Pushpalatha Katroth V. The Income Tax Officer

WP/12017/2024

AI Insights

The case involves Pushpalatha Katroth, the petitioner, challenging the assessment order and notices issued by the Income Tax Department for the assessment year 2016-17. The petitioner argued that the notices issued under Section 148 of the Income Tax Act, 1961, were not in compliance with the modified re-assessment procedure established by the Finance Act, 2021. The respondents included various officials from the Income Tax Department. The court referenced a common order in a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar issues regarding the procedural compliance of re-assessment notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752921 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 01-01-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income-tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Assessment Order; Income Tax; Natural Justice; Procedural Wrong; Re-assessment process; Writ of Mandamus
• Section: 147; 148; 144; 148A; 226

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) WEDNESDAY, THE FIRST DAY OF IVAY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTIGE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 12017 0F 2024 I Between: Pushpalatha Katroth, D/o years, H. No. 10-7-203 Rangareddy - 500060 .Swa1y Katroth, Occ. Teacher, Aged About 48 New Dilsukhnagar, Dwarakapuram, L.B. Nagar, AND ...PET|T|ONER 1. The lncgme TaxlOfficer, Ward 9(i ), Hyderabad, I T Tower, AC Guards, - I rlasab Tank. Hyderabad, Telangana, 500004. 2. The Principal Chief Commission-er of lncome Tax Ap and TS, 1Oth Floor, C- - qlock, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. The Assessment Unit, lncome Tax Departrirent, National Faceless Assessment Centre, Delhi, Ivlinistry of Finance, Room No. 4O1 ,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated iin 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 i; N/andamus, declaring the Assessment Order dt. 24lO2l2O24passed by the 3rdrespondent uls 147 r.w.s14411448 of the lncome-tax Act for A.Y. 2016-17'ivide DIN No. ITBA/ AST/S t14il2023-24 10614sO779(1), ccnsequentto the order passed u/s 148A(d) dt.22lO3lZO23 vide DIN No. , ITBA/AST/F/148A12022-2311051118256(1) and the notice u/s 148 dt.25to3t2o23 vide DIN No. ITBA/ASTlsl 148 112022-2311051297068(1), issued by the JA0(1st : respondent) instead of FA0(3rd respondent),as void, illegal, and contrary to the Provisions of lncome-tax Act and contrary to the Principles of Natural Justice. 1, I i / l p l: h l f lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstzrnces stated in the affidavit filed in support of the petition, the High Court may be p,leased to stay all further proceedings pursuant to the Assessment Order dt. 24lc)2l2o24passed by the 3rdrespondent u/s 147 r.w.s14411448 of the lncome-tax Act for A.Y. 2016- 17 vide DIN No. ITBATiAST/ 51147 12023-2411061450779('1 ), and may pass such other order(s) as the Hon'ble Court deems fit and proper in the interests of substantial justice, as otherwise the Petitioner would be put to irreparable loss and severe injury. Counsel for the Petitioner: SRI DUNDU MANMOHAN Gounsel for the Respondents: M/s. B.SAPNA REDDY FOR SRI J.V.PRASAD, SC FOR INCOME TAX The Court made the following: ORDER t'a ./ ./ THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.L20t7 0F 2024 ORDER: (1:er Hon'ble Justice Sujog paul) Heard Sri Dundu Manmohan, learned counsel for the petitioner(s) and Ms B. Sapna Reddy, learned counsel representing Sri J.V. Prasad, learned Senior Standing Counsel for the Income Tax Department for the respondents. 2. The ground taken by the learned counsel for the petitioner is that in furtherance of Financ e Act, 2O2l , 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, 1961 cannot sustain judicial scrutiny. Since notice is bad in law, 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.259O3 of 2022 ald other connected matters, decided by common order i.!t .: 2 dated 14.O9.2023. The parties agreed that this matter rnay be disposed of in terms of the Common Order dated 14.O9 .2023 4. This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, heid as under \"35. In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent- Department upon treatiEg the notices issued fot reassessment being under Sectiotr 148A, the subsequent proceedings was Eandatorily required to be undertaken ulder the substituted provisions as laid dosn under the Firance Act, 2021. In the absence of which, we are coastlained to hold that the procedure adopted by the respondent-Department is itl. contraveDtioa to the statute i.e. the Finance Act,2021, at thc first instance. Secondly, it is also in direct contraveation to the directives issued by the tlon'ble Supreme Court iD th€ case of Ashish Agarwal, supra. 36. For all the aforesaid reasols, the impugned notices issued aEd the procecdings drawn by the respondeot-Department is neither tenable, nor sustainable. The Eotices so issued arid the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quaahed. As a cousequence, all the: impugned orders getting quashed, the consequential order{i passed by the respondeDt 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 coasequeatial order is on the principles that whe[ the, initiation of the proceedings itself t as procedurally wrong., the subsequeat orders also gets nullified automatically. 37. The preliminary objection raised by the petitionet ist sustained and all these writ petitions stands allowed on thi.i very jurisdictional issue. Siace the impugned notices andt orders are getting quashed on the point ofjurisdiction, we are not iacliled to proceed further aad decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedi[gs. 38. Since the Hon'ble Supreme Court had, iu the case olf Ashish Agarwal, supra, as a one-time measure exercising the powets uuder Article 142 of the Constitution of India. ,,*:;t1', 3 pormitted tho Rcl,enu€ to proceed utrder th€ substituted provisions, and this Court allowing the petitions only on the procedutal flae, the right conferted on the Rewenue would temain reserved to proceed further if they so qrant from the stage of the ordcr of the Suprerre Couit in the case of Ashish Agarwal, supra. 39. No ordet 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 accordalce with law 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 afso stand closed. SD/-V.KAVITHA ASSISTANT RAGISIRAR //TRUE COPY/I / t!/ SECTION OFFICER 1. The lncome Tax Officer, Ward 9(1), Hyderabad, I T Tower, AC Guards, Masab Tank, Hyderabad, Telangana, 500004. 2. The Principal Chief Commissioner of lncome Tax AP and TS, 1 Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, IVlinistry of Finance, Room No. 401 ,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi--l 10003. 4. One CC to SRI DUNDU TVANIVOHAN, Advocate [OPUC] 5. One CC to SRI J.V.PRASAD, SC FOR INCOI 4E TAX [OPUC] 6. Two CD Copies 1 To PSK MR I HIGH COURT DATED:01 10512024 ORDER WP.No.12017 ot 2024 li -.p .r'[/ r C (i^ q l () J 1[1 ?1 .) li i,l1 ? I . ,(._' l;r 1;f i '' ')\" \"'.' ALLOWING THE WRIT PETITION WITHOUT COSTS. > 1 "