Umadevi Bandikatla V. The Income Tax Officer

WP/9601/2024

AI Insights

The case involves Umadevi Bandikatla, the petitioner, challenging the assessment order and related notices issued by the Income Tax Department for the assessment year 2015-16. The petitioner argued that the notices under Section 148 of the Income Tax Act, 1961, and the subsequent assessment order were issued without adhering to the modified re-assessment procedures mandated by the Finance Act, 2021. The respondents included various officials from the Income Tax Department. The court referenced a common order from a batch of writ petitions (W.P.No.25903 of 2022) decided on 14.09.2023, which had similar issues and ruled in favor of the petitioners, setting aside the notices and orders on procedural grounds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 753006 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 16-04-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income-tax Act, Finance Act, 2021, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K AROAM
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Assessment Order; Natural Justice; Procedural Flaw; Re-assessment process; Writ of Mandamus
• Section: 147; 148; 149; 144B; 226

Judgement Text

"t 3403 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY,THE SIXTEENTH DAY OF APRIL TWO THOUSAND AND TWENTY FOUR PRESENf THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 9601 oF 2024 Between: AND 1 Umadevi tandikatla, D/o Vishnumurthy Bandikatla, Aged 59 years, Occ. g-o-c!o_r_ in Govt. Hospital, 16-2-83616t2.' LtC Cotony, Saldabad, Hydeiabad- 500059. ...PETITIONER The^lncome Tax Officer, ard 12(11, Hyderabad, Aaykar Bhawan, Opposite LB Stadium, Basheer Bagh, Hyderabad, Telangana, 'SOOOOq. The Principal Chief Commissioner Of lncome Tax AP And TS, 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No 4O1 , Znd Floor, E- Ramp, Jawaharlal Nehru Stadium, Dethi-110003 .RESPONDENTS 2 J Petition under Article 226 of the Constrtution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue an appropriate writ order or direction more particularly one in the nature of Writ of Mandamus, declaring the Assessn'tent Order dt.1 5.03.2024 passed by the 3d respond ent uts 147 rw s1448 of the lncome-tax Act for A.y. 2015-16 vide DIN No. ITBA/AST/S 114712023-2411062700823(1). which is passed as a consequence of the order passed u/s 14BA(d) dt 18.04.2022 vide DIN No. ITBAJAST/F/148 N2022-2311O42762O17(11 and the notrce u/s 148 dt 18.04.2022 vide DIN No.ITBA,/AST/S 1148 112022- 2311042762540( 1 ), issued by rhe JAo(1st respondent) instead of FAO(3rd respondent). that too contrary to provrsions of section 149 of the Act, as void, illegal, and contrary to the provisions of Income-tax Acl and contrary to the Principles of Natural Justice lA NO: 1 OF 2o?4 Petitron under Sectron '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 furtl.rer proceedings pursuant to the Assessment Order dl-15.O3 z}24passed by the 3rdrespondenl uls 147 r.w.s144B of the lncome-tax Act for A Y 2015-16 vide DIN No ITBA/ASr H 1 47 12023' 241 1062700823(1), Counsel for the Petitioner: SRI DUNDU MANIiOHAN Counsel for the Respondents: SRI K. AROAM REPRESENTING FOR SRI VIJHAY K PUNNA (SENIOR SC FOR ITD) The Court rnade the following: ORDER l/ I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI { I I WRIT PETITION N0.9601 0F 20.24 ORDER: lDer Honbte Sp.J) Heard Sri Manmohan Dundu, learned counsel for the petitioner and Mr. K. Aroam, learned Counsel representing Sri Vijhay K Punna, learned Senior Standing Counsel for Income Tax appearing on behalf of the respondents. 2. The ground taken by the learned counsel for the petitioner is that in furtherance of Finance Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore notice issued under Section 148 of the Income Tax Act, 1961 calnot 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 hnally draw,n by this Court in a batch of writ petitions, W.P.No.25903 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 .2023. 2 4 This Court in the said order dated 14 'O9 '2023 irr W.P.No.259O3 of 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-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 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' supra. 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 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' 37. The preliminary objection 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 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 ! : i 1 3 from the stage of the order of the Supreme Court in the case of Ashish Agan ral, supra. 39. No order as to costs.\" 5. In view of the consensus arriv€d, the impugned Show Cause . notice and consequential orders passed in this writ petition are set aside. Liberty is reserved to both the pa'rties to take respective stand and to proceed in accordance with law as per paragraph No.38 of the order dated 14'O9'2023 in W.P.No.259O3 of 2022. 6. The writ petition is allowed. No costs' Interlocutory applications, if any pending, shall also stand closed' SD/-K.SREERAMA MURTHY ASSISTANT REGI RAR //TRUE COPY// SECTI N OFFICER To, 1 Tlre Income Tax Officer, Ward 12(1), Hyderabad, Aaykar Bhawan' Opposite LB Stacliurn, Basheer Bagh, Hyderabad' Telangana, 500004 2 The Principal Chief Commissioner Of lncome Tax Ap And Ts, 'lOth Floor' - C-Block t t. Towers, 1O-2-3, A.C. Guards, Hyderabad-500004 ' 3 The Assessment Unit, lncome Tax Department,National Faceless - a.rn.i-\"nt Centre, oelhi, Ministry of Finance, Room No' 401' 2nd Floor' E Rurrrp Jawaharlal Nehru Stadium, Delhi-1 10003 4 one cc to SRI DUNDU I 4ANMOHAN, Advocate [OPUC] 5 one CC to SRl. VIJHAY K PUNNA (SENIOR SC FOR ITD) [OPUC] 6 Two CD Copies GBR KKS k HIGH COURT DATED:16/0412024 1i-rr', ti T r,l