Sri Tangellapalli Mallikarjuna Chary V. The Assistant Commissioner of Income Tax

WP/23264/2024

AI Insights

The case involves multiple writ petitions filed by different petitioners challenging the notices and assessment orders issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, for various assessment years. The petitioners argued that the notices were without jurisdiction, arbitrary, and violated several provisions of the Act and CBDT circulars. The court referenced a previous batch of writ petitions (W.P.No.25903 of 2022) where similar issues were addressed, leading to a common order that set aside the notices and orders due to procedural flaws. The court's decision was based on the need for compliance with the amended procedures under the Finance Act, 2021, which were not followed by the respondents.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752837 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 28-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY
• Assessee Lawyers: A V RAM
• Keywords: Assessment Order; Income Tax; Jurisdiction; Notice Quash; Writ of Mandamus
• Section: 147; 148; 144; 149; 148A; 151A

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY EIGHTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.23264 23298 and 233330F 2024 wRtT PETITION NO.23264 0F 2024 Between: Sri Tanqellapalli Mallikarjuna Chary' S/o. Sri T. Bikshama Clary' Aged about 5S v\"iti, Oi.rpation. Piivate Service, 1865 Brannon Heard Lane, Cumming' Georgia - 30041, USA. ...PETITIONER AND '1 . The Assistant Commissioner of lncome Tax, Circle - 9(1 ), l T' Towers, A C' Guards, Masabtank. Hyderabad - 500004. 2. Assessment Unit, National Faceless Assessment Centre, lncome T-ax .. - O\"pirtr\"nt, noom No.401 , 2nd Floor, E-Ramp' Jawaharlal Nehru Stadium' Delhi -1'10003. 3. The lncome Tax Officer, Ward - 9(1), l.T. Towers, A.C' Guards, Masabtank' Hyderabad - 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 order or direction, especially one in the nature of wRlT oF MANDAMUS holding that the notice dated 26.O4.2022 issued by 3'd Respondent under section 148 of the Act (with DIN and Notice No.ITBA/AST/S/148-112022' 23t1042862109(l)) as being without lurisdiction, arbitrary, illegal, had in law, void ab initio, apart from being violative of provisions of section '148A and section '1 49 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 notice under section '148 dated 26.04.2022 and th€ assessment order passed by 1't Respondent under section '147 r.w.s 144 of the Act for asst yeat 2018-19' 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 stay the collection of tax raised by 1't Respondent and all consequential pending penalty proceedinlts for the Ay.20'18-19. Counsel for the Petitioner: SRI A. V. RAGHU RAM Counsel for the Respondents: MS.BOKARO SAPNA REDDY (Jr. SC FOR INCOME TAX) WRIT PETI TION NO: 23298 OF 2024 Between: Mr. Raheenr Uddin, S/o. Mr. Hafeezuddin' Aged about 71 years, Occ:,Retd' empbyee, 17-38-5i6/A, Yakutpura, Chandranagar, Hyderabad - 500023' ...PETITIONER ANO 1 2 Assessmenl Unit, National Faceless Assessment C^gntre, lncome Tax Deoartment Ministry of Finance, Room No 401 ,2\"\" Floor. E-Ramp' Jawaharlal t,lehru Stadium, Delhi - 110 003. The Assistant Commissioner of lncome Tax, Circle - 9(1)' I T Towers, A'C' Guards, Ma:;abtank, Hyderabad - 500004. ..RESPONDENTS Petition unrler Article 226 of the constitution of lndia praying that in the circumstances st€tted 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 holdrng that the notice dated 08.04.2022 issued by 2n'r Respondent under section 148, of the Act (with DIN and Notice No.ITBA/AST/S/148_112022- 23t1042658004(11 )) as being without iurisdiction, arbitrary, illegal, bad in law, void ab initio, apart frorn being, violative of provisions of section '148A and section, 149 of the Act and alt;o contrary to the circular issued by CBDT and provisions of section 151A of the Act, and consequently. set aside the notice under section 148 // dated 08.04.2O22 and the assessment order passed by 1't Respondent under section 147 r.w.s 144 r.w.s '1448 of the Act for asst. year 2015-16. 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 stay the collection of tax and penalty demands raised by '1\"r Respondent for the Ay.201 5-16. Counsel for the Petitioner: SRI A. V. RAGHU RAM Counsel forthe Respondents: MS. BOKARO SAPNA REDDY (Jr. SC FoR INCOME TAX) WRIT PETITION NO: 23333 OF 2024 Between: Mr. Naseeruddin Mohd, S/o. Mr. Mohd Hasnuddin, Aged about 53 years, Occupation. Business, 3-1-231, Near Alankar Theatre, Kakatiy a Colony, Hanamkonda, Warangal - 506001 . ...PETITIONER AND 1 Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 40'l ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi -1 10 003. The lncome Tax Officer, Ward -1, lncome Tax Office, 1-8-610, 3'd Floor, Mayuri Complex, Opp. TSNPDCL Bhawan, Nakkalagutta, Hanamkonda, Warangal - 506001. ...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 notice dated 27t0412O22 issued by 2nd Respondent under section 148 of the Act (with DIN and Notice No. ITBA/AST/S/148-112022- 2311042869678(1)) as being without jurisdiction, arbitrary, illegal, bad in law, void ab initio, apart f rom being violative of provisions of section 148A and section 149 of the Act and atso conlrary to the circular issued by CBDT and provisions of 2 section t51A of the Act. and consequently set aside the notice unCer section '148 dated 27.04.2022 and the assessment order passed by 1't Respondent under section '147 r.w.s. 1448o{ the Act for asst. year 2018-'19 lA NO: 1 OF 2024 Petition urrder Section 151 CPC praying lhat in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the collection o1' tax and penalty demand raised by '1\"r Respondent and the pending penalty proceed ings for the Ay.201 B-1 9 Counsel for the Petitioner: SRI A. V. RAGHU RAM Counsel for the Respondents: MS. BOKARO SAPNA REDDY (Jr. SC FOR INCoME TAx) The Court made the following: COMMON ORDER THE HONOURABLE SRI .IUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO tr,RJT PETITION NOS.23264 2329a &23333 0F 2024 COMMON ORDER (per Hon'ble SP,J) Sri A.V. Raghu Ram, learned counsel, appears for the petitioners and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, appea-rs for 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 petitioner(s) that in furtherance of Finance Act' 2O2l' te- assessment process stood modified 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, the consequential orders are also bad in law. 4. During the course of hearing, learned cotlnsel 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 and other connected matters, decided by common order dated ) 14.O9.20:23. The parties agreed that this matter ma1, be disposed of in terrr.s of the Common Order dated 14.O9.2023 5 This Court in the said order dated 14.O9.2023 in W.P.No.215903 ol'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-Oepartment upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undeftaken 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 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, su 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 Oepartment pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing lhe 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 the olher issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Cou( had, in the case of Ashish Agan/al, 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 3 from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs.\" In view of the consensus arrived, the impugned Show 6 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.38 of the order dated 14.09.2023 in W.P.No.25903 of 2022. 7 The Writ Petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. To, 1. 2. 3. 4. 6 b. Sd/. N. SRIHARI ASSISTANT EJiTSTRAR //TRUE coPY// sEcrldN oFFtcER TheAssistantCommissioneroflncomeTax,Circle-9(1),l.T.Towers'A.C. Guards, Masabtank. Hyderabad - 500004' i# r{;\";;,#i unit, irrationit Faceless Assessment Centre' I ncome -Tax #;;;ft;i R;;m r.rt.+or, ihd Floor, E-Ramp, Jawaharlal Nehru Stadium' Delhi -110003. i#'i\".,;;; T; officer, ward - 9(1), I T. Towers' A'c Guards' Masabtank' Hvderabad - 500004. oil\"-Cb io Sri A. V. Raghu Ram, Advocate [OPUC] 5;; cd i6 nri. iioturo Sapni n6oov (Jr' SC for lncbme Tax) [oPUc] Two CD CoPies TJ MP s I I HIGH COURT DATED:2810812024 ::'._---':---,, -i';1F.._- ,,. J,rll--^r - ' a)' ':.:. , 7A t E lt] tt t ORDER WRIT PETITION NOS' 23264,23298 and 23333 OF 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS lj: 'i l ' i :. i' ii I @c+q q - "