MANOHAR RAO PUPPALA, V. The Assistant Commissioner of Income Tax Circle 1,

WP/22981/2024

AI Insights

The case involves two writ petitions filed by Tuanohar Rao Puppala and Radha Krishna Chinnamsetty against the Income Tax Department and other related authorities. The petitions challenged the assessments made under Section 147 read with Section 144 of the Income Tax Act, 1961, for the assessment year 2015-16. The petitioners argued that the assessments were arbitrary, illegal, and violated principles of natural justice, among other legal provisions. The court's decision was influenced by the procedural flaws in the notices issued, which did not comply with the modified reassessment process under the Finance Act, 2021.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752841 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA; SAPNA REDDY; P REDDY
• Assessee Lawyers: THANNERU KUMAR
• Keywords: Assessment Year 2015-16; Faceless assessment; Income Tax; Jurisdiction; Natural Justice; Writ of Mandamus
• Section: 147; 148; 144; 148A; 265

Judgement Text

"[ 3411 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) FRIDAY, THE TWENTY THIRD DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSNC.d NAMAVARAPU RAJESHWAR RAO WRIT PETITION WRIT PETITION NO: 229810F 2024 Between: NOs:22981 an d22988 F 2024 o AND 1 TUANOHAR RAO PUPPALA, S/O. ng'A'E:rcXil,,?Hi,l ffi [3 RANGA RAO PUPPALA, Age$ about 72 ' i-nq oharoorcamp' Jagtial Karimnagar- bp'pszosc nt.essment Y-ear' 201 5-1 6 ...PETITIONER The Assistant Commissioner of lncome Tax Circle 1 ' Karimnaoar' lncome Tax office, Aayakar Bhavan, r'r\"lli'r''iiii ii\"iJii\"l kuii'n'gar Tel'nsana state' The Principal Chief, Commissioner of lncome-Tax - Telanoana and A P' Hyderabad, lT Towers' ^i\"6iiijt' rurasao ranr<' Hvderabad -500 028' Telangana. 3.TheCentralBoardofDirectTaxes,-Represented,bVitsChairman,Department of Revenue, Ministry ;i'Fi;;;'-b\"v6rnment of thoia' Secretariat Buildings' New Delhi - 110 001 ' 4. The National Faceless Assessment Center' lncome Tax Department' New Delhi. 5. The Union of lndia, Represented - by rts .Secretarv to the Government' Department or neu\"n'\"liInL\"iv'\"\"t\"ri\"l\"Je' ruew oettrl - 1 10 001 ' ...RESPONDENTS Petition under Article 226 of lhe Constrtution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may be pleased to issue an appropriate writ' order or direction more particularly one in the nature of Writ of Mandamus declarrng the order passed by the lncome Tax Authorities (National Faceless E-Assessment Centre completed the assessment U/S 147 r.w.s 144 read with section 1448 of the lncome Tax Act' 1961 vide DIN 2 and Notice No. dated 1810312024 |TBA/AST/S/147 t2O23-24t10628254O4(1) for the assessment year 2015-16 determininq the total income of Rs. 1,19,91,1541 as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being viotative of Articles 14, 19(i Xg) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice. Counsel for the Petitioner: SRI THANNERU CHA|TANYA KUMAR Counsel for the Respondent No.1 & 2: M/s. J.SUNITHA, Jr. SC FOR INCOME TAX Counsel for the Respondent No.3 to 5: SRI P.SHASHIDHAR REDDy, SC FOR CENTRAL GOVT, WRIT PETITION NO: 22988 0F 2024 AND 1 Between: RADHA KRISHNA CHINNAMSETTY, S/o- CHINNAMSETTY SATYINARAYANA, Aged about 71 years, Occupation. Business, RJo. H No 1i ].+1 |:lt agar,.Tiruvuru Ta Tiruvuru, Krishria 527235, Tetangana, tndia. PAN. AKTPC9457G Assessment year. 2015-i6 ...PETITIONER The lncome Tax Officer Ward 1, Khammam/, lncome Tax Office, Rajeev Gunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam Telangana Stat'e_ The Principal Chief Commissioner of lncome Tax, -Telangana and A.p, lyderabad, lT Towers, AC Guards, Masab Tank, Hyderab-ad - 500 02S: Telangana. The Central Board of Direct Taxes, Represenled by its Chairman, Department of Revenue, Ministry of Finance, Government of lhdia, Secretariat Eiuildings, New Delhi - 1 10 001 The National Faceless Assessment Center, lncome Tax Department, New Delhi. The Union o-f_lndra, Represented by its Secretary to the Government, ueparlment of Revenue, Ministry of Finance, New Delhi - 110 001. .RESPONDENTS Petition under Article 226 0f the constitution of lndia praying that in the circumstances staled in the affidavit fired therewith, the High court may be pleased to issue an approprrate writ, order or direction more particularry one in the nature of writ of I ,4andamus, decraring the order passed rry the lncome Tax 2 3 4 5 Authorities (National Faceless E-Assessment centre completed the assessment U/S147r.w'sl44readwithSectionl44BofthelncomeTaXAct,l96lvideDlN and Notice No. dated 16-02-2024 ITBA/AST/S/147t2023'2411O61054902(1 ) for theassessmentyear20l5-l6determiningthetotalincomeofRs.S0,l0,000i-as arbitrary'illegal,badinlaw'withoutjUriSdiction'void-ab.initio,violatiVeofthe principlesofnaturaljusticeapartfrombeingVlolativeofArticleSla'19(1)(g)and 265 of the Constitution of lndia and Sec l4BA of the lncome Tax Act' 1 961 ' and consequently set aside the same in the interests of iustice' Counsel for the Petitioner: SRI THANNERU CHAITANYA KUMAR Counsel for the Respondent No'1 & 2: M/s' SAPNA-REDDY' Jr. SC FOR INCOME TAX Counsel for the Respondent No'3 to 5: SRI P'SHASHIDHAR REDDY' SC FOR CENTRAL GOVT. The Court made the following: COMMON ORDER I THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HoNouRABLE sRr *\"rr\"t*orooroaro*u RA*rEsrrwAR RAo WRIT PETITION NOS.229A1 e, 229AA OF 2024 petitions / COMMON ORDER ber Hon,bte Sp,J) Sri Thannenr Chaitanya Kumar, learned counsel, appears for the petitioners, Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, appears for the respondent(s)-rncome Tax Department in w.p.N o.229g1 of 2024 and Ms. B.Sapna Reddy, learned Junior starrding counsel for Income Tax Department, appears for the responden t(s)_Income Tax Departmenl in W.p.No.229gg of 2024 and Sri p. Shashidhar Reddy, learned Standing counsel for centrar Government, appears for respondent(s)_Central Government in both the writ 2. Regarcl being had to the similarity of the question involved, on rhe loint request of the parties, the matters are analogously heard ald decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e AcL, 2021, 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 susta uarrno[ sustain judicizrJ scrutiny. /' bad in law. Since notices ar-e bad t, f.*, ti\" consequential orders are also order dated 14.o9.2023 ln 4. During the < parties agreed *\", . o\"\"t of hearing' lear this court in a batcr tains on this issue -ned counsel for the and other connected I of writ petitions' *''*t n\"''' drawn by r4.og.2o23.The partie tters' decideo o, \". *t'5903 of 2022 of in terms of the com, agreed that this -\"tt' order dated non order dated 14.0e.\";r:: be disposed 5 This Court in the sard W.P.No.2590 3 of 2022, beldas under: \"35. ln view of the aforesaid the procedure ;il;J i'\":ussions, it is bv now very crear that treatins rhe \".r,;-,:;:;\": bv the respondent-oepa.t, 1484, the subsequent o.o\"\"j]l'\"'\"\"\"\"\"r\";;;;;;;:#:t\"ff; undertaken '\"*'',n\" \"ro\",nlllln\" *:= mandatorilv required to be Finance Act, ; ;;:uted proyisions as taid down under rhe that the procedure' .ffin\"\" \"t *hich, we are constrained to hord contravention to the statute , l'.-tn\"-.t\"\"'ondent-Department is in instance. r*\"\"0,r,'n;\"jil l\".jt\" Finance Act, 2021, at the rirst issued by ,n\" ,.r1oi ;;;' direct contravention to the directives supra. re court in the case of Ashish Agarwal. 36- For all the afor proceedings oo*\"\"\"'o reasons' the impugned notices issued and the nor sustainable. .,n by the respondent-Department is neither tenable, being per \"\" ,,., notices so issued and th( aside/quashed' o\"egal' deserves to be .- \"'J procedure adopted quashed, the cor consequence' \"u tnt ''o\"Ji\"i\"t\"ttt:':'iH: Department or.\"r\"n\"\"ou\"nt'\"1 olclers passed by the respondeni wourdarsor\"r*H:'i\"\".i:'ffi\"\"\",\"Ti::\"Tffi:TJi:\"1* are quashing the c the initiation o, ,n,on\"\"Ou\"n,,al order is on the principles that when -srrhcon-.\",\",0.*\",i\"Tii'.f,,,*.,\"'i\"iL::\"\",iJ:ff :'rarrvwrons,the 3 37. The preliminary obiection raised by the petitioner is sustained and all these writ petitions stands allowed on this very iurisdictional issue' since the imPugned notices and orde6 are getting quashed on the point of iurisdiction' we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an apPropriate proceedings' 38. Since the Hon'ble Supreme Gou't 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'\" 6.Inviewoftheconsensusarrived,theimpugnedShow 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 W.P.No.25903 of 2022. of the order dated l4'O9'2O23 in 7 The Writ Petitions are allowed. No costs' Interlocutory applications, if any pending, shalt also stand closed sD/- P PADMANABRES,IiRRX //TRUE COPY// iL _ ro. sEcTKii(OFFtCER 1 . Th_e Assista nt Comr ori\"\",A\")\",iiliE:;;l:;,\"fr :::lr,:,:: jTr{fl\"?,[21i,];{!!prgr,,tncompr ' 3ZZ,',\"frZi,\"JnT*?,,;,i3yy,1r. ,:,' n;:,:,:\"\"\" x*irruiri'iiXila'lfo{^lr* .'ir,il;':;;i##;i::;l{,:,W' \" J^E\"iE;'a:.ffiirr;,:,,rr,r:*u\", o- *,uit nriJi:p:*;:.\" ,,\",\"\" o;;f,;Hs;l \" r, I f rE ?;;;:: :: ^A; / I /, /'l /i 5. The National Faceless Assessment Center, Income Tax Department, New Delhi. t H\"r\":::[,\":ilrJin,tlf.,ooS;ilnmenr' Department or Revenue' tvrinistry or / 7. One CC to SRI THANNERU CHA|TANYA KUMAR, Advocate IOPUCI B. One CC to SRt P.SHASHTDHAR REDDY, SC FOR CENTRAL GOW. loPUCl 9. One CC to Mis. J.SUN|THA, Jr. SC FOR TNCOME TAX [OPUC] '10.One CC to IVI/s. SAPNA REDDY, Jr. SC FOR |NCO|VE TAX tOpUCl 1 1. Two CD Copies BSR GJP P/\"LC.. ./o' J HIGH COURT DATED: 23lOBl2O24 a c t !1_ i.'lr . 25 l,?7 20?l COMMON ORDER WP.Nos.22981 AND 22988 of 2024 ALLOWING BOTH THE WRIT PETITIONS, WITHOUT COSTS P^{C,, :*lq Y*' "