M/s.Shantiniketan Educational Society V. The Income Tax Officer

WP/11235/2024

AI Insights

The case involved Shantiniketan Educational Society challenging the assessment order passed by the Income Tax Officer under Sections 147 and 144 of the Income Tax Act for the Assessment Year 2019-20. The petitioner argued that the reassessment process was not conducted in accordance with the modified procedures established by the Finance Act, 2021. The High Court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on this issue, leading to the decision to quash the notices and orders in this case as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752949 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 26-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIJHAY PUNNA; B MUKHERJEE
• Assessee Lawyers: SHAIK BASHA
• Keywords: Assessment Order; Faceless assessment; Income Tax; Natural Justice; Writ petition
• Section: 147; 148; 144; 148A(d); 226

Judgement Text

"I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SIXTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HON'BLE SRI JUSTICE SUJOY PAUL Ai{D THE HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NO: 1'1235 OF 2024 3rd Floor, 057. Rep 276l2RT, by its [ 3403 ] 10-3-86, President Between: lrzl/s.Shantiniketan Educational Society, Vijayanagar Colony, Hyderabad - 500 tvlr. C. N. Gajamohan PETITIONER AND 1_ 2 The lncome Tax Officer, Exemption Ward 1(4), Aayakar Bhavan, Basheerbagh, Hyderabad-500 004. The Principal Chief Commissioner of lncome Tax (Exemptions), A.P. and Telangana, lT Towers Masab Tank, Hyderabad-500 004. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi. Ministry of Finance, Room No.401, 2 Floor, E. Ramp, Jawaharlal Nehru Stadium, Delhi - 100003. The Union of lndia, Rep. by its Secretary, Ministry of Finance, IRE#3,[IL'\",. 4 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 a Writ, Order or Direction, more particularly one in the nature of Writ of [t/andamus, declaring the Assessment Order, dated 'l 110312024 passed by the 1st Respondent under Section 147 read with Section 144 of lhe lncome Tax Act for the Assessment Year 2019-20 vide Document Identification Number (DlN) and Order No.|TBA/AST/5114712O23-24110624077O5(1), which is passed as a consequence of the order passed under Section 148A(d), dated 1110312023 vide DIN and Notice No.ITBA/AST/F/148A12022-2311050638144(1) and the notice under Section 148, dated 1110312023 vide DIN and Notice No.ITBA/AST/S/ 148_112022-2311050638318(1 ) issued by the 1st Respondent instead of Faceless Assessing Officer, as void, illegal, without Jurisdiction and contrary to the provisions of lncome Tax Act and contrary to the Principles of Natural Justice lA NO: 1 OF 2024 Petition under Section 1 51 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings pursuant to the Assessment Order, dated 1110312024 passed by the '1st Respondent under Section 141 read with Section 144 of the lncome Tax Act for the Assessment Year 2O1g-20 vide Document ldentification Number (DlN) and Order No.|TBA/AST/S/ 14712023- 24110624077O5(1) Counsel for the Petitioner: SRI SHAIK JEELANI BASHA, COUNSEL FOR SMT. SHAIK VAHEEDA SUSHMA Counsel for Respondent Nos. 1 to 3: SRI VIJHAY K PUNNA (sENroR sc FoR tTD) Counsel for Respondent No. 4: SRI B. MUKHERJEE, SC FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL The Court made the following: ORDER 1 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.11235 OF 2o24 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri Shaik Jeelani Basha, learned counsel representing Ms. Shaik Vaheeda Sushma, learned counsel for the petitioner(s), Sri Vrjhay K Punna, learned Senior Standing Counsel for the respondent(s)-lncome Tax Department and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India for the respondent-Union of India. 2. The ground taken by the learned counsel for the petitioner is that in furtherance of Finance 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 2 this Court in a batcl-r of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.09.2023. Th,e 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 rn W.P.No.259O3 of 2022, held as under: \"35. In view of the aforesaid discussions, it is by now very clear that the procedure to be foltoqred by the respondent- Department upon treeting the notices issued for reassessment being under Section 148A, the subsequent proceedlngs was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2O21. In the absence of which, we ale constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Flnancc Act, 2O21, 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 Agar$ral, supra. 36. For all the aforesaid teasons, the impugned Dotices 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 illcgal, deserves to be and are accordingly set eside/quashed. As a consequence, all the impugned orders getting quashed, the consequeEtial orders passed by the respondent Department purauant to the notices issued under Sectio! 147 and 148 rould also get quashcd and it ls ordered accordingly. The reason E'e are quashing the consequential order is on the principleG that when the initiation of the proceedings itself Bras procedurally wrong, the subs€quent 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 issue. Since the impugned notices and orders are getting quashed otr the point ofjurisdlction, we are rrot inclined to proceed further and decide the other issues I I \"r/ raised by the petitioner which stends reserwed to be ralsed end contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra' as a one-tlme measure exercising the powers under Article 142 of the Constitutior of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitlons 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 irr the case of Ashish Agarwal, supta. 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 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 in W.P.No.259O3 of 2022. 6. The writ petition is allowed. No costs. Interlocutory applications, if any pending, shall also stand closed' SD/-A.V.S.PRASAD ASSISTANT REGIS R //TRUE COPY// SECTION FFICER To, 1 2 3 The lncome Tax Officer, Exemption Ward 1(4), Aayakar Bhavan, Basheerbagh, Hyderabad-500 004. The Princip-al Chlef Commissioner of lncome Tax (Exemptions), A.P. and Telangana, lT Towers ttlasab Tank, Hyderabad-S00 004. The A'ssessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi. Ministry of Finance, Room No.401 , 2 Floor, E. Ramp, Jawaharlal Nehru Stadium, Delhi - 100003. The Secretary, Ministry of Finance, Union of lndia, New Delhi. One CC to Smt. Shaik'Vaheeda Sushma Advocate [OPUC] One CC to Sri Vijhay K Punna (SENIOR SC FOR ITD) Advocate.tO.?U-q-. .^. One CC to Sri Gidi Praveen Kumar, Deputy Solicitor General of lndia [OPUC] Two CD Copies 4. 6. 7. B, MBC GJP N HIGH COURT DATED: 2610412024 'Y ; lg ilN202{ 1)'. 1; J-: ( 'l_a '. -.- ' /. .i> '; .+,:j ORDER WP.No.11235 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS "