SMT.HEMALATHA RATHI, OLD KABUTARKHANA, HYDERABAD V. INCOME TAX OFFICER, A.C.GUARDS, HYDERABAD AND ANOTHER

WP/27251/2007

AI Insights

The case revolves around a writ petition filed by Smt Hemalatha Rathi against the Income Tax Officer and the Commissioner of Income Tax, challenging a notice issued for reassessing her income for the assessment year 1995-96. The petitioner argued that the notice was illegal and arbitrary, violating the provisions of the Income Tax Act, 1961. The court examined the history of assessments and appeals related to the petitioner's income, particularly focusing on the long-term capital gains and the subsequent reassessments. The primary legal contention was whether the notice issued under Section 148 read with Section 150(1) of the Income Tax Act was valid, given the context of previous appellate decisions and the significant delay in issuing the notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753134 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-11-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SARMA
• Assessee Lawyers: ROHAN ALOOR
• Keywords: Illegal notice; Income Tax; Jurisdiction; Reassessment; Writ of Mandamus
• Section: 148; 143(3); 150(1)

Judgement Text

"[ 32e5 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY THIRD DAY OF NOVEMBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V, BHASKAR REDDY Between: Smt Hemalatha Rathi, W/o Shri.Bhagavandas Rathi, R/o.22-2-104, Old Kabutarkhana, Hyderabad. ..,PETITIONER AND 1. lncome Tax Officer, Ward 9(2), 2nd Floor, Income Tax Towers, A.C.Guards, Hyderabad. 2. The Commissioner of Income Tax-Vl, 7th floor, lncome Tax Towers, A.C.Guards, Hyderabad. ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ direction or order especially one in the nature of writ of mandamus declaring the notice issued by the 1st respondent on 20.03.2007 under section 148 read with section 150(1) of the lncome Tax Act, 1961 for reassessing the income of the petitioner for the assessment year 1995-96 as being illegal, arbltrary, and against the provisions of the lncome Tax Act,1961 and set aside the same. l.A. NO: 1 OF 2007(WPMP. NO: 35631 OF 2007) 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 initiated pursuant to the notice dated 20.03.2007 issued by the 1st respondent for reassessing the income of the petitioner under section 148 read with section 150(1) of the lncome Tax Act, 1961 for the assessment year 1 995-1 996. Counsel for the Petitioner: SRI ROHAN ALOOR Counsel for the Respondents: SRI B. NARASIMHA SARMA The Court made the following: ORDER I WRIT PETITION NO: 27251 OF 2007 THE HON'BLE THE CHIEF IUSTICE UIIAL BHUYAN AND THE HON'BLI] SRI IUS'TICE C.V.BTIASKAR REDDY W.P.No. 27251 of 2007 ORDER, (,a' r,a. I ht: bb rhc Chiel Jarie Ltjia/ Bktyan) Heard 4r. Itohan Aloor, learned counsel for the pcdtioner and Mr. B.Narsin'rha Sarma, learned counsel for the respondcnts. 2. tsy frhng this petition uncler Article 22(t of the Consdrution ol India, petiti,rncr seeks quashiflg of thc nodce dated 20.03.2007 issucd by resp,,,ndcnt No.1 2.r., lncomc Tax O[ficer, NTard 9(2), Hyderabad urrtlcr Section 118 r/w Scct-ion 150(1) of the Income 'l'ax Act, 196 I tbrie fly'thc Act' hereinafter). 3. We fincl that by the ordcr dated 24.12.2007, this Court had admitted thc u rit petition lc-,r final hearing ancl granted interim stay. 4. RespontJcnts havc neithcr filed any counter-affidavit nor any application for vacaring the stay. 5. Before rvc advcrt t() thc impugned notice, it would be appropriate to refer to the orders passed by the revenue authorities I 2 6. Petitioncr is an assessee under the Act. By thc assessment order datcd 19.03.1996 passed by the asscssing officer under Section 143(3) of the Act for the assessment year 1993-94, toral incomc of the petitioner vas assessed at Rs.41,94,430.00. This included income from long term capital gains to the extent of Rs.40,70,571.00. 7. Petitioncr frlcd appeal bcfore the Commissioner oF Income 'fax (Appeals) V, Hyderabad (briefly 'CIT(A)' hereinafter). I Iowcver, the appeal filed by the petitioner was dismissed by CIT(A) uide the order dated 30.08.1996 8. Thereafter, pctitiooer filed further appeal before the Incomc Tax Appellate Tribunal, Hyderabad Bench 'A', Hydcrabad @riefly 'the Tribunal' he reinafter) which was registered AS I.T.A.No.1756/Hyd/1996 for the assessment year 1993-94. By thc Regarding long term capital gun, view taken by the Tribunal was that petitioner had surrendered all her rights to get the constructed arca ofl the datc when the supplcmental dcvclopment agreement order dated 29.07.2005, appeal of the petitioner was pardy allowed. was executed rvhich became a sale agreemeflt. 'I'ransfer of land contemplated by the f rrst dcvelopment agreemeflt did not take placc. It took place u,hcn the supplemental developmental agrcement u,as crecuted. Thercfore, the endre amount pertaining to k)ng term capital gain should be brought to tax in the hands o[ the pedrioner in the asscssmcflt r,1621 1995-96. 9. ,{t this stegc, wc mav mcntion that alreadv lor thc assessment year 1995-96, assessing officcr had passed assessment order dated 13.02.1998 in respcct oI rhc petitioner under Section 143(3) of the r ct. In thc said :lssessmcnt order, total rncome of the petirioner rvas asscssed at Rs.29,60,670.00. 10. To givc cffcct ro the order of the 'fribunal dated 21 .07.2005, assessing oF|tcer i.e., rcspondcnt No.1 passed the consequentjal order dated 21.12.2005 b,v amending the assessment already framed I for the assessme nt year 1,995-96. The capital gains amount was added to the tot:rl income of the petitioner whe reafter revised total income of the pctitioner rvas cluantihed at Rs.44,06,602.00. I + 11. lt rvzs thcreaFtcr that thc irnpugned notice datcd 20.03.2007 came to be issued to thc pctitioner. Impugncd flotlcc dared20.03.2007 reads as under: PAN/GIR No.AEJHPR4824C Date: 20-03 2007 To Nlr Hemlatha Rathi, 22-2- 104, Old Kabutarkhana, Hyderabad. Whereas I have reason to believe th^t yqgl_taqq4e (tbe incone o/ ------ h res?ect oJ whichyt an astessable) tax fot the assessment yeer 1995- 96 has escaped assessment within the meaning of S ecttort 747 of Income Tax Act, 1961. I, therefore, proposc to assess / te-assess the income (z- conptte lossf fupnciatior albwance) for the said assessment yeat. I hereby require you to deliver to me within 5 &ys from the date o[ service of this notice, a return in the prescnbed form of yoru-iaeolqe (the income oJ --- -- i, nspect of whicb 1ot ar assusabb) for the assessmeni yezr. sd/- o,T.N.RAVINDRANATH) Income-tax OfEcer, Watd-9(2) Hydetabad Notice under Section 148 r.ws.150(1) of the Income Tax Act, 1961 OfFrce of the Income-tax Of6cer, !7ard-9 (2) 13'h Floor, Gagan rihar, Nampally, Hyderabad. I 5 1 1.1. The impugned notrce as cxtracted above indicates that the assessing officer: proposed to assess/re-assess the loss/depreciation allorvance of the petitioner lor the assessment year 1995-96. 12. At thrs stage, we malr ad -crt to Section 150 of the Act which reads as under: 150. Provision for cases where assessment is in pursuance of an order on appeal, etc. (1) Notwithstanding anytfung contained in scction 149, the notice uncler secrion 148 mav be issued at any time for the purpose of- making an assessment or reassessment of recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authonty in any proceeding under this act bl rvay of appeal, reference or rer.'rsion or by a courl in any prcceeding under any other law]. (2) The pror.rsions o[ sub- scction (1) shal] not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of u hich an assessment, reassessmeflt or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessmeflt, reassessment or recomputatron may be taken. 6:: 12.1.. From a perusal <;F sub-section (1) of Scction 150 of the Act, wc find that thc said provision is basically to be employed along with Section 148 of the Act to give effect to orders passed in appeal, reference or revision. It is not intended to re-open an ASSCSS1T1CNI. Already, order o[ the 'fribunal has been givcn e ffect to by the asscssing officer for the asscssment year 1995-96 by the consequential order datcd 21.12.2005. That being the position, it was not open to the asscssing ofltccr to have once again issued a notice undcr Section 148 read with Section 150 of thc Act to reopen the asscssment for the asscssment year 1995 96, that too, on a different issuc unconncctcd with the order of the Tribunal. 13. We further hnd that the impugned notice dated 20.03.2001 has been issued after almost a period of nine years from the date o[ passing of the assessment order dated 13.02.7998. That being the poslflon, we afe of the view that thc impugned nottce dated 20.03.2007 issued by respondent No.1 is without jurisdiction. 'fhe same is hereby set aside and quashed. 14. Consequendy, the writ petition is allowed. No costs. I I 1. 2. 7 As a scquel, miscellaneous Petitions, pending if any, stand SD/- N. RAJ GOPAL ASSISTAN closed //TRUE COPY// GI$TRAR rq 'ilrt OFFICER SECTI N To One One Two CC to SRI ROHAN ALOOR Advocate [OPUC] CC to SRI B. NARASIMHA SARMA Advocate CD Copies loPUCl KKS GJP P|.(q. I I I HIGH COURT DATED:2311112022 ORDER WP.No.27251 ot 2007 /; lio ll 'r 23 [t[ 2W, I i1, ' .1;:, '\"..t. ' r':q.,.1is..ar, ; ..-::i-::; '' :-. I .,/ -rl ,i: -,:-- l ALLOWING OF THE WRIT PETITION WITHOUT COSTS I I : i i l _-r:::: * ljir^o \",oiN @q*.-- q. rn' Y "