Spartek Ceramics India Limited V. The Union of India and The Principal Chief Commissioner of Income Tax and The Income Tax Officer, Circle 1(1), Tirupati and The Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless/E-Assessment Centre, Delhi and Assessment Unit, Income Tax Department

WP/28384/2024

AI Insights

The case involves M/s. Spartek Ceramics India Limited, which filed a writ petition against the Union of India and other respondents challenging the penalty notices and demand notices issued under Section 270A of the Income Tax Act (ITA). The petitioner argued that these notices were arbitrary, illegal, and violated fundamental rights under Articles 14, 19, and 21 of the Constitution of India. The High Court's decision to set aside the penalties and notices was based on a precedent set in a previous case (W.P.No.28844 of 2024), which found procedural issues in the initiation of such penalties.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 800864 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 31-12-2024
• Assessment Year: misc
• Other Referred Cases: W.P.No. 28844 of 2024, W.P.No. 11582 of 2024
• Laws Referred To: Article 226 of the Constitution of India, Section 274 read with 270A of the ITA
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PASALA RAO; Y N VIVEKANANDA
• Assessee Lawyers: M S CKR ASSOCIATES
• Keywords: Faceless assessment; Fundamental rights; Penalty notices; Writ of Mandamus; Arbitrary and Illegal Penalty
• Section: 274; 270A; 226

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) TUESDAY, THE THIRTY FIRST DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR PRESENT HON’BLE SRI JUSTICE B KRISHNA MOHAN AND HON’BLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO: 28384 OF 2024 Between: M/s. Spartek Ceramics India Limited, Regd. Off. Narsingapuram Mitta Palem Mandragiri Taluk, Chittoor, Andhra Pradesh-517 102. Rep. by its Authorized Signatory, T.Mani. ...PETITIONER AND 1. The Union of India, Represented by its Secretary (Revenue), Ministry of Finance, Department of Revenue North Block, New Delhi - 110001 2. The Principal Chief Commissioner of Income Tax, Assessment Centre, Income Tax Department, Delhi, Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003 3. The Income Tax Officer, Circle 1(1), Tirupati. National E- 2nd Floor, E- 4. The Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless/E-Assessment Centre, Delhi, Income Tax Department, Delhi, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium Delhi-110003. 5. Assessment Unit, Income Tax Department. ...RESPONDENTS Petition under Article 226 of the Constitution of India is filed praying that in the circumstances stated Court may be pleased to issue a writ, order or direction more particularly in the nature of Writ of Mandamus declaring the notices of penalty Nos. ITBA/PNL/S/270A/2023-24/1063080951(1) dated 21.03.2024 under in the affidavit filed therewith, the High one r Section 274 read with 270A of the ITA and ITBA/PNL/F/270A/2024- 25/1064436224(1) dated 29.04.2024 (“Penalty Notices”) under Section 270A of the ITA and thereafter passing the consequential penalty order vide DIN No. ITBA/PNL/F/270A/2024-25/1066811284(1) dated 18.07.2024 (‘Impugned Penalty Order’) under section 270A of the ITA and consequently demanding a penalty payable amount of Rs. 12,04,823/- vide Demand Notice vide DIN and Notice No. ITBA/PNL/S/156/2024- 25/1066807211(1) dated 18.07.2024 (‘Penalty Demand Notice’) passed by the 5th Respondent for AY 2019-20 as arbitrary, illegal, one without power or jurisdiction and contrary and against the Interim Order passed by this Honourable High Court of Andhra Pradesh at Amaravati vide WP. 13745 of 2024 dated 12.07.2024 apart from being violative of the fundamental rights guaranteed to me under Articles 14, 19 and 21 of the Constitution of India and consequently set aside the No. same. lA NO: 1 OF 2024 Petition under Section 151 CPC is filed praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the operation of Penalty Show Cause Notices bearing ITBA /PNL /S/270A/2023-24/1063080951(1) dated 21.03.2024 u/s 274 read with 270A of the ITA and ITBA/PNL/F/270A/2024- 25/1064436224(1) dated 29.04.2024 (‘Penalty Notices’) under 270A of the ITA and subsequent penalty order vide DIN. ITBA/PNL/F/270A/2024-25/1066811284(1) dated 18.07.2024 Penalty Order) u/s 270A of the ITA and section No. (Impugned consequently demanding a penalty payable amount of Rs. 12,04,823/- vide Demand Notice vide DIN and Notice No. ITBA/PNL/S/156/2024-25/1066807211(1) (‘Penalty Demand Notice’) passed by the 5th Respondent. dated 18.07.2024 Counsel for the Petitioner: M/S. CKR ASSOCiATES Counsel for the Respondent No.1: SRI PASALA PONNA RAO (DEPUTY SOLICITOR GENERAL OF INDIA) Counsel for the Respondent Nos. 2 to 5: SRI Y N VIVEKANANDA (CENTRAL GOVT. COUNSEL) The Court made the following; ORDER i APHC010543902024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) m [3516] TUESDAY ,THE THIRTY FIRST DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE B KRISHNA MOHAN THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO: 28384/2024 Between; ...PETITIONER Spartek Ceramics India Limited AND ...RESPONDENT(S) The Union Of India and Others Counsel for the Petitioner; 1.CKR ASSOCIATES Counsel for the Respondent(S); 1. 2.Y N VIVEKANANDA The Court made the following; ORDER: (perHon’ble Sri Justice B. Krishna Mohan) Heard the learned counsel for the petitionerand the learned Standing Counsel for the respondents. 2. Both the learned counsels submitted that this writ petition is squarely covered by the order passed by this Court in W.P.No.28844 of 2024, dated 09.12.2024. In terms of the same, this writ petition is also disposed of. In that 3. view of the matter, the impugned order of penalty, dated 18.07.2024 and the subsequent notice of the demand, dated 18.07.2024 are set aside herewith. The show cause notice, dated 21.03.2024 shall be adjudicated after the disposal of the pending writ petition. Accordingly, the Writ Petition is disposed of in the above terms. 4. There shall be no order as to costs. The copy of the order in W.P.No.28844 of 2024, dated 5. 09.12.2024 shall be appended to this order. As a sequel. Miscellaneous Petitions pending, if any, shall stand closed. Sd/- M. SRINIVAS ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. The Secretary (Revenue), Union of India, Ministry of Finance, Department of Revenue North Block, New Delhi - 110001 2. The Principal Chief Commissioner of Income Tax, National E- Assessment Centre, Income Tax Department, Delhi, 2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003 3. The Income Tax Officer, Circle 1(1), Tirupati. 4. The Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless/E-Assessment Centre, Delhi, Income Tax Department, Delhi, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium Delhi-110003. 5. The Assessment Unit, Income Tax Department 6. One CC to M/s. CKR Associates, Advocate [OPUC] 7. One CC to Sri Pasala Ponna Rao, Deputy Solicitor General of India, High Court of Andhra Pradesh. [OPUC] 8. One CC to Sri Y N Vivekananda, Central Government Counsel, Advocate [OPUC] 9. Three CD Copies (Along with a copy of order dt. 09.12.2024 in WP No. 28844 of 2024) TF HIGH COURT DATED:31/12/2024 ORDER WP.No.28384 of 2024 Q*? ..Ht) Os H4y ■^jV, ‘tV- % c Jf DISPOSING OF THE W.P., WITHOUT COSTS 1 HON’BLE SRI JUSTICE G.NARENDAR AND HON’BLE SRI JUSTICE T.C.D. SEKHAR WRIT PETITION No. 28844 of 2024 JUDGMENT:- (per Hon’ble Sri Justice G.Narendar) 1. Heard the learned counsel for the petitioner and Sri.Y.N.Vivekananda, learned senior standing counsel for the respondent-department. 2. The petitioner is before this Court being aggrieved by the order of penalty, dated 18.07.2024 and the subsequent notice of demand, dated 18.07.2024. The short ground on which the instant writ petition is 3. canvassed is that the levy of penalty and notice of demand are in the teeth of the earlier order of Coordinate Bench of this court in W.P.No. 11582 of 2024 whereby, the Coordinate Bench has recorded in paragraph Nos.7, 8 and 9 as under; “7. In the present case, the order of assessment has been passed, but in view of the submission that since the initiation of the proceedings was not as per the procedure and the provisions of the statute, the order of assessment is also bad, the matter that also requires consideration is, if the imitation is not as per the procedure prescribed, what would be its effect on the ultimate order passed which may be in the faceless manner. 8. Let the counter affidavits be filed within a period of four (04) weeks. 9. In view of the aforesaid, the operation of the impugned order of assessment shall remain stayed and no coercive steps will be taken till the next date of listing. ” 2 The Coordinate Bench in paragraph No. 9 has been pleased to stay the order impugned. The impugned assessment having been stayed, the respondent-Department could not have proceeded to the next stage of levying of penalty and demanded payment of the same. 4. 5. The learned senior standing counsel would fairly concede the position. 6. In that view of the matter, the impugned order of penalty, dated 18.07.2024 and the subsequent notice of demand, dated 18.07.2024 are hereby set-aside. 7. The show cause notice, dated 21.03.2024 shall be adjudicated after the disposal of the pending Writ Petition. 8. Accordingly, the Writ Petition stands ordered in the above terms. There shall be no order as to costs. As a sequel thereto, the miscellaneous petitions, if any, pending in this case shall stand closed. G.NARENDAR, J T.C.D. SEKHAR, J 09'^ December, 2024 PKR "