Siva S. Kumar Rajanala and Kavitha Rapolu and B. Mukherjee V. National Faceless Assessment Center, Income Tax Department, New Delhi, India and Income Tax Officer, Ward 9(1), Hyderabad and The Assessment Unit, Income Tax Department, Government of India, New Delhi, Ministry of Finance

WP/8488/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners against the National Faceless Assessment Center, Income Tax Officer, and the Assessment Unit of the Income Tax Department. The petitions challenged the legality of reassessment orders and notices issued under sections 147 and 148 of the Income Tax Act, 1961, claiming they were void, illegal, arbitrary, and without jurisdiction, thus violating Article 14 of the Constitution of India. The court's decision was influenced by a previous ruling in W.P.No.25903 of 2022, which established that the reassessment process must adhere to the provisions set out in the Finance Act, 2021.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798628 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Revenue
• Laws Referred To: Article 226 of the Constitution of India, Section 148A of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 151 CPC
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J PRASAD
• Assessee Lawyers: M DEEPAK; A RAGHURAM
• Keywords: Arbitrary; Illegal; Jurisdiction; Reassessment order; Void; Writ of Mandamus; Article 14 violation
• Section: 147; 151; 148A

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY ,THE SECOND DAY OF APRIL TWO THOUSAND AND T i iENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NOS: 8352.8389 AND 8488 OF 2024 W.P.NO: 8352 OF 2024 Between: ANO 1. 9iva Sqlish Kumar_Rajanala, S/o Rajanala Sathyanarayana Aged about 39 Years, R/o. 16-11-76211 TO 5 Rinda- plaza. Moosarani Bagh bilsukhnagar Hyderabad 500036 ...PETITIONER The National Faceless Assessment Center, lncome{ax Department, New Delhi, lndia 2. lncome Tax Officer, Ward 9 (1 )Hyderabad 3. The Assessment Unit, lnbomir Tax DeDarlment Government of lndia New Delhi Ministry of Finance. ...RESPONDENTS Petition under Article 226 0f the constitution of lndia praying lhat 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 writ of mandamus declaring order under section 14gA(d) dated 25-03-2023 bearing lrBtuAST/F/1 4 I N 2o22-23t 1 05 1 2823 1 2(1 ), the notice dated 25-03-20 23 ut s. 1 48 bearin g lrBA/AST/s/l 48 1 I 2o22-23t 1 0s 1 2s4 6t (1 ) and the Reassessmen t order dated 06-03-2024 bearing DtN |TBA/ASTtSt147tZO23_24l1062096133(1), as being void, illegal, arbitrary, without jurisdiction, violate of Article 14 of the Constitution of lndia and consequenfly 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 support of the petition, the High court may be pleased to stay all further proceedings incruding coflection of tax pursuant to the 2 Reassessment order dated 06-03-2024 bearing DIN ITBA/AST/S/14712023- 2411062096133(1) Counsel for the Petitioner: SRI M. NAGA DEEPAK Counsel for the Respondent No.1 & 2: SRI J. V' PRASAD (SC FOR INCOME TAX) Counsel for the Respondent No'3: SRI B. MUKHERJEE REPRESENTING FOR SRI GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA w.P.NO : 8389 OF 2024 Between: Kavitha Raoolu. W/o. Venkateswar Rao Rapolu Aged about 44 years Flat No )o: Airv hesidency, H No 16-107 New Mirzalguda Milkaigiri, Hvderabad 5ooo47 Telangana ...PETrroNER AND 1. The National Faceless Assessment Center, lncome{ax Department, New Delhi, lndia 2. lncome Tax Officer, Ward 1 5 (1 ) Hyderabad 3. The Assessment Unit, lncome Tax Department Government of lndia New Delhi Ministry of Finance, .,.RESPONOENTS PetitionunderAllicle226oftheConstitutionoflndiaprayingthatinthe 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 writ of mandamus declaring order under section '148A(d) daled 2210412022 bearing tTBA/AST/F/14 8Al2022-2311042868620( 1 ), the consequent notice dated 27104t2022 u/s. 148 bearing DIN ITBA/AST/S/148 112022-2311042870365(1) and the Reassessment order dated 02-03-2024 bearlng ITBtuAST/S/1 4712023- 24t106187 5639(1 ), as being void. illegal, arbitrary, without iurisdiction, violate of Article 14 of the constitution of lndia and consequently set aside the same lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circunlstances stated in the affidavit filed in support of the petition, the High court may be pleased to 3 staV all further Proceedings \"*.r.a\",\"tnt order dated 24l1061875639(1) Counsel for the Petitioner: SRI M' NAGA DEEPAK ir,*=,'1,,,*,*,l:#:rlr:1K,,'ipiiiti',=-1'fff i#:ffi including collection of 02-03-2024 bearing tax pursuant to the lrBA/AsT/s/147l2023- NO:8488 OF 024 2 w.P AND 1 Beween: BlsX*:l[:i\"i,klR\"J'fl esi\"d:t%J':l'\"?:h:fl i'i3':\"#'\"--\"{'13.,.:.:: 'E1g#g*fiu:dffi rt#,*:l*;;**** 2 Petition under Atlicle 226 of the Constitution of lndia praying that in the circumstances stated in tn\" 'ttio'uit t'\"'-]T::l: iT\"T:HTt#il:: pleased to pass an order or direction especially one tn MANDAMUS holding that the order passed by '1't Respondent u/s 147 r' w s 1448 oI the Act, dt 07 03 2024 wilh DIN NolTBAJASIlSl147l2l23' 24t1062159427 (1) for the Ay 2015- 16' as arbitrary' illegal' bad in law' void ab initio, apart from being violative of provisions of section 148A and section 149 of the Act and also contrary to the circurar issued by CBDT and provisions of section '151A of the Act' and consequently set aside the order passed by '1st Respondent uts 147 r' w s 1448 of the Act' dt 07 03' 2024 with DIN NoITBA/AST/S/ 147t2rJ23-24t1062159427(1 for the Ay. 2015-16 and all consequential proceedings pursuant thereto I IA N OF :1 2024 petition under Sec in rhe afridavit ,,,\";;r\"\"r;t'\"\" 1s1 cPc pravins rhat i stav alr further proceeo,'il' \"'the petition, ;\" ;;J lj,il;;::T::jj:t: passed by,nu ,.,*\"\"oonlnutn,;: 'r1lt-:nv recovery, pursuanr to the order ;jl:,:^H?l:1::::::::::;;|oJ,,iniiif,tHil\"il';1;,:J::: necessary in the circumstaorder or orders as this Honb nces of the case and ,..r0\".'r.11\":t mav deem rit and Counsel for the petitioner: SRI A. V. RAGHU RAM Counsel for the Respondents: SRI J. V. PRASAD (SC FOR INCOME TAX) The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NOS.A3s2 8389 AND a4aA OF 20.24 COMMON ORDER (per 1{on'ble SP,J) Heard Sri M.Naga Deepak, learned counsel for the petitioner(s) in W.P.Nos.8352 and 8389 of 2024, Sri A.V.Raghu Ram, learned counsel for the petitioner in W.p.No.g4 Bg of 2024, Sri J.V. Prasad, iearned Standing Counsel for Income Tax appearing on behalf of respondent Nos.1 and, 2 in all the writ petitions, and Sri B.Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing on behalf of respondent No.3 in W.p.Nos.g352 and B3B9 of 2024. 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 Financ e Act, 2021, re assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section l4g of the Income Tax Act, 196 I cannot sustain judicial scrutinv. - tl 2 Since notices are bad in 1as, the consequential orders are also bad in laq' 4 During the course ol hearing, learned counsel for the parties agreed that curtains on this issue are finilliy dravvn by this Court in a batch of nrit petitions, W.P.No.25903 of 2022 and other connected matters, decided by commott order dated 14.O9.2023. The parties agreed that this matter merv be disposed of in terms of tlre Common Order dated 14.O9.2023 5 This Court in the said order dated 11.O9.2023 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 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 Aqarwal' 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 bein€l, per se illeqal, 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 3 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 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 aeserved to be raised and contended in an appropriate proceedings. 38. Since the Hon,ble Supreme Court hact, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Atticle 142 of the Constitution of India, 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 Aganrval, supra. 39. No order as to costs.\" 6. In view of the consensus arrived, the impugned Show Cause notices and consequential orders passed in this batch of 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.3B of the order dated 14.09.2023 in W.P.No.259O3 of 2022. The writ petitions are .illowed. No costs. Interlocutory 3q1:1!rons, if any pending, sherll also stand closed. 7 .l b I I l sD/- K. VENKAIAH tnRUE coPY ASSISTANT I fl 6 HIGH COURT DATED:0210412024 COMMON ORDER WP.No.8352, 8389 AND 8488 of 2024 ALLOWING ALL THE WRITPETITIONS WITHOUT COSTS c gt\"'E * y{E S rA )€, 1 J o L.) 0 1 Jijli 2024 ], C) . I I * i Pr,1 (, I "