KANIKE MAHESH V. The Income Tax Officer

WP/19727/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners challenging the reassessment orders issued by the Income Tax Department under the National Faceless Assessment Scheme. 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, illegal, and without jurisdiction. The respondents included various authorities from the Income Tax Department and the Central Board of Direct Taxes. The court's decision was influenced by a precedent set in a similar case (W.P.No.25903 of 2022), where it was held that the procedures followed by the department were in contravention of the statute and the directives of the Supreme Court.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 766708 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 25-07-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Article 226 of the Constitution of India, Section 144B of the Income-tax Act, 1961, Section 14BA of the Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; B MUKHERJEE
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Assessment; Finance Act 2021; Income Tax; Jurisdiction; Natural Justice; Writ of Mandamus
• Section: 147; 148; 144B; 226; 14BA

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) THURSDAY, THE TWENTY FIFTH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRIJUSTIC.d NAMAVARAPU RAJESHWAR RAO Telangana J New Delhi - 110 001. 4. The National Faceless Assessment Center' Delhi. [ 3411 ] lncome Tax DePartment, New WRIT PETITION Nos. 19665 r9687 AND 19727 aF 2024 WRIT PETITION NO:196€5 OF 2024 Between: Shiv Shanker Goel, S19 - - lttu 6iCrprtion.eusiness, R/o 21'.7'558 Hydeiabad 500002.Telangana' Inora' Ram, Aqed about 61lears' ,opp:-Oi Higi Court Ghansi Bazar ...PETITIONER AND 1 z office of The lncome Tax officer, Ward 8(1), Hyderabad, Telangana State The Principal Chief Commissioner of lncome Tax -Telanoana and A P Hyderabad, lr Towers AC 'i;:';;;' ffitIo i\"ni' Hvdera-bad - 500 028' The central Board of Direct Taxes, Represented.by its chairman' Department of Revenue, Ministry ot r,nan66]6o'lEln'*lot lMia' Secretariat Buildings' u*\",,',ili\"J.?:l,\"Htxs:81\"fi fl l:i8,?Yli.ff :::1t3*'\"olH'9?l\"o't['\"\"' ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances staled i1 Jhe atfidayl! l1!ed tnelewrtfr' the Hlgh Court may be pleased to issue an appropriate *'it, o'4\"' or Oiiection more particularly one in the nature of Writ of Mandamus, declaring the order passed by the lncome Tax Authorities (Nationar Faceless E-Assessment centre) completed the assessment Ulsl4TreadwithSection,l44Bofthelncome-taxACtDateoforderlS-03.2o24' DINITBA/AST/st14712023.2411062823928(1)fortheAssessmentYear20,lB.l9 determining the total income of Rs 19,06,674l-as arbitrary' illegal' bad in law' without jurisdiction. void-ab-initio, violative of the principles of natural iustice apart frombeingViolativeofArticlesla,lg(1)(g)and265oftheConstitutionoflndiaand sec. 14BA of the lncome Tax Act, '1961, and consequently set aside the same in the interests of iustice Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 and 2: MS' J' SUNITHA' JUNIOR SC FOR INCOME TAX Counsel forthe Respondent No.3: SRI B' MUKHERJEE' REPRESENTING FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA Between: Ram Mohan Miryala, S/o.' Veeiaiah Miryala' Aged ab^out., S5ye-ars' cj;;rp;iffi -Brslnedi Rro !-!Qll ^lt9a1 Vijava N ursing Home' Gauthamnasar CninErnrgrt Rangareddy 500050, Telangana, lndia ...PETITIONER WRIT PETITION NO: 19687 0F 2024 The lncome Tax Officer, Serlingampally' Office of thelncome tax office' ward 8(1) Hyderabad, Telangana State. The Principal Chief Commissioner of lncome Tax - Telanoana and A P ' Hfi;';;;'i.liro*eii, Ac'c;;', M;;;b iank, Hvdera\"bad - 500 028' Telangana. 3. The Central Board of Dlrect Taxes, Represented by.its chairman, Department \" ;i'R\"*.;;, fr,,1inistr, ot finance, Goveinment of lndia, Secretariat Buildings, New Delhi - 1 .10 001 . 4. The National Faceless ASSeSSment Center, lncome Tax Department, New Delhi. 5. The Union of lndia, Represented by its Secretary to-the Government' \" o\"pa.t*\"\"ioi nevenu'e, trrtinistry oi Finance, Ndw Delhi - 110 001 ' ,.,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 AND 1 2 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 the lncome iax Act, 1961 vide DIN and Notice No. dated 18-01-2024 ITBA/AST tsl147 t2023-24/1059870199(1) for the assessment year2015-'l6determiningthetotalincomeofRs5l\"lT'543l-asarbitrary'illegal' badinlaw,withoutjurisdiction,void-ab-initio,violativeoftheprinciplesofnatural justice apart from being violative of Articles 14' 19(1)(g) and Constitution of lndia and Sec. 14BA of the lncome Tax Act' consequently set aside the same in the interests of justice' and pass WRIT PETIroli'ilio:'1i;lzi'aiF 2ozA '' Between: 265 of the 1961, and Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1 and 2: MS' J' SUNITHA' JUNIOR SC FOR INCOME TAX Counsel for the Respondent No.3: SRI B' MUKHERJEE' REPRESIENTING FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA AND 1 J 2 4 5 Kanike Mahesh, S/o: Kanike Veeraiah, Aqgd. about 43 y99r9' iiiir'Jrti\".ilir-\"nb.., nlo i.p of rvilS sai Deep-\"Mobrles and watch .Main ffi;:ruiliffiffi habronrGr rvratiabubnagar'509001'Telangana' lndia ...PETITIONER The lncome Tax Officer, Office of the lncome tax officer ward' DEO Office Road Mahabubnagar, Telangana State The Principal Chief Commissioner Of lncome Tax Telangana And Ap' Hlii,j,Iiiili'Ir-i\"*eii, AC cuaros, Masab Tank, Hvderabad- b6oo2B,T.tangan\" The central Board of Direct Taxes, Represented- By lts- chairman Department ;i'[\";;;;, Mi;i.try \"i rinjnce, cbu.inment of lnd'ia, secretariat Buildinss' New Delhi The National Faceless Assessment Center, lncome Tax Department' New Delhi The Union Of lndra, Represented Bylts Secretary !o The Government Department of Revenue, Ministry of Finance, New uelnr ...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 [ ,4andamus declaring the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre completed the assessment UIS 147 r/w Section 144-B of the lncome Tax Act, 1961 vide DIN and Notice No. daled 20-12-2023 ITBA/ASTlsl 1 47 12023- 2411 059093666(1 ) for the assessment year 2015-16 determining the total income of Rs. 50,68,5101as 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. 14BA of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice and pass Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR Counsel for the Respondents: MS. BOKARO SAPNA REDDY (Jr. SG FOR INCOME TAX) Counsel forthe RespondentNo.3: SRI B. MUKHERJEE, REPRESENTING FOR SRI GADI PRAVEEN KUMAR, DEPUW SOLICITOR GENERAL OF INDIA The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMA,VARAPU RAJESHWAR RAO UIRIT PETITION NOS.19665 19687 & 19727 0F 2024 COMMON ORDER (per Honbte SP,J) Sri Thanneru Chaitanya Kumar, learned counsel, appears for the petitioners, Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)-Income Tax Department in W.P.Nos.19665 & 19687 of 2024, Ms.B.Sapna Reddy, learned Junior Standing Counsel .for Income Tax Department, appears for the respondent(s)-Income Tax Department in W.P.No.l9727 of 2024 ald Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Depuly Sp-llqitor Gqr1er,4l . qf, India. fpr ' ; ; the respondent(s)-Central Government in all the writ petitions. 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 modihed but the respondents have not taken care of it and therefore notices issued under Section 148 of thq Income Tax Act, 1961 cannot sustain judicial scrutiny. .: -- )' :l?ii:: ,:r-..,. 2 Since notices are bad in law, the consequential orders are also bad in law. 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.25903 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 14.09.2023. 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 1484, 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 Agarwal, supra. 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 o.ders 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 o.dered 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- - sqbs_equent ordeIs also gets nullified automatically. 3 37. The preliminary obiection 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 gefting quashed on the point of jurisdiction, we are not inclined to proceed fu(her 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 erercising 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 The Writ Petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/. C, PRAVEEN KUMA ASSISTANT REGISTRA //TRUE COPY// SE ON OFFICER 6 Cause notices and consequential orders passed in this batch of writ petitions are set aside. Liberty is reserved to both the parties to take respegtivg, sleind g*9'-tq flq.\"S.g,4:in:.?c^c9t+3ll9 wrth. law as per paragraph No.38 of the order dated 14.09.2023 in W.P.No.259O3 of 2022. 7 V To, TJ GJP 1 2 3 4 5 6. 7. 8. L 10 Office of The Income Tax Officer, Ward 8(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. The Chairman, The Central Board of Djrect Taxes, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 1 10 001 . The National Faceless Assessment Center, lncome Tax_Department, NewDelhi. The Secretary to the Government, Department of Revenue, The Union of lndia, Ministry of Finance, New Delhi - 1 10 001 . One CC to Sri Thanneru Chaitanya Kumar, Advocate [OPUG] One CC to Ms. J.Sunitha, Junior Sc For lncome Tax [OPUC] One CC to Sri Gadi Praveen Kumar, Deputy Solicitor General of lndia[OPUC] One CC to fvls. B. Sapna Reddy, SC for lncome Tax Department[OPUC] Two CD Copies qtr HIGH COURT DATED:2510712024 COMMON ORDER B 1HF- s ra i o Y ( o .J 2 I l.lDIJ 2021 7. t WRIT PETITION NOS. 19665, 19687 AN 2024 ALLOWING ALL THE WRIT PETITIONS WITHOUT COSTS ap t )-q. i I I I 5 z(q-\"+u rl "