Ramaiah Dyaga V. Union of India, Ministry of Finance and Income Tax Officer, Ward 1, Mahabubnagar and The Principal Commissioner Of Income Tax-IV, Hyderabad and The National Faceless Assessment Centre, Income Tax Department, Ministry of Finance Govt, of India

WP/10919/2024

AI Insights

The case involves Ramaiah Dyaga, the petitioner, challenging the legality of notices issued under Section 148 and 148A(b) of the Income Tax Act, 1961, by the Income Tax Department. The petitioner argued that these notices were issued without adhering to the modified reassessment procedure established by the Finance Act, 2021, and were thus in violation of the principles of natural justice and the Constitution of India. The respondents included various authorities from the Ministry of Finance and the Income Tax Department. The court referenced a common order from a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar legal issues.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 804125 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 24-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GADI KUMAR; B REDDY
• Assessee Lawyers: POLKAMPALLY KUMAR RAO
• Keywords: Income Tax; Jurisdiction; Natural Justice; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 148; 148A(b)

Judgement Text

"[ 3403 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY FOURTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 10919 OF 2024 Between: Ramaiah Dyaga, S/o. Bovani aged aboutTlyears, Occ. Business, R/o. 5-40 Kashireddy Guda, Burgula Farooqnagar Mahabubnagar 509202 ...PETITIONER AND 1 Union of India, Ministry of Finance Rep. by its Secretary, 166-8 North Block, New Delhi - 1 10 001 . lncome Tax Officer, Ward 1, Mahabubnagar, Deo Office Road,DEO Office Road, lVlahabubnagar The Principal Commissioner Of lncome Tax-lV, Hyderabad, lT Towers, lr4asab Tank, Hyderabad, Telangana-500004 The National Faceless Assessment Centre lncome Tax Department, Ministry of Finance Govt, of lndia, New Delhi. ...RESPONDENTS Petition under Article 226 o'f the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to i. lssue a Writ, Order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the notice issued by the Respondent No.2 dated 12.O3.2O24u1s. 148A(b) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, 1961 dated 18.O3.2O24as illegal, arbitrary, bad in law, void ab initio, violative of the principles of natural justice and being violative of Articles 14,19 and 265 of the Constitution of lndia and consequently, ii. Set aside the Notices dated 12.03.2024ul s. 148A(b) and Notice issued under Section 148 2 4 of the lncome Tax Act, 1961 dated 18.03.2024calling for the return of income of the Petitioner for AY 2O2O-21 and any consequent proceedings as lacking in jurisdiction. Counsel for the Petitioner : SRI POLKAMPALLY PAVAN KUMAR RAO Counsel for the Respondent No.1 : SRI GADI PRAVEEN KUMAR, (Sr. SC FOR CENTRL GoVT) counser for the Respondents No'2to4 ' Ii;\";i;lJJirlil::'J::',r r.rr. The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.1o9t9 0F 2024 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri Polkampally Pavan Kuma-r Rao, learned counsel for the petitioner, Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor Genera,l of India for respondent No ' 1 and Ms.B.Sapna Reddy, learned counsel representing Sri J.V.Prasad, learned Standing Counsel for Income Tax Department for respondent Nos.2 to 4' 2. The ground taken by the learned cor.nsel for the petitioner is that in furtherance of Finance 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. . During the course of hearing, learned counsel for the arties agreed that curtains on this issue ale finally drawn by |) .) 2 this Court in a batch of writ petitions, W.P.No.25903 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 14 .O9 .2023. 4. This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: '35. Irr view of the aforesaid discussiors, it is by now very clear that the procedure to be followed by the respoadent- DepartEent upoa treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be uEdertaken uuder the substituted provisions as laid down uuder the Fiaance Act,2021. In the absence of which, we are constraiaed to hold that the procedure adopted by the respoldent-DepartEent is in contraventioo to the statute i.e. the Finance Act,2021, at the first instaDce. Secondly, it is also itl direct contravention to the directives issued by the Hon'bte Supreme Court ir the case ofAshisb Agarwal, supra. 36. For all the aforesaid reasons, the iEpugDed notices issued aad the proceedings drawn by the respoudeat-Department is Eeither tenable, nor sustaiiable. The lotices so issued aad the procedure adopted being per se illegal, deserves to be aad are accordingly set aside/quashed. As a consequeEce, all the lEpugEed orders gettiBg quashed, the consequential orders passed by the respondeEt Departlretrt pursuaut to the aotices issued urder Section 147 and 148 would also get quashed aEd it is ordeted accordiDgly. The reasoa we are quashing the consequcntial order is or1 the principles thet when the initiatiotr of the proceedings itself was procedurally Erong, the subsequent orders also gets nullified autoEatically. 37. The preliEi-oary objection raised by the petitioner is sustaiaed and aU these writ petitions stands allowed on this very jurisdictioaal issue. SiEce the ilEpugued aotices aad ordets are gettirg quashed on the point ofjurisdictiol, we are aot ioclined to proceed further and decide the other issues : .'-?- 3 raised by the petitioner which stands reserved to be raised and contended in an apPropliate Proceedilgs. 38. Since the Eon'ble supreEe Court had, in the case of Ashish Agarwal, supra, as a one-tiEe Eeasure exercisilg the powers under Article 142 of the coastitutioa of India' permitted the ReveEue to proceed under thc substituted provisions, aud this Court allowitrg the Petitioas oaly on the procedural flaw, the right conferred o[ the Reveaue Eould rcEain reserved to proceed further if they so waat froE the stage of the order of the SupreEe Court in the case of Ashish Agarsal, 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 a-re 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.259O3 of 2022. aliowed. No costs. Interlocutory 6 . The writ petition rs applications, if any pending, shall also stald closed SD/- MOHD. SANAULLAH ANSA //TRUE COPY// ASSISTANT REGIS SECTION FFICER To, The Secretary, Union of lndia, Ministry of Finance' 166-8 North Block' New Delhi - 1 10 001 . ii. \" f n\"o.\" iax Officer, Ward 1 , ltlahabubnagar' Deo Office Road' [/lahabubnagar iii;'\"P;;;'p\"rl Commissioner of lncome Tax, Ivlasab Tank' Hyderabad' Telanoana i[li'rtr%ii\"?'rr Faceless Assessment Centre, I /inistry of Finance Govt' of lndia' New Delhi. il;6c'i; sRt PoLKAIVPALLY PAVAN KUI 'IAR RAo Advocate LoPqgl-. 6;; ;\"c'i\" sHi eAor pnn-vEEN KUMAR (Sr- sc. FoR cENTRL Gow)' ilil; d;,i;ihe-Siate of Telangana at Hvderaba-d loPUCl -- ij;;'dci; b\"iii.v.ianSnD, Siror lncome rax Dept' [oPUC] Two CD CoPies. BSK GJP 1. 2. 3. 4. 5 u 7 8 g a I HIGH COURT DATED:2410412024 ORDER WP.No.10919 of 2024 , -'a - ::'.- 'i,,:- r- i- i.:l::.. a^ 1. .,,-- ' a 202t 7: c)i ;t >. {+ - ,:<,; ,. ,, :2 ALLOWING THE WRIT PETITION WITHOUT COSTS @'rid *\" $ 'r'1, "