Sri. Mandadi Raveendar Reddy V. Assistant Commissioner of Income Tax,

WP/12901/2024

AI Insights

The case involves two writ petitions filed by Smt. Yaraivada Yamini Reddy and Sri. Mandadi Raveendar Reddy against the Assistant Commissioner of Income Tax and other respondents, challenging the legality of reassessment notices and orders issued for the assessment years 2015-16 and 2016-17. The petitioners argued that the notices were issued without following the proper procedural requirements set out in the Finance Act, 2021, and were therefore void and in violation of the principles of natural justice. The court referenced a previous common order in W.P.No.25903 of 2022, which had addressed similar issues, and decided the current petitions in accordance with that precedent.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690579 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 03-05-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNDARI PISUPATI; J SUNITHA; B REDDY
• Assessee Lawyers: VENKATARAM MANTUR
• Keywords: Income Tax; Natural Justice; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 148; 148A(d); 1448; 226

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY,THE THIRD DAY OF MAY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 12891 & 12901 OF 2024 WRIT PETITION NO: 12891 OF 2024 Between Smt. YARAIVADA YAMINI REDDY, D/o Ranga Reddy, Aged about 47 years, Occ. House wife, Plot NO. 10 11, Apuroopa Pragathi Nagar, Nizampet, Qutbullapur, Hyderabad - 500090, Telangana State. PAN No ALRPY5734D ...PETITIONER AND 'l . Assistant Commissioner of lncome Tax, Circle 1 1(1), Signature Towers, Sy.No.6(P) of Kondapur, Sy.37(P) of Kothaguda Opp. Botanical Gardens, Serlingampally (M),R.R.District, HYDERABAD, Telangana, 500084. 2. Principal Chief Commissioner of lncome Tax, lncome Tax Towers, AC Guards,Masab Tank, Hyderabad-500004. 3. The Assessment Unit, ERamp Jawaharlal Nehru Stadium deli 4. The Assessment Unit, lncome Tax Department National Faceless Assessment Centre Room No 401, 2nd Floor ERamp Jawaharlal Nehru Stadium Delhi 1'10003 5. The Assessment Unit, lncome Tax Department National Faceless Assessment Centre Room No 401, 2nd Floor ERamp Jawaharlal Nehru Stadium Delhi 110003. ...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 issue a writ, order or direction, more particularly one in the nature of Writ of tvlandamus, declaring the rmpugned Order dt.28.'l 1.2023 passed uls 147 R/w Section 1448 of the lncome Tax Act 'videDlN No. ITBA/ASTISI147I2O13- 2411058262077(1), by the 3rd respondent for A.Y. 2O15-16, pursuant to the order u/s 148 A(d) dt. 03.04.2022 and notice issued u/s 148 dt.04.0.+.2022 by the JAO instead of FAO, as void, illegal, and contrary to the Provisions of lncome-tax Act and contrary to the Principles of Natural Justice. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circutrstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all the further proceedings initiated by the 3rdRespondent against the Petitioner, pursuant to the impugned order passed under section 147 Rlt,t Section 1448 of the Act, vide DIN and order no. |TBAiASTlsl147l2023-241105t262077 (1), dated 28 .11.2023 for the Assessment Year 2015-16 in PAN ALRPY5734D till the final disposal of this writ petition. Counsel for the Petitioner : SRl. VENKATRAM REDDY MANTIJR Counsel for the Respondents: Ms J SUNITHA JUNIOR COUNSiEL REP. Ms. SUNDARI R PISUPATI, SENIOR SC FOR INCOME TAX DEPT WRIT PETITION NO: 12901 OF 2024 Between Sri. Mandadi Raveendar Reddy, S/o Malla Reddy, Aged about 64 years, Occ: Business, 44, Suryadaya Colony, L.B. Nagar, HyJerabad- 500074, Telangana State. PAN No. AKAPIT/202'1K ...PETITIONER AND 1. Assistant Commissioner of lncome Tax, Circle 9(1), Hydelabad, lncome Tax Towers, AC Guards, IVasab Tank, Hyderabad-500004. 2. Principal Chief Commissioner of lncome Tax lncome Tax Towers,, AC Guards,Masab Tank, Hyderabad-500004. 3. The Assessment Unit, lncome Tax Department lrlational Faceless Assessment Centre Room No 401, 2nd Floor ERamp Jawaharlal Nehru Stadium Delhi 110003. .,RESPONDENTS Petition under Article 226 of rhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a writ, order or direction, more particularly one in the nature of writ of Mandamus, declaring the impugned order dt.29.0'l .2024 passed uls 147 R/w Section 1448 of the lncome Tax Act vide DtN No. |IBA/ASTts/14il2o23- 2411060208061 (t), by the 3rd respondent for A.y. 2016-17, pursuant to the order u/s 148 A(d) dt. 21.03.2023 andnotice issued u/s i48 dt.24.03.2023 by the JAo instead of FAo, as void, illegal, and contrary to the provisions of lncome-tax Act and contrary to the Principles of Natural 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 the further proceedings initiated by the 3rdRespondent against the petitioner, pursuant to the impugned order passed under section 147 Rlw section 1448 of the Act, vide DIN and order no. lrBAlASTtstl4Tt2oz3-24/106020806i (1), dated 29.01 .2024 for the Assessment Year 20i6-12 in pAN AKAP^/2021K till the final disposal of this writ petition. Counsel for the Petitioner : SRl. VENKATRAM REDDy MANTUR Counsel forthe Respondents: Ms .B SAPNA REDDY REp. RI J V PRASAD, SC FOR INCOME TAX The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKITRAMJI lIIRIT PETITION NOs.1289I- & L29OL OF i:O24 COMMON ORDER: (per Hon'ble Justice Sujog Paut) Sri Venkatram Reddy Mantur, learned colrnsel appears for the petitioner(s), Ms. J. Sunitha, Iearned Junior Standing Counsel represents Ms.Sundari R.Pisupati, leiuned Senior Standing Counsel for the respondents-Income Ta: Department in W.P.No.l2B9l of 2024 and Ms. B. Sapna Re,ddy, learned counsel represents Sri J.V. Prasad, learned Standing Counsel for the respondents-lncome Tax Department in W.P.No.72901 of 2024, 2 Regard being had to the similarity of '_he question involved, on the joint request of the parties, the matters are analogously heard and decided by this common ordr:r. 3. It is common ground taken by the learnecl coun sel for the petitioner(s) that in furtherance of Finance Ar:t, 2021, re assessment process stood modified but the respondr:nts have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judic ial scrutiny. Since notices are bad in law, the consequential orclers are also bad in law. 2 4 During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drau.,n bv this Court in a batch of writ petitions, W.P.No.259O3 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 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 consequer*ial 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 proceedings. 38. Since the Hon'ble Supreme Cou( 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 conf(lrred 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 c.rse of Ashish Agarwal, supra. 39. No order as to costs.\" 6 In vien, 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 4'ith lal r as per paragraph No.3B of the order dated 14.09.2023 io W.P.No.259O3 of 2022 7 The n,rit petitions are allowed. No cos-:s. Interlocutory applications, if any pending, shall also stand closred. SD/- MOHD. ISMAIL ASSISTANT REGISTRAR //TRUE COPY// e D SECTION OFFICER To, ^ .- - joner of lncome Tax, circle 1 1 (1 ). Signature Towers, ' t;llT&.' i f [:'Jil:i t v : ii (:-i:'-\"f 'll; +:*l'; ?J3[ff I G a rd e n s serlinoampallv 0\"rl,n1E]oiti\"\"i'ivbEnnsnD] Telanqana' 500084' 2. The Princip'r cniettoi'ilttion\"'of lncome i'i' into'nt Tax Towers AC ' Cr\"tO.'ft'f 'sab Tank' Hyderabad-500004 ' ' 3. The Assessment unit, En,.pl,*,r,arlal Nehru Stadium deli 4. The Assessment \"I;u'\"\"i;;\" ru* Deoartment National Faceless Assessment c\"nu\" Ho'o* 'rtr\"\" \"+or ' ino rroor ERamp Jawaharlal Nehru . ?lT''Lo.\"\"l:IJ:itt'\"-' lngom.e^- rax- Deoartment Nationar Faceress Assessment c\"nt'\"toirn\"rtr\"t\"+ilt' zno FrJoi ERamp Jawaharlal Nehru . 3T:'33 P\"\" ! [l ] $Pt-t*r EA qR E^?: Y-YAN r u R' Ad vo r; ate ro P u cl 7. one cc to Ms. ;iffi!,H''h''ffipnri ser'rron rlc ror lncome rax DePt IOPUCI 8. One CC to SRI J V PRASAD' SC FOR INCONIE TAX DE:PARTIIENT'[OPUC] 9. Two CD CoPies SB KKS@ HIGH COURT DATED:0 310512024 ORDER WP.No.12891 & 12901 ot 2024 ALLOWING THE WRIT PETITION'S WITHOUT COSTS .rHE srAIe oSspatcrr go c 5 3 2l JUN 2o2l v z a L I t G yA, "