M/s Siyora Developers Private Limited V. The Income Tax Officer

WP/25695/2024

AI Insights

The case involves multiple writ petitions filed by M/s Siyora Developers Private Limited and Mr. Cheruku Jangaiah Goud against the Income Tax Department, challenging the legality of notices and orders issued for reassessment under the Income Tax Act, 1961. The petitioners argued that the notices were arbitrary, illegal, and violated principles of natural justice, as well as various articles of the Constitution of India. The court referenced a previous decision in W.P.No.25903 of 2022, which had set a precedent on the procedural flaws in such notices. The court's decision was based on the agreement of the parties to dispose of the matter in accordance with the earlier judgment, which had quashed similar notices and orders due to procedural irregularities.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752774 (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, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY; J SUNITHA
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Finance Act 2021; Income Tax; Legal Proceedings; Natural Justice; Reassessment; Writ of Mandamus
• Section: 147; 148; 144; 271(1)(c); 271(1)(b); 271F; 270A; 151; 144B; 148A(d); 272A(1)(d); 226

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) SATURDAY ,THE TWENTY FIRST DAY OF SEPTEIUBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITIO N NOS: 25695 25704 AND 2s914 0F 2024 w.P. No: 25695 OF 2024 Between: M/s Siyora Developers Private Limited ' 1-34112' 2nd Floor' Street .No 5' ;;;.i\"il; Hro\"t\"'oii - soo bo7. ielangana Repre^sented by its Director' rrrri. Ja]pit Rediy Gowrigari S/o. Mr' Narayana Reddy Gowrtgart ...PETITIONER AND lThelncomeTaxOfficer,Ward3(1),HyderabadSionatureTowers'Opposite Botanical Gardens,5v\"- r\"ij-oiiicii x6no-a!^u'' Sv-No 37(P) of Kothaguda' ffiil;;;p\"liy-rtri']\"d'rr\"'-nvil,|.hio'-- -s-tirj oa4' Ransa Reddv District' Telangana 2. The Principal Chref Commissioner of- lnc-qme Tax Andhra Pradesh and Tetanoana. HvderaOad\"Hoo, f.fo. S)2, gti, Floor, B Biock, l.T.Towers, 10-2-3, AC GIards, Hyderabad - 500 004, Telangana.. 3. Assessment unit, rnilmJ irio\"pirtrn\"\"nt, National e-Assessment center, New Delhi, noo, rlJ]ao\"r, z'io Ftb\"'' E-Ramp' Jawaharlal Nehru Stadium' New Delhi - 110 003 ...RES'ONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstancesstatedintheaffidavitfiledtherewith,theHighCourtmaybe pleased to issue a writ of Mandamus or any other appropriate writ' ordg or Direction,declaringthata.theorderpassedunderSec'148A(d)ofthelncome TaxAct,i961'dated30.o4.2024,bearingDlNandNoticeNo. ITBA/AST/Fi14BA12O24-25I1064481852(1), by the 1st Respondent', for the Assessment Year 2017 - 18 b. the notice issued under Sec 148 of the lncome Tax Act, 1961, dated 30.04.2024, bearing DIN and Notice No ITBA/AST/S/148- 112024-25t1064481864(1),bythe1'tRespondent'fortheAssessmentYear 2olT.lSasarbitrary.illegal,badinlaw,void.ab-initio,violativeoftheprinciples / I l of natural justice, apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec 14BA of the lncome Tax Act' 1961' and to consequently set aside the same in the interests of iustice IA NO:1 OF 2024 PetitionUndersectionl5lCPCprayingthatinthecircumstancesstated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings, including any recovery, pursuant to the notice issued under Sec 148 of the lncome Tax Act, 1961, dated 30 042024' bearing D N and Notice No. ITBA/AST/S/148-1t2024-2511064481864(1), by the 'l't Respondent' for the Assessment Year 2017 - 18, pending disposal of the above Writ Petition Counsel for the Petitioner: SRI A. V' A. SIVA KARTIKEYA Counsel for the Respondents: Ms. BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAx) W.P. No:25704 OF 2024 Between: Mr Cheruku Jangaiah Goud, S/o..M.r. Narsimha Goud' aged 58 fejr,rs.',Occ Aoriculturist. arc l2;-l-lg\"flJ\"i V,jrV, Gardens, Bandi-aguda GSI Uppal' Ringareddy District - 500 068, Telangana ...'ET'T'ONER AND 1'AssessmentUnit,lncomeTaxDepartment,Nationale-AssessmentCenter, ' i,i6**O\"rn-i, n\"o.i rubl aOf , TnO Fioor, E-R'amp, Jawaharlal Nehru Stadium, New Delhi - 110 003. 2. fh'\" liJome rax-o.*icer, ward 17(1), Hyderabad, signature Towers,^s_y-tNo - 6(p) oiKondapur, Sy. No.. 37(p) olKothaguda oooosite Botanrcal Garoens, sliritingamparry rrrrrio\"il n\"tigi -n\"Jai -o\"tiict, ' Hvoerabad - 500 084' Telangana. 3 ih; Frilipal chief commissioner of lncome Tax, Andh.ra Pradesh_ and - ielanoanal HvAeraOaJ-Coo, No-. SZZ, 9th Floor, B Block, l.T.Towers, 10-2- 3, AC\"Guards, Hyderabad - 500 004, Telangana ...RES'ONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstancesstatedintheaffidavitfiledtherewith,theHighCourtmaybe pleasedtoissueaWritofMandamusoranyotherappropriateWrit,orderor Direction, declaring that a. the order passed by the 1't Respondent' uls 147 rlw Sec. 144 r/w Sec. 1448 ol the lncome Tax Act' 1961' dated 08 01 2024 ' beartng I I I -) DlNandNoticeNo.ITBA/AST/s,t14712023-24t1059452444(1)'forthe ASSeSSment Year 2o15 - 16, b. Consequential penalty orders passed by the 1s| Respondent, levying penalties u/s 271('l)(c)' 271(1Xb) and 271F of the lncome Tax Act, 1961, dated 19.07'2024, 10'07'2024 and 10'07'2024' bearing DIN' ll:BA/PNLIFt271(1)(c)t2o24-25l1066859709(1),lTBfuPNL/F/271(1)(b)12o24- 25t106657ggg3(1)ITBA/PNLtFl271Ft2o24-25/1066579578(1),respectively,for theAssessmentYear20l5-l6,asarbitrary,illegal,barredbylimitation'badin law,void-ab-initio,violativeoftheprinciplesofnaturaljustice'apartfrombeing violativeofArticlesl4,lg(1Xg)and265oftheConstitutionoflndiaandSec 14BA of the lncome Tax Act, 1961, and to consequently set aside the same in the interests of .iustice IA NO:1OF 2024 PetitionunderSectionl5lcPcprayingthatinthecircumstancesstated intheaffidavitfiledinSupportofthepetition,theHighCourtmaybepleasedto stay all further proceedings, including any recovery' pursuant to the order passed by the 1't Respondent, uts 147 r/w Sec 144 rlw Sec 144B of the lncome Tax Act. 1961, dated 08 01 .2024'bearing DIN and Notice No ITBA/AST/S/14712023- 2411059452444(1),fortheAssessmentYear2OlS-16'pendingdisposalofthe above Writ Petitton Counsel for the Petitioner: SRI A' V' A' SIVA KARTIKEYA Counsel for the Respondents: Ms' J' SUNITHA (JUNIOR SC FOR INCOME TAX) w.P. No: 2591 40F 2024 Between: AND 1 lrlr. Cheruku Jangaiah Goud, S/o Mr' Narsimha Gold aoed 58 vears Occ Aoriculturist, Rio. 12-1-zg, ;; i'lj;v; G'iaens eanatlsuda GSI Uppal' iZngareddy District - 500 068 -e s-zana ...'ET.T,ONER Assessment Unit, lncome Tax Departmel N?tio,l3L e-Assessment Center' ili\"*ii\"riii\"'n\"om No. 401,'i;d il;;;. e-Rarnp. Jawaharlal Nehru Stadium. New Delhi - 110 003. ?#'\"1.;;\" i\"i-Otfi\"u, Ward 17(1), Hyderabad' sionature Towers' Sv r r'\"'ot'pi\"o x\",\"iiliri sv r.r\".'JiipI oikbthiguaa, ofpos-ite Botanca| Gardens 2 i + Serrtingampally Mandal' Ranga Reddy District' Hyderabad 500 084' Telanoana. 3 il5'F;;l;'pal Chief Commissioner at lncome Tax Andhra Pradesh and Tetanoana uvaeraoaJiob, r.r\". -szz, gth Floor. B Block lT-Towers 10-2-3, RC GJarOs l-iyderabad - 500 004 Telangana ...RES'ONDENTS 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 of Mandamus or any other appropriate Writ' Order or Direction, declaring that a. the order passed by the 1st Respondent' uls 147 tlw Sec.144riwSec.l44BoftheIncomeTaxAct,1961,dated21.12.2023,bearing DIN and Notice No. ITBA/AST/S/14712023-24t1055147733(1)' for the Assessment Year 2018-'19, and , b. consequential penalty orders passed by the 1st Respondent, levying penalties u/s 270A, 272A(1 (d) of the lncome Tax Act' 1961, dated 18.06.2024 and 12.06'2O24, bearing DIN' ITBA/PNLlFl270Al2O24- 2511065698931(1)ITBA/PNL/F/272A(1)(d)t2024-25/1065589246(1), respectively,fortheAssessmentYear2ol}-lg,aSarbitrary,illegal,barredby limitation, bad in law, void-ab-initio, violative of the principles of natural justice, apartfrombeingviolativeofArticlesl4,lg(1Xg)and265oftheConstitutionof lndia and Sec 14BA of the lncome Tax Act, 1961, and to consequently set aside the same in the interests of justice IA NO:1 OF 2024 PetitionunderSectionl5lCPCprayingthatinthecircumstancesstatedin theaffidavitfiledinsupportofthepetition,theHighCourtmaybepleasedtostay all further proceedings, including any recovery, pursuant to the order passed by the 1.t Respondent, u/s 147t rtw sec. 144 r/w sec. 144 B of the lncome Tax Act, 1961, dated 21 .122023' bearing DIN and Notice No ITBA/AST/S/14712023' 2411059147733(1),fortheAssessmentYear2ol}-lgpendingdisposalofthe above Writ Petition Counsel for the Petitioner: SRI A' V' A' SIVA KARTIKEYA Counsel for the Respondents: Ms' J' SUNITHA (JUNIOR SC FOR INCOME TAX) The Court made the following: COMMON ORDER lr I / THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA''ESHU/AR RAO IIRIT PETITIoN NOS.25 695, 25704 AND 259t4 0F 2024 coMMON ORDER {per Hon'ble SP,J) Sri A.V.A. Siva Kartikeya, learned counsel appears for the petitioners, Ms.B.Sapna Reddy, learned Junior Standing Counsel for income Tax Department appears for the respondents in W.P.No.25695 of 2024 and Ms' J'sunitha' learned Junior Standing Counsel for Income Tax Department appears for the respondents in W.P.Nos.257O4 and 25914 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 Finance Acl' 2O2l' re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicial scrutiny' 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 2 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 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 I'lon'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 orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and l rlg 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 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 reserved to be raised and contended in an appropriate proccedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under '1 3 Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Cou( 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.\" 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.38 of the order dated 14.09.2023 in W.P.No.259O3 of 2022. 7 . The writ petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. To, BIV 1. The lncome Tax Officer,-Wa1d 3(1), Hyderabad, Signature Towers, Opposite Botanical Gardens, S.y N9, 6(P) of Kondapur, Sy.-No. 37(p) of Kotha'guda, Serlingampally Mandal, Hyderabad - 500 0S4, Ranga Reddy Di-strict, Telangana 2. The Principal Chief Commissioner of lncome Tax, Andhra pradesh and I\"]qlgrnr, Hyderabad Rogln-ryo. q22, 9th Ftoor, B Btock, l.T.Towers, .10-2-3, AC Guards, Hyderabad - 500 004, Telanqana. 3. Assessment Unit, lncome Tax Departm-ent, National e-Assessment Center, New Delhi, Room No. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003 4. The lncome Tax Officer. Ward 17(1), Hyderabad, Siqnature Towers. Sv. No 6,(P) 0 Kandapur. Sy. No. 37(p) of Kothiguda, Oppos-ite Botancal Garderis Serilingampally Mandal, Ranga Reddy -District, Hyderabad 5OO 084. Telangana. 5. One CC to SRI A V. A: SIVA KARTIKEYA, Advocate [OPUC] 6. One CC to Ms. BOKARO SAPNA REDDY (Jr.- SC FoR INCoIUE TAX)[OPUC] 7. One CC to Ms J. SUNITHA, Jr. SC FOR TNCOME TAX DEPARTMENT loPUCl B Two CD Copies te qv( //TRUE COPYII SD/. K. AMIT,IAJI AS S I STA N T R.EG.I S/'E4] l)1t--' SECTION OFFICER l I 1 1 6 HIGH COURT DATED:21 10912024 : t . ( o o o 2 5 Nlu pgza fa.q rcireo * \"l COMMON ORDER WP.Nos.25695 ,25704 AND 25914 OF 2024 ALLOWING ALL THE WRITPETITIONS WITHOUT COSTS 1* 1 o LV a A "