Sri Srinivasulu Veeramalla V. The Income Tax Officer

WP/24527/2024

AI Insights

The case involves two writ petitions filed by Sri Srinivasulu Veeramalla and Sri Komal Reddy Gottumukkula against the Income Tax Department, challenging the legality of notices and assessment orders issued for the assessment years 2016-17, 2017-18, and 2018-19. The petitioners argued that the notices issued under Section 148 of the Income Tax Act were without jurisdiction and violated several provisions of the Act and the Finance Act, 2021. The court referenced a previous decision in W.P.No.25903 of 2022, which had set a precedent on the procedural flaws in the reassessment process post the Finance Act, 2021. The court's decision was based on the agreement of the parties to dispose of the matter in accordance with the earlier judgment, which had quashed similar notices and orders due to procedural non-compliance.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752812 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 06-09-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal vs. Income Tax Department
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY; J SUNITHA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Illegal notice; Jurisdiction; Reassessment; Stay proceedings; Tax Collection; Writ of Mandamus
• Section: 147; 148; 144; 149; 270A; 271AAC(1); 148A; 151A; 272A(1)(d)

Judgement Text

"t 3411 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SIXTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS:24527 AN D 24589 0F 2024 W.P.NO: 24527 OF 2024 Between: Sri Srinivasulu Veeramalla, S/o. Sri Veeramalla Yadagiri, Aged about .50 years, Occ Business, 19- 5125ntA, Human Nagar, Devarakonda, Nalgonda - 5o824B ...PETlrtoNER AND 1. The lncome Tax Officer, Ward - 1, Income Tax Office, Near Rail Under Bridoe. Naloonda - 508001 . 2. Assdssmeni Unit, National Faceless Assessment Centre, lncome Tax Deoartment. Ministrv of Finance, Room No. 401,2nd Floor, E Ramp' Jawaharlal Nehru Siadium, Delhi - 110 003. ...RES'ONDENTS 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 wRlT OF MANDAMUS hog that the notice dated 28. 04.2022 issued by '1st Respondent under section 148 of the Act (with DIN and Notice No. ITBA/AST/S/148 112022- 2311042896411(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 issuec by GBDT and provisions of section 151A of the Act, and consequently set aside the notice under section 148 dated 28. 04.2022 and the assessment order passed by 1st Respondent for asst. year 20 1 8- I 9 under section 147 r. w. s 144 of the Act. lA NO: 'l 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 stay the collection of tax raised by 1st Respondent for the Ay. 2016- '17 pursuant to passing assessment order and stay the pending penalty proceedings u/s- 271AAC(1),272A(1)(d) and 270A of the Act. Counsel for the Petitioner: SRI A.V.RAGHU RAM Counsel for the Respondents: M/s. B.SAPNA REDDY, Jr. SC FOR INCOME TAX W.P.NO: 24589 OF 2024 Between: S/o. Sri Mallareddy Gottumukkula, Aged 8-4-721, Thirumal Nagar, Karimnagar - ,..PETITIONER AND 1. The Assistant Commrssioner of lncome Tax, Circle - 1, lncome Tax Office, Aayakar Bhavan, Near Natraj Theatre, Karimnagar - 505001. 2. Asiessment Unit, Nataonal Faceless Assessment Centre, lncome Tax Department, Room No 401,2 nd Ftoor, E Ramp, Jawaharlal Nehru Stadium, Delhi 3. Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadtum. Delhi -110 003. ...RES'ONDENTS Petition under Article 226 ol 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 bf WRIT OF MANDAMUS holding that the order passed by lst Respondent u/s.14BA(d) of the Act, d1.2710312024 with DIN and Notice No.ITBtuAST/F1148412023- 2411063457051(1) and the notice daled 2710312024 issued under section 148 of the Act with DIN and Notice No ITBA/AST/S/148 112023-2411063470506(1) for the assessment year 2017-18, as being illegal, arbitrary and passed in gross violation of principles of natural Justice without application of mind, and consequently set aside the same. Sri Komal Reddy Gottumukkula, about 59 years, Occ. Business, 505001. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that:n 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 1st Respondent uis.148 of the Act, dt.27to3t2o24 for the assessment year 2017-18 with DIN and Notice No.ITBA/AST/S t148 112023-24/1063470506(1) and all consequential proceedings thereto Counsel for the Petitioner: SRI A.V.RAGHU RAM counset for the Respondents: M/s. J.SUNITHA. JUNIOR SC FOR INCOME TAX The Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.24527 AND 24549 0P 2024 COMMON ORDER (per Hon'ble SP,J) Sri A.V.Raghu Ram, learned counsel, appears for the petitioners, Ms.B.Sapna Reddy, iearned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)- Income Tax Department in W.P.No.24527 of 2024 and Ms. J. Sunitha, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)-Income Tax Department in W.P.No.245B9 of 2024. 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. a- l , 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e Act, 2O2I, re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section l4g of the Income Tax Act, 196 1 cannot sustain judicial scrutiny. Since notices are bad in law, the consequential orders are also bad in law. 2 4. During the course of hearing, leamed counsel for the parties agreed that curtains on this issue are Iinatly drawn 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.Og.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14'09'2023' 5. This Court in the said order dated l4'O9'2O23 in W.P.No.259O3 of 2022., held as under: \"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 ate constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act' 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 upra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the resPondentoepartment 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 pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accofdingly' The reason we 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 obiection 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 ry 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. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with law as per paragraph No.3B of the order dated 14.09.2023 in W.P.No.25903 of 2O22 7 The Writ Petitions are allowed. No costs. Interlocutory To PSK. GJP applications, if any pending, shall also stand closed. ASSTsTAS?lvESIYIXA ,TTRUECOPY/' ,.Y SEiTION OFFICER 1. The lncome Tax Officer' Ward - 1, lncome Tax Office' Near Rail Under Bridoe. Naloonda - 50800'l , X$8;iml;\"iii,iir ru-rii\"-\", i race less Assessm-ent^centre' I ncome Tax ' 6;;;;il;;t r,l\"i\"liirv \"i Finance, Rool- 9 401,2nd Floor' E- Ramp' J\"riinil\"t Nehru Siadium Delhi - 'l 10 003 -^^. .^ 3. b;;tc i; Sni [V nncuu RAM, Advocate [oPUCr 4. one cc to M/s e snpNt'HebiiV' j; s-CF-gjF lNdprrre^rexloeucl 6. il; d6 i; ivii;. JSur.riiHn,lr sc FoR TNCoME rAx IoPUC] 6. Two CD CoPies r 3 the other issues raised by the petitione{ which stands resewed 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 the 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 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.\" / .l HIGH COURT DATED:0610912024 COMMON ORDER WP.Nos.24527 AND 24589 of 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. ?h 0 t) q r)4^ Qllz 3 1t 0EC 2024 Z' f o * I/q S E 1 ( o l' ParcttE t ! I "