Shyam Kumar Nallella V. Assessment Unit, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance and The Income Tax Officer, Ward - 6(1)

WP/25739/2024

AI Insights

The case involves Shyam Kumar Nallella, the petitioner, challenging the legality of a re-assessment order issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, for the financial year 2017-18. The petitioner argued that the re-assessment process was not conducted in accordance with the modified procedures set out in the Finance Act, 2021, and thus, the notice and subsequent orders were illegal and violated principles of natural justice. The respondents were the Assessment Unit of the National Faceless Assessment Centre and the Income Tax Officer, Ward - 6(1). The court referenced a common order from a batch of similar writ petitions, which had already addressed the procedural flaws in the re-assessment notices.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 688147 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 21-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: AYYAGARI
• Keywords: CBDT Circular; Natural Justice; Procedural Flaw; Re-assessment process; Writ of Mandamus
• Section: 148; 149; 148A; 151A; 14BA(d)

Judgement Text

" 134111 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) SATURDAY, THE TWENTY FIRST DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 25739 OF 2024 Between: AND 1 Shyam Kumar Nallella, S/o.Venkateshwarlu Nallella, Occ. Business, Aged aboul 42 years, R/o. 2-2-116713140, Mudari Mohan Rani Nilayam, 2nd Floor, lndira Nagar, Tilak Nagar, Hyderabad - 500 044, Telangana State. ...PETITIONER Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, l/inistry of Finance, Room No.401, 2nd floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The lncome Tax Officer, Ward - 6(1), I T Tower, AC Guards, Masab Tank, Hyderabad - 500 004, Telangana State. ...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 a Writ or order or direction, more preferably in the nature of Writ of l rlandamus, holding the order passed by the 2nd respondent herein under Sec. 14BA(d) of the Income Tax Act, dated. 07.04.2022 with DIN Notice No. ITBA/AST/F/148412022-2311042629018(1) for the F.Y 2017-18 relevant to the Assessment Year 2018-19 as illegal, arbitrary, bad in Law and violation of Principles of Natural Justice apart from being violative of Provisions of Sec. 148A and 149 of the Act also contrary to the Circular issued by CBDT and provisions of Sec.151A of the Act consequently set aside the same. / IA NOt'l oF 2024 Petition under Section 15'1 CPC prayrng that in the circumstances stated in theaffidavitfiledinSuppcrtofthepetition,theHighCourtmaybepleasedto Suspend the Operation of the Order dated 0T O4 2022 wilh DIN Notice No.ITBA/AST/Fl14}Al2}2',a-23t104262g018(1) for the F Y 2017-18 relevant to the AssessmentYear20lB-1s|passedbythe2ndrespondent,pendingoisposalofthe above writ Petition. Counsel for the Petitioner: M/S AYYAGARI JAYASHREE Counsel for the Respondents: MS'BOKARO SAPNA REDDY (Jr. SC FOR TNCOME TAX) The Court made the following: ORDER I1 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOT'RABLE SRI .'USTICE NAMAVARAPU RA.'ESHWAR RAO T PETITIOI{ No.25739 OF 2o24 ORDER: (per Hon'ble Justice Sujog Paul) Heard Smt. Ayyagari Jayashree, lea-rned courlsel for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department for the respondents. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2O2L, re- assessment process stood modifred but the respondents have not taken care of it and therefore, notice issued under Section 148 of the Income Tax Act, 1961 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 Iinally 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 I4.O9.2023. 7 4. This Court in the said order dated 14.Q9.2O23 1n W.P.No.259Q3 of 2t)22, held as under: \"35. In view of the aforesaid discuEslons, it is by now very clear that the procedure to be follosed by the resPoadeEt- Department upon treatlEg the notlceE iasued for reasseEsEent being under Section 148A, the subsequent proceedings was mandatorily required to be uEdertakcn uader the substituted provisions as laid down uBder the Finance Act,2021. Io the absence of which, we are consttahed - to hold that the procedure adopted by the respondent-DepartEeEt is in coEtravetrtlon to the statute i.e. the Finance Act, 2021, at the first iqstance. Secondly, it i6 ako in direct coEtravention to the directlves issued by the Hon'ble Supteme Court in the case of Ashish Agarsal, supra. 36. For all the aforesaid reasoas, the iEpugaed notlces i86ued and the proceedings drawa by the respondent-DepartEent ls nelther tenable, nor sustailable. The notices so lssued aad the proceduro adopted beitrg per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the iurpugned orders getting quashed, the conaequetrtlal otders passed by the respoldeEt Depertment pursuant to the Eotices issued u[der Section 147 aad 148 would also get quashed and it is ordered accordingly. The reason we are quashlng the consequential order is oa the principles that wheE the initiation of the proceedi[gs itGelf was procedurally wrong, the subsequent orders also gets nulllfied automatically. 37. The prelimiaary obJection raised by the petltloner is sustained and all these srit pctitions staads allowed oE this vcry jurisdlctional issue. Slnce the impugned lotices and orders are getting quashed otr the point ofjutisdiction' lre ate not inclined to proceed further and decide the other issues raised by the petitioner which staads teEcrved to be raised and contended in qn appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, aa a one-tlme meaaure exercising the powers under Article 142 of the Con5titution of lEdia, perEitted the Revenue to proceed utrder the Eubstituted provislons, and this Court allowing the petitions only ou the procedural flaw, the right corferrcd on thc Revenue would regrain resen,ed to proceed further if they so watrt from the 3 stage of the order of the Supreme Court ln the case of Ashlsh Agarrel, supra. 39. No order es to costs.' 5. In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this writ petition zre set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.3g of the order dated 14.09.2023 in W.P.No.25903 of 2022. 6. The writ petition is allowed. No costs. Interlocutory applications, if any pending, shall also staad closed. SD/.P. PADMANABHA //TRUE COPY// ASSISTANT G EDDY TRAR SECTION FFICER To, TJ LS 1. Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No.401, 2nd floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The lncome Tax Officer, Ward - 6(1), I T Tower, AC Guards, Masab Tank, Hyderabad - 500 004, Telangana State. 3 Qne CC to t tlls Ayyagari Jayashree, Advocate IOPUC] 4. One CC to Ms. Bokaro Sapna Reddy (Jr. SC for lncomefax) IOPUC] 5. Two CD Copies t/ 1 i I f I I HIGH COURT DATED:2110912024 ORDER WP.No.25739 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS ( T S , Y 6 0 2 I A k I 2 t, r E 0 3 1 o P 7 C) .L -lt i t fiF .S:'.,.-r C,r'!-' -._--::t='',- g 6p;.t> /rz 6/o/za ( "