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

WP/24629/2024

AI Insights

The case involves the Primary Agriculture Coop Society Limited, represented by its Secretary, challenging the reassessment order passed by the Income Tax Authorities for the Assessment Year 2019-20. The petitioner argued that the reassessment process did not comply with the modified procedures under the Finance Act, 2021, specifically concerning the notices issued under Section 148 of the Income Tax Act, 1961. The respondents included various levels of the Income Tax Department and the Central Board of Direct Taxes. The court's decision was influenced by a precedent set in a batch of writ petitions, including W.P.No.25903 of 2022, which addressed similar procedural issues.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752810 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 09-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Revenue
• 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 MUKHERJEE; PULIMAMIDI REDDY
• Assessee Lawyers: THANTNERU KUMAR
• Keywords: Finance Act 2021; Income Tax; Jurisdiction; Natural Justice; Re-assessment; Writ of Mandamus
• Section: 147; 148; 144; 148A; 265

Judgement Text

" 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 THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRlT PETITION NO: 24629 OF 2024 t 3411 I ..,PETITIONER Between: AND 1 Primary Aqriculture Coop Society Limited, Rep. By its Secretary Bodakuntla Viiender, -S/o.Raiaiah Eiodakuntla, Occupation. Business Aged about 41 years, RD. KundbramV , Mandal Kalvasrirampoor, Dist Karimnagar 505174' Telangana, lndia. The Assistant Commissioner of lncome Tax Circle 1, Karimnagar, lncome Tax Office, Aayakar Bhavan, Near Natraj Theatre, Karimnagar Telangana State. The Principal chief Commissioner of lncome Tax Telangana an^d^AP^,^ Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028, Telangana 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, Goveinment of lndia, Secretariat Buildings' New Delhi - 1 '10 001 . 5. The Union of lndia, , Represented by Department of Revenue, Ministry of F its Secretary to the Government, inance, New Delhi - 110 00'l . ,..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 Date of 2 .) 4 :f. .1 ./ / 1310212024, DIN lTBA/ASTtst147 t2023-24tio6o 4514i(1) for the Assessment Year 2019-20 determining the total income of Rs. 29,26 14ol-as arbitrary, illegal, bad in law, without lurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles ia, 19(i )(g) and 265 cif the Constitution of lndia and Sec. 14BA of the lncome Tax Act, .1961, and consequently set aside the same in the interests of justice. Counsel for the Petitioner: SRI THANNERU CHA|TANYA KUMAR 99^r!i\"] for the Respondent Nos.1 to 3: MS. J SUNTTHA (JUN|OR SC FOR rNcoME TAX) 9gyry\"t for the Respondent No.4: SRI B. MUKHERJEE, REPRESENTTNG FOR SRI GADI PRAVEEN KUMAR, DEPUTYSOLICITOR GENERALOF INDIA counsel for the Respondent No.5: sRr puLrMAMrDr sHASHTDAR REDDY The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUI' AND THE HONOURABLE SRJ JUSTICE NAMAVARAPU RAiIESHWAR RAO U/RIT PETITION No.2 4629 0F 2024 ORDER: (per Hon'bte Justice Suioy Paul) Heard T. Chaitanya Kumar, learned counsel for the petitioner, Ms. J'Sunitha, lea-rned Junior Standing Counsel for Income Tax Department for the respondents-Income Tax Department. Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India for the respondents-Central Government' Sri Pulimamidi Shashidhar Reddy, learned counsel for respondent No.5. 2. The ground taken by the learned counsel for the petitioner is that in furtherance of Finance Act' 2021, re- assessment process stood modified, but the respondents have not taken care of it and therefore, notice issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial scrutiny. Since notice is bad in law' the consequential orders are also bad in law' 3. During tl-re course of hearing, learned counsel for the parties,.agreed that curtains on this issue are finally drawn by 2 this Court in a batch of writ petitions, W.P.No.25903 of 2022 arrd other connected matters, decided by common order dated 14.09.2023. The parties agreed that this matter may 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.25903 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now very clear that the procedu.e to be followed by the respondent- Department upon treating the notices issued for reassessment being undcr Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as lald dowr under the Finaflce Act,2021. In the absence of Ehich, we are cotstrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.c. the Finance Act, 2O21, at the frrst instance. Secondly, it is also itr direct contraventior to the directives issued by the Hon'ble Supreme Court in the case of Ashish AgarEal, supra. 36. For all the aforesald reasons, the impugaed notices issued and the proceedings drawn by the respoDdent-Department is neither tenable, aot sustainable. The notices so issucd aad the procedurc adopted beitrg per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, aU the impugned ordets Betting quashed, the consequcntial orders passed by the respoDdent Department pursuant to the notices issued under Section 147 and 148 rould 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 traa procedurally wrong, the subsequent orders also gets nultified automatically, 37. The preliminary objection raised by the petitioner is sustained and all these writ petitioEs stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed further and dccide the other issues I 3 I ralsed by the petitioner which stands reserued to be raised and conteaded ia eE eppropriete proceedirgs- 38. Sittce the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercislag the powers under Article 142 of the Constitution of India, permitted the Reverue to proceed uEder the substituted provisiotrs, aad this Court allowirg the petitions only ou tbe procedural flaw, the rlght cotrfe[ed ou thc Revenue c/ould remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the casc of Ashish Agarqral, supra. 39. No order as to costs.\" 5. In view of the consensus arrived, the impugned Show Cause notice and consequential 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 Iaw as per paragraph No.38 of the order dated 14.09.2023 in W.P.No.25903 of 2022. 6. The writ petition is allowed. No costs' Interlocutory applications, if any pending, shall also stand closed //TRUE COPY// SDL K. AMMAJI ASSISTANT REGISTRAR r1v,, SECTIffOFFICER To, The Assistant Commisstoner of lncome Tax Circle 1' Karimnaoar' lncome Tax office. Aavakar Bhavan. N\";;i{;i;;j ih\"rii\", xrri.nrgar Telingana state. The Princibal chief Commrssilt'i:tii ritC\"'\"-rax Telan!ana and AP' ilfi # U :5: ii;;;; AC e ; ;i';' M ;;; b 1' n t'' u vo eia u a o 5 0 0 0 2 8' If;51,%1ll,Xr, Faceless Assessment center, lncome Tax Department' New ?frIb\"n,r\", Board of Direct raxes, Represented.by.its chairman, Department of Revenue, Ministry or rinrn;6lco;;l;;;l;i lniia' secretariat Buildings' New Delhi - 1 10 001 . The Secretary to the Government Department^o^f .Revenue Ministry of ii;r;;'iii;'Liiion oiinoia. New Deihi- 110 001 . ijilS i[ t. sr.iih.nneiu cn'it'tnvi kutu'' Advocate [oPUCl 5'# dd i6 rri. ^L sun,t,, tl'I\"ili'sc io-i tnio'\" ra'),j3l\"''r:f\"r tndia[opUC] 6;; d6 io Sii caoi Pravedn Kumar' Deputv solicitor t 5'# 66 ii 5ii F\"ri*\"*ioi si-''Jnior'lr Riodv navocate[oPuc] 1 2 3 4 5 6 7 R I 1 TJ GJP 0.Two CD CoPies HIGH COURT DATED:0910912024 ORDER WP.No.24629 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS r , 1 ($ ( l- TA S () J r'! () 3 0 Nll J zul - Pr-0 '5s :,1-; I h yl ,l / tt F4 z "