Nawsherwan Adil Mirza Shakeebai V. Union of India, Rep. by its Secretary, Finance Department, North Block New Delhi and Principal Commissioner of Income-tax, Hyderabad-I and Income-tax Officer, Ward-14 (I), Hyderabad

WP/17454/2024

AI Insights

The case involves Nawsherwan Adil Mirza Shakeebai, the petitioner, challenging the legality of a notice issued by the Income Tax Officer, Ward-14(1), Hyderabad, for reopening his income tax assessment for the year 2020-21. The notice was issued under Section 148 of the Income Tax Act, 1961, which was contested on the grounds of procedural impropriety following the amendments introduced by the Finance Act, 2021. The petitioner argued that the respondents failed to adhere to the modified reassessment procedure, rendering the notice and subsequent orders illegal. The court referenced a common order in a batch of writ petitions, including W.P.No.25903 of 2022, which had set a precedent on this issue.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 815549 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 08-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; B REDDY
• Assessee Lawyers: Y RATNAKAR
• Keywords: Income tax assessment; Mandamus; Procedural impropriety; Quashing of notice; Reassessment
• Section: 148; 151; 151A

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) [/ONDAY, IHE EIGHTH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO:17454OF 2024 Between: Nawsherwan Adil Mirza Shakeebai, S/o. Late Ab{ul Ahmed, aged 65.years' Occ; ijr.i\"\"i\"'tirO, H\"'ght., Plot No.10d, Road No 12, Baniara Hills' Hyderabad' .....PETITIONER AND 1. Union of lndia, Rep. by its Secretary, Finance Department' North Block New Delhi. 2. Principal Commissioner of lncome{ax, Hyderabad-l' 3. lncome-tax Officer, Ward-14 ( l ), Hyderabad' .....RESPONDENTS Petition Under Article 226 of lhe constitution of lndia praying that in the circumstancesstatedintheaffidavitfiledtherewith'theHighCourtmaybe pleased to issue a writ in the nature of Mandamus or any other writ, order or direction declaring that the notice issued by the Respondent No.3 for assessment year2O2o-2lreopeningthelncomeTaxassessmentu/s.,l48ofthelncomeTax Actlg6lbearingPANCCUPS2400J,dated2St3t2o24andDlNandMticeNo. ITBfuAST/S/148-112023- 2411063580464(1), as illegal, untenable, unsustainable andcontrarytotheprovisionsofSectionl51Aoftheincome-taxAct'1961and notification issued bearing s.o.1466(E) (No.1B/2O22 E.No.37014211612022' TPL{Part-1 ) daled 29t3t2O22 and be pleased to quash the same' I.A.NO:1 OF 2024 Petition under section i 51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to suspend the notice issued by the Respondent No.3 u/s.i4g of the LT.Act, dated 2 l3t2o24 for asst. year 2020-21 bearing pAN ccups2400J and DIN and notice No. ITBAJAST t S I 1 48 - 1 I 2023- 24t 1 063580 464(1 ). Counsel for the Petitioner : SRI Y.RATNAKAR lognqel for the Respondent No.1 : sRr B.MUKHERJEE, ADVOCATE FoR sRl GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA 99_rl:\"] for the Respondent Nos.2 & 3 : Ms. B.SAPNA REDDy, SC FOR INCOME TAX DEPARTMENT The Court made the following ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HOI{OURABLE SRI JUSTICE NAMAVARAPU RAJESTIWAR RAO WRIT PETITION No.L7454 OF 2o24 ORDER: (per Hon'ble Justice SujoY Paul) Heard Sri Y.Ratnakar, learned counsel for the petitioner; Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.1; and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for respondent Nos.2 and 3. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021 , re- assessment process stood modihed 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 law, the consequential orders are also bad in law. 3. During the course of hearing, Iearned 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.259O3 of 2022 ald other connected matters, decided by common order t, re -'r' 2 dated 14.09.2023. The parties agreed that this ma.tter may be disposed of in terms of the Common Order dated L4.O9.2023. 4. This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: '35. In view of the aforesaid discussions, it is by noc, vcry clear that the procedure to be followed by the respoEdeEt- Department upon treating the notices issued for teassessment bcing uader Section 148A, the subsequeEt proceedings was maldatorily required to be uldertaken under the substituted prowisions as laid doEE under the Finatrce Act,2O2l. In the absence of which, we are constraiEed to hold that the proccdure adoptcd by the respondent-DepartDent is in contraventior to the statute i.e. the Fiaarce Act, 2021. at the first instance, Secoldly, it is also iE direct contravention to the directives issued by the Hon'ble SupreEe Court ilr the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the iBpugDed loticcs issued and the proceedilrgs drawtr by the respoodent-DepartDxent is neither tenable, nor sustaiuable. The notices so issur:d and the procedurc adopted beirg per se illegal, deserves to be ard are accordingly set aside/quashed. As a coasequeace, all the impugned ordcrs gettiEg quashed, the consequeatial orders passed by the respondent DepartEent pursuaEt to the noticcs ,issued under Section 147 and 148 rrould also get quashed and it is ordered accordingly. The teason we are quashing the colsequeEtial order is on the prirciples that when the initiatiou of the proceedilgs itself was procedurally wrong, the subsequent orders also gets nullilied autonatically. 37. The preliminary objection raised by the petitiotrer is sustained and all these writ petitioEs stands allowed oE this very jurisdictioDal issue. SiEce the iEpugned notices and orders are gettiag quashed otr the poiEt ofjurisdiction, we are aot iacliaed to proceed further and decide the othet issues raised by the petitioaer which stands reserv€d to be raised and coEteDded in an appropriate proceedi[gs. 38. Siace the Hon'ble Supreme Court had, in the case of Ashish Agarsal, supra, as a one-tiEe Eleasure exercisiog the powers uader Article 142 of the Coastitution of India, .. 3 perEitted thc Revenue to proceed under the substituted ptovisions, aEd this Court atlosing the petitions only on the procedural lIaE, the right coaferred oa the Reveaue would reEain reserved to proceed further if they so waat froE the stage of the order of the Supreme Court i[ the case of Ashish AgarFal, supra. 39. No order as to costs.\" 5. In view of the consensus arrived, the impugned Show Cause notice and consequentia-l 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 pa-ragraph No.38 of the order dated 14.09.2023 in W.P.No.259O3 ot 2022. 6. The writ petition is allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/- MOHD.SANAULLAH ANSARI ASSISTANT REGI RAR //TRUE COPYII SECTION OFFICER The Secretary, Union of lndia, Finance Department, North Block New Delhi. The Principal Commissioner of lncome-Tax, Hyderabad-1. The lncometax Officer, Ward-1 4('1 ), Hyderabad. One CC to Sri Y.Ratnakar, Advocate {OPUCI One CC to Sri Gadi Praveen Kumar, DEPUTY SOLICITOR GENERAL OF rNDrA [OPUC] One CC to Ms. B.Sapna Reddy, SC FOR INCOME TAX DEPARTMENT {oPUC) Two CD Copies To 1. 2. 3. 4. 5. o. 7. SA LS s HIGH COURT DATED:0810712024 ORDER WP.No.17454 oI 2024 ALLOWING THE W.P WITHOUT COSTS. w' i 12 lu :/al o 1ll -c ii ,'4 i6. isp,rr --: ]HeO I 6 ( .|. it o a i\" t "