Mr. Syed Niyaz Ahmed and Ms. Roshini Khanam and Mr. Jam Mohammed Khan and Ms. GB Madhu V. Assessment Unit, Income Tax Department, National e-Assessment Center and The Income Tax Officer, Ward - 1, Karimnagar and The Principal Chief Commissioner of Income Tax, Andhra Pradesh and Telangana

WP/11730/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners challenging the reassessment notices issued by the Income Tax Department for various assessment years. The petitioners argued that the notices were issued without following the proper procedure as laid down by the Finance Act, 2021, and were therefore illegal and violated principles of natural justice. The respondents, representing the Income Tax Department, contended that the notices were valid. The court referred to a previous common order in a batch of writ petitions (W.P.No.25903 of 2022) which had set a precedent on this issue, leading to the decision to quash the notices and consequential orders in the present case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 688604 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 30-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B REDDY; VIJHAY PUNNA
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Reassessment; Writ of Mandamus
• Section: 147; 144B; 148A; 265; 226

Judgement Text

"t I I t [ 3403 ] HIGH URT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TU SDAY, THE THIRTIETH DAY OF APRIL O THOUSAND ANO TWENTY FOTJR THE PRESENT NOURABLE SRI JUSTICE SUJOY PAUL AND THE NOURABLE SRI JUSTICE N.TUKARAMJI WRIT PE TION NOS:11729 1 1730 AND 11759 0F 2024 , S/o. Mr. Ahmed Syed, Aged 67 years, Occ.- Retired State , Ri/o. H.No. 5-6-230, Mahboob Pura. Jagital, Karimnagar W.P.No.11729 ot 2o24 Between: Mr. Syed Niyaz Ah Government Emplo District - 5OS 327 , Tela na AND .....PETITIONER 1. Assessment Un lncome Tax Department, National e-Assessment Center 2 3 New Delhi, Roorh No.- 4O1,2N Floor, E-Ramp, Jawaharlal Nehru Stadium, NewDelhi - 11Opo3. I The lncome TaxlOfficer, Ward - 1. Karimnagar, lncome Tax Office, Aayakar Bhawan, Near Nbtraj Theatre, Karimnagar - 5O5 OO1, Telangana. I The Principal Chlef Commissioner of lncorne Tax, Andhra Pradesh and Telangana. Hyderabad, Room No.- 922,gth Floor, B Block. lT Towers, 10-2- 3, A.C. Guards, Hyderabad - 50O 0O4, Telangana. I ,,..RESPONDENTS Petition Under Article 226 of the Constitution of lndia praying that in the circumstances stated r 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 the order passed by the 1st Respondent, u/s 147 rlw Sec. 1448 ot the lncome Tax Act, 1961, dated O5tO3t2O24, bearing DIN and Notice No.- lTBtuASTlsl14712023-24110,62048269,(1 ), for the Assessment Yeat 2015 - 16 as arbitrary, i{legai, bad in law, void-ab-initio, violative of the principles of natural justice, apart from being violative of Articles 14, 1g(1Xg) and 265 of the Constitution of lndia j and Sec 148A of the lncome Tax Act, 1961, and I consequently set asid€j the same in the interests of justace. !.A.NO:1 AF 2024 Petition Under Section 151 cPC praying that in the circumstances stated in l the affidavit filed in support of the petition, the High court may be pleased to stay i all further proceedingS, including any recovery, pursuant to the order passed by i the 1st Respondent, u/s 147 rlw Sec_ 1448 of the lncome Tax Act, 1961, dated 05.O3.2O24, bearinj DtN and Notice No.- |TBA/AST/S/14 712023- 2411062048269(1), foi the Assessment year 2015 - 16,.pending disposal of the 1 above writ petition. Counsel for the Petitidner : SRt A.V.A.S|VA KART|KEYA Counsel forthe Respjndents : Ms. B.SAPNA REDDY, COUNSEL REPRESENTING SRI J.V.PRASAD, SC FOR INCOME TAX DEPARTMENT I 4 W.P.I{O:11730 OF 2o2 Between: Ms. Roshini Khanam, House Wife, R/o. 18 Telangana. AND Petition U circumstances s nder l I I I Dy'o. Mr. Jam z-a1sfi'ilt2, j I I I .....PETITIONER eel Mohammed Khan, Aged 38 years, Occ. Hafez Baba Nagar, Hyderabad - 500 058, I 1. Assessment Unii, lncome Tax Department, National e-Assessment Center. New Delhi, Roorh No. 4O1 ,Znd Ftoor, E-Ramp, Jawahadal Nehru Stadium, New Delhi - 1 10 003. I 2. The lncome TaxlOfficer, Ward g(1 Guards. Hyderabad - 500 004, Tel 3. The Principat Chief Commissioner Telangana. Hyddrabad Room No. AC Guards, Hydbrabad - 500 004, ), Hyderabad, l.T.Towers, 10-2-3, AC angana. of lncome Tax, Andhra Pradesh and 922,91h Floor, B Block, l.T.Towers, 10-2-3, Telangana. ....RESPONDENTS rticle 226 of the Constitution of lndia praying that h the n the affidavit filed therewith, the High Court may be tated I Ulnit of U\"nOrmus or any other appropriate Writ, Order or ttriat the order passed by the 1st Respondent, uls 147 rlw 44lB of the tncome Tax Act, 1961 , dated 11/O3/2O24, bearing t ITBN AST lS I 1 47 I 2023 -24 I 1 062353 1 74( 1 ), fo r the Assessment w, void-ab-initio, violative of the lative of Articles 14, 19(1 )(g) and the lncome Tax Act, 1961, and to of justice. |.A.NO:I OF 2024 Petition Under ection 151 CPC praying that in the circumstances stated in the affidavit filed in su port of the petition, the High Court may be pleased to stay the 1st Responden all further proceedi I ngq, t, ,1\" including any recovery, pursuant to the order passed by 147 rlw Sec. 144 r/w Sec. 1448 of the lncome Tax Act, 1961, dated 11t(R12124 bearing DIN and Notice No. ITBA/AST/S/14T|ZO23- 2411O623s3174(1), fo the Assessment Year 2016 - 17, pending disposal of the above writ petition. Counsel for the Pe ner: SRI A.V.A.SIVA KARTIKEYA pleased to issue a Direction, declaring Sec. 144 r/w Sec. 1 DIN and Notice No. Counsel for the Res DEPARTMENT W.P.NO:11759 OF 20 Between: Ws GB Madhu Con 50O 047, Telangana. Balachiftiah. AND L dents : SRI VIJHAY K.PUNNA, SC FOR INCOME TAX ns, H.No.14-142, Miqal Guda, Malkajgiri, Hyderabad sented by its Partner, Mr. Gunti Balram, S/o. Mr. Gunti .....PETITIONER 1. Assessment Uni lncome Tax Department,, National e-Assessment Center New Delhi, Room No.401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, New Delhi - 110 2. The lncome Tax Tank Hydera 3. The Principal 2 r Ward 15 1 Hyderabad, lT Towers AC Guards Masab missioner Of lncome Tax 4, Hyderabad lT Towers AC nk Hyderabad. Guards, lt/asab Ta I I I i : .....RESPONDENTS fticle 226 of the Constitution of lndia praying that in the in the affidavit filed therewith, the High Court may be pleased to issue a t of Mandamus or any other appropriate Writ, Order or order passed by the 1st Respondent, uls 147 r/w Sec. Direction, declaring t 144 rlw Sec. 144B of lncome Tax Act, 1961 . dated 1111212023, bearing Dll{. tTBAtASTtst147t2023 411058623838(1), for the Assessment Year 2018 - '19, as arbitrary, illegal, bad n law, void-ab-initio, violative of the principles of natural justice apart from ing violative of Articles 1a, 19(1Xg) and 265 of the and Sec. 148A of the Income Tax Act. 1961 , and the same in the interests of justice. Constitution of lndia consequently set asid I.A.NGl OF 2024 Petition Under ection 151 CPC praying that in the circumstances stated in .ul nsJ, t,J the affidavit filed in port of the petition, the High Court may be pleased to stay al[ further proceedi including any recovery, pursuant to the notice issued by the 1st. Responden s 147 rlvt Sec. 144 r,/,.^v Sec. 1448 of the lncome Tax Act, 1 A Petition Under circumstances stated I 1961, dated 1111212013, bearing DlN.. ITBA/ASTlsl147l2o23-24l1058623838(1), for the Assessment YeLr 2018 - 19, pending disposal of the above writ petition. I Counsel for the Petitilner: SRI A.V.A.SIVA KARTIKEYA Counsel for the Res DEPARTMENT i po I J ndents : SRI VIJHAY K.PUNNA, SC FOR INCOME TAX The Court made the llowing COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRT JUSTICE rt. TUKARAMJI WRIT PETITION ITOs.11729 117304ND LL759or.20.24 COMMON ORDER: (per Hon'ble Justie Sujog paul) Sri A.V.A. Siva Kartikeya, learned counsel for the petitioner(s), Ms. B. Sapna Reddy, Iearned counsel representing Sri J.V. Prasad, learned Standing Counsel for the respondents- Income Tax Department in W.P.Nos. 11730 & 11759 of 2024 and Sri Vijhay K Punna, Iearned Senior Standing appea_rs for the respondents-Income Tax Department in W.P.No.lIT29 of 2024. 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order. 3. It is common ground taken by the learned counsel for tlre petitioner(s) that in furtherance of Finance Act, 2021, re- assessment process stood modihed but the respondents have not taken care of it and therefore notices issued under Section 148 of the lncome Tax Act, 1961 cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. 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 fetitions, W.p.No.2S90 3 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 dated 14.O9 .2C23. 5. 'l'his Court in the said order dated 14.O9.2023 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 foliowed by the respondent-Oepartment upon treating the notices issued for reassessment being uftdei 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-Oepartment is in contravention to the statute i.e. the Finance Act, ZOZ1, 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 procedure adopted being p€r 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 Oepart nent pursuant to the notices issued under Section 147 and 149 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 objection raised by the petitione. 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 point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner lyhich stands reserved to be 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-time measure exercising the powes under To 3 Article l/t2 of the Constltution 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 Reyenue would remain reserved to p.oceed further if they so want from tfte stage of the order of the Supreme Couft in the case of Ashish Agarwal, supra. 39. No order as to costs.\" 6. In view of the consensus arrived, the impugned Show Cause notices and consequential orders passed in this batch of writ petitions are set aside. Libert5r 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 14.09.2023 in W.P.No.259O3 of 2022. 7 . The writ petitions ar-e allowed. No costs. lnterlocutory applications, if any pending, shall also stand closed, SD/. P. PADMANABHA ASSISTANT REGI DDY //TRUE COPY// SECTION OFFICER 1. The Assessment Unit, lncome Tax Department,, National e-Assessment Center, New Delhi, Room No.. 401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, New Delhi - 110 003. 2. The lncome TaxiOfficer Ward 15 1 Hyderabad, lT Towers AC Guards Masab Tank Hyderabad. 3. The Principal Commissioner Of lncorne Tax 4, Hyderabad lT Towers AC Guards, Masab Tank Hyderabad. 4. The lncome TaxlOfflcer, Ward 15(1), Hyderabad, IT Towers, AC Guards, Masab Tank, Hyderabad - 5O0 004, Telangana. 5. The Principal Commissioner of lncome Tax - 4, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 004, Te{angana. 6. One CC to Sri AiV.A.Siva Kartikeya, Advocate IOPUC] 7. One CC to SRI VIJHAY K.PUNNA, SC FOR INCOME TAX DEPARTMENT [oPUC] 8. One CC to SRI (oPtrc) 9. Two CD Copies i J SA KKS {r L V.PRASAD, SC FOR INCOME TAX DEPARTMENT I I I I I I I I 2 HIGH COURT DATED:30/04/ 024 COMMON OR ER WP.Nos.11729 fi73A AND 11759 of 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. .,'i-i.F,1 '.' r ' (- l,I ,,,*r ls} :,li tt ru\" :i (,. ( o J+ ,',/ t i) F 1l' --' I ! t t \". "