Sri Kanaka Durga Restaurant V. Office of The Income Tax Officer

WP/8416/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners challenging the reassessment orders issued by the Income Tax Department for the assessment years 2015-16 and 2016-17. The petitioners argued that the reassessment notices were issued without following the proper procedural requirements as mandated by the Finance Act, 2021, and were thus arbitrary and violative of natural justice. The respondents included various authorities from the Income Tax Department and the Central Board of Direct Taxes. The court consolidated the hearings due to the similarity in the legal questions involved and decided the matter based on a precedent set in a previous batch of writ petitions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 758117 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-04-2024
• 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 V PRASAD; B MUKHERJEE
• Assessee Lawyers: T KUMAR
• Keywords: Faceless assessment; Finance Act 2021; Income tax assessment; Jurisdiction; Natural Justice; Writ of Mandamus
• Section: 147; 14; 148A; 265; 226; 144(8); 19(1)(g)

Judgement Text

"/ [ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SECOND DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NOs:8327 8335 8341 8416 AND 8423 0F 2024 WRIT PETITION NO: 8327 OF 2024 Between: l, SANDHYA RANI IVUKKARA, D/o. Ailallaiah Balakrishna Gotla, Aged About 50 Years, Occupation Eusiness, R/o. H.No.2-2-185140 Rama Krishna Nagar ,Bagh Amberpet, Hyderabad 500013, Telangana, lndia. PAN BAMPM8835J Assessment Y eat 201 5-1 6 ...PETITIONER AND I 2 Office Of The lncome Tax Officer Ward 9(1), Hyderabad, Telangana State. The Principal Chief Commissioner Of lncome Tax Telangana And Ap, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 3. The Central Board Of Direct Taxes, Represented By lts Chairman, Department of Revenue, Ministiy of Finance, Government of lndia, Secretariat Buildings, New Delhi 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi. 5. The Union Of lndia, Represented By lts Secretary To The Government, Department of Revenue, Ministry of Finance New Delhi ...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 UtS 147 r/w Section 144-8 of lhe lncome Tax Act, 1961 vide DIN and Notice No. dated 05/03/2024 ITBA/ASTlsl14712023-2411062026065('1 ) for the assessment year 2015-l6determining the total income of Rs. 95,98,100/- as arbitrary, illegal, bad in law, wrthout jurisdiction, void-ab-initio, violatrve of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice. Counsel for the Petitioners: SRI T.CHAITANYA KUMAR Counsel for the Respondent No.1 & 2: SRI J.V.PRASAD, SC FOR TNCOME TAX Counsel for the Respondent No.3 to 5: SRI B.MUKHERJEE, REP. FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA WRIT PETITION NO: 8335 OF 2024 Between: PALLEBOYINA MANJU RANI, W/o. Nagaiah, Aged About 56 years, Occupatron. Business, Rlo. 142l2RT H NO 10 -1 -4tB VTJAYANAGAR COLONY , MASAB TANK HYDERABAD 500057, Tetangana, tndia. pAN. BWFPM5l 88R Assessment Y ear. 2016-1 7 ...PETITIONER AND 1 2 Office Of The lncome Tax Officer Ward 7(1), Hyderabad/, Telangana State. The Principal Cfrief Commissioner of lncome Tax, Telangana and A.p, lyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. The Central Board of Drrect Taxes, Represented by its Chairman, Department of Revenue, Ivlnistry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 1'10 001. The National Faceless Assessment Center, lncome Tax-- Department, New Delhi. The Union oJ_lndia, Represented by its Secretary to the Government, Department of Revenue, lvlinistry of Finbnce, New Delhi - 1 -10 OO1 . ...RESPONDENTS J 4 5 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 declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment centre completed the assessment U/S 147 rlw Section 144-8 of the lncome Tax Act, 1961 vide DIN and Notice No. dated lncome Tax Act, 1961 vide DIN and Notice No. dated 2810212024 ITBA/AST/S/147/2023-24/1061633174(1) fot the assessment year 2O16- l Tdetermining the total income of Rs. 55,38,910/- as arbitrary, illegal, bad in law, without jurisdlction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of 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 T.CHAITANYA KUMAR Counsel for the Respondent No.1 & 2: SRI J.V.PRASAD, SC FOR INCOME TAX Counsel for the Respondent No.3 to 5: SRI B.MUKHERJEE, REP. FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA WRIT PETITION NO: 8341OF 2024 Between: AND 1. 2. l, Mohammed Abdul Rahman, S/o N4ohammed Abdul Raheem,-aged. about 72 vears, Occupation Business, Rlo 1-10-7914 S S Gutta, Mahabubnagar i;OSOOt ,tetangana, lndia. PAN AFKPIV5948Q Assessment Year 201 5-16 ...PETITIONER Office Of The lncome Tax Officer Ward, ,lVlahabubnaga r, Telangana State. The Principal Chief Commissioner of lncome Tax, Telangana 9!q |.?, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Flnance, Government of lndia, Secretariat Buildings, New Delhi - 110 001 . The National Faceless Assessment Center, lncome Tax Department, New Delhi The Union Of lndia, Represented By lts Secretary To The Government, Department of Revenue, Ii/inistry of Finance, New Delhi-1 '10001 . ...RESPONDENTS J 4 5 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 I the nature of Writ of [ rlandamus declaring the order passed by the 3rd (National Faceless E-Assessment Centre) completed the assessment U/S 147 read with section 1448 of the Income-tax Act Date of Order 2310312024, DIN ITBA/AST/S/14712023-2411063285992(1) for the Assessment Year 2015- 'l6determining the total income of Rs. 38,14,275l- as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec. '148A of the lncome Tax Act, 1961 , and consequently set aside the same in the interests of justice. Counsel for the Petitioner: SRI T.CHAITANYA KUMAR Counsel for the Respondent No.1 & 2: SRI J.V.PRASAD, SC FOR INCOME TAX Counsel for the Respondent No.3 to 5: SRI B.MUKHERJEE, REP. FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA WRIT PETITION NO: 8416 OF 2024 Between: Sri Kanaka Durga Restaurant, Rep. by its partner Sanem Sudhakar Goud S/o. Sudarshan Goud, aged about 63 years, Occ Business R/O House No 8 134, Koheda Village, Hayathnagar [Vlandal Rangareddy 501511, Telangana, lndia. Pan ACLFS2680P Assessment Year 20'1 5- 16 ...PETITIONER AND 1 2 Office of The lncome Tax Officer, Ward 15(1), Hyderabad, Telangana State. The Principal Chief Commissioner of lncome Tax - Telangana and A. P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. 3. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110 001 . 4- The National Faceless Assessment Center, lncome Tax Department, New Delhi. 5. The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, [/]inistry of Finance, New Delhi - 110 001 . ...RESPONDENTS Petition under Article 226 of lhe 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 3rd (National Faceless E- Assessment Center) completed the assessment UiS 147 read with section 1448 of the lncome- tax Act Date of Order 01- 02- 2024 ' DIN ITBA/AST/S/147t2O23- 2411060398680(1) for the Assessment Year 2015- 16 determining the total income of Rs. 26,98,794l- as arbitrary, illegal, bad in law, without jurisdiction, void- ab- initio, violative of the principles of natural justice apart from being violative of Articles 1a, 19(1)(g) and 265 of 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 T.CHAITANYA KUMAR Counsel for the Respondent No.1 & 2: SRI J.V.PRASAD, SC FOR INCOME TAX Counsel for the Respondent No.3 to 5: SRI B.MUKHERJEE' REP. FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA WRIT PETITION NO: 8423 OF 2024 Between: Nagaraju Kashappa, S/o. Govind Kashappa Ag^e^qb!.uJ 40 Years, O99yP3l'.9I' B,;h\"(., - NIO. . S-S-I I ZIS, SRINAGAR COLONY, RAMANTHAPUR' fli-Oenn'eno, 500013, Telangana PAN CWUPK83134 Assessment Year 2015-16 ...PETITIONER AND 1 2 Office of The lncome Tax Officer, Ward '16(3), Hyderabad, Telangana State The Principal Chief Commissioner of lncome Tax Telangana and nvOeraUaOi lT Towers, AC Guards, Masab Tank, Hyderabad 500 Telangana 3. The central Board of Direct Taxes, Represented by its chairman, De_Partment ' 6i n\"*nr\", Vinistry of Finance, Gov6rnment of lhdia, Secretariat Buildings, New Delhi - 110 001 4. The National Faceless Assessment Center' lncome Tax Department, New Delhi 5. The Union of lndia, Represented by its Secretary t9 !h9^ Government' - Oepart.ent of Revenue, Ministry of Finbnce, New Delhi - '1 10 001 A.P, o28, ..,RESPONDENTS Petition under Article 226 of lhe 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 or any other appropriate Writ, Order, or Direction, declaring the order passed by the respondent no 1 completed the assessment UIS 147 read with section 1448 of the lncome-tax Act Date of Order 21 lO3l2O24, DINITBA/AST/SI 1 47 12023 - 241 1063082302(1 )lor the Assessment Year 2015 - 16 determining the total income of Rs_ 36,12,903/- as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural, justice apart from being violative of Articles 14, 19(1Xg) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, .1961, and consequently set aside the same in the interests of justice. Counsel for the Petitioner: SRI T.CHAITANYA KUMAR Counsel for the Respondent No.1 & 2: SRI J.V.PRASAD, SC FOR INCOME TAX counsel for the Respondent No.3 to 5: sRl B.MUKHERJEE, REp. FoR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERIAL OF INDIA The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NOS.8327, 8335, 8341, 8416 AND a423 0F 2024 COMMON ORDER (per Hon'ble SP,J) Heard Sri T.Chaitanya Kumar, learned counsel for the petitioner(s), Sri J.V.Prasad, learned Standing Counsel for Income Tax appearing on behalf of respondent Nos.1 and 2, and Sri B.Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing on behalf of respondent Nos.3 to 5. 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Finance Act, 2021, te- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 196 I cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. I 2 4. 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 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9.2023. 5 This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. ln the absence of which, we ate constrained to hold that the procedure adopted by the .espondent_Department is in contravention to the statute i.e. the Finance Act, ZOZ1, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, su pra. r.. / 36. For all the aforesaid reasons, the impugned notices issued and fhe proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the tespondent Oepartment pursuant to the notices issued under Section 147 and i4g would also get quashed and it is ordered accordingjly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. The preliminary objection raised by the petitioner is sustained and all!hese writ petitions stands aflowed on this very iurisdictionar issue. .+' 3 Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers unde. Article 142 of the Constitution of lndia, permitted the Reyenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No ordea as to costs.\" 6 In view of the consensus a-rrived, the impugned Show Cause notices and consequential orders passed in this batch of writ petitions are 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 of the order dated 14.09.2023 rn W.P.No.25903 of 2022 7 . The writ petitions are allowed. No costs. Interlocutory application-s, if any pending, shall a-lso stand!19!gg,_ SD/. V. HARI PRAS D ASSISTANT REGIS //TRUE COPY// SECTION OFFICER The Office Of The Income Tax Officer Ward 9('l), Hyderabad, Telangana State. The Office Of The lncome Tax Officer Ward 7( 1), Hyderabad/, Telangana State. To, 1 2 3. The Office Of The lncome Tax Officer Ward, State. Mahabubnagar, Telangana 4. The Office of The lncome Tax Officer, Ward 15(1), Hyderabad, Telangana State. 5. The Office of The lncome Tax Officer, Ward 16(3), Hyderabad, Telangana State. 6 The Princip{ _Chief Commissioner Of lncome Tax Telangana And Ap,- Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 7. The chairman, centrar Board of Direct Taxes, Department of Revenue, lr,4inistry of Finance, Government of rndia, Secretariat aLiroingi, Ne* D;ihi -'' 8. The National Faceless Assessment center, rncome Tax Department, New Delhi. 9. The Secretary_ to The Gorrernment, Department of Revenue, Ministry of Finance, New Delhi, Union Of lndia. '10. One CC to SRI T.CHA|TANYA KUN/AR, Advocate tOpUCl 11. One CC to SRI J.V.PRASAD, SC FOR TNCOME TAX tOpUCl 12.one cc to sRl GAD| pRAVFf N KUMAR, DEpury solrcrroR GENERTAL OF tNDtA. High Court for the Stare of tetanganaii HyaeiaOao lOpUEit'\"' 1 3. Two CD Copies BSR GJP $ HIGH COURT DATED: o2lo4l2024 COMMON ORDER WP.Nos'8 327,8335,8341' 8416 AND 8423 OF 2024 (- oR iHE S14 ,6. [ 5 iirl 2024 s ( o '4. * \"4 ' ,;iiE-O ALLOWING ALL THE WRIT PETITIONS' WITHOUT COSTS "