Smt. Nama Krishnaveni V. The Income Tax Officer

WP/25657/2024

AI Insights

The case involves two writ petitions filed by Sri Balasaidi Reddy Yeredla and Smt. Nama Krishnaveni against the Income Tax Officer and the Assessment Unit, National Faceless Assessment Centre, challenging the legality of notices issued for reassessment under Section 148 of the Income Tax Act, 1961. The petitioners argued that the notices were issued without following the proper procedural requirements introduced by the Finance Act, 2021, and thus were invalid. The court referenced a previous decision in W.P.No.25903 of 2022, which had set a precedent on similar grounds, leading to the quashing of the notices and any subsequent orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690435 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 19-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Revenue
• Laws Referred To: 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: Arbitrary; Finance Act 2021; Illegal; Reassessment Process; Violation of Principles of Natural Justice; Writ of Mandamus
• Section: 148; 148A(d)

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) PRESENT WRIT PETITION NOS- 25648 AND 25657 OF 2024 WRIT PETITION NO: 25648 OF 2024 Between: Sri Balasaidi Reddy Yeredla, S/o Sri Koti Reddy Yeredla, Aged about 48 years, Occ. Business, 30-191, Beside Vijaya Garden, Eduluguda, Miryalguda, Nalgonda - 508207 ..,PETITIONER AND 1. The lncome Tax Officer, Ward - 1, Near Rail Under Bridge, Nalgonda - 508001. 2. Assessment Unrt, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi -.1 10 003. .RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the Hagh Court may be pleased to pass an order or direction, especially one in the nature of WRIT OF MANDAMUS holding that the order passed by '1'r Respondent u/s.148A(d) of the Act, dt.30.03.2023 with DIN and Notice No. ITBAJAST/F/148N2022- 2311051627896(1) and the notice dated 01.04.2023 issued under section 148 of the Act with DIN and Notice No.ITBA/AST/S/148 -112023-2411051841596(1) for the assessmenl yeat 2016-17, as being illegal, arbitrary and passed in gross violation of principles of natural justice without application of mind, and consequently set aside the same. i I THURSDAY, THE NINETEENTH DAY OF SEPTENIBER TWO THOUSAND AND TWENTY FOUR THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO lA NO: 1 OF 2024 Petition under Section 151 CPC praying that an the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the notice issued by the 1\"r Respondent u/s.148 of the Act, dt.0'1.04.2023 for the assessmenl year 2016-17 with DIN and Notice No.ITBA/AST/S t148 -112023-24/1051841596(1) and all consequential proceedings thereto. Counsel for the Petitioner: SRI A. V. RAGHU RAM Counsel forthe Respondents: MS. BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAX) WRIT PETITION NO: 25657 OF 2024 Between: Smt. Nama Krishnaveni, D/o. Sri Nama Showri, Aged about 40 years, Occupation- Private Service, 4-1 18, Bothalapalem, Damaracherla Mandalam, Damaracherla, Nalgonda - 508355 ...PETITIONER AND 1 The lncome Tax Officer. Ward - 1, Near Rail Under Bridge, Nalgonda - 508001. 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. ...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 order or direction, especially one in the nature of WRIT OF MANDAMUS holding that the order passed by 1\"r Respondent u/s.'148A(d) of the Act, d1.2O 03 2024 with DIN and Notice No-ITBA/AST/F1148N2023- 2411063015266(1) and the notice dated 2010312024 issued under section 148 of the Act with DIN and Notice No-|TBA./AST/S/148.1/2023-2411063029164(1) for the assessment year 2020-21 , as being illegal, arbitrary and passed in gross violation of principles of natural justice without application of mind, and consequently set aside the same. 2 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 suspend the operation of the notice issued by the 1't Respondent u/s.148 of the Act, d1.20.03.2024 for lhe assessment yeat 2O2O-21 with DIN and Notice No- ITBA,/AST/S/148 .112023- 2411063029164(1) and all consequential proceedings thereto. Counsel for the Petitioner: SRI A. V. RAGHU RAM Counsel forthe Respondents: MS.BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAX) The Court made the following: COMMON ORDER t'-1 THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOs.25648 AND 25657 0F 2024 COMMON ORDER (per Hon'ble SP,J) Sri A.V. Raghu Ram, learned counsel, appears for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s). 2 Regard being had to the similarity of the question invoir.ed, ol-l the joint request of the parties, the matters are analogously l-re:rrd and decided b-v this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Finance Act, 2021, re assessment process stood modified but the respondents have not taken care ol it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in lau, 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 -\"'.1 other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter ma.y be disposed of in terms of the Common Order dated 14.09.2023. 5 This Court in the said order dated 14.09.2023 rn W.P.No.25903 of 2022, held as under: 2 \"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 Acl, 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, s u pra. 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 puisuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason lve are quashing the consequential 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 Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising ihe 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 conferred on the I 6 3 Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39- No order as to costs.\" In vieu' of the consensus arrived, the impugned Show SD/. N.CHANDRA SEKHAR RAO ASSISTANT REGISTRAR //TRUE COPY// - SEC1ION OFFICER The lncome Tax Officer, Ward - 1, Near Rail Under Brldge, Nalgonda - 508001 Assessment Unit. National Faceless Assessment Centre, lncome Tax Department. Mrnistry of Finance, Room No. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium. Delht -1 '10 003. One CC to Sri A. V. Raghu Ram, Advocate IOPUC] One CC to Ms. Bokaro Sapna Reddy (Jr. SC for lncome Tax) [OPUC] Two CD Copies AY Cause notices ald 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 with law as per paragraph No.38 of the order dated 14.O9.2023 in W.P.No.25903 of 2022. 7 The Writ Petitions are allowed. No costs. Interlocutorv applications, if any pending, shall a,lso stand closed To, 1 2 3 4 5 T LS J HIGH COURT DATED:1910912024 COMMON ORDER ? 10 oEC 202{ ( -- 1 H€ ST4 Ip T' i t WRIT PETITION NOS. 25648 AND 25657 OF 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS ?+ !1r1* zl 1c4;p' "