Sanvi Infra Projects Private Limited V. The Union of India and Principal Commissioner of Income Tax, National E Assessment Centre and The Additional Joint Deputy Assistant Commissioner of Income Tax, National Faceless E Assessment Centre and Assessment Unit, Income Tax Department and Income Tax Department, Office of the Income Tax Officer Ward 31 Hyderabad

WP/24539/2024

AI Insights

The case involves Sanvi Infra Projects Private Limited challenging various notices and orders issued by the Income Tax Department under the Income Tax Act, 1961, for the assessment years 2019-20 and 2016-17. The petitioner argued that the notices were issued without adhering to the procedural modifications introduced by the Finance Act, 2021, and were therefore void, arbitrary, and illegal. The respondents included various officials from the Union of India and the Income Tax Department. The court's decision was influenced by a previous common order dated 14.09.2023, which set a precedent on the procedural requirements for such notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803941 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 06-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; B REDDY
• Assessee Lawyers: K MAANASA
• Keywords: Faceless assessment; Income Tax; Jurisdictional issue; Legal Proceedings; Reassessment; Writ of Mandamus
• Section: 147; 148; 142(1); 148A(b); 148A(d); 156; 226; 144B(1)

Judgement Text

"[3411] IN THE HtGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SIXTH DAY OF SEPTEMBER TWO THOUSAND AND TVVENTY FOUR PRESETJI THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVAIIAPU RAJESHWAR RAO WRIT PETIT|ON NOs: 24463 & :4539 OF 2024 W.P.No.24463 OF 2024 Between: Sanvi lnfra Projects Private Linrired., Registerer: oiirte at. 8-2-686/D/B122/1, Plot No 22, Road No. 12, Banjara Hills, Hyderabad-5C0034. ...PETITIONER AND 1 The Union of lndia, Represented by iis Secretary (Revenue), Ministry of Finance, Department Of Revenue N6rth 3lock, New Delhi - 110001. Principal Commissioner of lncome Tax, National E Assessment Centre lncome Tax Department Delhi 2nd Floor E Ramp Jawaharlal Nehru Stadium Delhi The Additional Joint Deputy Assistant Ccmmissioner of lncome Tax, National Faceless E Assessment Centre Delhi lncome Tax Department Delhi 2nd Floor E Ramp Jawaharlal Nehru Stadium, Delhi Assessment Unit, lncomer Tax Departrnert lncome Tax Department, Office ot the income Tax Officer Ward 31 iiyderabad .,.RESPONDENTS Petition under Article 226 of the Cons,;tulron of lndia praying that in the circumstances stated in the affidavit filed. therewith, the High Court may be pleased to issue a writ, order or direction more particularly in the nature of a writ of llanciarnus deciaring the (1) Notice u/S 148A(b) with DIN No. ITBA/AST/F /1 4BA(SC N y2022-2 3/1 0504689 1 2 ( 1 ) dt 06/03 12023, (2) consequent Order passed uis 148A(d) of the Act bearing DIN No. ITBA/AST/F/148N2022' 2311051437361(1), dt. 27.03.2()23, and the c.3irserLieirt (3) consequent Notice u/S. 2 3 4 5 148 of the Act bearing DIN No. ITBA/AST/S/148 112022-2311051437536(1), dt. 2710312023 issued by the 5th Respondent, (4) consequent Notice ulS 142(1) bearing DIN ITBA/ASrtFl142(1)12023-24t1A57033930(1) dt. 1311012023, (5) consequent Notice u/S 1448(1) bearing DlN. ITBA/ASTiF/144(SCN[2023- 2411059499353(1) dt. 09.01.2024, and the (6) consequent Assessment Order issued u/S 147 of the Act bearing DlN. ITBA/ASTlsl147l2o23-24l1060206901(1) dt. 2910112024 and the (7) consequent Notice of demand issued u/S 156 of the Act bearing DIN ITBA/ASTlsl15612023- 2411060206923(1) dt. 2910112024, issued by the 4th Respondent, for Assessment Year 2019-20 in PAN. AABCE7161Q as being void, arbitrary, illegal, without jurisdiction and contrary to S.1448 of the lncome Tax Act., 1961 and the Faceless Jurisdiction of lncome Tax Authorities Scheme, 2022, aparl from being violative of the fundamental rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of lndia, and consequently set aside the same. lA NO: 't OF 2024 Petiiion under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the operation of the Assessment Order bearing DlN. ITBA/AS TlSl147l2O23 - 2411060206901 (1) dt. 29/01/2024 and the consequent Notice of demand issued ulS 156 of the Act bearing DlN. IT84/45T15115612023-24/1060206923(1) dt. 2910112024 issued by the 4th Respondent for Assessment Year 2019-20. W.P.No.24539 OF 2024 Between: Sanvi lnfra Projects Private Limited., Registered office at. 8-2-686lDlBl22l'1, Plot No 22, Road No. 12, Banlara Hills, Hyderabad- 500034. ,..PETITIONER AND 1. The Union of lndia, Represented by its Secretary (Revenue), Ministry of Finance. Department of Revenue North Block, New Delhi - 1 10001 . 2. Principal Commissioner of lncome Tax, National E-Assessment Centre Income Tax Department Delhi 2nd Floor E-Ramp Jawaharlal Nehru Stadium Delhi 110003. w 3. The Additional/JoinVDeputy/Assistant Conrnltssioner of lncome Tax, National Faceless/E-Assessmeni Ci.,ntre, Delhi, lncome Tax Department, Delhi, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003. 4. Assessment Unit, lncome Tax Department. 5. lncome Tax Department. Office of the lncome Tax Officer Ward 31 Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed thereurith, the High Court may be pleased to issue a writ, order or direction more particularly in the nature of a writ of Mandamus declaring the (1) Notice u/S 148A(b) of the lncome Tax Act, '1961 (Act) bearing DIN and Notice No. ITBA/AST/F/ 148A(SCN)/2022- 2311050346035(1) dt. 02.$.2A23, (2) Order passed U/s. 148A(d) of the Act bearing DIN and Notice No. TBtuAST/F/148 A12022- 2311051204860(1), dt. 23.03.2023, and the consequent (3) Notice U/s.148 of the Act bearing DIN and Notice No. ITBA/AST/S/148-112022- 23110512A5097 (1), dt. 23.03.2023 issued by the Sth Respondent, (4) Notices Uls.142(1) bearing DlN. ITBA/A Sf ffn42() t2023-24t1055146639(1) dt.16.08.2023, (5) ITBA/AST/F/142(1)12023- 2411A57033 881(1) dt.13. 1A.2023, (6) Notice U/s.144B('l) bearing DlN. ITBA/AST/F/ 144(SCN)/ 2023-2411059439460(1) dt.09.01 .2024, and the (7) Assessment Otder issued Uls- 147 of the Act bearing DlN. ITBA/AST lsl147l 2023-2411060373655(1) dt.01 .02-2024, and the (B) notice of demand issued U/s.156 of the Act bearing DlN. ITBAi AST/S/'1 56i2023- 2411060373745(1), dt. 01 .02.2024, by the 4th Respondent for Assessment Year 2016-17 in PAN. AABCE7161Q as being void, illegal, arbitrary, violative of the rights guaranteed under Article 14 of the Constitution of lndia. without any authority of law, and consequently set aside the same. lA NO: 1 OF 2024 ,/ Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in sdpport of the petition. the High Court may be pleased to stay the operation of the Assessment Order under S,'147 of the Act dl.O1 .02.2024 bearing DlN. ITBA/ASTlsl147l2o23-24l 1060373655(1) and notice of demand issued U/s.156 of the Act bearinq DlN. ITBAJAST/S/1 5612023- 2411060373745(1), dt. 01 02 2024, by the 4th Respondent for Assessment Year 2016-17 Counsel for the Petitioner in W.Ps : Ms.K.MAANASA c o u ns e I ro r th e Res p o n d e n t N o' 1' tHi B'^ ri EIXV[!5 T.'r:fi ^[,';y. so. c E N counsel for the Respondent No.2tos in w.Ps ' :liB:jiitREDDY, The Court made the following: COMMON ORDER a] THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHIIIAR RAO WRIT PETITION NOS.24463 D 24539 0F 2024 COMMON ORDER (per Hon'ble SP,J) Ms. K. Maalasa, learned counsel, appea-rs for the petitioners, Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appears for the respondent(s)-Central Government and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)-Income Tax Department. 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, re- 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, 1961 calnot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. I ir I I I ri 2 4. During the course of hearing, Iearned counsel for the parties agreed that curtains on this issue are finally drawn by 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 14.09.2O23. 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 are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Acl, 2021, 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, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawniy 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 asidelquashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent 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 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 these writ petitions stands allowed on this very jurisdictional issuAr.__ Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide this Court in a batch of writ petitions, W.P.No.259O3 of 2022 r 3 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 under Article 142 of the Constitution of lndia, permitted the Revenue 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 order as to costs.\" In view of the consensus arrived, the impugned Show appiications, if any pending, shall also stand closed. Cause notices artd consequential orders passed in this batch ol 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.O9.2023 in W.P.No.259O3 of 2022. 6 //TRUE COPY// SD/-V.KAVITHA ASSISTANT^REGISTRAR SEOTION OFFICER To, 1- The Secretary (Revenue), Ministry of Finance, Department pf Revenue North Block, Union bf lndia, Represented by rts New Delhi - 110001 z. ine Principal Commissi6ner of lncohe Tax, National E Assessment Centre lncome Tax Department Delhi 2nd Floor E Ramp Jawaharlal Nehru Stadium Delhi a. ine eOaitional Joint Deputy Assistant Cornmrssioner of Income Tax, National - Faceless E Assessmeni C6ntre Delhi lncome Tax Department Delhi 2nd Floor E Ramp Jawaharlal Nehru Stadium, Delhi 4. The Assessment Unit, lncome Tax Department S. fne f n\"ome Tax Deiartment, Office of the lncome Tax Officer Ward 3(1) Hvderabad 6. Ohe CC to Ms.K MAANASA, Advocate [OPUC] 7. One CC to SRI GADI PRAVEEN KUMAil, (Deiutv Solicitor General of lndia)' Hiqh Court for the State of Telangana at Hyderabad. [OPUC] A. Oie CC to Ms.B SAPNA REDDY, Jr.SC for lncome Tax Department. [OPUC] 9. Two CD Copies BSK ,7.9, GJP T-2 7 . The Writ Petitions are allowed. No costs. Interlocutory HIGH COURT DATED:0610912024 COMMON ORDER WP.No.24463 & 24539 ot 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS I : 1a }EE Wl a {5i sIA Hf- * f} lra. Tc .t }o JI I I "