M/s GB Madhu Constructions V. Assessment Unit, Income Tax Department,

WP/11759/2024

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 thus illegal and void. The High Court, referencing a previous batch of writ petitions (W.P.No.25903 of 2022), found that the procedure followed by the Income Tax Department was in violation of the statutory provisions and the Supreme Court's directives, leading to the quashing of the notices and consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690678 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 30-04-2024
• 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: B SAPNA REDDY; VIJHAY PUNNA
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Reassessment; Writ of Mandamus
• Section: 147; 148; 144; 151; 226

Judgement Text

"[ 3403 ] HIGH URT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) , TH€ TU T l J DAY, THE THIRTIETH DAY OF APRIL WO THOUSAND AND TWENTY FOUR PRESENT ONOURABLE SRI JUSTICE SUJOY PAUL AND )NOURABLE SRI JUSTICE N.TUKARAMJI Rt/o. H.No. 5-6-230, Mahboob Pura. Jagital, Karimnagar ana. .....PETITIONER THE H J. WRIT PE toN NOS:11729. 11730 AND 11759OF 2024 W.P.No.11729 ot 2024 Between: Mr. Syed Niyaz Ahmed, S/o. Mr. Ahmed Syed, Aged 67 years, Occ.- Retired State S8ffifT.\"#*ru1; I I ,1 AND 1. Assessment Un lncome Tax Department, National e-Assessment Center. New Delhi, Roorh No.- 4O1,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 1 10 po3. I 2. The lncome TaxlOfficer, Ward - 1. Karimnagar, Income Tax Office, Aayakar Bhawan, Near Nhtraj Theatre, Karimnagar --5O5 0Ol , Telangana. I 3. The Principal Chlef Commissioner of lncome 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 l Petition Under Article 226 of the Constitution of lndia praying that in the circumstances stated I 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, uls 147 r/w Sec. 1448 ot the lncome Tax Act, 1961, dated O5lO3l2O24, bearing DIN and Notice No.- lTBtuASTlsl14712023-2411062048269(1), for the Assessment Year 2015 - 16 as arbitrary, illegai, bad in law, void-ab-initio, violative of the principles of natural justice, apart from being violative of Articles 1 4, 1 9(1 xg) and 26s of the Constitution of lndia ] and Sec 148A of the lncome Tax Act, 1 961 , and consequently set asidd the same in the interests of justice. !.A.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 1st Respondent, u/s 147 rtw Sec. 1448 of the lncome Tax Act, 1961, dated O5.O3.2O24, bearinj DtN and Norice No.- |TBAiAST/S/141t2O23- 2411062048269(1), foithe Assessment year 2015 - 16, pending disposat of the 'l above writ petition. i l Counsel for the Petitioner : SRI A.V.A.SIVA KARTIKEYA Counsel for the Respdndents : Ms. B.SAPNA REDDY, COUNSEL REPRESENTING SRI J.V.PRASAD, SC FOR INCOME TAX DEPARTMENT W.P.I{O:11730 OF 202.4 Between: Ms. Roshini Khanam, D/o. Mr. Jameel Mohammed Khan, Aged 38 years, Occ. House Wife, R/o. 1 Telangana. 2-4191M112, Hafez Baba Nagar, Hyderabad 500 058, .....PETITIONER AND 1 . Assessment Unil , lncome Tax Department, National e-Assessment Center. New Delhi, Roorh No. 4O1 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 O03. I 2. The lncome TaxlOfftcer, Ward 9(1 Guards. Hyderabad - 500 004, Tel I 3. The Principal Chlef Commissioner Telangana. Hyddrabad Room No. AC Guards, Ftydbrabad - 500 004, ), Hyderabad, LT-Towers, '10-2-3, AC angana. of lncome Tax, Andhra Pradesh and 922,9th Floor, B Block, LT.Towers, 1O-2-3, Telangana. .....RESPONDENTS fticle 226 of the Constitution of lndia praying that in the n the affidavit filed therewith, the High Court may be Petition Under A circumstances stated I pleased to issue a Writ of lrrlandamus or any other appropriate Writ, Order or t the order passed by the 1st Respondent, uls 147 rlw of the lncome Tax Act, 1961, dated 1110312024, bearing DIN and Notice No. ITBA/AST/S/14712O23-24t1062353174(1 ), for the Assessment w, void-ab-initio, violative of the lative of A(icles 1a, 19(1 )(g) and the lncome Tax Act, 1961, and to of justice. I.A.NO:1 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 all further proceedi the 1st Responden , including any recovery, pursuant to the order passed by s 147 w Sec. 144 r/w Sec. 1448 of the lncome Tax Act I 1961 , dated 11to3t2d24. bearing DIN and Notice No. ITBA/AST/S/14712O23- Direction, declaring ttia Sec. 144 r/w Sec. 14418 I Counsel tor tte nesJna DEPARTMENT I W.P.NO:11759 OF 2024 2411O623s317 4(1), the Assessment Year 2016 17, pending disposal of the above writ petition Counsel for the Pet ner: SRI A.V.A.SIVA KARTIKEYA ents : SRI VIJHAY K.PUNNA, SC FOR INCOME TAX Between: Ws GB Madhu Co ctions, H.No.14-142, Miial Grlda, Malkalgiri, Hyderabad - 50O 047, Telangana Balachiftiah- epresented by its Partner, Mr. Gunti Balram, S/o. Mr. Gunti .....PETITIONER AND 1. Assessrnent Un lncome Tax Department,, National e-Assessment Center, New Delhi, Roorir No.401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, New Delhi - 11O 2. The lncome Tax 3 Tank Hydera 3. The Principal mtssioner Of lncome Tax 4, Hyderabad lT Towers AC Hyderabad. fficer Ward 15 1 Hyderabad, lT Towers AC Guards Masab Guards, Masab Tank Year 2016 - 17, as principles of natural 265 of the Consti consequently set a t, I Petition Una.r. I circumstances stateo I i pleased to issue a Wiri Direction, declaring thL 144 rlw Sec. 1+48 of tL .....RESPONDENTS rlicle 226 of the Constitution of lndia praying that in the n the affidavit filed therewith, the High Court may be t of Mandamus or any other appropriate Writ, Order or order passed by the 1st Respondent, uls 147 r/w Sec. e lncome Tax Act, 196'1 , dated 1111212023, bearing DlN.. 2411058623838(1), for the Assessment Year 2018 - 19, as n law, void-ab-initio, violative of the principles of natural ITBA/AST/S/147l2023 arbitrary, illegal, bad justice apart from ing violative of Articles 1a, 19(1Xg) and 265 of the and Sec. 148A of the lncome Tax Act, 1961, and the same in the interests of justice. Constitution of lndia consequently set asid |.A.NO:1 OF 2024 Petition Under ection 151 CPC praying that in the circumstances stated in Counsel for the Res DEPARTMENT ndents : SRI VIJHAY K.PUNNA, SC FOR INCOME TAX The Court made the lowing COMMON ORDER I the affidavit filed in sufport of the petition, the High Court may be pleased to stay I all further proceedingd, including any recovery, pursuant to the notice issued by the 1st Respondent, Js 147 rlw Sec. 144 r/r,^,,Sec. 1448 ot the lncome Tax Act, '1961, dated 11t12120)3,bearing DlN.. lTBAiASTtsl147t2O23-24/1053623838(1), for the Assessment yJr 2018 - 19, pending disposal of the above writ petition. I Counsel for the Petititner : SRI A.V.A.SIVA KARTIKEYA THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI wRrT PEf,ITION ItOs. I 1729 11730 AND LtT59 0F 20.24 COMMON ORDER: @er Hon,ble Justie suhg paut) Sri A.V.A. Siva Kartikeya, leamed counsel for the petitioner(s), Ms. B. Sapna Reddy, learned counsel representing Sri J.V. Prasad, learned Standing Counsel for the respondents- Income Tax Department in W.P.Nos.1173O & 11759 of 2024 and Sri Vijhay K Punna, learned Senior Standing appears for the respondents-Income Tax Department in W.P.No.Il729 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 the petitioner(s) that in furtherance of Financ e Act, 2O2I, re- assessrnent process stood modifted but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income 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 2 of writ petitions, W.P.No.2S903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9.2023. 5. This Court in the said order dated 14.09 .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 followed by the respondent-Department upon treating the notices issued for reassessment being under Section 1.8A, 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 lo hold that the procedure adopted by the respondentoepartment is in contrayention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in darect 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-Oepartment 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 consequenual orders passed by the respondent Oepartment puEuant to the notices issued under Section 147 and 149 would also get quashed and it is ordered accordingly. The reason we arc 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 obiection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurasdictional 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 which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case ot Ashish Agarwal, supra, as a one-time measure exercising the po!, /ers under 3 Articte 142 of the Constkution of lndia, permitted the Revenue to proced under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, th€ right conferred on the Revenue would remain nesewed to proceed further if they so want from the stage of the order of the Supreme Court 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. 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 14.09.2023 in W.P.No.259O3 of 2022. 7. The writ petitions are a-llowed. No costs. Interlocutory applications, if any pending, shall also stand closed. REDDY ETRAR SD/. P. PADMANABHA ASSISTANT REGI To SA KKS //TRUE COPY// N SECTION OFFICER 1. The Assessment Unit, lncome Tax Department,, National e-Assessment Center, New Delhi, Room No.. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. 2. The lncome TaxjGfioer 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 TaxlOfficer, Ward 15(1), Hyderabad, IT Towers, AC Guards, Masab Tank, Hyderabad - 5O0 004, Telangana. 5. The Principal Cornmissioner of lncome Tax - 4, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 5O0 004, Telangana. 6. One CC to Sri A,;V.A.Siva Kartikeya, Advocate IOPUC] 7. One CC to SRI VIJHAY K.PUNNA, SC rcR INCOME TAX DEPART]VIENT [oPUCl ] 8. One CC to SRI J.V.PRASAD, SC FOR INCOME TAX DEPARTMENT (oPrrc) 9. Two CD Copies fr & HIGH COURT DATED:30/04/ 024 A t;. 0. o J 1s'! t t ... E t' I j COMMON OR ER 1 1 WP.Nos.11729l AND 11759 oI2 11730 024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. \",' I, nS- 7 "