Vempati Venkateshwarlu V. Union of India and Ministry of Finance and Commissioner, Telangana and The Income Tax Officer, Ward 1, Khammam

WP/25463/2024

AI Insights

The case involves Vempati Venkateshwarlu, the petitioner, challenging an assessment order issued by the Income Tax Department for the assessment year 2016-17. The petitioner argued that the reassessment process followed by the respondents did not comply with the modified procedures under the Finance Act, 2021, and thus, the notice issued under Section 148 of the Income Tax Act, 1961, was invalid. 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 found the procedures adopted by the Income Tax Department to be illegal and unsustainable. The court's decision was based on the jurisdictional error in the issuance of the notices and the subsequent proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 820504 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 20-09-2024
• 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: P KIRAN; B REDDY
• Assessee Lawyers: E BABU
• Keywords: Assessment Order; Fundamental rights; Jurisdiction; Natural Justice; Re-assessment process; Writ petition
• Section: 147; 148; 14

Judgement Text

"[ 3411 ] I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY,THE TWENTIETH DAY OF SEPTEIUBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 25463 OF 2024 .t Between: AND 1 2 Vempati Venkateshwarlu, , S/o.. Vgqpati Janardhan, Aged 42 years, Occ. Businesss, Rlo.6-22, Warangal X Road, yedulapuraml Xhammam Rural, Khammam District - 507003. ...PETITIONER Union of lndia. IUinistry of Finance, Cornmissioner. Tela nga na. The lncome Tax Officer, Ward 1 Kham,.nar\"n Rep. by The Prrncrpai Chief ...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 partrcularly in the nature of certiorari declaring impugned assessment order passed by the 3rd Respondent against the Petitioner for the A.Y. 2016-17 vide DIN No. |rBA/ASTlst14ill2o23- 2411061105756(1) Dt. 1910212024 as iltegat, whoily without jurisdiction, viotative of natural 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 lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the clrcumstances stated in the affidavit filed in support of the petition, the High Court may be pleased restrain the Respondents from taking further action in pursuance to the impugned assessment order passed by the 3rd Respondent against the Petitioner for the A.Y.2O16-17 vide DIN No. ITBA/AST/S/147112023- 24t 1 061 1 05756( 1 ) Dt. 1 9102t2024 Counsel for the Petitioner: SRI E. HARI BABU Counsel for the Respondent No.1: SRI P. SHASHI KIRAN Counsel for the Respondent No.2: Ms. B. SAPNA REDDY, Jr. SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER THE HONOURABLE SRI .IUSTICE SUJOY PAUL rHE HoNouRABLE sRr Jusrrc\"fl?ou*u RAJESH*AR RAo WRIT PETITION No.25463 F 2024 o ORDER: (per Hon,bte Justice Sujog paul) Heard Sri E. Hari Babu, learned counsel for the petitioner(s), Sri p. Shashi Kiran, Iearned Standing Counsel, for respondent No,1 and Ms. B Sapna Reddy, learned Junior Standing Counsel for Income Tax Department, for respondent No.2 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finarrc e Act, 2021, re- assessment process stood modified but the respondents have not taken care of it and therefore, notice rssued under Section l4g of the Income Tax Act, 1961 cannot 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 fina-lly drawn by this court in a batch of writ petitions, w.p.No.2590 3 of 2022 q4d other connected matters, decided by common order I t .:7,,, / 2 dated 14.09.2023. 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 14.09.2023 rn W.P.No.259O3 of 2022, held as under: \"35- In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respo[dent- Departmeut upon treating the Dotices issued for reassessme[t being under Sectioa 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid dowD uDder the Finance Act,2021. IE the absence of which, we are constrained to hold that the procedure adopted by the respondeDt-Department is in contravention to the statute i.e. the Finance Act, 2O21, at the first irstance. Secoadly, it is also in direct contravention to the directives issued by the Hotr'ble supreEe Court in the case ofAshish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawE by the respondeot-DepartEent is neither tenable, r1or sustainable. The notices so issued and the procedure adopted beiag per se illegal, deserves to be and are-aceordingly set aside/quashed. As a consequence, all the imfugned orders getting quashed, the corsequential orders passed by the respoldent Department pursuaEt to the notices issued under section 147 alld 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequeutial order is on the principles that shen the initiatioo of the proceedings itself was procedurally ttrrong, the subsequent orders also gets nullified autoEatically. 37, The prelimiaary objection raised by the petitioner is sustained and all these writ petitions staads allowed on this very jurisdictional issue. Since the itrpugned notices and orders are getting quashed on the poitrt ofjurisdiction, we are not iaclined to proceed further aad decide the other issues raised by the petitioner which staads reserved to be raised and contended in an appropriate proceedings. 3E. since the Hon'ble Supreme court had, in the case of Ashish Agarwal, supra, as a one-time ,treasure exercising the _pgwers under Article 142 of the Constitution of India, ( ( 3 permitted the Reverue to proceed under the substituted provisions, arld this Court allorriEg the petitions only on the procedural ,law, the right coEferred on the Revenue would reEain reseryed to proceed further if they so Eatrt from the stage of the order of the Supreme Court in 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 stand and to proceed in accordance with law as per paragraph No.38 of the order dated 14.09.2023 in W.P.No.25903 of 2022 6. The Writ Petition is allowed. No costs. Interlocutory applications, if any pending, shall a_lso stand closed. sD'- P.cr{:ru+f$ P SHAMBA -, ctsrnen ,/ HU IITRUE COPY/I SEC OFFICER The Principal Chief Commissioner' Union of lndia' Min g1#gpS*Fffi HfriffiiHiFr'ts31\"' istry of Finance' To, LS 1 a 4 ( M B / rd HIGH COURT DATED:2010912024 ORDER WP.No.25463 of 2024 ALLOWING THE WRITPETITION WITHOUT COSTS Js 't H E s'Irr€ ) o t 1i 0EC zut z o t * oE5P.41r;rr r-l) I b // /zo24 "