Sri Bala Swamy Vallep and Pmt. Maghira Kanapuram and Smt. Madhavi Kanapuram and Sri Jagadeeswar Rao Usirika and Sri Thirupathi Jally and Sri Pochampally Kanna Reddy V. Assessment Unit, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance and The Income Tax Officer, Ward 1, Mahabubnagar and The Income Tax Officer, Ward 15(3), IT Towers, Hyderabad and The Income Tax Officer, Ward 1, Khammam and The Income Tax Officer, Ward 9(1), Hyderabad and The Income Tax Officer, Ward 15(1), Hyderabad

WP/9908/2024

AI Insights

The case involves multiple writ petitions filed by various petitioners challenging the reassessment orders issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961. The petitioners argued that the reassessment notices and the subsequent orders were arbitrary, illegal, and void ab initio, as they were not issued following the procedural requirements set by the Finance Act, 2021. The respondents, representing the Income Tax Department, contended that the notices were valid. The court, referencing a previous decision in W.P.No.25903 of 2022, found in favor of the petitioners, setting aside the notices and orders due to procedural non-compliance.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 812958 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-04-2024
• 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 V PRASAD
• Assessee Lawyers: A V RAGHURAM
• Keywords: Faceless assessment; Income Tax; Judicial scrutiny; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 144; 149; 151; 148A; 151A; 226

Judgement Text

"t 31031 IN THE HIGH COURT FOR THE STATE OF TEI.ANGANA AT HYDERABAD (Special Original Jurisdictbn) THURSDAY, THE EIGHTEENTH DAY OF APRIL TWO TFIOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRl JUSTICE N.TUKARAI,IJI WR,IT PETITION NO:982t() 9866.9892.9893. e908 AND 9912oF 2024 W.P.No.g8i[{) OF 2021 Between: I Sri' Bala Swamy Vallep, S/o. 16/1, Main Road, Kothakota, Sri Ma Ogulaiah, Aged about 67 years, Ooc. Business, 19- habubnagar - 509102. . ...PETITIONER D 1 . Assessment Unit, National Faceless Assessrnent Centre. lncome Tax Department, MiniStry of Finance, Room No. 4O1' 2N Floor, E-Ramp. Jairaharlal Nehru Stadium, Delhi - 110 0O3. 2 i I AN I I I The lncome Tax Officer, Ward 1, Mahabubnagar, DEO ffice Road' Mahabubnagar ...RESPONOENTS Petition under Anide 226 of the Constitution of lndia praying that in the cirlumstances stated in the affidavit filed therewith, the High Court may be pleased to pass an ord€r or direction, especially one in the nature of WRIT OF MANDAMUS holding that{he order passed by 1st Respondent u/s. 147 r.w.s 144 r.w.s 1448 of the Act, d1.14.O3.2O24 with DIN No.|TBA/AST/S114712023- 24t1}626382q1) for the Ay.2O18-19, as arbitrary, itlegal. bad in {aw' 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 askle the order passed by 1st Respondent l, i I ! i lr ii I I s l I :i i I i I u/s. 147 r.w.s 144 r.w.s 1448 of the Act No. I TBA/AST/S I 1 47 I 2023-241 1 062633820( 1 ) for eonsequential proceedings pursuant thereto. , dt.14.03.2024 the Ay.2018-19 with and DIN all IANO: I OF 2024 Petifion under Section 151 CPC praying that in the circumstan@s stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings, including any re@very, pursuant to the order passed by the 'lst Respondent u/s. 147 r.w.s 144 r.w.s 14/:B ot the Act, dt.14.0J.2O24 with D I N No. ITBA/AST l S l l 47 12023-241 1 062633A20(1 ) for the Ay.2O1 B- 1 9. WP.No.9886 OF 2024 Between:. p.mt. ]vlqglral' Ka-nap_uram, w/o. Sri K. Krishna Reddy, aged about 54 years, Occ. House Wife, 2-1-39, R4nagar Cotony, Uppal, R.R. District : 5OOO39. - ...PETMONER ANO 1. Assessment Unit, National Faceless Assessment Department, Ministry of Finance, Room No. 401, Jawaharlal Nehru Stadium Dethi - 110 OO3. 2. The lnmme IqI Officer, Ward - 15(3), l.T. Towers, A.C. Guards, Masabtank, l-lyderabad - 500004. ...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 pass an otder or direction. especially one in the nature of WRIT OF MANDAMUS holding that the order passed by pt Respondent uts. 141r.w.s 1448 of the Act, dt.21.O3.2O24 with DIN No.|TBA/AST/St147t2123- 2411063105360(1) for the Ay.2015-16, as arbitrary, illegal. bad in law, void ab initio, apart from being violative of provisions of section 1484 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 order passed by 1St Respondent u/s. 147 r.w.s 1448 of the Act, d1.21.O3.2t24 wirh DtN No.tTBtuAST/St14tt2123- Centre, lncome Tax 2nd Floor, E-Ramp, 2411063105860(1) for the Ay.2O15-16 and all consequential proceedings pursuant thereto. lA NO: I oF m21 Petition under Sec{ion 151 CPC praying that in the circrmstances stated in the affidavit filed in support of the petition, the High Court may be pleas€d to stay all further proceedings, including any recovery. pursuant to the order passed by the 1st Respondent uls. 147 r.w.s 1448| of the Act' d1.21.O3-2O24 with DIN No. ITBA/AST/S I 1 47 I 2023-24 I 1063 1 05860( 1 ) for the Av'20 1 5-1 6. W.P.No.9892 OF 2024 Eetween: Smt. Madhavi Kanapuram, Wo. Sri K. Krishna Reddy, aged- ^a^bout 54 years' Occ- Horse Wife, 2-1-39, 'Rajnagar Colony, Uppal, R.R. District - 500039. ...PETMONER AND 1. Assessmslt Unit, National Faceless Assessment Centre, lncorne Tax Oepartment, Mini;try of Finance, Room No. 4O1' 2nd Floor, E*amp' Jaiaharlal Nehru Stadium, Delhi - 110 fi)3. 2. The lncome Tax Officer, Ward 15(3), l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500OO4 ...RESPONDENTS Petition under Artide 226 of the Constitution of lndia praying that in the drGrmstances stated in the affidavit filed therewith, the High Court may be pleased to pass an order or direction. especially one in the natwe of WRIT OF MANOAMUS holding that the order passed by 1st Respondent u/s. 147 r'w's 1448 of the Acr, dt.21tol2o24 with DIN No-ITBA/AST/S114712023- 2411063105713(1) for the Ay.2O1&17, as arbitration illegal, bad in law, void ab initio' apart from being violative of provisions of section 148A and sec{ion 149 of the Act and alsO contrary to the circular issued by oBDT ard provisions of section 151A of the Ad. and consequently set aside the order passed by Ist Res@ndent U/s 147 r'w's 1448 of the Act. dt.21l}3t2124 with DIN NoITBA/AST/St14712O23-2411O6310571311) for the A) .201G17 and all consequential proceedings pursuant thereto' lA NO: I OF 2024 Petition under Section 151 CPC pralng that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to stay all further proceedings, including any recovery, pursuant to the order passed by the 1d Respondent u/s, 147 r.w,s 1448 of the Act, dt.21t}3t2}24 wth D lN No-ITBA/ASI I S I 1 4t 12023-24t 1 063!05Z 1 311) for the Ay.Zo 1 6- 1 7 . W.P.No9893 OF 2024 Between: Sri Jagadeeswar Rao Usirika Occ Retd. Govt. Empipace. 7- palli. S/o. Sri U. Mukund Rao, Aqed about 70 veirs. 29, Kusumanchi, Khammam - 507f59 ...PETITIONER AND 1. Assessment Unit, National Faceless Assessment Centre. lncome Tax Qepartment,. Ministry.of Fqragge. Room No. 4O1, 2 nd Floor, E Ramp, Jawaharlal Nehru Stadium, Delhi 2. The ln-come Tax Officer, {ard 1. Khammam Rajeev Gunt, Rajeev Chowk, Near Kinnerasani Theatre, Khammam ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circrmstances stated in the affidavit filed therewith, the High Court may be pleased to pass an order or dlrection, especially one in the nature of WRIT OF MANDAMUS holding that the order passe{ by 1st Respondent uts. 141 r.w.s 144 r.w.s 1448 of the Act, dt.O6.10.2023 with DtN No tTBA/AST/5t14il2O23_ 2411056832646(1) for the Ay.201S-16, as arbitrar., illegal. bad in law, void ab initio, apart from beiqg violative of provisions of section I zlgA and section 149 of the Acd and also contrary,to the circular issued by CBDT and provisions of section 't61A of the Act, and consequently set aside the order passed by 1st Respordent u s. 147 r.w.s 144 r.w.s 144B of the Act, dt.06.10.2023 with DtN No lrBA/AST/S/14712023-2411os6&32646(1) for the Ay.2015-16 and ail consequentiat proceedings pursuant thereto. lA}{(t: { OFmzl Petition under Section 151 CPC praying lhat in the circumstances stated in ttrc affidavit filed in $rpport of the petition, the High Court may be pleased {o stay all further proceedings, induding any recovery, pursuant to the order passed by ttle lst Respondent u/s. 147 r.w.s 1zl4 r.w.s 1448 of the Ac{, dt.06.10.2023 with DIN i|o:ITBA/AST lsl147 12023-241105eB32646(1) for the Ay.Z)l 5-{6. W.P.No.99O8 OF 2024 Betwecn: SrirThirupathi Jally, S/o. Sri Bikshapathi Jally, Aged about 47 years,Occ.Business. Plot No.d6, Kamalbnivas Vasavi Colbny, Road No.S, Kothapet, Rang@ R€ddy District -500035. ...PETITIONER AND '1. Ass€ssment Unit, National Faceless Assessment Centre, lncone Tax Department, Ministry of Finance, Room No. 4O1, 2 nd Floor, E Ramp, Jau6harlal Nehru Stadium, Delhi 2. The lncome Tax Officer, Ward 9(1), Hyderabad,l T Towers, A. C. Guards, Masab Tank, Hyderabad ...RESPONDENTS Petition under Artide 226 of the Constitution of lndia praying that in the circurnstances stated in the affidavit filed therewith, the High Court may be pleased to pass an order or direction, especiat{y one in the nature of WRIT OF MANDAMUS holding that the order passed by lst Respondent uls.147 r.w-s 1448 of the Ac( d1.18.O3.2O24 with DIN No ITBA/AST/S114712O23- 241162841W 1) for the Ay.2O1G17, as 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 contary to the circular issued by CBDT and provisions of section 151A of the Act' and consequenUy set aside the order passed by 1st Respondent u/s. 147 r.w.s 144f| of the Act, dt.18.03.2024 with DIN No ITBA/AST/S114712@3-2411@2841OO8(1) tor the Ay.201G17 and all consequential prooeedings pursuant thereto. !ANO: I OF 2024 I I 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 staff allifurther proceedings, induding any recovery, pursuant to the order passed by th6 Respondent u/s. 147 r.w.s 1448 of the Act, dt.1B.Og.2O24 with DM , No: ITBA/AST/S I 1 47 I 2023-241 1 O6284i 000( 1 ) for the Ay.2O 1 6- 1 7. I W.P.N 120F 2021 I Between: 1 Sri Pochamp_ally canna.Reddy, S/o. Sri pocfr,ampally pedda Rectdy, Aged about 59 years, Occ. Private Service, L:a.xma Reddy Colony, Ufpal, R.R. Dist;ict-'50o039. II ..pEnloNER AND 1 . Assessment Unit, National Faceless Assessment Department, Ministry of Finance, Room No. 401. Jawaharlal Nehru Stidium, Delhi - 110 0O3. 2. The lncome.T* Offiogr, Ward 1S(1), Hyderabad, l.T. Towers, A.C. Guards, Masabtank, Hyderabad. ...RESPONDENTS Centre, lncome Tax 2nd Floor, E-Ramp, .t qrcum j Petition under Article 226 of the Constitution of lndia praying that in the stances stated ih the afftdavit filed therewith, the High Court may be pl&sed to pass an order or dinection, especially one in the nature of WRIT OF MANDAMUS holding that the order passed.by 1st Respondent uls- 141 r.w.s 1448 of the Act, dt.14.Q3.2o24 with DtN No.ITBA/Asr,F,n4ttmz3-24/10626ss405(1) for the Ay.2015-16, as arbitrary, illegal, bad in law, void ab initio. apart from being violative of provisions of secticin lrt8A and section 149 of the Act and also contrary to the circular issued by CBDT and provisions of section 1514 of the Act, and consequently set aside the order passed by 1st Respondent u/s. 147 r.w.s 1448 of the Act, d1.14.O3.2024 with DtN No.ITBA/AST/St14Tt2O23-2411O62655405(1) for the Ay:2015-16 and all consequential proceedings pursuant thereto. ! i i IANO: I OF 21024 I o*,,on under secrion 151 Cpc pralng that in the circurnstane stated in ttJ amoavit filed in support of the petition, the High court may be pkeased to slay alllfurtner proceedings, induding any re@very, pursuant to the order passed by mJ tst Respondent u/s. 147 r'w's 1448 of the Act' dtJ4f,32o24 with DIN Noi.ITBA,/AST/S t'.l 47 12O23-24t1O62655405(1 ) for the Ay'201 5-1 6' 1 I C&nsel for the Petitioner ln W.Ps : SRI A'V'RAGHU RAM { Citnsel for Respondents in W.Ps: SRI J'V'PRASAD' Sr'S'C FoR INGoME TN( I nf Court made the follour3ng: COMMON ORDER I t TTIE HONOURABLE SRI JUSTICE SUJOY PAUL A!{D TIIE HONOURABI,E SRI JUSTTCE N. TUKARAMJI NOs.9840 9866 9492 9493 99()8 AND WRIT PEf,tTION 99L2 0F 20.24 COMMON ORDER @er Hon'ble SP,J) Heard Sri A.V.Raghuram, learned counsel for the petitioner(s) and Sri J.V.Prasad, Iearned Senior Standing Counsel for Income Tax appearing on behalf of the respondents' 2. Regard being had to the similarity of the question involved, on the joint request of the parties, the matters are analogously heard and decided by this common order' 3. It is common ground taken by the learned counsel for the petitionedst that in furtherance of Finance Act, 2021, te- assessment Process stood modi-fied but the respondents have not taken care of it and therefore notices issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicial scrutiny' Since notices are bad in law, ttre consequential orders are also bad in law. 4. 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'259O3 of 2022 2 and other connected matters, decided by common order dated I4.O9.2O23. The parties agreed that this matter may be disposed of G terms of the Common Order dated, l4.O9.2O23. 5 This Court in ttte said ordir dated 14.Og.2O23 W.P.No.259O3 of 2022, held as under: \"35. ln view of the aforesaid discusslons, lt ls by now very clear that the procedure to be followed by the respondent-Department upon keating the notices lssued for reassessmeflt being under Sec{ion lrAA, tne subsequent proce€dings was mandato.ily required to be undertaken under the substituted provisions as laid down under the Finance Act, 202i. ln the absence of which, we are constrained to hold that the procedure adopted by the respondent_Departm€nt is in coltravention to the statutc i.e. the Finance Acl,2021, at the first instance- Secondly, it is also in direct contravention to the direc{iyes issued by the Hon'bte Supreme Court in the case of Ashish Agarwal, supra- 36. For all the aforesaid reasons, the impugned notices issued and the p'oceedings drawn by the .espondent{)epartment is neither tenabre, nor sustainable. The notices so issued and the procedure adopted be{ng per se illegal, deserves to be and are accordingly set asider uashed. As a consequence, all the impugned orders getting quashed, the consequential ordeG passed by the respondent Oepartment pu.suant to the notices lssued unde( kion 1!ll and 14 would also get quashed.and it is ordered accordingly. The reason we are quashing the consequential ordef ls on the princlples that when the initiation of the proce€dings itself was procedqrally wrong, the subsequen( orders also geE nullified automatically. 37' Th€ preliminary obiection rais€d by the petitioner is s.stained and all these writ petitiofls stands allowed on {hls veqr Jurisdictional issue- Since the impugned notices and orders are getting,quash€d on the point ofjurisdiction, we are not inclined to proceed furaher 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 Gourt had, in the case of Ashish Agarwal, supra, as a one-time meix;ure exercising the powers under IN 3 Article 142 of the Constitutbn of tndia, permitted the Revenue to $ocd under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue rvould rcmain reserved to proceed further if they so.want from the stage of the order of the Supreme Court in the case of Ashlsh Agarwal, supra. 39. No order as to costs.\" 6. In view of the consensus arrived, the impugned Show Cause notices and consequential orders passed in this batch of writ petitions are set aside. Liber$ is reserved to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.38 of ttre order dated 14.09.2023 in W.P.No.25903 of 2022. 7 . The writ petitions ard allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. t I I J I I SD/-I(. SREERAMA MURTHY ASSISTANT BEGISTRAR ,/TRUE COPY// I ,- SECNdN OFFICER 1. The Assessment Unit, National Faceless Ass€ssment Centre. lncome Tax ' Oeoartment Ministry ' of Finance, Room No. 4O1. 2(d Floor, E{amp' Javr/aharlal Nefrru Stidium, Delhi - 110 0O3. 2. i#-l'ocJmd-fax Omcer, Ward 1, Mahabubnagar, DEO office Road' Mahabubnagar 3. TE'incfi;\"it officer, Ward - 15(3), l.T. Towers, AC. Guards, Masabtank, Hvderabad - 5(X)0o4. fG-incom. Tax Ofiicer, Ward 1, Khammam Rajeev Gunt' Raieev Chowk, Near Kinnerasani Theatre, Khammam One CC to SRI A.V.RAGHU RAM' Advocate. [OPUC] orle cc to sRl J.V.PRASAD, Sr.s.c FoR lNcoME TAx [oPUCI Two CD Copies. BSK BS 4 5 6 7 HIGH COURT DATED:1810412024 COMMON ORDER W.P.NOs: 9840,9866, 9892, 9893, 9908 AND 9912olF 2024 ALLOWNG THE WRIT PETITIONS WTHOUT COSTS ,/. ,// . )' r:.'- Si;t :.- ,i ':: ,:- i. )2 l (, ,; ,:. 'i [ 1JUl,2024 .. 1- . ,j. .. .-,.rz/ cl.u .'2' tP(i o w Ar! o "