Smt. Bhanupriya Dasari Karre and Shilpa Shinde V. Assessment Unit, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance and The Income Tax Officer, Ward 10(1) and The Income Tax Officer, Ward - 16(3) and The Income Tax Officer, Ward 15(1)

WP/23759/2024

AI Insights

The case involves two writ petitions filed by Smt. Bhanupriya Dasari Karre and Shilpa Shinde against the notices and assessment orders issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961. The petitioners challenged the jurisdiction and legality of these notices, arguing that they were issued without following the proper procedural safeguards mandated by the Finance Act, 2021. The court referenced a previous batch of writ petitions (W.P.No.25903 of 2022) where similar issues were addressed, leading to a decision that set aside the notices and orders for being procedurally flawed. The court's decision in this case followed the precedent set in the earlier judgment, emphasizing the need for adherence to statutory procedures in the reassessment process.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 805750 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Income Tax Department
• 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 V PRASAD
• Assessee Lawyers: A V RAM
• Keywords: Assessment Order; Jurisdiction; Notice; Penalty order; Reassessment; Writ of Mandamus
• Section: 147; 148; 144; 149; 144B; 148A; 151A; 272A(1)(d); 226

Judgement Text

"43411) HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) IVONDAY, THE SECOND DAY OF SEPTEIUBER TWO THOUSAND AND TWENTY FOUR THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS: 23759 AND 23823 OF 2024 W.P.No.23759 ot 2024 Between: Smt. Bhanupriya Dasari Karre, D/o. Sri [ ,4ohan Rao Dasari, Aged about 50 years, Occupation Private Service, H.No.10-2-241, Flat No.4D, Laxmi Towers, Street No.5, Ashwini Colony. West Marredpally, Secunderabad 500026. .....PETITIONER AND 1. Assessment Unit,, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 401 ,Znd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi 1.10 003. 2. The lncome Tax Officer, Ward 10(1), l.T. Towers, A.C. Guards, ft/asabtank, Hyderabad - 500004. .....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 pass an order or direction, especially one in the nature of WRIT OF MANDAMUS holding that the notice dated 1510412022 issued by 2nd Respondent under section 148 of the Act (with DIN and Notice No.lTBNASTlsll4BA12O22- 23110427 47769(1 )) as being without jurisdiction, 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 circular issued by CBDT and provisions of section 151A of the Act, and consequently set aside the notice under section 148 , I PRESENT , dated 1510412022 and the assessment and penarty orders passed by 1st Respondent for asst. year 2o1g 'l 9 under section 1 47 r.w.s 144 r.w.s 1448 and 272A(1Xd) of the Act, respectrvely. l.A.NO:1 OF 2024 Petition Under section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay the collection of tax and penarty demands raised by 1st Respondent for the Ay.201 8-19 and stay the pending penalty proceedings. Counsel for the Petitioner : SRI A.V.RAGHU RAM !9_u19et for the Respondents : Ms. BOKARO SAPNA REDDY (Jr. SC FOR TNCOME TAX) W.P.NO:23823 OF 2024 Between: lgt QgOgO-a1 ,Shi1de, W/o. Sri prakash Shinde, Aoed about 51 years, Occ.House wrfe' 2-2-j 109/90, Bagh Amberpet, canga aowti,'nrinerpet, HyoeiauaJ'- sooor-al' .....PETITIONER AND Petition circumstances 1. The lncome Tax Officer, Ward - 16(3), l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. 2. Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Room No.401, 2nd Ftoor, E_Rili, iilrhiirri ru\"nir'diroiur, Delhi. 3. The lncome Tax Officer, Ward 15(i ), Hyderabad, l.T.Towers, A.C. Guards, Masabtank, Hyderabad. 4. Assessment Unit, Nation_al Faceless Assessment Centre, lncome Tax Department. Ministrv of Finance, noom No. +Oi, Z\"if nobi, E-nJ\"ip',' Jawahartat Nehru Siadium, Oetn-i - iiO oo3. '- \" -\"' S fn9]1_c.om,e Tax0fficer, Ward - 15(1), I.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. .....RESPONDENTS Under Article 226 of the Constitution of lndia praying that in the stated in the affidavit filed therewith, the High Court may be pleased to pass an order or direction, especiafly one in the nature of wRrr oF I I I IilANDAN/US holding that the notice daled 27.03.2023 issued by 3rd Respondent under section 148 of the Act with DIN and Notice No.ITBA/AST/S/148 112022- 2311 05 1 388549 1 as beingwithout.jurisdiction, arbitrary, illegal, bad in law, void ab initio, apart from being violative of provisions of section 14BA and section 149 of the Act and also contrary to the circular issued by CBDT and provisions of section 1 51A of the Act, and consequently set aside the notice under section 'l 48 daled 27.03.2023 and the assessment order passed by 1 Respondent for asst. year 2016-17 under section 147 r.w.s 1 44 of the Act. l.A.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 the collection of demand raised by 1st Respondent pursuant to passing assessment order for the Ay.2016-1 7 and stay the pending penalty proceedings. 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 ORDER I I I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOs.23759 AND 23a23 0F 2024 COMMON ORDER (per Hon'ble SP,J) Sri A.V.Raghu Ram, learned counsel, appears for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for lncome Tax Department, appears for the respondents. 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, 2O21-, re- assessment process stood modilied but the respondents have not taken care ol it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 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 this Court in a batch of writ petitions, W.P.No.259O3 of 2022 and other connected matters, decided by common order dated - 2 J 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023. 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-Oepartment is in contravention to the statute i.e. the Finance Acl, 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 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 the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 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 getting quashed on the point of iurisdiction, 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 I 7 To 1. 2. 3. 4. 3 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.25903 of 2022. The Writ Petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/. N. CHANDRA SEKHAR RAO ASSISTANT REGISTRAR //rRUEcoPY// il),' sEcr'lo{ oFFrcER I The lncome Tax Officer, Ward - 16(3), l-T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. The Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Room No.401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, Delhi. Th6 lncome Tax Officer, Ward 15(1), Hyderabad, l.T.Towers, A.C. Guards, Masabtank, Hyderabad. The Assessment Unit, National Faceless Assessment Centre, Income Tax Department. t ,4inistry of Finance, Room No. 4O1, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium. Delhi - '1 10 003. The lncome Tax Officer, Ward - 15(1), l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. One CC to SRI A.V.RAGHU RAM, Advocate [OPUC] One CC to SRI J.V PRASAD (SC FOR INCOME TAX) Advocate [OPUC] One CC to [/s. BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAX) (OPUC) Two CD Copies t) 7 9 SA GJP'n 1 HIGH COURT DATED:0210912024 COMMON ORDER WP.Nos.23759 AND 23823 of 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. ulz tnru zczi nt's r,.lr c (. Qr, (( 2 C 11cog od &-- I !+ t I I "