Mrs. Uma Devi Gottumukkala V. Assessment Unit, Income Tax Department, National e-Assessment Center and Income Tax Officer, Ward 12(1), Hyderabad and Principal Chief Commissioner of Income Tax, Andhra Pradesh and Telangana

WP/22621/2024

AI Insights

The case involves Mrs. Uma Devi Gottumukkala, the petitioner, challenging the reassessment notice and penalty show cause notice issued by the Income Tax Department for the assessment year 2015-16. The petitioner argued that the notices were issued without adhering to the modified procedures under the Finance Act, 2021, and violated principles of natural justice and constitutional rights under Articles 14, 19(1)(g), and 265. The respondents included various officials from the Income Tax Department. The court referenced a common order in a batch of writ petitions (W.P. No. 25903 of 2022) which had already addressed similar issues, leading to the decision to set aside the notices and orders in this case as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 812951 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 21-08-2024
• 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
• Assessee Lawyers: S VIJAY ADITHYA
• Keywords: Finance Act 2021; Income Tax; Natural Justice; Reassessment; Writ of Mandamus
• Section: 147; 144; 271(1)(c); 151; 144B; 148A; 226

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Speciat Original Jurisdiction) WEDNESDAY, THE TWENTY FIRST DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT [ 3411 ] THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HoNoU RAB LE SRI I usTIcTTTDTvTAVARAPU RAJ ESHWAR RAo WRIT PETITI ON NO: 22621 0F 2024 Between: Mrs. Uma Devi GottumukkaJa.,- !l,ot No.73, Devi Elight, Vengal Rao Nagar Road, S.R.Nagar, Hyderabad-500 038. AND ...PET|T!oNER '1 . Assessment Unit, rn_come Tax Department, Nationar e-Assessment center. Room No.40'1 , 2nd Froor, E-Ramf , Jawahirrar rverrru stioium, ri!*btii,i-i r o 003. 2. lncome TaxOfficer, Wr( 1?(|,^lyderabad, 2nd Ftoor, Aayakar Bhavan, Basheerbagh, Hyderabad-500 029. 3. Principal Chief Commissioner of lncome Tax, Andhra pradesh and fglqlgunu, Hyderabad.l0-2-^3, Room No.922, sfli Fbor, EV Biii.I rr ro*\"rr, AC Guards, Hyderabad-500 004. ...RESPONDENTS Petition under Article 226 of the cohstitution of lndia praying that in the circumstances stated in the affidavit fired 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, under section 147 read with 144 read with Section 1448 of the rncome Tax Act, 1961, dated 1613.2024, bearing DrN rrBA/AST/s/14712023-241106224544s(1), for the assessment year 2015-16 and (b)the penalty show cause notice under Section 271(1xc) bearing DrN rrBA/ pNL/F1271(1)(02o24-2sr1o64Bt227B(1) dated 141512024 as arbitrary, illegal, bad in law, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1xg) and 265 of the constitution of lndia and section 14gA of the lncome Tax Act, 1961 , and consequently set aside the same in the interests of justice. l I I I I I I l IA NO: 1 0F 2024 PetitionunderSectionl5lCPCprayingthatinthecircumstancesstatedin theaffidavitfiledinsupportofthepetition,theHighCourtmaybepleasedtostay all further proceedings' including any recovery, pursuant to the notice issued by the 1st Respondent, under Section 147 -ead with section 144 read with section 1448 oI the lncome Tax Act, 1961, dated 16.3.2024, bearing DIN: ITBA/AST/ sl14712023-24t1062745445(1) for the assessment year 2015-16 and the penalty showcausenoticeunderSection2Tl(1)(c)bearingDlN:ITBA/PNL/F/ 271(1)(c)t2O2 -2511O64872278(1) dated 14.5'2024, pending disposal of the Writ Petition as otherwise the Petitioner will be put to severe loss and hardship. Counsel for the Petitioner: SRI S.VIJAY ADITHYA Counsel for the Respondents: SRI BOKARO SAPNA REDDY, Jr' SC FOR INCOME TAX The Court made the following: ORDER THD HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA^IESIIWAR RAO WRIT PETITION No.22621 OF 2o24 ORDER: (per Hon'ble Justice Sujoy Poul) Heard Sri S. Vqay Adithya, learned counsel for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for the respondent(s)' 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, te- 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 1aw, 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 finally drawn by this Court in a batch of writ petitions, W'P'No'25903 ol 2022 and other connected matters, decided by common order dated 14.09. 2023. Tine parties agreed that this matter may be disposed of in terms of the Common Order dated 14'O9'2023' 2 4. This Court in the said order dated 14'09'2Ct23 in W.P.No.25903 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by tbe respondent- Department upon tteating the notices issued for reassessment being under section 148A, the subsequent proceedings was maEdatorily required to be undcrtaken under the substituted provisions as laid down under the Finance Act, 2021. ln tlre absence of which, !f,e are constrained to hold that the procedure adopted by the resPondent-Department is in contraventioD to the statute i.e- the Firaace Act,2O21, at the Iirst instance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble supreme Court in the case of Ashish Agarc/al, suPra. 36, For all the aforesaid reasous, the iulpugned notices issued and the proceediugs drawn by the respondeDt-Department is reithet tenable, nor sustainable. The notices so issued and the procedure adoPted being per se illegal, deserves to be and are accordiagly set aside/quashed. As a consequence, all the impugued orders gettiEg quashed, the consequential orders passed by the tespondent Department Pursuant to the notices issued undet section 147 and 148 sould 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 wroag, the subsequent orders also gets nullified automatically. 37. The preliminary objection raised by the petitioner is sustained and all these etit petitions stands allowed on this very jurisdictional issue. Since the impugned notices ar1d otders are getting quashed on the poiat ofjurisdictiol, we are not inclined to proceed further and decide the other issues raised by the petitioncr which stands teseryed to be raised and contended itr an appropriate proceedilgs. 38. Since the Hoa'blc Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Cotrstitutioa of India, permitted the Reverue to proceed under the substituted provisious, and this Court allowilrg the petitions only on the procedural flaw, the right conferred on the Revenue would remain rescrved to proceed further if they so want from the 3 stage of the order of the Supteme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" 5. In view of the consensus arrived, the impugned 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 14.09.2023 in W.P.No.25903 of 2022. 6. The Writ Petition is allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/-K.AMMAJI ASSISTANTRE_J}laTRAR )' SECTION OFFlCER Assessment Unit, lncome Tax Department, National e-Assessment Center' ii\"\"r-rtr\".+oi, ino rtoor, E-Rami, Jawaharlal Nehru Stadium, New Delhi-1 10 003. t-ni-ome tax Officer, Ward 12(1 ), Hyderabad, 2nd Floor, Aayakar Bhavan' Basheerbagh, HYderabad-500 029. Fri\"CLilcfii.it Cbmmissioner of lncome Tax, Andhra Pradesh and i.\"i;;E;;;. Hvo\"rJoio io-z-e, Room No.922, 9th Floor, EV Block, lr Towers, AC GJards, H:yderabad-SO0 004. one cc to sni s.vuny ADITHYA, Advocate to?ucj- 5;i; cc i; sRi BoKARo sAPNA aroov, Jr.-sc FoR INCoME TAX loPUCl Two CD Copies //TRUE COPY// To 1 2 o PSK. BSR - V 3 4 t HIGH COURT DATED:21 10812024 ORDER WP.No.22621 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS. _.1: -- ,a- ,, -. ?t :l f ,., f{ o .: : 1S lil r0A +- a- ''__' @) ,i n o, "