Malhal Rao Sandela V. Office of The Assistant Commissioner of Income Tax

WP/10118/2024

AI Insights

The case involves multiple writ petitions filed against the orders issued by the Income Tax Department under Sections 147 and 148 of the Income Tax Act, 1961, for various assessment years. The petitions challenged the legality and procedural correctness of these orders, arguing that they were arbitrary, illegal, and violated the principles of natural justice. The High Court examined the procedural adherence of the Income Tax Department in issuing these orders and found them lacking, particularly in following the substituted provisions mandated by the Finance Act, 2021, and the Supreme Court's ruling in Ashish Agarwal. As a result, the court quashed the notices and all consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 753004 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 19-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Union of India
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIJHAY PUNNA; SUNITHA PISUPATI; B MUKHERJEE
• Assessee Lawyers: A V A KARTIKEYA; THANNERU KUMAR; DUNDU; VENKATARAMANA MANTUR; A V RAGHURAM
• Keywords: Assessment; Faceless assessment; Income Tax; Legal Violation; Natural Justice; Writ of Mandamus
• Section: 147; 148; 144; 14; 144B; 148A; 265; 226; 19(1)(g)

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE NINETEENTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION Nos.10078 10084 10089 10099 10105 101 10 10't12 10117 10118 10121 10146 10175 10194 10234 1023-6 10254 10258 10259 10273 10286 AN D 10303 0F 2024 WRIT PETITION No. 10078 0F 2024 Between: ...PETITIONER AND smt B Laxmibai, wo Late Sri B.Mailaiah, Aged g0 vears, occ. Housewife, Rto 2-2- 1125192, New Nailakunta shivam noao, Hvteiabi,i - sob o+a. rliangan-;,'ilr-ru,. Partner, M/s Sri Ambica Wines (pAN AcorSsgzrpl , # 2'_i_1ogd2,t;il;'kr, Hyderabad - 500 01 3, Telangana. 1025s 1 Assessment Unit, lncome Tax Department, National e_Assessment Centre, New Delhi Rogm No 401 ,2nd Floor, E-Ramp, .lawanarfif f.finru Siro,r.l' New Delhi - 'l 10 003. The lncgme Tax Officer, WrlO^ 1(] ), flyderabad. l.T. Towers, AC Guards, Masab Tank, Hyderabad - 500 0b4. telangani - The Principal Commissioner of lncome Tax - 1, Hyderabad, l.T. Towers, AC Guards, Masab Tank. Hyderabad - 500 004, fefing'ani 3 ...RESPONDENTS Petition under Articre 226 0f the constitution of rndia 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, decraring that the order passed by the 1st Respondent, urs 147 rtw Sec. '144 r/w Sec. 1448 of the lncome Tax Act, .196.1 , dated 2g.02.2024, bearing DIN and Notice No: ITBA/AST/S/,47t2023_ 24t1061663944(1), for the .10102. l Assessment Year 20'19 - 20 as arbitrary, illegal, bad in law. void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14 t9(1)(g) and 265 of the Constitution of lndia and Sec 148A of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice. 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, including any recovery, pursuant to the order passed by the 1st Respondent, uls 147 r/w Sec. 144 rlw Sec. 144B of the lncome Tax Act. 196'1 , dated 28022024, bearing DIN and Notice No.: ITBA/AST/S/14712023-2411061663944(1), for the Assessment Year 2019 - 20, pending drsposal of the above Writ Petitton. Counsel for the Petitioner: SRI A. V. A. SIVA KARTIKEYA Counsel for the Respondents: SRI VIJHAY K PUNNA, SENIOR S.C. FOR INCOME TAX WRIT PETITION NO: 10084 OF 2024 Between: Primary Agriculture Co-Operative Society Limited Kamanpur, Rep. By its Secretary Society Santhosh Kumar Thimmaraju, S/o.Thirumala Rao Thimmaraju, aged about 52 years, RlO. 5-180/4 Main Road Kamanpur, Kamanpur Mandal, Karimnagar 505188, Telangana, lndia. PAN. AACAP2059D Assessment Year. 2018-19 ..PETITIONER AND 'l . Office of The Assistant Commissioner of lncome Tax Circle, 1, Karimnagar, Telangana State. 2. The Principal Chief Commissioner of lncome Tax, Telangana and A P.' Hyderabad lT Towers AC Guards Masab Tank Hyderabad 3. The Natronal Faceless Assessment Center, lncome Tax Department, New Delhi. 4. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Minrstry of Finance, Government of lndia Secretariat Buildings, NewDelhi - 110001 5. The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Ministry oi Finance, Ndw Delhi j i 0 00i ' ...RESPONDENTS Petition under Artrcre 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 Mandamus, decraring the order passed by the lncome Tax Authorities (National Faceless E-Assessment centre) completed the assessment uls 147 read with section 1448 of the lncome-tax Act Date of order z}to2t2oz4, DIN |rBA/ASTlsl 1 47 t2023-24ii 06i645s91 (1 ) for the Assessment yeat 2o1}_1g determining the totar income of Rs. 3,32,27,432t- as arbitrary, illegal, bad in law, without lurisdiction, void-ab-initio, violative of the princrples of natural justice apart from being violative of Articles 1a, 19(1)(g) and 265 of the constitution of lndia and sec. '148A of the rncome Tax Act, 'r961, and consequenfly set aside the same in the interests of justice. Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. 1 & 2: Ms. SUNITHA, REPRESENTING Ms. SUNDART R ptSUpATt, SENTOR S.C. FOR TNCOME TAX counsel for the Respondent Nos.3 to s: sRr B. MUKHERJEE, REPRESENTING SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 10089 0F 2024 Between: Maheshwan [t{rt_rlglt!, D/o Narsaiah tppa, Aged About 44 years, Occuoation. Business. R/o 7 5 96/1 Dharmapuri Roa(.)O.l ol''.10.1 2. ilclcj r is r-t tlclct' ln l 4 \"35. ln view of thc aforesard discussions, it is by now very clear that the procedure to bc followed by the respondent-Oepartment upon treating the notices issued for reassessment being undcr Section 148A, thc subsequent proceedings was mandatorily rcquired to be undertaken urrder the sutrstituled provisions as laid down under the Finance Act, 2021. ln the absence of which, we arc 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, su pra. 36- For all the aforcsaid reasons, thc impugned notrccs lsst,ed and the procecdirrgs drawn t)y thc rcspondent Ocpartrrrcnt is ncither tenable, nor sustainablc. Thc noticcs so issued and the proccdLtre aclopted being pcr se illegal, deseryes to be and arc accordingly set aside/quashed. As a consequence, all the impugned orders gettiog quashed, the consequential orders passed by the respondent Oepartment 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 the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gcts nullified automatically. 37. The prelrminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue. Since the impugned notices and orders are gctting quashed on the point of iurisdictioni 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 proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising 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 o, the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" $ (' Irt 'it'r'.l tlt. r'.rtsr.rrs,s ;rrr.tr.cl . tlt. ir:t1trtt,(,d Slto lals(' aorr.es rLrrl coJrsL'(rtrLralrirl ar-clt.r':r 1,rs:t.tl i. tlris rrirtc:h or r-lt r)arlrtroas:rr'a s('r rrsrrr. I-rrrt rtr is rr.sL'r rirr trr Ir,trr trr(. r)alr-tics to latlic rr:sPectivc st:rncl lrrtrl lri 1tr-occt.rl il ;tr r.rrr.rlitrrct, rrith lart ilsi p('r paragr:rph N..il8 ctl lhc trrri.l clrrr.rl l-l.Oi).f023 in W.I'.No.25903 ol\"2O)) 7 The u'rit 1;eti{ions arc lrlroued No r.rrsrs Intr.r ror.rrtor-1 alrplic:rtions. il irn.r. penclrnrl. sltail ;llso sl;tir(l ..1() (,(l //TRUE COPY// SD/-A,V.S, PRASAD ASSISTANT REGIST AR a SECTION OFFICER To, 1. The Assessment Unrt, lncorne Centre, New Delhi, Roont No Stadiurn, New Delhi - 1 10 003. B The Income Tax Officer. Ward 509001 Tax Depl,rlnrr:rrl. N rl,urtal c-Assessmenl 4 tl ?' 1te,r L R rrrrl). Jarvah;rrlel Nehru 2. The Inconre Tax Officer Ward 4(1). Hyderllrarl. I T lowe rs AC Guards, l ,4asab Tank, Hyderabad - 500 004 Telanqana 3. Tlrr-. Prrncrpal Commissiorrr:r cif lrrconre Tirx 1 Hytlerr:rlr;tr.1. lT. Towers, AC Guartis. It4asab Tank, Hyderal-;ar1 500 00,1 f i:lantlltn.t 4. The Assrstant Commissioner of lrrcorne Tax Crrck:, 1 Kalntnaqar, Telangana State. 5. The Pr nciperl Chief Cornnrissi(;ner oF Inconr(l Tax. TL:l;rnr;ana and A P , Hyderabad lT Towers AC Guards Masab Tartk llytlerair.rrl 6 The Cerrtral Board of Dirr:ct Taxcs, Represcr.tte.l lry rts Oltairrttar. Dcpartment of Revenue, tt4inistry of Ftnance, Govcrnrlrertt of lnrlt:r Sit:t;re tariat Buildings, Ncw Delhr - 110001 / The Ser;retary to the Governnrent, Dcltartntent of Rcr.,etrtte. Urrion of lndia, lr,4rnistry of Finance, Ncw De lhr 1 1 0 001 9 Thr: lnconre Tax Officer, Warcj 2(1 ). Stqn.ltLrre Tour(trs. O;rp Botanicai (larciens. Kondapur, Hyclerabad 500084 1C The lncome Tal Officer. Ward 1. D.No.1 B-U10. 3''' Floor. fi,4a;'uri Complex. Opp. TSNPDCL Bhaw:rn Nltkkalarlutt;t H;trt;ltrtkond:t vr,r;ttitttt;al - 50tj001 1 DEO Olfir;e Ro:ui. N4ahabL]bnactar I T for.n,r:rs 10 2 3, AC 1 1 Tlrr) Inconre Tai Officer, l/arcl 1 5( 1 ). Hy(lcr:rb:r,:l (lr:arils, Hyderabad 500 004 Tr:larril:tna 12 I lro lrra;onle Tax (Jfftr;c:r, Wltttl i, i ellt ll,rrl [./rlLrul u nclge ir:rrgorrcra So8sol €, / i[ ii f,'. { I I I 18. The lncome fr$f,.u, Ward 2(1 ). lnconre Tax Departrnent, Hyderabad 19.The lncome Ta Office,. Warci 6(1), Hyrlcratrad, lT Tower, AC Guards, I ,4asab I ank, Hybe ratrlrrl Tc:lanq:tnlt.'5()0b04 i 20.The Delxtty Comrtrrssortt:r of nt;orlt: Ilrr (lrrce 2(1). SiqnatuTe Towers. i SV No 6( P) ol KonrlapLrr :iy Nrr .iTr [) r rri t(otlt,tctlcj;t O;tp B6'[a1rr;al Gardens. i Serrltnr.,]:rr]l pally, R;rltr;ii R,,;,l, lj, l,,r-rlr.r,l Tel:.r|lr1: r,t - 5t)0084 13 The lncorre Tali Office, r,/:rrcl 10(l) Hyrlr:raharl, I T Towcr, AC Guards, N,4asab Tarrk Hyderal)ir(i 5(l()00-,1 '14 I'hc Del)uty ComrTlsstrrnt:r of l{rLU,rrc T.rx. C rclc: 1i1). Hyrieraltarl, I T Towcr, AC Gu:trcjs i ,4asab Ti]ll k HyclIr:rlr:trl :,0(l0Lrl 15. The lnconrc Tax Olficcr ,Varti l' Karrnrn:rqar. A:.ryakar Bhavan, Near Natral Theatre. Karirnnagar. l-cl;r n( la n a 505001 16 The Prrncipal Comnlssroncr of lnr;onrc Tax - 2, Hyderabad, Srgnature Towers, Opp. Botanical Garclcns. l(orrrlaprrr Hyderabad-500 0u4 lr 17. The Assrstant lComrnrssroner of lnconrc Tax Circlr: 9(1), Hydcrabad, I T Tower, Ac GLraids, N,4as.rlr.f:rnk. llydcrabacl - 50000,1 .) r:rr',la)l)llC] for Inconre lax [OPUC] 23. One CC to SRI THANNERU CHAITANYA KUtVlAR, Advocate tOpUCl 24.One CC to lt4s. SUNDARI R PISIJPATI. Senror S.C. for lncome Tax [OpUC] 25.One CC to SRI GADI PRAVEEN KUtulAR, Deputy Solicitor Generat of lndia loPUCl 26. One CC to SRI A. V. RAGHU RA[4. A(tvoc.rte IOPUC] lr 27 .One CC to SRI J. V. PRASAU, S.C. tor lrrconro I ax iOPUCI 28.One CC to SRI Flll ,4AN(llNl SAN(lHl Arlvor:ate tOPLlCl lt 29. One CC to SRI DUNDU IVIANI 4OI1AN A(lvocate IOPUC] tr 30 Onc CC to SRI VENKAT RAI 4 REUDY tulANTtlR, Advocate [OPUCI i L t I i i t ! 21.One CC I,r Slll A. ./ ]1 .r ./i, l.1J .lilll(l 'i'i A 22.One CC to SRI VIJHAY K PUNNA Senror S C 31 . Two CD Copies N/P GJP o-