Primary Agriculture Co-Operative Society Limited Maidipally V. Office of The Income Tax Officer

WP/11146/2024

AI Insights

The case involves multiple writ petitions filed by various Primary Agriculture Co-Operative Societies against the Income Tax Department, challenging the reassessment orders for the assessment years 2018-19 and 2019-20. The petitions argued that the reassessment notices and orders were arbitrary, illegal, and violated the principles of natural justice, among other legal provisions. The court examined the procedural adherence of the Income Tax Department to the Finance Act, 2021, which had modified the reassessment process. The court's decision was influenced by a previous judgment in W.P.No.25903 of 2022, which had set a precedent on the matter.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752980 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 25-04-2024
• Assessment Year: misc
• Other Referred Cases: W.P.No.25903 of 2022
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNITHA; B MUKHERJEE
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Faceless assessment; Income tax assessment; Jurisdictional issue; Natural Justice; Writ of Mandamus
• Section: 147; 14; 148A; 1448; 265; 226; 19(1)(g)

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HON'BLE SRI JUSTICE SUJOY PAUL AND THE HON'BLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NOs.1 1 103 11120 11130 't1131 11146 11168 11175 & 11189 0F 2024 WP NO: 11103 OF 2024 Between Primary Agriculture Co-Operative Society Limited, Potharam,Rep Kantam Gangadhar, S/o. Rajaiah, Aged About 40 Years, R/o. tr/allial Mdl, karimnagar Dist 505452 , Telangana, lndia PAN Assessment Y ear. 2O19-20 By lts Secretary Potharam Vill , AABAP7435L ..PETITIONER AND 1. Office of The lncome Tax Officer, Ward 2,Karimnagar,Telangana State 2. The Prrncipal Chief Commissioner of lncome Tax, Telangana.and A.P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028, Telangana 3. The National Faceless Assessment Center,, lncome Tax Department, New Delhi' 4. The Central Board of Direct Taxes,, Represented by its Charrman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 1 10 001 5. The Union of lndia,, Represented by its Secretary to the Government' Department of Revenue, Ministry of Finance, New Delhi - '1 10 001 ...RESPoNDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumslances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of wril of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment U/S '147 read with section 1448 of the lncome-tax Act Date of order ol 21-02-2024, DIN ITBtuAST/S|14712023' 2411061290772( 1 ) for the Assessment Year 2019-20 determining the total income of Rs. 18,84,979^. as arbltrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, I i ! ! I I I a i : I I I I I I I I I t I I t 9(1 )(9) and 265 of the Constrtution of lndia and Sec. 148A of the lncome Tax Act, 1961 , and consequently set aside the same in the interests of lustice. WP NO: 11120 OF 2024 Between: WP NO: 11130 OF 2024 Between Primary Agriculture Co-Operative Society Limited., Kalleda,, Rep. By lts Secretary, Jajala Shekar, S/o. Chinnaiah, Aged About 54 Years, R/o.Kalleda Vill, Jagityal Mdl, Karimnagar Dist 505454 ,Telangana, lndia PAN. AABAP7445E Assessment Year. 2018-19 ...pETrroNER AND il t? Office of The Assistant Commissioner of lncome Tax Circle-1 , Karimnagar, Telangana State. The Principal Chief Commissioner of lncome Tax -Telangana and A.P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. The National Faceless Assessment Center, lncome Tax Departnrent, New Delhi. The Central Board of Direct Taxes, Represented by its Chairntan, Department of Revenue, ti,4inistry of Finance, Government of lndia, Secretariat t3uildings, New Delhi - 110001. The Union o[ lndia, Represented by its Secretary to the Governntent, Deparlment of Revenue, Ministry of Finance, New Delhi - 1'10 001 . -..RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewilh, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Wrrt of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment U/S 147 read with section 1448 ot the lncome-tax Act Date of Order of 15-01-2024, DtN |TBA/AST/S11 47l2O23- 2411059712312( 1) for the Assessment Year 2018-19 determining the total income of Rs. 18,51,845/- as arbitrary, illegal, bad in law, withoul jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec 148A of the lncome Tax Act, 1961 , and consequently set aside the same in the interests of justice 3 4 5 Primary^Agriculture C^o Operative Society Limited Kalleda, Rep. By lts Secretary, Jajala Shekar, S/o. Chinnaiah, Aged About 54 years, R/o.Kalleija Vill, Jaqitval Mdl, Karimnagar Dist 505454 , Telangana, lndia PAN. AABAPT44SE Assess\"m6nt Year. 2019-20 ...PETITIONER -l AND circumstances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of lr,4andamus or any other appropriate Writ, Order, or Direction, declarrng the order passed by the lncome Tax Authoritres (National Faceless E-Assessment Centre) completed the assessment uts 14t read with sectton 1448 of tl.re Income tax Act Date of Order of 26t02t2024, DIN lTBtuASTlsl147l2O23- 2411061490140( 1) for the Assessment Year 2019-20 determining the total income of Rs. 33,39,3701 as arbitrary, illegal, bad in law, without jurisdiction, vord-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(t)(g) and 265 of the constitution of tnlia and Sec. 1484 of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice WP NO: 11131 OF 2024 Between: Office of The Assistant Commissioner of lncome Tax Circle, Karimnagar, Telangana State. The Piincipal Chref Commissioner Of lncome Tax Telangana And Ap, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad The National Faceless Assessment Center, lncome Tax Department, New Delhi The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110 001 The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Ministry of Finance, New Delhi - 1 10 0!1 . The Principal Chief Commissioner of lncome Tax -Telangana and A.P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad -500 028, a\",rnn113..ro\"o.*r. Petition under Atlicle 226 of the Constitutron of lndia praying that in the Primary Agriculture Co-Operative Soclety Limited tulalyala, Rep. By Mittapilli Govardhan, S/o. Rayamallu, Aged About 61 Years, Aqriculture Co-Op , Malyala Villand Mdl, Karrmnagar Dtst 50545 lndia PAN. AABAPT 425J Assessmenl Year.2019-20 1 '2 il3 ia 6 AND e Government, Its Secretary, R/o. Primary 2, Telangana, ...PETITIONER 1. Office of The lncome Tax Officer, Ward 2, Karimnagar,Telangana State. 2. The Principal Chief Commissioner Of lneome Tax Telangana And Ap' Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 3. The National Faceless Assessment Center, lncome Tax Department' New Delhi 4. The Central Board Of Direct Taxes, Represented By lts Chairman,, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi 5. The Union Of lndia, Represented By lts Secretary To Th Department of Revenue, Ministry of Finance, New Delhi RESPONDENTS .1 Petition under Arlicle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit frled therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of lVlandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment U/S '147 read with section 1448 of the lncome-tax Act Date of Order ol 27 -02-2024, DIN ITBA/AST/5114712023- 2411061606516(1) for the Assessment Year 2019-20 determining the total income of Rs. 9,39,46,211l- as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(t Xg) and 265 of the Constitution of lndia and Sec. 148A of the tnccime Tax Act, 1961 , and consequently set aside the same in the interests of justice WP NO: 11146 OF 2024 Between Primary Agrrculture Co-Operative Society Limited Maidipally, Rep. By lts Secretary The Society,._Olupula Bondharah, S/o. Rajanna, Aged About 57 year's, R/o. tr/aidil! Yill_ gl9 MDL Karrmnagar, Kairmnagar 505453, Telangana, tndia pAt'i. AABAP7556J Assessment Year' 2o19-2o ...pETr.oNER AND 1. Office of The lncome Tax Officer, Ward 2,K arimnagar,Telangana State. 2. Ttre Principal-Chief Commissioner Of lncome Tax ietanganiAnd Ap, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 3. The Nationalfacelessassessmentcenter, lncome Tax Department, New Delhi 4. The Central Board Of Direct Taxes Represented By lts Chairman,, Department of Revenue. Minrstry of Finance, Government of lndid, Secretariat Buildings, New Delhi 5. The Union Of India, Represented By lts Secretary To The Government,, Department o[ Revenue, Ministiy of Finance, New Delhi. ...RESPONDENTS Petition under A/',ticle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of N4andamus declaring the order passed by lhe lncome Tax Authorities (National Faceless E-Assessment centre) completed the assessment U/S 147 read with section 1448 ot the lncome-tax Act Date of order of 11-03-2024, DtN |TBAJAST/91147 t2o23- 2411062372835(1) for the Assessment Year 20i9-2o determining the total income of Rs. 47,95,586/-. as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justrce apart from berng violative of Articles 14, 5 1g(r )(g) and 265 of the constitution of lndra and sec. 1 48A of the lncome Tax Act, 1961 , and consequently set aside the same in the lnterests of justice WP NO: 11168 0F 2024 Between: Primary Agriculture Co-Operative Society Limited Jaina, Rep By-lts Secretary, ealmuii Sigal. Rao, S/O. Kona Rao, Aged About 56 .Years, R/O- J-aina- Vill ' On\"irrpri irtot, X-i'irnug* Dist 505425, Telangana, India Pan AABAP7429E Assessment Yeat.2019-20 ...pETtIoNER petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of Mandamus, declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment centre) completed the assessment u/s 147 read with section 1448 of the lncome-tax Act Date of order oI 2210312024, DIN ITBAJAST/SI14712023- 2411063191223( 1 ) for the Assessment Year 2019-20 determining the total income of RS' 6,98,02,108/- aS arbitrary, illegal, bad in law, without jurlsdiction, void.ab.initio, violative of the principles of natural justice apart f rom being violative of Articles 14, r9(r)(g)and265oftheConstitutionoflndiaandSec.l4SAofthelncomeTaxAct, 1961 , and consequently set aside the same in the interests of justice WP o;11175 0F 20 Between: 1 . Office of The lncome Tax Officer' Ward 2, Karimnagar,Telanga.na,Slate . i. ine Principal Chiet Commissioner Of lncome Tax Telangana And Ap, HyderaDao\" lT Towers, AC Guards, Masab Tank, Hyderabad s ine NaiionatFaieiess Assessment Center, lncome Tax ^Department, New Delhi . i. tne centrat Board of Direct Taxes, Represented By Its Chairman, Department or A\"r\"nr\", ftlinistry of Finance, Government of lndia, Secretariat Buildings, New Delhi The Union Of lndia, Represented By lts Secretary To The Governmenl, Department of Revenue, Ministry of Finance, New Delhi ...RESPONDENTS Primarv Aoriculture Co-Operative Society Limited Galipally, Rep By lt-s-Sqcretary' Nandi 'Mallesham, S/O. Yellaiah, Aged About 50 Years, H No 4-83 Galrpally Viit;;;,'Ei6iha(uniJ vanoal, Kaiimnag-arDist 505530, relangana, lndia PAN.AABAP8275G Assessment Year.2019-20 ...pETtTtoNER AND AND 6 1. Office of The lncome Tax Officer Ward-2, Karimnagar, Telangana State. 2. The Principal Chief Commissioner Of lncome Taxtelangana And A P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 3 The National Faceless Assessment Center, lncome Tax Department, New Delhi. 4. The Central Board Ofdrrect Taxes, Represented By lts Charrman,, Department of Revenue, lr,4inlstry of Firiance, Government of lndia, Secretariat Buildings, New Delhi 5. The Union Ol'lndia, Represented By lts Secretary To The Government,, Department of Revenue, Ministry of Frnance, New Delhi ...RES'.NDENTS Petitron under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) completed the assessment U/S 147 read with section 1448 of the lncome tax Act Date of Order of 0910212024, DIN ITBAJAST/SI14712023- 2411060732773( 1 )for the Assessment Yeat 2O19-2O determining the total income of Rs. 5,20,19,055/-.as arbrtrary, rllegal, bad in law, without jurrsdiclion, vold'ab-rnrtro, violative of the principles of natural justice apart from being violatrve of Artrcles 14, 1 9(t )(g) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961, and consequently set asrde the same in the interests ofjustice WP NO: 11189 OF 2024 Between: Primary Agriculture Co Operative Society Limited Nancherla, Rep. By its Secretary The Society, Routhu Mahukar, S/O. Mallaiah, Aged About 49 Years, R/O Primary Agriculture Co-Op , Nancherla Post and Vill Pegadapally Mdl, Karimnagar Dist 505532 , Telangana, India PAN AABAP7426M Assessment \"\"r, ,0r 1.3?r,r,o*r* AND 1. Office of The lncome Tax Officer, Ward 2,Karimnagar,Telangana State. 2. Ttre Principal Chief Commissioner Of lncome Tax Telangana And Ap, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad -500 028, Telangana. 3. The National Faceless Assessment Center, lncome Tax Department, New Delhi 4. The Central Board Of Direct Taxes, Represented by its Chairman Department of Revenue, lvlinistry of Finance, Government of lndia, Secretariat Buildings, New Delhi 5. The Union Of lndia, Represented By lts Secretary To The Government, Department of Revenue, Ministry of Finance, New Delhi Petition under Article 226 of the Constitution of tndia ,r\"r';f1tnT\",?tlH circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre) leted the assessment t)lS 147 read with section '1448 of the lncome-tax Act Date of order of oa 02-2024, DIN ITBfuAST/5114712023' 2411 060646066(1 ) for the Assessment Year 2019-20 determining the total income of Rs. 7,32,68,5781 as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio' violative of the principles of natural iustice apart from being violalive of Articles 14, J9(1 Xs) and 265 of the constitution of lndia and Sec. 148A of the lncome Tax Act, 1961 , and consequenlly set aside the same in the interests of justice Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR (ln all the Writ Petitions) Counsel for Respondent Nos. 1 to 4: Ms. SUNITHA, COUNSEL FOR Ms. SUNDARI R PISUPATI SENIOR SC FOR INCOME TAX DEPARTMENT (ln all the Writ Petitions) Counsel for Respondent No. 5: SRI B. MUKHERJEE, COUNSEL FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL (ln all the Writ Petitions) The Court made the following: COMMON ORDER I I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NOs.111O3, 1112O,11130, 11131 , LLL46, 11168 11175 & 11189 0F 2024 COMMON ORDER: Hezrrd Sri Thanneru Chaitanya l(umar, learned counsel for the pctitioner(s), Ms.Sunitha, learned counsel representing Ms.Sundzrri R.Pisupati, learned Senior Standing Counsel for the fittt llctrL'ltlt' ,ltLsttt-<: SLrjoy l)cLtd) responrlcnts Incontc T:rx Deltartment and Sri B. Mukherjee, it'ltr-nt'rl r'ounsi'i li Pr-etsr:ntine Sli Cltcli I)r'lrr.,t,cn I(r-rrnrrr-, lcarnr_'cl Deputy Solicitor General of Irrdia lor the respondents Union of India 2 Regard being had to the similarity of the question involved, on tl-re joint request of the parties, the matters are analogousll' hcard and decided bv this common order 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e Act, 2O2I , re- assessment process stood modilied but the respondents have not taken care of it and therefore notices issued uncler Section 148 of the Income Tax Act, 196 1 cannot sr-rstain .ludicial scrutiny. Since notices are bad in iarv, tlte consequentierl orders are also bacl in lau,. ) 4. Durring thc course of hearing, learned counsel lor thc partics agreed tl-rat curtains on this issue are linally drcru,n b.r. this Court in zr batch of r,vrit petitions, W.P.No.25903 of 2022 and other con nccted matters, decided by common ordcr dateci 14.O9.2023. The parties agrced that this matter may be disposcd of in tcrms of the Common Order dated I 4 .O9 .2023. 5 This Court in the said order dated 14.O9.2023 in W.P.No.259O3 of 2022. hcld as r-rnder \"35. ln view of the aforcsaid discussions, it is by now very clear that the procedure to be followed by the respondent-Oepartment upon treating the notices issued for reassessment being under Section 1484, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. ln the absence of which, we are constrained to hold that the procedure adopted by lhe respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither lenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and 149 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 t I 3 point of jurisdiction, we are not inclined 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 Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue 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 want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" () to talf 2022 In vic.u of thc consensr-rs arrived, the inrprigted Sho ' C:rusc r-rot iccs anrl corrse boLh the parties 7 The r.rri t pctitions :tre allowed. No costs. Interlocutory applications, if anl,pendir-rg, sl-rall also stand closed. SD/.K. SAI KUMARI ASSISTANT REGISTfAR //TRUE COPY// SECTI FFICER t or{o To, 6. 7. L 9. MBC BS 1. The Office of The lncome Tax Officer, Ward 2Xarimnagar'Telanoana State' 2 The Princioat cnief commisToi\"i \"r i'iiorn\" r'i' Tetaigana.and A P' Hyderabad' ' ri i\"tirli'JIec cuaros, Haasau Tank. Hvderabad 500-028 Telanoana 3 The National Faceless d;;;;;i'b;i[i\" r\"loilr'x Deoartrient' New Delhi' 4. The chairman, central sol\",ibi Dii\"\"t iix'es, Department oi Revenue-,-Ministry of - ii#;;,'G;;\"|.r*\"ni or tniia SJcreiariat Buildinilj' New Delhi - 110 001 5 i'h;S\"e;.I;iv io in\" Cou\"rnileni. Oepa.tment of Revenue, Ministry of Finance, New Delhi - 110 001 iril CC'i; sii inlnneru Chaitanva Kumar Adlocate [oPUg] ^^. .^. 6;; dd ii v-i Srnaain. pisupiti, Senior SC for lncome Tax(oPUC)--- ^, 6;;6d io sii orai prrueen rctimai, Deputv Solicitor General of lndia [oPUC] Two CD Copres s 9 HIGH COURT DATED: 2510412024 COMMON ORDER WP NOs.1 1 103, 11120, 1'1130, 11131, 11146, 11168, 11175 & 11189 0F 024 R 1HE 51O o ( ! 6 JiiN 20a o .lTCHL , * (s t' ,o esp ALLOWING THE WRIT PETITIONS WITHOUT COSTS (0of* I I I i L+ ,l) tt.) uu, "