Sukhanya Sunkireddy, W/o. Sunikreddy Ravinder Reddy V. Union of India, Ministry of Finance and Income Tax Officer, Ward 1, Mahbubnagar and The Principal Commissioner of Income Tax - IV Hyderabad and The National Faceless Assessment Center Income Tax Department, Ministry of Finance Govt. of India

WP/24325/2024

AI Insights

The case involves Sukhanya Sunkireddy, the petitioner, challenging the legality of a notice and subsequent orders issued by the Income Tax Officer, Mahbubnagar, under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17. The petitioner argued that the notice was issued without adhering to the modified reassessment procedure mandated by the Finance Act, 2021. The respondents included the Union of India, Ministry of Finance, and various income tax authorities. The court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on this issue, leading to the decision to quash the notices and orders in this case as well.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 807401 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 04-09-2024
• 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: A KRANTI REDDY; B SAPNA REDDY
• Assessee Lawyers: P SRIKANTH RAO
• Keywords: Income Tax; Jurisdictional issue; Procedural Flaw; Reassessment; Writ of Mandamus
• Section: 148; 148A(d); 226

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE FOURTH 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 NO: 24325 OF 2024 Between: Sukhanya Sunkireddy, W/o. Sunikreddy Ravinder Reddy Aged about 64 years, Occ.Business, R/o. 1-3-1271 6 Rajendranagar, Mahabubnagar, Mahabubnagar 509001, Telangana, Hyderabad. AND ...PET|T|ONER 1. Union of lndia, Ministry of Finance Rep. by its Secretary, 166-B North Block, New Delhi - I 10 00'1 2. lncome Tax Officer, Ward 1, Il4ahbubnagar lTO, Deo Office Road, Mahbubnagar, 509001 3. The Principal Commissioner, of lncome Tax - lV Hyderabad lT Towers, Masab Tank, Hyderabad. Telangana - 500004. 4. The National Faceless Assessment Center lncome Tax Department, Ministry of Finance Govt. of lndia, New Delhil .,.RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the clrcumgtances stated in the affidavit filed therewith, the High Court may be pleased to i. lssue a Writ, Order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No.2 in passing the Order dated 21 .03.2023 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, 1961dated 21 .03.2023 as illegal, arbitrary. bad in law, void ab initio, violative of the principles of natural justice and being violative of Articles 14,19 and 265 of the Constitution of lndia and consequently, ii. Set aside the Order dated 21 .03.2023 u/s. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncome Tax Act, 1961 dated 21 03.2023 calling for the return of income of the Petitioner for AY 2016-17 and any consequent proceedings as lacking in jurisdiction. Counsel for the Petitioner: SRI P.SRIKANTH RAO Counsel for the Respondent No.1 : SRI A.KRANTI KUMAR REDDY, SC FOR CENTRAL GOVT. Counsel for the Respondent Nos.2 TO 4: M/s. B.SAPNA REDDY, Jr. SC FOR ITD The Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI .IUSTICE NAMAVARAPU RA'IESHWAR RAO WRIT PETITION No.2432SoF 2024 ORDER: (per Hon'bte Justice Sujog Paul) Sri P.Srikanth Rao, learned counsel for the Sri A.Kranthi Kumar Reddy, learned Standing Central Government, for respondent No ' 1 and Reddy, learned Junior Standing Counsel for Heard petitioner(s), Counsel for Ms.B.SaPna Income Tax Department, for respondent Nos'2 to 4' 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act' 2O2l' re- assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 148 of the lncome Tax Act, 196 1 cannot sustain judicial scrutiny. Since notice is bad in law' the consequential orders are also bad in law. 3. 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'25903 of 2022 andotherconnectedmatters,decidedbycommonorder 2 dated 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023. 4. This Court in the said order dated 14.09.2023 in W.P.No.25903 ol 2022, heid as under: \"35. In view of the aforesaid discussions, it is by noq, very clear that the procedure to be followed by the tespondent- Department upon treatitrg the notices issued for reassessment being under Sectlon 148A, the subsequent proceedings was mandatorily requir€d to be undcltaken under the substltuted provisions as laid dowr under the finance Act,2021. In the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute l.e. the Finance Act, 2O21, at the first instance. SecoEdly, it i6 elso iE direct contrawention to the directivcs issued by the HoE'ble Supreme Court in the case of Ashish Agarwal, Eupra. 36. For all the aforesaid reasons, the impugred notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustaioable. 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 ordera getting quashed, the consequential ordets passed by the respondent D€partment pursuant to the notices issued under Section 147 and 148 would also get quashed end it is ordered accordingly. The reason we are quashing the consequential order is on the principles that r.yhen the initiation ol the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. 37. The preliminery objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned flotices and orders are Bctting quashed oD the point ofjurisdiction, we are not inclined to proceed further and declde thc other issues raised by the petitioner Ehich stands reserwed to be raised and contended in an appropriate proceedlngs. 38. Since the Hon'ble Supreme Couft had, in the case of Ashish Agarttral, supra, a6 a one-time measure exercising the poq'ers under Article 142 of the Constitution of India, 3 pennitted the Reveauc to proceed uader the substituted provlslons, and thi6 Court allowltrg the Petitlols only on the procedutal flaw' the rlght colfered oo the Revenue would remain reserved to proceed further if they so want from the stage of the ordet of the Supreme court iu the case of Ashish Agarwal, supra. 39. No ord€r as to costs.\" 5. In view of the consensus arrived, the impugned Show Cause notice and consequentia-i orders passed in this writ petition 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. 6. The Writ Petition is allowed' No costs. Interlocutory applications, if aly pending, shall also stand closed. SD/-K. VENKAIAH ASSISTAN REGI TRAR /,TRUE COPY// SE N OFFICER To The Secretary, Union of lndia' Ministry of Finance 166-8 North Block' New '-?'i.;tilf3lticer, ward 1' Mahbubnasar lro' Deo orrice Road' Ir/ahbubnagar' 5uvuu I . :r. of lncorne Tax - lV Hyderabad lT Towers. The PrinciPal Commtsstone Yf,: ftt kl5, li:; m, l\"l: L%1lt \"??:l'Xi o m e r a x D e p a rtm e nt' Ivr i n i stry H#33i':E[\"','ii[fft +tr#i{hsr\",'.i:\",'3ru3'\"=*'*o'oou' 8I\"'& to M/s B.SAPNA REDDY' Sc FoR ITD [oPUC] Two CD CoPies / 1. 2 4 ? ki 7 a PSK. BS HIGH COURT DATED:0410912024 ORDER WP.No.24325 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS. S 1 1 i tlli; /'. tA r4- ( - { 9 L ':. 1l itt I T a I t r-9 .* i-- 2 {] )./ /,t /o /3/ /toz* "