Sri. Ravi Kethavath V. The Income Tax Officer

WP/21792/2024

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The case involves a writ petition filed by Sri Ravi Kethavath against the Income Tax Department, challenging the validity of notices and orders issued for reassessment under the Income Tax Act, 1961. The petitioner argued that the reassessment process was not modified in accordance with the Finance Act, 2021, leading to the issuance of notices under incorrect provisions. The respondents acknowledged that the matter was similar to a batch of writ petitions previously decided by the court. The court referred to its earlier decision in W.P.No.25903 of 2022, which had set aside similar notices and orders due to procedural flaws. Consequently, the court allowed the writ petition, quashing the impugned notices and orders, and reserved the right for the Revenue to proceed under the substituted provisions as per the Supreme Court's decision in Ashish Agarwal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 760720 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 12-08-2024
• 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 V PRASAD
• Assessee Lawyers: VENKAT RAM MANTUR
• Keywords: Income Tax; Natural Justice; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 147; 148; 144; 156; 226; 143A

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) I/ONDAY,THE TWELFTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HoNoURABLE SRI .IusTlcf TffIvIAVARAPU RAJESHWAR RAo WRIT PETITIO N NO:2'l 792 0F 2024 13411) .,PETITiONER ...RESPONDENTS Betwee n: Sri Ravi Kethavath. Sic,^ Chatdru Kethavath Aged about 45, years, Occ Busrness, H NO.20-336/1 T;tikoie-'R;L?\",'ti\"uururcnda, Natgonda D jstr-ict - 5A8248, Telangana 1. Th: in:o:r: T_:< Cffrr:r iriard 0gi1) l,1C=:ata:]. ir:.:r: Trx T;,,,:.: AC G u : rd s. i ,!a sao iank.Hycerabad-d06'00i. - - \" - \" 2 Principal chief commissioner of rncorne Tax, rncome Tax Towers AC Guards tu{asab Tank Hyderabad-500004 3. The Assessment Unit lncome Tax Department, National Faceless Assessment Centre, Room No 401, 2hd Flo;;'Ei;mp Ja.,vahartal Nehru Stadium Dethi 1i0003. Petition under Articre 226 of the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, trre High 'C;rr,t Lrv n\" pleased to issue a writ, order or direction, more particular-ry oie rn tlre natuie ot Writ of i landamus, declaring the impugned Orderdt_03.01 .ZCZ+ purruO ut,^ lql R/w Section 144, read with section riqg or the Income Tax Act vide DrN No. lTBA/AST/S r147/2023-24,1059312024(1) arong with notice under section 156, dt. 03.01 .2024 of the rncome-Tax Act, 1961, by thi 3rd respondent for A.y. 2o1|_1g, pursuant to the order u/s 14sA(d) dt.19.o4.2022 and notice issued u/s 148 dt20.04.2022 by the JAo instead of FAo, as void, ittegat. ano .\"\"irrrv'io t. Provisions of lncome-tax Act and contrary to the principres of Naturar Justice AND I I I I I IA NO:10F 2024 ,n\" ,n,!3ljll\",l#,X\"n\"#,:1.181 cpc prayins rhar in the circumstances stared in u,, \" J,,ti \",\" il; ;:'\"\"# :i,,Iffi J;, [;,ir,Jx: 3A i{\"T ];], ffi 1ff .i:;*,# SJ:;::\",,,1\"_Jn\"\",,Tl;ni.* o,.o\"I o,.Juj' ;,;;.R/w seuion 1a4 real wirh zq l osgs,t zolzot, l \"iin.'f^\"Ie Tax Act vide Dt N rvo. rreAind iis,,Ziirox zora rg. in piilt.i\".;[; tncome-Tax Act, 1e61. bv the 3rd n\".p\"ro!r, #io v -'K8659O riil rhe finat disposat or tr.,i, *riii\"t]n\"in ,\", Coundet for the petitioner: SRt. VENKATRAM REDDY MANTUR counsel for the Respondents: sRr J v PRASAD (sc FoR rNcoME TAX) The Court made the following: ORDER ! I THE HONOURABLE SRI JUSI'ICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION No.21792 OF 2o24 ORDER: (per Hon'ble Justice Sujog Paull Heard Sri Venkatram Recicil' Mantur, learned counsel for the petitioner(s) and Sri J.V.Prasad, learned Senior Standing Counsel for Income Tax Departrnent for respondents. petitioner{s} is that in furtherance ol Finance Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and tl-rerefore r-rotice issued under Section l4B of the Income Tax Act, i96 I cannot sustain -judicial scrutinv. Since notice is bad in lavr.. the consequential orders are also bad in lau,. 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finaily dravvn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.O9.2023. 2. The ground taken by the iearned counsel for the .- 4. This Court in the saici order dated 14.O9.2023 in W.P.No.259O3 cf 2O22. held as u.nder '35. In view of the aforesaid discussions, it is by now very clear that the procedlrre t(l lte followed by the respondent- Departme'tt upon treating the llotices issuod for reassessment being u[der Sectiotr 143A. the subseqqent proceedings was mandatorily required to be undertaken undet the substituted provisions as laid dow:r under the Finance Act, 2021. ln, the absence af which, we are constrained to hold that the proeedute adopted by the respondent-Department is in co[travention to the statute i.e. the Filance Act,2O21, at the first instance. Secondly, it is also in direct contravention to the directiwes issued by the Hon'bte SuPreme Court iD the case of Ashish Agarwal, supra, 36. For au the aforesaid reasons, the impugaed notices issued and the proceedings drawa by the respoodent-DePartment is neither tenable, nor sustainable. The notices so issued and the p!:ocedure adopted bciirg Fer se illegal, deserves to be and are accoidingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department pursuaDt to the notices issued under sectioa 147 alld 148 would also get quashed and it is ordered accordingly. The reasQfl wc are quashing the consequential order is or the principles that when the initiation of the proceedings itself was ptocedurally wrong' the subsequent orders also gets nullifred automatically. 37. The p.elimirar!, objc.tion raised by the petitioner is sustained and atl these writ petitiols stands aUowed on this very jurisdictional issue- sirce the impugned notices aad orders a.e getting quashed on the poitrt ofjurisdiction, we are not incliEed to proceEd further and decide the other issues raised by the petitioner $/hich stands reserved to be raised and contended in an apirropriate proceedilgs. 38. Siace the Hon't,le Slpreme Court had, in the case of Ashish Agarwal, supra: as a ore-time measule exercising the powers under Atti.le 142 of the Colstitution of India, permitted the Revenue to proceed under the substituted provisions, ard this Court allowing the petitions only on the procedural flaw, the right conferred oa the Revenue would remaitr reserved to proceed further if they so waqt from the stage ol the order of the Suprerrre Cou:t in the case of Ashish Atarwal, 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 .rre set aside. Liberty is resen,ed to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.3B ol the order dated 14.09.2023 in W.P.No.259O3 of 2022. 6. The r.r,rit petition is alior,r,ed. No costs. Interlocutory applications, if any pending, shall also stand closed. SD/- T. JAYASREE ASSISTANT REGIS R //TRUE COPY// SECT{ON OFFICER To, 2 The lncome Tax Officer, Ward 09 (1), Hyderabad, lncome Tax Towers' AC Guards, Masab Tank, Hyderabad-500004' PrincioalChiefCommissioneroflncomeTax,incomeTaxTowersACGuards tr4asab Tank HYderabad The Assessment Unit lncome Tax Department, National Faceless A;;;;;il;i Centre, Room No 4o1, 2nd Floor ERamp Jawaharlal Nehru Stadium Delhi 110003. 4. One CC to SRI VENKATRAIU REDDY IMANTUR Advocate [OPUC] 5. One CC to SRl. J V PRASAD (SC FOR INCOME TAX) IOPUCI 3 6 K.KS GJP Two CD CoPies i l F'^- HIGH COURT DATED:1210812024 ORDER WP.No.21792 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS (,oY< e) /,Cx L' {.-t "