03.2023u/ s. 148A(d) and the Notice issued by the Respondent No.2 u/s 148 of the lncome Tax Act, '1961 dated 29.03.2023calling for the return of income of the Petitioner for AY. 2O16-17 and consequent proceedings as lacking in jurisdiction iii.Set aside the proceedings initiated u/s 148 and the order passed u/s 148A(d) as void-ab-initio and as lacking in jurisdiction as the income alleged to have es<;aped assessment is below Rs 50 lakhs and the extended period of limitation u/s 149(1) is not available. 2 J 4 i t; l I I I I iii l lll t. ti. t!, ril I W.P.No.E383 oF 2024 AND 1. Between: t ilr. Irlallesh Narala, S/o.Yettaiah Narala aged about 40- -y^eg-r:' Occ' Business' nyr.ri.r.f\".l- s-+os, Hanman Vada, Bhongir, Nalgonda, TS-5081 '16 ...PETITIONER Union of lndia, Ministry of Finance Rep. by its Secretary, 166.8 North Block, New Delhi - 1'10 001 . lncome Tax Officer, Ward 7(1)' Signature Towers, J(ondapur, O^p^p^ ^Botanical CJii\"i., S\"rilingampatty, R.it. District Hvderabad, Telangana 500084 The Principal Commissioner Of lncome Tax 1, lT Towers' Masab tank Hyderabad, Telangana The National Faceless Assessment centre, lncome Tax Department Ministry of Finance Govt. of lndia, New Delhi ...RESPONOENTS 2 J 4 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 pleasedto.iv.lssueaWrit'orderorDirectionmoreparticularly,one,inthenature of writ of Mandamus, declaring the order passed by the Respondent No'2 in passingtheorderdaled2T.o4.2o22uts.l4sA(d)andNoticeissuedbythe Respondent No.2 under section 148 of the lncome Tax Act, 1 961 also dated 27 .04.2O22as illegal, arbitrary, bad in law, void ab initio, violative of the principles of natural justice and being violative of Articles 14,19 and 265 of the Constitution of tndia and consequently, v. set aside the order dated 27.o4.2O22u1 s. laBA(d) and Notice issued by the Respondent No.2 under section 148 of the lncome Tax Act, 1961 daled 27.o4.2O22calling for the return of income of the Petitioner for AY 2015-16 and any consequent proceedings as lacking in jurisdiction' COUNSEI for thE PEtitiONET iN W.PS : SRI POLKAMPALLY PAVAN KUMAR RAO counserrorthe Respondents No'1 in w'Ps il,3#F'dtjft.dlmt^ Counsel for the Respondents No'2to4 in W'Ps : SRI VIJAY K'PUNNA' SC FOR IT DEPT The Court made the following: COMMON ORDER i ! ir i I I I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NOS.835O 8369 AND 8383 0F 2024 COMMON ORDER (per Hon'bLe SP,J) Heard Sri Polkampally Pavan Kumar Rao, learned counsel for the petitioner(s), Sri B.Mukherjee, Iearned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing on beha-lf of respondent No. 1 and Sri Vijay K Punna, learned Standing Counsel for Income Tax appearing on behalf of respondent Nos.2 to 4 2. Regard being had to 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 learned counsel for the petitioner(s) that in furtherance of Financ e Act, 2O2l , te- assessment process stood modilied but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 196 I cannot sustain judicial scrutiny. Since notices are bad in laq,, the consequential orders are also bad in law. Z 4. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are fina-lly 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 o[ in terms of the Common Order dated 14.09.2023. 5. This Court in the said order dated l4-O9.2O23 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 piocedure 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 unde. 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-Department is neither tenable, nor sustainable. The notices so issued and the p.ocedure 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 pu.suant to tfte 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 wis procedurally wrong, the subsequent o.ders also gets nullified automatically. 37. The p.eliminary obiection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue' l - 3 Since the impugned notices point ofiurisdiction, we are r and orders are getting quashed on the the other issues raised r,,.':t'Iff:rt;ffi ::#::\"X:.r:j :: raised and contended in an appropriate proceedings. 38. Since the Hon,ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one_tim Atticle 142 of the constitutie measure exercising the powers under proceed under rhe substituteo f..'J,Jlll :\"\"#f:.,fi j,\".#J: petitions only on the procedural flaw, the .ignt conferreO on ttre Revenue would remain resen rrom the stase or the -r*\";'jJr:J:\"\"::,lTffiJ::::T:J# Agarwal, supra. 39. No order as to costs.,, 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 6. In view of the as per paragraph No.3g W.P.No.259O3 of 2022. consensus arrived, the rmpugned Show of the order dated 14.Og.2O23 IN 7 The writ petitions are allowed. No costs. Interlocutory applications, if any pending, sha-ll a_lso starrd closed To, //,RUE copy// o\".,rroi?rn[bffii* ii6gtT*.,\", union ot lndia, Minisky or Finance, ,.., *\"\"^T:I:HT:::: ;glm*':,ffnffiatid.ru##ffi+##l&;::ffi ;glgt*l{F,i''\"+m*-+-rym*#,+:,-i{*I.#;#:; GJP 1 2 3 4. C, 7 8 o I HIGH COURT DATED:0210412024 i COMMON ORDER WP.Nos.8350, 8369 AND 8383 of 2024 ] ALLOWING THE WRIT PETITIONS I WITHOUT COSTS .a)':rt-t* ./.1--.' i ') '. :' S14rA 3 0 lllAY 2I]24 L'- C /, _-:. 1i. i l,t' C) ,sp11; 'ir_1-., I l I I I i I i I I : "