Prabhaker Pidisetty V. The Deputy Commissioner of Income Tax And 2 Others

WP/44991/2022

AI Insights

The case involves Prabhaker Pidisetty, the petitioner, challenging the legality of notices and orders issued by the Income Tax Department under Sections 148 and 148A of the Income Tax Act, 1961, for the assessment year 2013-14. The petitioner argued that the reassessment process followed by the respondents did not comply with the modified procedures set by the Finance Act, 2021. The High Court referenced a common order in a batch of writ petitions, including W.P.No.25903 of 2022, which had already addressed similar issues. The court concluded that the notices and proceedings were procedurally flawed and thus illegal, leading to their quashing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690323 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-07-2024
• 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 REDDY; GADI KUMAR
• Assessee Lawyers: VENKAT RAM MANTUR
• Keywords: Certiorari; Certiorari; Consequential proceedings; Jurisdiction; Limitation; Mandamus; Notice; Reassessment; Writ petition
• Section: 148; 151; 148A(d)

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original J urisdiction) TUESDAY, THE SECOND DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL ' l) THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 44991 OF 2022 Between: Prabhaker Pidisetty, S/o. P. Veeraswamy Aged 63 years, H'No 1--B-430/20lA' lnside Uma Gardens, Near Lord Venkateswara Temple, Chikkadpally' Hyderabad, Telangana -500020 ...PETITIONER AND 1 The Deputy Commissioner of lncome Tax, Circle 1(1), Aayakar Bhavan, Hyderabad - 500004. The Principal Commissioner of lncome Tax-1, 3rd Floor' Aayakar Bhavan, Basheerbagh, Hyderabad - 50004. The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Ministry of Finance, New Delhi - 110 001 . ...RESPONDENTS Petition under Article 226 of Ihe 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, one, more particularly in the nature of certiorari and mandamus declaring the inrpugned order dated 2910712022 passed u/s.148A(d) of the Act vide DIN atrd Order No. ITBA/COMIFl1712022 - 2311044307422(1)A as illegal, arbitrary and void ab initio as it is without jurisdiction and barred by limitation and consequently to quash the same along with the original notice issued u/s.148 dated 28106/2021, received by the assesse on 14tO712021 ( DIN and Notice No. ITBA/AST/S/'14812021-2211033719310(1)), and subsequent proceedings initiated u/s.14BA(b) dated 2410512022 vide DIN and Letter No. ITBA/COM/F/1 7 t2022 - 23t1043148071 and consequential notice issued under section 148 0f the Act dated 2910712022 vide DIN and Document No. ITBA/AST/S/91 12022 - 23t1044314042(1) and stay all the consequential proceedings 2 3 lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court m;ry be pleased to stay all further proceedings of the impr\"rgned order dated 29lOll2O22 passed u/s.148A(d) of the Act vide DIN and Order No. tIBAtCOt AtF 11712022- 2311044307422(1)A and notice issued under section 148 of the Act dated 2910712022 vide DIN and Document No. ITBA/ASTlslg1l2O22 - 23t1044314042(1) for the A.Y.201 3 - '14 along with consequential Irroceeclings Counsel for the Petitioner: SRl. VENKATRAM REDDy MANTUR Counsel for the Respondent NOs.1&2: MS. B. SAPNA REDDY (SC FOR TNCOME TAX) Counsel for the Respondent NO.3: SRI GADI PRAVEEN KUMAR Dy. SOLICITOR GENERAL OF INDIA The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO ORDER: (per Hon'l;le ,Justice Sujog Paul) Heard Sri Venkatram Reddy Mantur, lea-rned counsel for the petitioner(s), Sri B.Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for the respondents Central Government and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for the respondents-lncome Tax Department. 2. The ground taken bv the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2027, re' assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Ta-x Act, 196 I cannot sustain judicial scrutiny. Since notice is bad in lau,, the consequential orders are also bad in lalr,. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drau'n by this Court in a batch of writ petitions, W.P.No.25903 of 2022 WRIT PETITION No.44991 OF 2022 2 and other connected matters, decided by common order dated 14.09.2O23. The parties agreed that this matter ma1\" be disposed of in terms of the Common Order dated 14.09.2023 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 noq, very clear that the procedure to be followed by the respondeut- Department upon treating the notices issued for reassessment being under Section 148A, the subsequent ptoceedings was mandatorily required to be undertakel under the substituted provisions as laid dowE urder the Finance Act, 2O21. In the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2O21, at the Iirst instance. Secondly, it is also in di.ect contravention to the directives issued by the llon'ble Supreme court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasolrs, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordi[gly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department putsuant to the notices issued under Sectiol 147 and 148 would 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 wrong, the subsequent orders also gets nullified automatically. 37- The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point ofjurisdiction, we are not iaclined 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 llon'ble Suprerne Court had, in the case of Ashish Agarwal, supra, as a one-time measule exercising the polsers under Article 142 of the Constitution of India' permitted the R€venue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so watrt from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No orde. 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 paragraph No.3B of the order dated 14.09.2023 rn W.P.No.259O3 of 2022. 6. The Writ Petition is allowed. No costs. Interlocutory applications, if aly pending, shall also stand closed SD/. C. PRAVEEN KUM ASSISTANT REGIST AR AR ,TRUE COPY// SECTION FFICER To, 7. Two CD CoPies KKS GJP Qrnh. 1. The Deputy Commissioner of lncome-[ax' Circle 1(1)' Aayakar Bhavan' Hyderabad - 500004' 2 The Principal Commissioner of lncome Tax-'l ' 3rd Floor' Aayakar Bhavan' ' B;;i\";;#sh, HYderabad -5ooo4 Illfi , lil \"J? Pt ] :x;?, t-H\"#.I:11%\"o31 :' \"''e n t' De p a rtm e nt or Reve n u e' One CC to SRl. VENKATRAIVI REDDY IVIANTUR Advocate IOPUCI One CC to MS. B.SAPNA REDDY (SC FOR INCONIE TAX) [OPUC] oneCCtoSriGadiPraveenKumar'DeputySolicitorGeneraloflndia[oPUC] 3 4 ( 6 HIGH COURT DATED:0210712024 ORDER WP.No.44991 of 2022 ALLOWING THE WRIT PETITION WITHOUT COSTS E H 1 2 3 ECT 2|Il4 --_:--_ - - qLsl\"\"' "