Smt. Lalitha Vandanapu, Wo. Sri V. Ravinder Kumar V. Assessment Unit, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance and The Income Tax Officer, Ward - 9(1)

WP/24813/2024

AI Insights

The case involves Smt. Lalitha Vandanapu, the petitioner, challenging the validity of a notice issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17. The petitioner argued that the notice was without jurisdiction and violated several provisions of the Act and a CBDT circular. The respondents were the Assessment Unit of the National Faceless Assessment Centre and the Income Tax Officer, Ward - 9(1). The court referenced a common order in a batch of writ petitions (W.P. No. 25903 of 2022) decided on 14.09.2023, which had similar issues regarding the procedural flaws in the re-assessment process post the Finance Act, 2021. The court agreed with the findings of the previous judgment and set aside the notice and consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 820818 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: A V RAM
• Keywords: Assessment; CBDT Circular; Illegal; Jurisdiction; Notice; Penalty; Re-assessment; Void ab initio; Writ of Mandamus
• Section: 147; 148; 144; 271(1)(c); 271(1)(b); 149; 271F; 148A; 151A

Judgement Text

"134111 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRIJUSTICE NAMAVARAPU RAJESHWAR RAO wRlT PETITION NO: 24813 OF 2024 Between: Smt. Lalitha Vandanapu, Wo. Sri V. Ravinder Kumar, Aged about 50 years, Occupation- House Wife, 7-112198, Balapur, Ranga Reddy District - 500035 ,..PETITIONER AND 1, Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The lncome Tax Officer, Ward - 9(1), LT. Towers, A.C. Guards, Masabtank, Hyderabad - 500004 ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit fiied 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 24.03.2023 issued by 2nd Respondent under section '148 of the Act (with DIN and Notice No.ITBA/AST/S/148 112022- 2311051242217 (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 sectlon '148 dated 24.03.2023 and the assessment. and penalty orders passed by 1st Respondent for asst. year 2016- 17 under section 147 r.w.s 144 r.w.s 1448, u/s, 271F,271(1)(b) and271(1)1c) of the Act, respectiveiy lA NO: 1 OF 2024 Petttion under Ser:tion 151 CPC prhying 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 tax and penalty demands raised by Respondent for the Ay.20'16- 17. Counsel for the Petitioner: SRI A.V.RAGHU RAM Counsel for the Respondents: M/s. BOKARO SAPNA REDDY, Jr. SC FOR INCOME TAX The Court made the following: ORDER :j- THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAT,ESIIWAR RAO WRIT PETITION No.24at 3 0F 2024 ORDER: (per Hon'bte Justice Sujog Paut) Heard Sri A.V.Raghu Ram, learned counsel for the petitioner(s) arrd Ms. B' Sapna Reddy' learned Junior Standing Counsel for Income Tax Department' for the respondents. 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Acl' 2O2l' re- assessment process stood modified but the respondents have not taken care of it ald therefore notice issued under Section l48ofthelncomeTaxAct,lg6lcannotsustainjudicial scrutiny. Since notice is bad in law, the consequential orders are also bad in law. 3. 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'25903 of 2022 andotherconnectedmatters,decidedbycommonorder dated 14.09. 2023. Theparties agreed that this matter may be disposed of in terms of the Common Order dated 14 '09 '2023 ' 2 4. This Court. in the said order dated 14.09.2023 in W.P.No.259O3 of 2C22, heid as under: \"35. In view of the aforesaid discussions, it is by llow very clear that th€ procedure to be followed by the respondeflt- Department upon treating the notices issued for rcassessment being under Section 148A, the Eubsequent Proceedings E'as mandatorily required to be undertaken under the substituted provisions as laid dosn under the Finance Act, 2021. In the absence of s,hich, we are constrained to hold that the procedure adopted by the respondert-Department is in co[travention to the statute i.e. the Finance Act' 2O21, at the frrst instance. secondly, it is also in direct contraveltion 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 [otices so issued aDd the procedure adopted being per sc illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugled orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and L48 would also get quashed and it is ordered accordingly. Thc reason we are quashing the coflsequential order is on the principles that when the initiation of the proceedirgs itself was procedurally wrong, the subsequent orders also gcts nullilied automatically. 37. The preliminary objection raised by the petitioner i$ sustained and. all th€se writ petitions stands allowed on this very jurisdictional issue. SiEc6 the impugned notices and orders are getting quashed on the point ofjurisdiction, 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 approprlate proceeding6. 38. Since the Hon'ble Supreme court had, in the case of Ashish Agarwal, supra, as a onc-time rneasure exercising the posers under Article 142 of the Cotrstitution of India, permitted the Revenue to proceed uader the substituted provisions, and this Court allolritlg the petitions only on the procedural flaw, the right cortferred on the Revenue would 3 To reEraia .eserved to proceed further if they so walt frolr the stage of the order of the SupreEe Court irt the case of Ashish Agarwal' suPra. 39- No order as to costs.\" 5. In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this writ petition 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'O9 2023 in W.P.No.25903 of 2022. 6. The Writ Petition is allowed. No costs. Interlocutory applications, if any pending, shall a-lso stald closed' SD/-K. VENKAIAH J/TRUE COPY// ASSISTANT EG R R SEC N OFFICE toPUCl Two CD CoPies ? Assessmenty.rit'f gtl9Ei:fi ::lT:#'*T'ToT*r?iIfu 'lt1H:.1;: Deoartment, Ministry ot l- tni ii{l m:n\"-i:ht::l fr;m lur,,il ? +'of\"*\" *, A c G u a rd s' M asa bta n k' Hl's\"ttigilrt:rysm\"Js^HHf; gbr?1\",t:53?t*,*'on\"'o* 1 2 J 4 PSK. BS HIGH COURT DATED:10t0912024 ORDER WP.No.24813 of 2024 ALLOWNG THE WRIT PETITION WITHOUT COSTS, i- r6 ( :t -) r 7 0EC 202{ I Ll P z a ''',, c 1 /A ,fi/'u 'L* I "