Vasudeva Naga Vardhana Kumar Alamuri V. Union of India, Ministry of Finance and The Income Tax Officer, Ward-1, Kothagudem and Assessing Officer, (NFAC) National Faceless Assessment Center Delhi

WP/23436/2024

AI Insights

The case involves Vasudeva Naga Vardhana Kumar Alamuri, the petitioner, challenging the assessment order passed by the Income Tax Department for the assessment year 2016-17. The petitioner argued that the notice issued under Section 148 of the Income Tax Act, 1961, was invalid due to procedural errors following the amendments introduced by the Finance Act, 2021. The respondents included the Union of India, Ministry of Finance, and the Income Tax Officers involved in the assessment. 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 procedural issues. The court's decision was based on the improper application of the reassessment procedures as mandated by the Finance Act, 2021, and the Supreme Court's ruling in Ashish Agarwal, which required adherence to these new procedures.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 803966 (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, Finance Act, 2021, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B MUKHERJEE; J SUNITHA
• Assessee Lawyers: E BABU
• Keywords: Assessment Order; Fundamental rights; Jurisdiction; Natural Justice; Reassessment Process; Writ petition
• Section: 148; 148A

Judgement Text

",/_ [ 3411 I 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: 23436 OF 2024 Between: Vasudeva Naga Vardhana Kumar Alamuri, S/o. China Brahmam, Aged 44 years, Occ Business R/o. 3-'1-1 36/4, Prop. Sri Venkata Manikantha Enterprises, Budidagadda, Kothagudem, Bhadradri Kothagudem District 507 l ol ' Telangana ..PETITT.NER 1. Union of lndia, Ministry of Finance, Rep. by The Principal Chief Commissioner, Telangana. 2. The lncome Tax Officer, Ward-'l , Kothagudem. 3. Assessing Officer, (NFAC) ANational Faceless Assessment Center 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 Certiorari declaring impugned assessment order passed by the 3'd Respondent against the Petitioner for the A.Y. 2016-17 vide DIN No. ITBA/ASTlsl147l2O23- 2411061705152(1) Dt. 281212024 as illegal, wholly without jurisdiction, violative of nalural justice and fundamental rights of the Petitioner under Article 14 and consequently quash the same, restrain the Respondents from further action in pursuance to the impugned assessment order I AND 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 restrain the Respondents from taking further action in pursuance to the impugned assessment order passed by the 3'd Respondent against the petitioner for the A.Y. 2016-17 vide DIN No. |TBA/AST/S|147t2OZ3 - 24t106j705152(j) Dt. 281212024 Counsel for the Petitioner: SRI E. HARI BABU Counsel for the Respondent No.1: SRI B. MUKHERJEE REp SRI GADI PRAVEEN KUMAR Dy. SOLICITOR GEN. OF tNDtA Counsel for the Respondent Nos.2&3: Ms. J. SUNITHA Jr. SC for'lncome tax Department The Court made the following: ORDER I THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION No.23436 0F 2024 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri E.Hari Babu, learned counsel for the petitioner(s), Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department for the respondents-Income Tax Department and Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India for the respondents-Central Government. 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 l48ofthelncomeTaxAct,lg6lcannotsustainjudicial 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 finatly drawn by this Court in a batch of writ petitions, W'P'No'259O3 of 2022 andotherconnectedmatters,decidedbycommonorder I I r 2 dated 14.O9.2O23. Tlrc 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 74.09.2023 in W.P.No.25903 of 2022, held as under: \"35. Ia view of the aforesaid discussio.s, it is by now very clea. that the procedure to be followed by the respondelrt- DepartmeDt upon treatilg the notices issued for reassessment being uader Section 148A, the subsequent proceedings was tnandatorily required to be undertaken under the substituted provisions as laid down under the FinaEce Act, 2021. In the absence of which, we are constraired to hold that the plocedure adopted by the respondent-Department is in contravention to the statute i.e. the Firaace Act, 2O21, at the first instance. Secondly, it is atso in direct contravention to the directives issued by the Hoa'ble Supreme Court in the case ofAshish Agarwal, supra. 36. r.or all the afo.esaid .easons, the impugaed notices issued atrd the proceedings draslr by the respondent-Department is lreither tenable, Dor sustainable. The notices so issued and the procedure adopted beitrg per se illegal, desetves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getthg quashed, the consequential otders passed by the respondetrt DepartEent pursuant to the notices issued urder Section 14? and 148 Eould also get quashed and it is ordered accordiagly. The reason *e are quashing the consequential order is on the principles that when the initiatiol of the proceedings itself was p.ocedurally wrong, the subsequent otders also gets nullified autotuatically. 37. The prelimirary objection raised by the petitioaer is sustained and aU these srrit petitions stands allowed on this very jurisdictioaal issue. Since the impugoed notices and orders are getting quashed on the point ofjurisdiction, we a.e not inclined to proceed further and decide the other issues nised by the petitioner which stands reserved to be raised alrd cotrtended in aa appropriate proceedi[gs. 38. Since the Hotr,ble Sup.eme Court had, in the case of Ashish Agars'al, supaa, as a oDe-time Eteasuae exercising the Irowers under Article 142 of the Constitution of India, .7' 3 permitted the Revenue to proceed uuder th€ substituted provisions, and this Court aUowing the petitions only on th€ procedural tlaw, the tight conferred on the Revenue would reBain reserved to proceed further if they so qrant frotn the stage of the ordet of the Supreme Court ill the case of Ashish Agarwal, supra. 39. No 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 stald and to proceed in accordance with law as per paragraph No.38 of the order dated 14'09'2023 io W.P.No.259O3 of 2022. 6. The writ petition is allowed' No costs' Interlocutory applications, if any pending, shall also stand closed' //TRUE COPY// SD/.V.KAVITHA ASSISTANT REGISTRAR s6r#a SECTION OFFICER To, ,l.ThePrincipalChiefCommissioner,UnionofIndia,tvlinistryofFinance, Telanqana. 2- The lricome Tax Officer, Ward-1 , Kothagudem' 5. n'dr\"J.-ii,q bfficer, (rufnC) ANationat Fa]\"eless Assessment Center Delhi 4. One CC t-o SRl. E. HARI BABU, Advocate [OPU-ul s. 6;; cc i; 5Ri. cAor pnnvtrN KUMAR'Dv. sollclroR GEN oF INDIA IOPUC] o bn\"-cb to Ms. J. suNlrHA , Jr sc FoR INCoME TAX DEPARTMENT toPUCl 7. Two CD CoPies B[/ BSK w i I HIGH COURT DATED:2910812024 ORDER WP.No.23436 of 2024 ALLOWING THE WRITPETITION WITHOUT COSTS R o I€ ltr,E s14 14 0[T 2 - 'Qrr ,r,; q^ r.,4 ul ( 7 C) qcePq\"b tu I t-' rl :t 'o o {' ,/ "