Soujanya Constructions V. Assessment Unit, National Faceless Assessment Centre, Income Tax Department and The Income Tax Officer, Ward - 8(1)

WP/23607/2024

AI Insights

The case involves Tvl/Soujanya Constructions, which filed a writ petition against the Income Tax Department challenging a notice issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner argued that the notice was without jurisdiction and violated several provisions of the Income Tax Act as well as the circulars issued by the CBDT. The court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on similar grounds, leading to the decision to quash the notice and all consequential orders in this case as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798576 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 30-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Assessment Order; Jurisdiction; Notice; Penalty order; Reassessment; Writ of Mandamus
• Section: 147; 148; 144; 149; 148A; 151A; 221; 212A

Judgement Text

"[3411] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE THIRTIETH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITI ON NO: 23607 0F 2024 Between: tvl/s. Soujanya Constructions, Plot No. I0-and .1 1 , [ 4.urari Residency' Uppe.rapally' nrl \"nOri N'aqar. R. n. Oistitt - SOOO+a Rep. by its Managing Partner, Sri Nutangi Lagrnmol-,an heddy. S/o. Sri Narasimha Reddy Nutangi' .....PETITIONER AND Assessment Unit, National Faceless Assessment Centre, lncome Tax ij;;;;;\";i. Minlbt\",l of Finance, Room No. 401 ' 2nd Floor, E- Ramp' Jawaharlal Nehru Siadium, Delhi -1 10 003. The lncome Tax Officer, Ward - 8(1), Signature Towers, Opp Botanical Gardens, Kondapur, Hyderabad - 500084' 1 2 .....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 pass an order or direction, especially one in the nature of WRIT OF IVANDAMUS holding that the notice dated 06 04 2022 issued by 2nd Respondent under section 148 of the Act (with DIN and Notice No' ITBA/AST/S/148 1t2022- 23t1042572195(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 dated 06' 04' 2022 and the assessment and penalty orders passed by '1St Respondent for asst. year 2o1B- 19 under section 1 47 r. w. s 1 44 r. w. s 1 448, 2Z 1 AAC(1 ) and 2t2A(1)(d) of the Ac;t. |.A.NO:1 OF 2024 Petition Under section 1s1 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to stay the collection of demand raised by 1st Respondent pursuant to passing assessmenl and penalty orders for the Ay. 2018_ 19. Counsel for the Petitioner : SRt A.V.RAGHU RAM counsel for the Respondents : Ms J.suNITHA (JUNroR sc FoR rNcoME TAx) The Court made the following ORDER Heard Sri petitioner(s) ald THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRJ JUSTICE NAMAVARAPU RA\"ESIIWAR RAO WRIT PETITION No.23607 oF 2024 ORDER: (per Hon'bte Justice Sujog Paul) A.V.Raghu Ram, learned counsel for the Ms. J.Sunitha, 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 Act' 2O2l ' te- assessment process stood modif,red but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicial 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 hnally drawn by this Court in a batch of writ petitions, W'P'No'25903 of 2022 arrdotherconnectedmatters,decidedbycommonorder dated 14.09. 2023 - Tire parties agreed that this matter may be disposed of in terms of the Common Order dated l4'O9'2023' ,.,., 7 4. This Crrurt in the said order dated 14.09.2023 tn W.P.No.2590i of 2022, held as under: \"35. In view of the eforesaid discqssioas, it is by now wery clear that the procedure to be followed by the respondent_ Department upon treatiEg the notices issued for reassessment being under Scction 148A, the subsequent proceedings was matrdatorily required to be undertaken under the substituted provisions as laid down under the FiEance Act,2O2l. In the absence of which, we are constrained to hold that the procedure adopted by the respoEdent-Department is in contravention to the statute i.e. the FiEaace Act, 2021, at the Iitst instance. Secondly, it is also ia direct contrawention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid teasons, the impugoed uotices issued and the proceedings drawn by the respondent_Department is neither tenable, nor sustainable. The trotices so issued and the procedure adopted being per se illegal, desetves to be and are accordiagly set aside/quashed. As a corsequence, all the impugned orders gettiog quashed, the consequeEtial orders passed by the respondent DepaitEcnt pursuatrt to the notices issued under Section l4Z and 148 would also get quashed and it is ordered accordirgly. The reason we are quashing the consequertial order is on the priaciples that when thc initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nultified automatically. 37. The preliEiaary objcctior raised by the petitioner is sustained and all these writ petitioas statrds allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the poiat ofjurisdiction, r.rre are not inclined to proceed further arrd decide the other issues raised lry the petitioEer which staads reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble SupreEe Court had, in the case of Ashish Agarwal, supra, as a one-tirIe measure exercising the powers under permitted the Article 142 Revelue to of the Constitution of India, proceed uEder the substituted provisions, and this Court allowing the petitions only on the procedrrral flaw, the right conferred oa the Revenue would remaiu reserved to proceed further if they so Eant from the I I I l stege of the otder of the supreme Court in 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 asid'e' Liberty is reserved to both the parties to take respective stand and to proceed in accordance with law as Per Paragraph No'38 W.P.No.259O3 of 2022' of the order dated 14'09'2023 irt 6. The Writ Petition is allowed' No costs' Interlocutory applications, if any pending' shal1 also stand closed' s D/' N' c{tlsD#ili'J[tts'[iR //TRUE coPY/t 1/ SECTION OFFICER To 5 SA GJP 1 i}ifitral.=ll*i$-tffi iiT{'H,::: .'.::::; :;il:;' \" 2. The lncome Tax Ofllcer' ;itl*=f ffitr$m\"*,xi. lm$\"\"n'annBSh'-o*';Advoca'ie t il roPucl two CD CoPies trr I HIGH COURT DATED:3010812024 ORDER WP.No.23607 of 2024 ALLOWING THE W.P WITHOUT COSTS. c) rf SF4 1 a 16 it 0t a '( 5 t t * a*'Pq4 VY' a16q t : ; i I I i I I I I i i I I I t i I I "