Suresh Kumar Reddy Medipalli V. The National Faceless Assessment Center, Income Tax Department, New Delhi, India and Income Tax Officer, Ward 14 (1), Hyderabad and The Assessment Unit, Income Tax Department, Government of India, New Delhi

WP/23590/2024

AI Insights

The case involves Suresh Kumar Reddy Medipalli, the petitioner, challenging the validity of notices and orders issued by the Income Tax Department under Section 148A(d) and Section 148 of the Income Tax Act, 1961. The petitioner argued that these notices and the subsequent orders were void, illegal, arbitrary, and without jurisdiction, thus violating Article 14 of the Constitution of India. The court referenced a previous common order in W.P.No.25903 of 2022, which had addressed similar procedural issues under the Finance Act, 2021. The court's decision to set aside the notices and orders was based on the procedural flaws identified in the handling of re-assessment processes by the Income Tax Department.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798578 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Section 148A(d) of the Income Tax Act, 1961, Section 148 of the Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOKARO REDDY; B MUKHERJEE
• Assessee Lawyers: M DEEPAK
• Keywords: Arbitrary; Finance Act 2021; Illegal; Jurisdiction; Re-assessment process; Violate of Article 14; Void; Without jurisdiction; Writ of Mandamus
• Section: 148; 148A(d)

Judgement Text

"134111 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY NINTH 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 NO: 23590 OF 2024 Between: Suresh Kumar Reddy Medipalli, S/o. M.Pratap Reddy, Aged about 45 years, Occ. Business, Rl/o. Flat No.776, Jubilee Hills, Hyderabad, T.S 500 034. ...PETITIONER AND 1 The National Faceless Assessrneflt Center, lncorne{ax Department, New Delhi. lndia 2. lncome Tax Officer, Ward 14 ('l), Hyderabad 3. The Assessment Unit, lncome Tax Department, Government of lndia, New Delhi ..RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction, more particularly in the nature of writ of mandamus declaring order dated O4lO3l2O24 under Section 148A(d) bearing DIN and Notice No. ITBA/ASTllFl148Al2O23-2411O61933378(1) and the consequent notice dated O4-O3-2O24 u/s. 148 bearing ITBA/AST/S/148112023-241 1061942897(1), as being void, illegal, arbitrary, without jurisdiction, violate of Article 14 of the Constitution of lndia and consequently set aside the same. lA NO: 1 OF 2024 Petition under Section 1 51 CPC praying that in the circumslances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay I I continuation of Assessment proceedings on the basis of notice dated 04-03-2O24 u/s. 1 48 bearing ITBA/AST/S/ 1 48 1 t2023- 241 1 061 942897 (1 ) Counsel for the Petitioner: SRI M. NAGA DEEPAK Counsel forthe Respondent Nos.1 and2: MS. BOKARO SApNA REDDY (Jr. SC FOR INCOME TAX) Counsel forthe Respondent No.3: SRt B. MUKHERJEE, REPRESENTING FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENRAL OF INDIA The Court made the following: ORDER / /t /t THE HONOURABLE SRI WSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE ITAMAVARAPU RA^'ESIIWAR RAO WRIT PETITION No.23590 0F 2o24 Governmen t / ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri M.Naga Deepak' learned couns€l for the petitionerts), Ms.B.Sapna Reddy' learned Junior Standing CounselforlncomeTaxDepartmentfortherespondents. lncome Tax Department and Sri B' Mukherjee' learned counsel representing Sri Gadi Praveen Kumar' learned Deputy Solicitor General of India for the respondents-Central 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 I 48 of the lncome Tax Act, 1961 cannot sustain judicial scrutin-v. 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 drarvn by this Court in a batch of writ petitions' W'P'No'259O3 of 2022 and other connected matters' decided by common order tl i 2 dated 14.09.2O23. 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.O9.2023 in W.P.No.259O3 of 2022, held as under: '35. In vies of the afoiesaid dlscussioEs, it is by now very clea. that the procedure to be follorqed by the lespondelt- DepartEent upo! treating the noticGs issued for reassesstrert being under Section 148A, the subsequent proceediags was mandatorily required to be unde.taken uider the substltuted provlaions as l.aid dowD under the Firance Act, 2021. I! the abaelce of qrhich, we are coastraiaed to hold thrt the procedure adoptcd by the respordeat-DepartEeDt is ia coutravention to the statute i.e. the Fiaaace Act, 2021, at the first instaace- Secondly, it is also in direct coatravention to the dtcctiwes issued by the Hon'ble SupreEe Court ia the case ofAshish Agarwal, supra. 36. Fot all the aforesaid reasons, the iapugred lotices lssued and the proceedings drawn by the respondelt-DepartmeEt is leither teaabte, nor susteinable. The Doticcs so issued altd the procedure adopted beinB per se illegal, deserves to be and a.c accordiEgly set aside/quashed. As a coascquetrce, qll the impugned orders getting quashed, the coasequeatial ordera passed by the respoodeot Department pursuaEt to the Dotices issued uDder Section 147 and 148 would also get quashed and it is o.deted accordingly. The reasoo we are quashi.g the coasequential order is on the principles that whea the ilitiatioa of the proceedings itself was p.ocedurally wrong, the subsequent orders also gets nullified autoEaticrlly- 37. The pr€liminary objectioo raised by the petitioter is suataiDed and all these srit petitions stands allowed o[ this very jurisdictlooal issue. Since the impugtred notices aEd orders are getting quashed orr the point ofjurisdiction, we are not iaclired to proceed further and deeide the other issues ralsed by the petitioner qrhich stands res€rved to be raised ald contended io an appropriate proceedilgs. 38. Since the Hon'bte Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers uDder Article 142 of the Constitution of India, 3 j permitted the Revenue to proceed under the substituted provisioEs, ead this Court aUorilrg the petitiotrs only on the procedural flaw, the right conferred olr the Reveaue rrould reEaio reserved to proceed further if they so uralrt froD the stage of the order of the SupreEe Court ia the case of AsLish Agarwal, supra. 39. l{o order as to costs-' 5. In.view of the consensus arrived, the impugned Show Cause notice and consequential 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 Iaw as per paragraph No.3B of the order dated 14.09.2O23 1n W.P.No.25903 of 2022 6. The w'rit petition is allowed. No costs. Interlocutory applications, i[ any pending, shall also stand closed. sd/- c. P KUMAR ASSISTANT S //TRUE COPY// SE FFICER '1. The National Faceless Assessmenl Center, lncome-tax Department, New Delhi, lndia 2. The lncome Tax Officer, Ward 14 (1), Hyderabad. 3. The Assessment Unit, lncome Tax Department, Govemment of lndia, New Delhi 4. One CC to Sri t ,4. Naga Deepak, Advocate {OPUCI 5. One CC to [,4s. Bokaro Sapna Reddy (Jr. SC for lncome Tax) IOPUC] 6. One CC to Sri Gadi Praveen Kumar, Deputy Solicitor General of lndia[OPUC] 7. Two CD Copies 1c4r To, TJ MP ll li I I i i t t HIGH COURT DATED:2910812024 ORDER WP.No.23590 ot 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS 3 14 ocT zut la 16- I s 1 R 6 l- C/ t o qco$d 'YAu. ,'.11 ' I i I I I s'l ,? ,.rr..te,rrE9 "