Tummala Santosh Reddy and Jaheeda Mohammed V. The National Faceless Assessment Center, Income Tax Department, New Delhi, India and Income Tax Officer Ward 4(1), Hyderabad and The Assessment Unit, Income Tax Department, Ministry of Finance, Government of India, New Delhi

WP/11494/2024

AI Insights

The case involves two writ petitions filed by Tummala Santosh Reddy and Jaheeda Mohammed against the National Faceless Assessment Center and other respondents, challenging the legality of reassessment orders issued by the Income Tax Department. The petitioners argued that the reassessment notices and orders were issued without following the proper legal procedures as required by the Finance Act, 2021, and were therefore arbitrary and violated their rights under Article 14 of the Constitution of India. The court referenced a previous decision in W.P.No.25903 of 2022, which had set a precedent on the procedural requirements for reassessment under the amended law.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 688376 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-04-2024
• 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, Section 147 of the Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIJHAY PUNNA; J SUNITHA; GADI KUMAR
• Assessee Lawyers: M DEEPAK
• Keywords: Arbitrary; Illegal; Income Tax; Reassessment; Violation of Article 14; Without jurisdiction; Writ of Mandamus
• Section: 147; 148; 148A(d)

Judgement Text

"[ 3403 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) I/ONDAY, THE TWENTY NINTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION Nos. 11435 and 11494 OF 2024 WRIT PETITION NO.11435 ot 2024 Between: Tummala Santosh Reddy, S/o. Tummala Bakka Reddy, Aged about 43 Years 3-4-1005/3, Samyukta Pride Enclave, Barkhatpura, Hyderabad - 500027 ...PETITIONER AND 1 The National Faceless Assessment Center, lncometax Department, New Delhi, lndia lncome Tax Officer Ward 4(1), Hyderabad The Assessment Unit, lncome Tax Department Ministry of Finance, 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 a writ of mandamus declaring the order under Section 148A(d) dated 12-04-2022 bearing ITBA/AST/F/148A12022-2311042715252(1), the consequent notice dated 12-04-2022 u/s. 1 48 bearing ITBA/AST/S/1 4B 1 12022- 231 1 0427 17 390(1 ) and the consequent Reassessment order dated O3-O4-2O24 bearing ITBAAST/S/14712023-2411063884577(1), as being void, illegal, arbitrary, without jurisdiction, violate of Article '14 of the Constitution of lndia and consequently set aside the same. 2 J 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 all furlher proceedings including collection of tax pursuant to the Reassessment order dated O3-04-2024 bearrng ITBA/AST/S/i 4 712023- 2411063884577 (1) Counsel for the Petitioner: SRI M. NAGA DEEPAK Counsel for the Respondents: SRI VIJHAY K pUNNA (SENIOR SC FOR ITD) Counsel for the Respondent No.3: SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 11494 OF 2024 Between: AND 1 Jaheeda lVlohammed, D/o. Samiullah L,4ohammed, Aged about 40 years, Rlo.17-2-80, Suddapalli Donka, Old Guntur, Guntur 522001 ...PETITIONER The National Faceless Assessment Center, lncome{ax Department, New Delhi, lndia lncome Tax Officer, W ard 2 (1 ) Hyderabad The Assessment Unit, lncome Tax Department Ministry of Finance Government of India New Delhi ...RESPONDENTS 2 3 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 issue a writ, order or direction more particularly in the nature of a writ of mandamus declaring the order under section 14BA(d) dated 2110412022 bearing lTBAlASTlFll4BA|2O22-2311042801171(1), the consequent notice dated 2110412022 u/s 148 bearing lrBA/AST/s/148 1t2022- 23t1042801320(1) and the consequent Reassessment order dated 2l lO2l2O24 bearing lrBA/AST/S/1 47 I 2023-24 I 1 061 579953( 1 ), as being void, illegal, arbitrary, without jurisdiction, violate of nn,\",\" , O of the Constitution of lndia and consequently set aside the same. lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed rn support of the petition, the High Court may be pleased to stay all further proceedings including collection of tax pursuant to the Reassessment order dated 27 10212024 bearing ITBA/AST/S/1 47 12023-2411061 579953(1 ). Counsel for the Petitioner: SRI M. NAGA DEEPAK Counsel for the Respondent No.1 and 2: MS. J. SUNITHA REPRESENTING FOR MS. SUNDARI R PISUPATI (Sr SC for lncome Tax Dept) Counsel for the Respondent No.3: SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA The Court made the following: COMMOM ORDER THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NOs.11435 &,11494 OF 2024 COMMON ORDER: lper Hon'bte.Justr.., Sttlog Ptrutl Sri M. Naga Deepak, lcarned counsel appears for the petitioner(s), Sri Vijhay K Punna, learned Senior Standing appea-rs for the respondents Income Tax Department 1n W.P.No. 11435 of 2024, Ms. J. Sr-rnitha, learned Junior Standing Counsel representing Ms. Sundari R. Pisupati, learned Senior Standing Counsel lor the responden ts- lncome Tax Department in W.P.No.ll494 of 2024 and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for the respondents-Union of lndia in both the writ petitions. 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 .) It is common ground taken by' the learned counsel for the petitioner(s) tl-rat in furtherance of Finance Act, 2021 , re- assessment process stood modified but the respondents have not taken care of it and therefore notices issued under Section l4B of the Income Ta;r Act, l96 l cannot sustain judicial scrutiny 2 Since notices are bad in lau', the consequential orders are also bad in law. 4. During the course ol hearing, learned counsel for the parties agreed that curtains on this issue are linally drawn by this Court in a batch of u,rit petitions; W.P-No.259O3 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 -O9.2O23. 5 This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: \"35. ln view of the aforesaid discussions, it is by now very cleaa 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 are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Acl, 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' supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Departrn€nt is n€ither 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 o.ders 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 accordingly. 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. 3 37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands alloryed on this very jurisdictionat issue. Since the impugned notices and orders 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 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.\" 6 In view of the consensus arrivcd, thc impurgned Show Cause notices arld consequential orders passed in tl-iis batch of writ petitions are set aside. Liberty is rescrved to botlt the parties to take respective stand and to proceed in accordance with law as per paragraph No.38 of the order dated 11.09.2023 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, TJ MR 1 2 3 4 6 7 8 ^'1?5I^1iT'#t',3vR=^'J //rRUE coPYil $ SECTION OFFICER The National Faceless Assessment Center, lncome-tax Department, New Delhi, lndia lncome Tax Officer Ward 4(1), Hyderabad The Assessment Unit, lncome Tax Depa(ment Ministry of Finance, Government of lndia New Delhi 9ne QQ to Sri M. Naga Deepak, Advocate tOpUCl One CC to Ms. Sundal R Pisupati, SC for lncome Tax[OpUC] 9n. 99 to Sri Vijhay K Punna (SEN|OR SC for tTD) tOpUCl ' One CC to Sri Gadi Praveen Kumar, Deputy Solicitor b.ne.at of lndia[OpUCl Two CD Copies @ HIGH COURT DATED:2910412024 COMMON ORDER 3\" 2a ,Jun ZMI r riE S14 ,'€. uEo (S ( z a I t oT SPA TC * WRIT PETITION Nos. 11435 and 11494 OF 2024 ALLOWING THE WRIT PETITIONS WITHOUT COSTS. (ntle> Goa- o k "