Prithyasa Cooperative Credit Society Limited V. Assessment Unit, Income Tax Department, National e-Assessment Center, New Delhi and The Income Tax Officer, Ward 1, Sangareddy and The Principal Commissioner of Income Tax, Hyderabad

WP/18166/2024

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The case involves Prithyasa Cooperative Credit Society Limited, which challenged the validity of a notice and subsequent orders issued by the Income Tax Department under Section 147 read with Section 148 of the Income Tax Act, 1961, for the assessment year 2019-20. The petitioner argued that the reassessment process was not in compliance with the modifications introduced by the Finance Act, 2021, and thus, the notice was unsustainable in law. The court referenced a batch of similar writ petitions (W.P.No.25903 of 2022) where it had previously ruled on the procedural requirements for reassessment under the amended provisions of the Finance Act, 2021, and the Supreme Court's directives in Ashish Agarwal's case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 818126 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 12-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Natural Justice; Reassessment; Void ab initio; Writ of Mandamus
• Section: 147; 148; 148A; 265

Judgement Text

"J HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) FRIDAY, THE TWELFTH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HQNoURABLE SRI I usTIcATDaTvTAVARAPU RAJESHWAR RAo [34111 WRIT PETITION NO: 18166 0F 2024 Between: PrIFy^Asl\"ytturar cooperative credit.society Limired, purkar, purkar, Medak - 502 293. Teranoana. Ri.'presented uriti-cn-irir Er;.;iir; oii;\"r,-ivil\"p\"Itur, Nagaiah, S/o. MrI pentala' nnlaiatr- AND ...PET|TIONER 1. Assessment Unit. lncome Tax Department, National e_Assessment Center. New Dethi, nooni r.lo. +or, ,;; n;;;:'E:Fi:;;, i;;;;;;ti;\"iili tEEi..iil, New Delhi - .1 10 003. 2. The lncome Tax Officer, W_ard 1, Sangareddy. lncome lax Office, Veerabhadra Naoar,. New ers siand, -s;ngrle,;ov - 5b2 o'ot ,'i6iinqrn, 3. The princ_ipar coirmissionei_;f lilili;;l' )] Hyo\"r\"oro, Siqnatuie Towers, opposite Bota n ica r ea roe n j, sy. r.r\" :'6i ij i;iiirr\"d #i iitil\"rrr\" 37(P) of Kothaouda Seritinsampa,y A/ii,jji nvo\"rroro _ sob bb+ini\"g\" Reddy District,-Telangana, ...RESPONDENTS Petltion under Articre 226 of the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to issue a writ of [ rlandamus or any other appropriate writ, order or Direction, decraring the order passed by the 1st Respondent, u/s 147 rrw 1448 of the IncomeTaxAct, i961, dated 22.03.2024, bearing DrN.. |rBA/AST/st14712023- 2411063178524( 1), for the Assessment year 2019 - 20, as arbitrary, illegal, bad in law, void-ab-initio, viorative of the principres of naturar justice apart from being violative of Articles 1+, 19(i )(g) and 265 of the constitution of rndia and sec. 148A of the lncome Tax Act, 1g61 , and consequenry set aside the same in the interests of justice. 5'i -gf lA NO: 1 OF 2024 Petition under section 151 cPC praying that in the circu'nstances stated in the affidavit filed in support of the petition, the High courl may be pleased to stay all further proceedings, including any recovery, pursuant to the notice issued by the 1st Respondent, uts 147 rlw 1448 of the lncomr: Tax Act, 196'l dated 22.03.2024, bearing DlN. ITBA/AST/S/14712023-2411063178524(1), for the Assessment Year 2019 - 20, pending disposal of the above Wril Petition' Counsel for the Petitioner: SRI A.V.A.SIVA KARTIKEYA Counsel for the Respondents: M/s. J.SUNITHA, JUNIOR SC FOR INCOME TAX The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HOI{OURABLE SRI JUSTICE ITAMAVARAPU RAJESIIWAR RAO WRIT PETITION No.181 66 0F 20.24 ORDER: (per Hon'ble Justice Sujog paut) Heard Sri A.V.A.Siva Karitkeya, learned counsel for the petitioner(s) and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for the respondents. 2. The ground taken by. the learned counsel for the petitioner(s) is that in furtheralce of Financ e Act,2O2l, re_ assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Sectior 148 of the Income Tax Act, 1961 cannot sustain judicial scrutiny. Since notice is bad in 1aw, the consequential orders are also bad in law. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.p.No.259O 3 of 2022 and 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. I4.O9.2023. 2 4. This Court in the said order dated 14'C9 '2023 in W.P.No.25903 of 2022, held as under: \"35. Ia view of the aforesaid discussiors, it is lcy noc' very clear that the proccdure to be followcd by the rcspotrdent- Department upon tteating the aotices issued for reassesrsmeEt being uoder Section 148A, the subsequent ploceedings was rrandatorily required to be utrdertakeD uader the substituted prowisioos as laid dosn utrder the Firatrce Act, l2o2l':ln the absence of which, we are constralEed to hold thst the procedure adopted by the reslroEdent-DepartEert is in contraveEtion to the statute i.e. the Fltrance Act, 2021, 8t the Iirst insta[ce. SecoEdly, it is also in direct coElravention to the directives issued by the Hon'ble Supreoe Court h the case of Ashish Agarwal, suPra. 36. For all the aforesaid reasols, the iEPugEed rotlces issued and the proceedings drawa by the respoBdent-DePartrteat is oeither teoabl€, l1or sustaiEable. The notices s'r lssut'd and the procedute adopted being per sc illegal, deseruea to be and are accordingly set aside/quashed. As a consequ,eEce, all the iEpugoed orders Settiog quashed, the consequential ordera passed by the respondeat DepartmeEt pursuaat to the troticcs issued under Section 147 aad 148 would also get quashcd aDd it is ordered accordingly. The reasoa we ate quashiog the consequcntial order is on the pritrciples that whtru the initiatioE of the Proceediags itself was Proced[rally Erong, the subsequent orders also gets nullilied autoDatically. 37. The preliEiaary objection raised by the petiti('ner i6 sustained and all these writ petltioEs stands al.lowed on this very jurisdictioaal issue. Since the iEpugned notices and orders are getting quashed on the Poiat ofjurisdiction' we are not inclined to proceed further aad decide the other issues raiscd by the petltioaer which stands teserved to be raised and conterded in atr appropriate Proceedirgs. 38. since the llon'ble supreme Court had, in. the i:ase of Ashish Agarwal, supftr, as a one-time Beasure (lxercising the polrrers undet Article 142 of the Constitution of India' permitted thc Revenue to Procecd under the sub.tituted provisioas, and this Court allocring the petitiols only on the procedural flaw, the right corferred oE the Revenu€ wonld remain teserved to Proceed furthcr if they so teant ftom thc {( 3 (( To stage of the order of the Supretre Court in the case of Ashish Agarwal, supra. 39. No order aE to costs.. 5. In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this writ petition a_re set aside. Liberty is reserved to both the parties to take respective stand arrd to proceed in accordance with law as per paragraph No.3g of the order dated 14.09.2023 in W.P.No.25903 of 2022. 6. The Writ Petition is a_llowed. No costs. Interlocutory applications, if aly pending, shall also stand closed. SD/. K. VEN AH //TRUE COPY// ASSISTANT REGI R SECTION FFICER 1 Assessment Unit, lncome Tax D_epartment, National e_Assessment Center, New Delhi, Room No. 4o1 2nd Ft'oor, E:R;m;, iail,a\"nartat Nehru Stadium, New Delhi - '1 '10 003. The lncome Tax Officer, Ward 1, Sangareddy, lncome Tax Office, Veerabhadra Naqar. New aus-Siand, -Sing;iildt f ;62 oor', ierangana The Princ_ipat Comniissioner of ln;me i;i:'2, n'vo.i,itro, Sisnature Igygr., opposite Botanicat caroens, sy Nol of Fiii?on,irp;;: St. N\".. 37(P) of Kothaquda. Seritingampaly ruui,oai Hvliui-a'ura _ sobtb+] nr\"s, Reddy District, Telanoana. ' 9n\" 99 to SRt A.V.A;S|VA KARTTK_EYA, Advocate tOpUCl one CC to M/s. J.SUN|THA, JUNTOR Si FoR tN'CoilE TAx [opuc] Two CD Copies 2 4 5 o PSK. GJP J E ll.. HIGH COURT DATED:1210712024 ORDER WP.No.18166 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS. .a .y':,)1 t ) r f HE SId U I 0[r zut 1 t. 1 \",- riJPrrt C.reO 6) ]; * b-l fn [0 W "