Mr. Seetharamji Maktumkari V. Assessment Unit, Income Tax Department

WP/18353/2024

AI Insights

The case involves two writ petitions filed by Seetharamii Maktumkari and Mrs. Veeravellv Jyothi against the Income Tax Department and other officials, challenging the legality of reassessment notices issued for the assessment years 2015-16 and 2016-17. The petitioners argued that the notices were arbitrary, illegal, and violated principles of natural justice and various articles of the Constitution of India, as well as Section 148A of the Income Tax Act, 1961. The court examined the procedural adherence of the Income Tax Department in issuing these notices, particularly in light of the modifications brought by the Finance Act, 2021, and relevant Supreme Court rulings. The court's decision was influenced by a precedent set in a batch of similar writ petitions, W.P.No.25903 of 2022, where it was held that the notices issued without following the correct procedure were illegal and thus, all consequential orders were also quashed.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690623 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 15-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Article 22G of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 148; 148A; 265; 144E

Judgement Text

"7. I tB jri lii ai, ffi # : it; 'a!.l i' i i.. t ii' F t t, is I I 1 I I [ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYOERABAD (Special Original Jurisdiction) MONDAY, THE FIFTEENTH DAY OF JULY TWO;THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA.IESHWAR RAO WRIT PETITION NOs: 18353 & 18423 0F 2024 IT PETITION NO: 18353 0F 2024 \"L*\"\"n, I r$i i$ WR I D lrlr Seetharamii Maktumkari, S/o. Mr. Khaseemji Maktumkari, aged 59 years, ilit. -ciUii c6ntrictor, nyir. 42'2615, Sai Nagar colonv, Wanaparlhv, Mahabubnagar - 509 103, Telangana } ...PETITIONER t ;t AssessmentUnit,lncomeTaxDepartment,Nationale-AssessmentCenter' itil**6emi,'n\"\". No. +ot, 2nd Fioor. E-Ramp, Jawaharlal Nehru Stadium' New Delhi - 110 0031 ''-',-- I J Thei lncome Tax Oficer, Ward 1 , Mdhabubnagar, lncome Tax Office, Deo Office Road, Mahabubnagar - 509 001 ' Telangana The, Principal Chief; Commissioner of lncome Tax, Andhra Pradesh and i\"6noana.'XvOLrabad Room No 922' gth Floor, B Block, l T Towers, 10-2-3' AC Giardd, Hyderabad - 500 004, Telangana # lt' rI \"RESPoNDENTS [*, Ifril petition under Arlicle 22G of the Constitution of lndia praying that in the rft r circumstances stated in the affidavit filed therewith, the High court may be pL\"..O to issue a Writ of Mandamus or any other appropriate Writ' Order or Direction, declaring that the order passed by the 1st Respondent, uls 147 rlw Sec. 1448 of the lncome Tax Act, 1961, dated 2oll2l2o23, bearing DIN and Nttice No. ;TBpJAST/SI14l t1o23-2411001184912(1), for the Assessment Year zirc - t as arbitrary, illegal, bad in law, void-ab-initio, violative of the principles of natural iustice, apart from being violative of Articles 1a, 19(1)(g) and 265 of ,I: rl I ! : i Il I i I .r.t- fr. It! lr 1', t: il i-i I , 1 I I l,i fi l' I '1.i. li fi ; Constitution of lrdia and Sec 148A of the lncome Tax Act 1961 , and to bAnsequentty set aside the same in the interests of justice rf IA NO 10F 2024 It,, Petitirrn under Section 151 CPC praying that in the circumstances stated lfile arrioavit fired n support of the petition, the High court mav be pleased to i stay all further proceedings, including any recovery, pursuant to the order passed fr,tn\" l.t Respondent, uts 147 r/w Sec. 144E. ot the lncome Tax Act, 1961 ' 5t a zonztzoz+. bearing DIN and Notice No.: ITBA/AST/S/14712023- li,aou,,uonar(1 ), for the Assessment Year 2016 - 17, pending disposal of the ftve writ Petition. I b b I 2 I ia HXr.\", for the Petition\"ri a*, o.r.o.alvA KARTIKEYA HXn\"\", for the Respondents: M/s. B.SAPNA REDDY, ,h,t r=r,r,on. NO Jr. SC FOR INCOME TAX : 18423 OF 2024 Htt*\"\"n, .t Mrs Veeravellv Jvothi, W/o. Mr. Veeravelly Srinivas, aged 42 years, Occ' :l House Wife, R/o. 128, Flal No. 28, Adhithya Apartment. Huda Complex' E Kothapet, Saroornagar, Hyderabad - 500 035, Telangana. fi tf AN ...PETITIONER D 1 ',1 2 Assessment Unit, lncome Tax Department, National e-Assessment Center, f.few Oetni Room No. 4O1, 2nd Fioor, E-Ramp' Jawaharlal Nehru Stadium, Nerv Delhi - 1 10 003. Th€) lncome Tax Officer, Ward 1, Nalgonda, lncome Tax Office' Near Rail, Unrjer Bridge, Nalgonda- 508 001, Telangana The Principal Chiefi. Commissioner of lncome Tax, Andhra Pradesh and Telanoana. Hvderabad, Room No. 922, gth Floor, B Block l.T.Towers, 10-2- 3, AC-Guards, Hyderabad - 500 004, Telangana. ...RESPONDENTS J i I Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated rn the affidavit filed therewith, the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction. declaring that the order passed by the 1st Respondent, uls 147 rlw Sec. 1448 of the lncome Tax Act, '1961, dated 23.02.2024, bearing DIN and ' { ; ! i i I I :l t I i I i '1,, !rl il 'I 1 ! 1., :.t 1,l # t.. tfi l,rl 1; ii I : l ! 1 ! 1 ! I t1r i { J:, l-, llr I i I i ITBA/AST/S/14712023-2411061394853(1), for the Assessment Year Notice No. Z6r s-r O as arbitrary, illegal, bad in law, void-ab-initio, violative of the principles oi natural iustice, apart from being violative of Articles 1 ' 19(1Xg) and 265 of int Constitrtion of lndia and Sec '148A of the lncome Tax Act' 1961 and to ii' 'conseq lill ;lfNO: uently set 10F 2024 aside the same in the interests of justice lf' int th i+ stay 1448 of the lncome Tax Act, 1961, Notice No. ITBtuAST/S/147l2023- Petition under Section 151 CPC praying that in the circums e affidavit filed in support of the petition, the High Court may all further proceedings, including any recovery, pursuant to the the 1st ResPondent, u/s 147 r/w Sec ed 23.02.2024, bearing DIN and tances stated be pleased to order passed I v It r t' b d 2 I a 1061394853(1), for therAssessment Year 2015 - 16; ' pending disposal of the bove Writ Petition I \"Lrn tB,\" 1e sel for the Petitioner: SRI AV.ASIVA KARTIKEYA sel forthe Respondents: M/s. B.SAPNA REDDY' I Jr. SC FOR INCOME TAX i i Court made the following: COMt{ON ORDER li F I i I I + I I t I 1 i l ,l I I I I a THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO wRrT PETITION NOS.1a353 & 1A423 0F 2024 COMMON ORDER Det HotL ble SP,J) Sri A.V.A Siva Kartikeya, learned counsel appears for the petitiorers and Ms.B.Sapna Reddy, learned Junior Standing Counsel for In come Tax Department, appears for the responden ts. 2 Regard being had to the similarity of th{r question involved, the joint request of the parties, the matters are on analogous;ly heard and decided by this common order J It is common ground takenJby the learned counsel for the petitioner(s) that in furtherance of Financ e Act, 2O2l , re- assessment process stood modified but the respondents have not taken cale of it and therefore notices issued under Section 148 of the Income l'a-x Act, 1961 cannot sustain judicial scrutiny. Since no.rices arr: bad in law, the consequential orders a-re also bad in law 4. l)uring the course of hearing, iearned counsel for the parties :Lgreed 'hat curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 ald othr:r conrLccted matters, decided by common order dated 2 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 tn W.P.No.25903 of 2O22, 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 Act, 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 Aganrual, su Pra. 36. For all the aforesaid reasons, the impugned notices issued and the 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 orde.s passed by the respondent oepartment 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 orde6 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 issue. 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 under ptrticle 14? of the constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the 3 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.\" 6. In vieu' of the consensus arrived' the impugned Show Cause notices anrd consequential orders passed in this batch of writ petitions are set aside' Liberty is reserved to both the parties to take rt:spective stand and to proceed in accordance with law as per paragraPh No'38 W.P.No.259O3 of 2022. of the order dated 14.09'2023 in 7. The Writ Petitions are allowed' No costs' Interlocutory applications, if any pending, sha1l also stand closed' ffi & l i t, i: t.! t' I .l :r )..' ,?-a ffi tf' :IS l{i t. 1I i o\"'\"T'{t*'{f[HA 'ITRUE coPY// sECnoN SOFFICER fu$; B,',ih:li{3dr ll;:[.e, ]txifi BaiEr';] 3l' ::fl '?*illft 3fl\"it8?tlfi{ : ll,i.rigt'*rn?,{1\",,\"1\"I'#JaysJ\"T:':?\":lrncomeraxorrice'Deo rufdlt*f,ggtrf-\",i{'?\",.sJffi*lafl lsiri+T'ii!€l1o'.' ili ffirHiffi 3Jffi1 .Hs \"% i : +?:t\"\"J:\"? I n com e r ax orri ce' N ear Ra i I' ;r\";\" to sRt R v n stvA KARTIKEYA' Advocate [oPUcl one CC to lr4/s B SAPNA REDDY' Jr' SC FOR INCOME TAX iOPUCI T i1 1 I I 2. I ? 4. 'l 5 6 ?. ,u,o cD coPies s R BS' i i I I I L I 1 i ti i' : h ltGH COURT i t- ii^rro' 1sto7t2o24 l i ffi i- I I I .1, lit : { i, l: I i,- ili: ffi lir : +., 'fi t: H- it iGo . 2$Z r, a, : MMON ORDER (' -> I 1ir T t I LOWING BOTFI THE WRIT PETITIONS' i I i I vfP.ruo=.t83s3 & 18423 of 2024 ,ffirxour cosrs ! t t t i I I I i I :i ], il :I I' i.t ri L+ "