Ramesh Kumar Agarwal V. Assistant Commissioner of Income Tax

WP/26133/2024

AI Insights

The case involves Ramesh Kumar Agarwal, the petitioner, who challenged the validity of a notice issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961, for the assessment year 2018-19. The notice was issued to a non-existent entity, as the firm in question had been dissolved in 2014. The petitioner argued that the notice was illegal and violated the principles of natural justice. The court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on similar grounds, leading to the decision to quash the notice and all consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690293 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Jurisdictional issue; Notice; Procedural Flaw; Re-assessment; Writ of Mandamus
• Section: 148; 151; 226

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF SEPTEMBER TWO IHOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 26133 OF 2024 Between: AND 1 Ramesh Kumar Agarwal, S/o: Badrilal Agarwal, Erstwhile partner of Kamala lnternational(Dissolved Firm). Aged about 71 years, Occupation - Business, # H. No. 8-2-2931821N852, Road No.44, Jubilee Hills, Hyderabad - 500033. ...PETITIONER Assistant Commissioner of lncome Tax, Circle 8(1), Hyderabad, Signature Towers, Sy.No.6(P) of Kondapur, Sy.No.37(P) of Kothaguda, OPP. Botanical Gardens, Serlingarnpally, Ranga Reddy, Hyderabad, Telangana - 500084. The Chief Commissioner of lncome Tax AP and TS, 1Oth Floor, C-Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 2 ...RESPONDENTS Petition under Arlicle 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 notice u/s '148 dt. 2910812024 vide DIN No. ITBtuAST/S/148_112024-2511068104688(1) issued by the JA0(1st respondent) instead of Faceless Assessing Officer(FAO) for A.Y. 2018-19, that too to a non-existent entity, which was dissolved on 2210712014, as void, illegal, and contrary to the provisions of lncome{ax Act and contrary to the Principles of Natural Justice. I lA NCr: 1 OF 2024 Petition under section '151 cpc praying that in the circumstances stated in the afFidavit fired in support of the petition, the High court may be preased to stay all furlher proceedings pursuant to the notice u/s 14g dt. 2g/o}r2o24vide DrN No. IrBA/ ST/S/148-1r2024-2st1o68i046s8(1) issued by rhe JAO(1st respondent) instea,l of Faceless Assessing Office(FAO) for A.y. 2018_19. Couns,el for the Petitioner: SRI DUNDU MANMOHAN Counsel for the Respondents: MS. BOKARO SAPNA REDDY (Jr. sc FoR tNCoME TAX) The Court made the following: ORDER I I ,,.,, ,, THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESENIAR RAO WRIT PETITION No.26t33 0F 2024 ORDER: (per Hon'bte Sri Justice Sujog paut) Heard Sri Dundu Manmohan, iearned counsel for the petitioner(s) and Ms. B. Sapna Reddy, 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 furtherance of Financ e 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 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.25903 of 2022 and other connected matters, decided by common order dated 14.09.2023. The parties agreed that this ma.tter may be disposed of in terms of the Comrnon Order dated 14.O9.2023. 2 4. This Court in the said order dated l4-O9.2O23 rn W.P. o.25903 of 2022, held as under: \"35. Ia view of the aforesaid discussions, it is by now very clear that the procedure to be follorred by the respotrdent- DepartEent upon treatiEg the notices issued for reassessment being ulrder Section 148A, the subseque[t proceedings was ruaDdatorily requited to be uldertaken uEder the substituted provisions as taid dowa uEder the Finarce Act,2021. In the absence of c,hlch, se are constraiaed to hold that the procedure adopted by the respondetrt-DePartmert is in contraveEtio! to the statute i.e. the Fitrance Act, 2o2l' at tlre tirst iastance. secondly, it is also in direct cootraveEtion to the directives issued by the llon'ble Supreme Court in the case of Ashish Agarwal' suPra. 36. For atl the aforesaid reaaons, the inpugned Dotices issued aDd the proceedings drawn by the respoadent-DepartmeDt is nelther tenable, nor sustainable. The notices so issued arrd the procedure adoPted beitrg pet se illegal, deserves to be and are accorditrgly set aside/quashed. As a colsequetrce, all the impugned orders getting quashed, the consequertial orders passed by the respondent Department pulsuaat to the notices iasued under Section 14? and 148 would also get quashed and it is ordered accordiogly. The reasot we are quashilg the consequential ordet is o! the pri[ciples that when the initiation of the proceediltgs itself was procedurally wioag' the subsequent orders also gets auuified autotratically. 3?. The preumiE.ry objection raised by the petitioner is Euataitred and all these writ petitions staads aUowed on this very lurisdictional isaue. Siace the impugred lrotices aad orders are gettirg quashed on the Poiut of jurisdiction, we are not iucllled to proceed further and decide the othet issues raised by the petitioner which stands reserved to be raised aad couteaded ia alr appropriate proceedings. 38. Since the Ho!'ble Supt'eEe Court had, i! the case of Ashish Agarc/al, supra, as a one-tiEe measure exercising the powera utrder Article 142 of the Constitution of India, permitted the Revenue to proceed u!de. the substituted provlsions, aud this Court allowing the Petitions only on the procedural flaw, the right colferted olr the Revenue would I 3 retDain reserved to proceed further if they so waat from the stage of the order of the Supreme Court ia the casc of Ashish Agarwal, supta. 39. No order as to costs.- 5. In view of the consensus arrived, the impugned Show Cause notice and consequentia_l orders passed in this writ petition zre set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.38 ofthe order dated 14.09.2023 in W.P.No.25903 of 2022. 6. The Writ Petition is a_llowed. No costs. Interlocutory applications, if any pending, shall also stand closed. ; 1 //TRUE COPY// SD/. T, TIRUMALA DEVI ASSISTANT REGISTRAR SECTION OFFICER To, T '1 . Assistant Commissioner of lncome Tax, Circle 8(1), Hyderabad, Signature Towers, Sy.No.6(P) of Kondapur, Sy.No.37(P) of Kothaguda, OPP. Botanical Gardens, Serlingarnpally, Ranga Reddy, Hyderabad, Telangana - 500084. 2. The Chief Commissioner of Income Tax AP and TS, 1Oth Flbor, C-Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. One CC to Sri Dundu Manmohan, Advocate IOPUC] 4. One CC to Ms. Bokaro Sapna Reddy (Jr. SC for lncome Tax) [OPUC] 5. Two CD Copies l ,W J -.1 / HIGIH COURT SP,J & RRNJ rl ORDER WP,No.26133 of 2024 ALLOWING THE WRIT PETITTON ',22il[uttp > a sso2 7. \".1 5 s.t4 ^ $ . o I I l j I .6lr + S* I DATED:2310912024i I I I I I WITHOUT COSTS t "