N Syama Sundar Naidu V. The Union Of India and Others

WP/8461/2024

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The case revolves around a writ petition filed by N Syama Sundar Naidu challenging the order issued under Section 148A(d) of the Income Tax Act, 1961, by the 3rd respondent. The petitioner contested the jurisdiction of the Assessing Officer to issue a notice under Section 148 for the Assessment Year 2015-16, citing the provisions of Section 149 prior to its amendment by the Finance Act, 2021. The petitioner argued that the notice was issued beyond the permissible time limit and violated principles of natural justice. The respondents countered that the petitioner had not filed any returns for the said assessment year and had not responded to show cause notices. However, the court found that the account number referenced in the notice did not match any records pertaining to the petitioner, leading to the setting aside of the impugned proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 800568 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 11-02-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: G ARUN SHOWRI; Y N VIVEKANANDA
• Assessee Lawyers: N KUMAR
• Keywords: Assessment Year 2015-16; Income Tax; Notice; Violation of Principles of Natural Justice; Wrong Account Number
• Section: 149; 148A(b); 148A(d)

Judgement Text

" APHC010069432024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3516] TUESDAY, THE ELEVENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE B. KRISHNA MOHAN THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO: 8461/2024 Between: N Syama Sundar Naidu ...PETITIONER AND The Union Of India and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. N RAMESH KUMAR Counsel for the Respondent(S): 1. G.ARUN SHOWRI(CENTRAL GOVT. COUSEL) 2. Y N VIVEKANANDA 2 HBKM,J & HVN,J W.P.No.8461 of 2024 The Court made the following: ORDER: (Per Hon’ble Sri Justice B. Krishna Mohan) Heard Mr. N. Pavan Kumar, the learned counsel representing Mr. N. Ramesh Kumar, the learned counsel for the petitioner and the learned Standing Counsel for the respondents. 2. This writ petition is filed questioning the order of the 3rd respondent issued under Section 148A (d) of the Income Tax Act, 1961 (hereinafter referred as “the Act”) dated 11.04.2022 on the ground that as per the information available, that the income chargeable to tax represented in the form of asset, amounts to more than fifty lakh rupees has escaped assessment and on the basis of material available on record, it is concluded that in respect of the petitioner/assessee, it is a fit case for issuance of notice under Section 148 of the Act for the Assessment Year 2015-16. 3. The learned counsel for the petitioner submits that in this case, the notice was issued under Section 148A (b) on 17.03.2022 for the Assessment Year 2015-16 calling upon to submit reply within 7 days i.e., by 24.03.2022. The said notice was sent as an attachment to the Email dated 31.03.2022 and the notice was issued under Section 148 of the Act dated 11.04.2022 and on the same day, the impugned order was passed under Section 148 A (d) of the Act. The main contention of the petitioner is that pursuant to the Section 149 of the Act, the Assessing authority has no jurisdiction to issue notice under Section 148 dated 11.04.2022 for the Assessment Year 2015-16 and it is 3 HBKM,J & HVN,J W.P.No.8461 of 2024 contrary to the proviso 1 of Section 149 of the Act, as it was mandating position of pre-Finance Act 2021 since the assessment year involved in this writ petition is for the assessment year 2015-16. Finally he submits that the impugned order under Section 148A (d) dated 11.04.2022 was issued in violation of principles of natural justice. 4. He further submits that in fact the petitioner’s wife initially submitted first reply dated 05.04.2022 to the 3rd respondent stating that the writ petitioner received a notice dated 17.03.2022 under Section 148 A (b) of the Act, based on account activity in A/c No.52383373, Andhra Bank. In view of the admission of her husband in the hospital in Bangalore they could not submit any reply and they sought time for a period of three (03) months to come before the authority along with the supporting documents. 5. Subsequently, the petitioner also issued another letter dated 09.08.2023 to the grievance cell of the department. The petitioner again submitted a letter dated 13.10.2023 addressed to the Andhra Bank Manager seeking the details of the account No.52383373 contending that it does not belong to him. Accordingly, the Union Bank of India, Tirupati Branch also issued a certificate stating that the petitioner is the customer of this bank and however he is not maintaining the account No.52383373 in their branch. On 08.11.2023 also the petitioner’s wife addressed a similar letter to the grievance cell of the department informing that again the husband/the writ petitioner was hospitalized and sought time to submit any proceedings and to confirm the 4 HBKM,J & HVN,J W.P.No.8461 of 2024 bank details. But that letter was returned with an endorsement “insufficient address”. However, there was no response from the department for any of these letters addressed either by the petitioner or by his wife. 6. Be that as it may, the learned counsel for the petitioner mainly harps upon the provisions of Section 149 of the Income Tax Act, prior to amendment by way of Finance Act, 2021, which deals with time limit for notice as under:- 149. Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year, - (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; 7. He also refers to the amendment by way of Finance Act, 2021 with effect from 01.04.2021 to the Section 149 of the said Act, which reads as under:- (1) No notice under section 148 shall be issued for the relevant assessment year, – (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); 1[(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of - 5 HBKM,J & HVN,J W.P.No.8461 of 2024 (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if 2 [a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021: (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. 8. Relying upon the said provision, the learned counsel for the petitioner submits that the six year time limit would have expired in this case on 31.03.2022 for the assessment year 2015-16. Whereas, the impugned notice under Section 148 was issued on 11.04.2022. 9. On the other hand, the learned Standing Counsel appearing for the respondents relying upon the counter of the respondents submits that in this case, the petitioner has not filed any returns for the said assessment year and not replied for the show cause notices he received and as such, the impugned order under Section 148 A (b) of the Act, 1961 was passed by the 3rd respondent, which was assailed in this writ petition. But it is very clear from 6 HBKM,J & HVN,J W.P.No.8461 of 2024 the counter of the respondent-department that as they admitted that due to typographical error in mentioning the branch, as several hundreds of notices were issued in a just two days. The data was uploaded by the bank and accordingly in the petitioner’s case also, the said mistake was crept in, in the said notice issued to the petitioner/assessee. But he has got all the time to deny the details, they are not matching by providing the correct details. Instead of getting a certificate from the bank that the account details furnished in the impugned notice does not belong to the petitioner even he should have given the correct account details with a SBI account. 10. He further pleaded that there were subsequent developments after passing the impugned order under Section 148 A (d) of the Act, 1961 dated 11.04.2022 as it was ultimately culminated in passing the assessment order by the 3rd respondent dated 12.01.2024. If so aggrieved the petitioner can assail the same and this writ petition becomes infructuous in view of the subsequent development of passing of the assessment order by the 3rd respondent. 11. In view of the above said facts and circumstances and upon consideration of the rival submissions made, the counter of the respondents is very clear that the account number referred by them in respect of the petitioner is not matching in any aspect to sustain the impugned show cause notice issued by the 3rd respondent and in view of the same, even though the subsequent developments were occurred, the same would not stand for the 7 HBKM,J & HVN,J W.P.No.8461 of 2024 scrutiny of law. Since the impugned notice and other proceedings are defective with respect to the material factum of mentioning the wrong account number to the petitioner, the whole proceedings shall go which occurred till the date of issuing the show cause notice to the petitioner for the said assessment year. 12. In view of the same, we allow the writ petition by setting aside the impugned proceedings of the 3rd respondent and the consequential proceedings of the 3rd respondent including the assessment order as referred above. Consequently the respondent-department is directed to take appropriate action if any strictly basing upon the correct material particulars against the petitioner, if so, warranted under law. The writ petitioner shall furnish the correct bank details and the other relevant details to the department whenever it is required. 13. Accordingly, this writ petition is allowed. There shall be no order as to costs. As a sequel, Interlocutory Applications pending, if any, shall stand closed. __________________________ JUSTICE B. KRISHNA MOHAN ________________________ JUSTICE NYAPATHY VIJAY 11.02.2025 PGT "