PRIMARY AGRICULTURE COOP SOCIETY Limited V. The Assistant Commissioner of Income Tax Circle 1

WP/24638/2024

AI Insights

The case involves two writ petitions filed by the Primary Agriculture Coop Society Limited and ShyiaKumar Thadikahala against various respondents including the Assistant Commissioner of Income Tax and the Central Board of Direct Taxes. The petitions challenged the reassessment orders for the assessment year 2018-19, which were issued by the Income Tax Department under the National Faceless E-Assessment Centre. The petitioners argued that the reassessment orders were arbitrary, illegal, and violated principles of natural justice and constitutional rights. The court's decision was influenced by a prior ruling which clarified the procedural requirements for reassessment under the Finance Act, 2021.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 760710 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 09-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; B SAPNA REDDY; P SHASHIDHAR REDDY; B MUKHERJEE
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Faceless assessment; Income tax assessment; Natural Justice; Reassessment Process; Writ of Mandamus
• Section: 147; 148; 144; 148A; 265

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY,THE NINTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS: 24638 AND 24655 OF 2024 W.P.No: 24638 OF 2024 Between: PRIMARY AGRICULTURE COOP SOCIETY Limited, Rep. By its Secretary BODAKUNTLA VIJENDER, SIo.RAJAIAH BODAKUNTLA, Occupation. Business Aged about 41 years, R/o. KundaramV, Mandal Kalvasrirampoor, Dist Karimnigar 505174, Telangana, lndia. Assessment Year.2018-19 ...PETITIONER AND 1 2 The Assistant Commissioner of lncome Tax Circle 1, Karimnagar, lncome Tax Office, Aayakar Bhavan, Near Natraj Theatre, Karimnagal Telangana State- - The Prin6ipal Chief Commissiondr of lncome Tax Telangana -qlfd 4i Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028' Telangana The liational 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 10001 ...RESPONDENTS 3 4 5 Petition under Article 226 oI 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 UtS 147 r.w.s 144 read with section 1448 of the lncome{ax Act Date of 09-02-2024, DIN ITBA/ASTlSl147 12023-2411060713598(1) for the Assessment Year 2018-1 9 determining the total income of Rs. 25,41 ,995/-as arbitrary, illegal, {> bad in law, without.lurisdiction, void-ab-initio, violatlve of the principles of natural justice apart from being violatrve of Articles 14, 19(1Xg) 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 Counsel for the Petitioner: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. 1&2: Ms. J. SUNITHA JT SC FOR INCOME TAX DEPARTMENT Counsel for the Respondent Nos.3to5: SRI P. SHASHIDHAR REDDY W.P.No: 24655 OF 2024 Between: SHYIAKUIVIAR THAKDIKAHALA, S/O MALLIKARJUNA RAO THADIKAHALA, Aged about 50 years, Occupation Business, R/o Flat 1 11, Block A , Splendour Apts Gajularamaram, Hyderabad 500055 Telangana, lndia. Assessment Year 2018- 19 ...PETITIONER AND 1. The Assistant Commissioner of income tax circle 12(1), Hyderabad Aaykar Bhawan, Opposite Lb Stadium, Basheer Bagh, Hyderabad, Telangana, 500084 2. The Principal Chief Commissioner of lncome Tax - Telangana and A- P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. 3. 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. 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi 5. 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 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 UIS 147 r. w. s 144 read with section 1448 of the lncome Tax Act, 1961 vide DIN and Notice No. dated 13-02-2024 ITBA/ASTiS/14712023-2411060872165(1) for the assessment year 2018- 19 determining the total income of Rs. 10,55,28,475l- as arbitrary, illegal, bad in law, without jurisdiction, void- ab- initio, violative of the principles of natural justice apart from being violative of Articles 1a, 19(1Xg) 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 Counsel for the Petitioner: SRI. THANNERU CHAITANYA KUMAR Gounsel for the Respondent Nos. 1&2: Ms. B. SAPNA REDDY, (Jr. SC FOR INCOME TAX) Counsel for the Respondent Nos.3to5: SRI B. MUKHERJEE REP SRIGADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA The Court made the following: COMMON ORDER ,/ THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.24638 AND 24655 OF 2024 COMMON ORDER (per Hon'ble SP,J) Sri Thanneru Chaitanya Kumar, learned counsel appears for the petitioner(s), Ms. J.Sunitha, learned Junior Stalding Counsel for Income Tax Department, appears for respondent Nos.1 and 2 in W.P.No.24638 of 2024, Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appears for respondent Nos. 1 and 2 ln W.P.No.24655 of 2024, Sri P. Shashidhar Reddy, learned counsel, appears for respondent Nos.3 to 5 in W.P.No.24638 of 2024 and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveern Kumar, Iearned Deputy Solicitor General of India, appears lor respondent Nos.3 to 5 in W.P.No.24655 of 2024 2 Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtheralce of Financ e Act, 2027 , re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section 148 j 2 of the Income Tax Act, 196 1 cannot sustain judicial scrutinv. Since notices a-re bad in law, the consequential orders are also bad in law 4. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are hnally drawn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023. 5 This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A, 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 the respondent-Oepartment is in contravention to the statute i.e. the Finance Act, 202,1, 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. Fo. all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Depa(ment is neither tenable, 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 ,148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when 3 the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37- The preliminary obiection 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 of iurisdiction, 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.\" 6 In vierv of the consensus arrived the impugned Show Cause notices and consequential orders passed in this batch of writ petitions a-re set aside. Liberfy 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 ol 2022 7 The Writ Petitions are a-llowed. No costs. Interlocutory applications, i| 211, pending, shall also stand closed //TRUE COPY// SD/- C. PRAVEEN KUMAR ASSISTANT REGISTRAR . -.' SECTION OFFICER 1 2 The Assistant Commissioner of lncome Tax Circle '1, Karimnagar,.lncome i;; Offi\"\", A\"yakar Bhavan, Near Natraj Theatre, Karimnagar Telangana State. in?-principat Chief Commissioner of lncome Tax Telanoana and AP' ivi\"ljilloi rr r\"*\"i.. Ac' clriJs -vrsru rank. Hvcjeraiad 500 028, Telangana To, 3. The National Faceless Assessment Center, lncome Tax Department, New' Delhi 4. The Chairman, Central Board of Direct Taxes, Department of .Reverue, - Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi 110001. 5. The Secretary ,Union of lndia to the Government, Department of Revenue, fi/inistrv of Finance. New Delhi o. ine Adsistant Commissioner of income tax circle 12(1), Hyderabad Aaykar Bhawan, Opposite Lb Stadium, Basheer Bagh, Hyderabad, Telangana' 500084 7. One CC to SRl. THANNERU CHAITANYA KUMAR, Advocate [OPUC] B. One CC to Ms J. SUNITHA , Jr SC FOR INCOME TAX DEPARTMENT loPUCl g bne ci to sRt. GADI PRAVEEN KUMAR, DY. sollclroR GENERAL oF rNDrA [OPUC] 10.One CC toMs. B.'SAPNA REDDY, Jr. SC FOR INCOME TAX IOPUC] 11.Two CD Copies B I 4 GJP HIGH COURT DATED:09109t2024 t I UE Sl q,. 1 ( ( 'J c 1l llru 2uul I ( ) c f' t * o€spATcHf_ a COMMON ORDER WP.No's.24638 AND 24655 OF 2024 ALLOWING BOTH THE WRITPETITION S WITHOUT COSTS ? t) ,U >M "