Mrs.Padma Gurram V. The Income Tax Officer

WP/24989/2024

AI Insights

The case involves Mrs. Padma Gurram, the petitioner, challenging several notices and orders issued by the Income Tax Department under the Income Tax Act, 1961. The notices were related to reassessment proceedings which the petitioner argued were not conducted in accordance with the modified procedures set out by the Finance Act, 2021. The petitioner contended that the notices were issued without jurisdiction, violated principles of natural justice, and were arbitrary and illegal. The respondents included the Income Tax Officer, Ward-1, Income Tax Office, Kothagudem, the Principal Chief Commissioner of Income Tax, Hyderabad, and the Union of India represented by the Secretary to the Government, Ministry of Finance. The court's decision was influenced by a previous common order in a batch of writ petitions, which set a precedent for the procedural requirements that must be followed in such cases.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752806 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 11-09-2024
• 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: BOKARO SAPNA REDDY; B MUKHERJEE
• Assessee Lawyers: KARAN TALWAR
• Keywords: Article 14; Article 19(1)(g); Income Tax; Jurisdiction; Natural Justice; Reassessment; Writ of Mandamus
• Section: 148; 148A(b); 148A(d); 148A(a)

Judgement Text

"[3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARA,PU RAJESHWAR RAO WRIT PETITION NO: 24989 OF 2024 Between: Mrs.Padma Gurram, C/o. Gurram Venkat Reddy, Aged about 53 years, Occ; Residing at D.No.8-2-368, Sundariah Nagar, Manuguru 8.O., Khammam-5071 17. .....PETITIONER AND 1. The lncome Tax Officer, Ward-1 , lncome Tax Office, Kothagudem. 2. The Pr. Chief Commissioner, lncome Tax Department, Hyderabad. 3. Union of lndia, represented by its Secretary to the Government, Ministry of Finance, New Delhi-l '10001 . .....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 issue a Writ, Order or Direction, more particularly one in the nature of Writ of tVandamus'or any other applicable writ declaring and setting aside (i) the impugned notice dated 08.02.2024 vide DIN and Letter No. ITBA/AST/F11712023' 2411060639419( 1 ) issued under Seclion 1 48 A( a) of the lncome Tax Act, 1961 , (ii) the Notice dated 28.02.2024 vide DIN and Notice No. ITBAiAST/F/148tu(SCNy2023-2411061656310('1 ) issued under Section 148A(b) of the lncome Tax Act, 1961 , (iii) the Order dated 29.03.2024 vide DIN andNotice No. |TBAJASTiFll4BAl2023-24l1063590502(1) passed under Section 14BA (d) of the lncome Tax Act, 1961, and consequential (iv) impugned Show Cause Notice dated 30.03.2024 vide DIN and Notice No. ITBA/AST/S/14A 112023- 2411063712243(1 ) issued under Sectron 148 of the lncome Tax Act, 1961 and any consequential notices and orders for being without jurisdiction, in violation of principles of natural justice, patently illegal, arbitrary, violative of Article 14 and Article 'l 9(1)(g) of the Constitution of lndia. l.A.NO:'l OF 2024 Petition Under Section '1 5'1 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay (i) the impugned notice dated 08.02.2024 vide DIN & Letter No. ITBA/AST/F/I712023-2411060639419(1 ) issued under Section .148A(a) of the lncome Tax Act, 1961, (ii) the Notice daled 28.02.2024 vide DIN & Notice No. IrBA/AST/F/1 4BA(scNy2023-24/i 061 65631 0(1 ) issued under secrion 148A(b) of the lncome Tax Act, 1961, (iii) the order dated 29.03.2024 vide DIN & Notice No. |rBA/ASTlFl148Al2023-24l'1063590502(1) passed under section 148A (d) of the lncome Tax Act, 1961, and consequential (iv) impugned Show Cause Notice dated 30.o3.2024 vide DrN & Notice No. rrBA/AST/s/148 112023- 2411063712243(1 ) issued under Section 148 of the lncome Tax Act, 1961 . Counsel for the Petitioner : SRI KARAN TALWAR Counsel for the Respondent Nos.1 & 2 FOR TNCOME TAX) Ms. BOKARO SAPNA REDDY (Jr. SC Counsel for the Respondent No.3 : SRI B.MUKHERJEE, REPRESENTING SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA The Court made the foltowing ORDER 7 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESTIWAR RAO WRIT PETITION No.249a9 0F 2024 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri Karan Talwar, learned counsel for t'he petitioner(s), Ms. B. Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for respondent Nos'1 & 2 and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, Iearned Deputy Solicitor General of India, for respondent No.3. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act' 2O2l' re- assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 1 48 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 frnally drawn by this Court in a batch of writ petitions, W'P'No'25903 of 2022 and other connected matters, decided by common order fi a 2 .*i:ffi yj dated 14.09.2023. Tlne parties agreed that this marrer may be disposed of in terms of the Common Order dated 14.O9.2023. 4. This Court in the said order dated 14.O9.2023 1n W.P.No.259O3 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now very clear that the proccdure to be followed by the respondent_ Department upon treating the lrotices issued fot reassessment being under Section 148A, the subsequent proceedings qras handatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2c/21. ln the absence of which, qre are constraiued to hold that the procedure adopted by the respondent_DepartEent is in contravention to the statute i.e. the Fiuance Act, 2O21, at the first instance. Secondly, it is also in direct conttavention to the directives issued by the Hotr'ble Supreme Court in thc case of Ashish Agarwal, supta. 36. For all the aforesaid reasons, the impugned notices issued arld the proceediDgs drawn by the rcspondent_DepartmeDt is neither tenable, [or sustainable. The notices so issued and the procedure adopted beiEg per se illegat, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugncd orders getting quashed, the consequentia[ ordets passed by the respoadent Department pursuant to the notices issued under Section l4Z and l4g crould also get quashed and it is ordered accordingly. The reason Ee are quashitrg the conseqirential order is on the principles that tflhen the initiation of the proceediugs itself was proceduraLly wrong, the subsequent ordets also gets nuuified automatically. 37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands alloEed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed further and decide the other issues raised by th(j petitioner which stands leserved to be raised and contcndcd in an appropriate proceeditrgs. 38. siDce the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure er.ercising the powers under Article 142 of the CoDstitution of India. { I ) 5. In view of the consensus arrived' the impugrred 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 rs allowed. No costs. Interlocutory applications, if any pendinq ,:!dl =l1o-\"tfgjl9:99'- permitted the Revenue to proceed under the substituted provisions, alrd this court allowing thc petitions only on tbe procedurel flas, thc right conferred on the Revenue would remain reserwed to ploceed further if they so want from the stage of the order of the Suptcme Court ia the case of Ashish AgarEal, suPra. 39. l{o order a6 to costs'\" SD/. P.CH.NAGAB ASSISTANT //TRUE COPY// 1 HUSH BA REGt RAR SECTION FICER I i To, The lncome Tax Officer. Ward-1' lncome Tax Office' Kothagudem' rhe Pr. Chief commissroner'i\";\";;i'; Department' Hvderabad' The secretary to tne ooverJrni'\"iil u=tit?i\"Ti'iJ'' rt'rinittw of Finance' New Bli dd'liH: #&,mb'skH'ff +tss:rl?138\"?R N coM E Hl#['8ff LTol?*uttN KUMAR' DEPUTY solrcrroR GENERAL oF INDIA (OPUC) Two CD CoPies 1. 2. 3. 4. b 7 SA o t I HIGH COURT DATED:1110912024 ORDER WP.No.24989 of 2024 ALLOWING THE W.P WITHOUT COSTS. el4 P 22 "