Venkateshwar Rao Ponnamaneni V. Income Tax Officer

WP/23213/2024

AI Insights

The case involves Venkateshwar Rao Ponnamaneni, a professor, who filed a writ petition against the Income Tax Department challenging a notice issued under Section 148 for the assessment year 2017-18. The petitioner argued that the notice was issued by the wrong authority and was not in accordance with the modified re-assessment procedure established by the Finance Act, 2021. The respondents included the Income Tax Officer, the Chief Commissioner of Income Tax, and the Assessment Unit of the National Faceless Assessment Centre. The court referenced a previous common order in W.P.No.25903 of 2022, which had set a precedent on similar grounds, leading to the quashing of the notice and all consequential orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752839 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 27-08-2024
• Assessment Year: misc
• Other Referred Cases: Ashish Agarwal
• Laws Referred To: Income-tax Act, Finance Act, 2021, Article 226 of the Constitution of India, Section 151 CPC
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J SUNITHA
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Jurisdictional issue; Notice; Procedural Flaw; Re-assessment; Writ of Mandamus
• Section: 147; 148; 148A

Judgement Text

"[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY ,THE TWENTY SEVENTH 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: 23213 OF 2024 Between: Venkateshwar Rao Ponnamaneni, S/o. P Hanmantha Rao,Aged about 63 years, Occupation. Professor, H. No. '1 .-8-724141A, Padma Colony, Road No. 1, Nallakunta lvlarket, Hyd era bad-500044 ...PETITIONER AND 1. lncome Tax Officer, Ward-1, Nirmal, lncome Tax Office' Nirmal-504101. 2. The Chief Commissioner of Income Tax, Hyderabad, 1Oth Floor' C-Block, l.T' Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 4O1 ,2\"d Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003. ...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 an appropriate writ, order or direction more particularly one tn the nature of writ of Mandamus, declaring the notice u/s 148 d1.27.O2.2024 vide DIN No. ITBA/AST/S/148-112023-2411061607460(1) issued bv the JAo(1st respondent) instead of FAo(3rd respondent) for A.Y. 2017-18, as void, illegal, and contrary to the provisions of lncome-tax Act and contrary to the Principles of Natural Justice I I I Counsel for the Petitioner: SRl. DUNDU SASHANK MANMOHAN Counsel for the Respondents: Ms. J SUNITHA (JUNIOR SC FOR INCOME TAX) The Court made the following: ORDER 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 pteased to stay all further proceedings pursuant to the notice u/s 148 dt.27.02.2024 vide DIN No. ITBA/ AST/S/1 4B-112023-2411 061607460(1) issued by the JAO(1't respondent) instead of FAC(3'd respondent) for A.Y. 2017-18,and may pass such other order(s) as the Hon'ble Court deems fit and proper in the interests of substantial justice, as otherwise the Petitioner would he put to irreparable loss and severe injury. //.t THE HOIVOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJDSTIWAR RAO WRIT PETITION No. 232L3 0F 20.24 ORDER: (per Hon'ble Justice Sujog paul) Heard Sri Dundu Manmohan; learned counsel for the petitioner(s) and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for the respondents. 2. The ground taken by the learned counsel for the petitioner(s) is.that in lurtherance of Financ e Act,2O2L, 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, 196 1 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 fina1ly drawn 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 o\"gl\"f in terms of the Common Order d,ated. 14.09.2023. dis I I t I 2 4. This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: 'r35. In view of the aforesaid discussioas, it is by now very clear that the procedure to be follolied by the respondent- Department upon treating the notiees issued for reassessment being under Section 148A, the subsequerlt proceedings was mandatorily required to be uldertaken under the substituted provisions as laid down undet the Finance Act,2021- In the absence of $hich, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2O21, at the first instance. Secoadly, it is also in direct colrtravention to the directives issued by the Hon'ble Supreme Cou.t in the case ofAshish Agarrral, supta. 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 iltegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the colsequential orders passed by the respotrdent Department pursuant to the notices issued under Sectiou 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the priaciples 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 sustaiaed and all these writ petitions stands allowed on this very jurisdictional issue. Since the iErpugned notices and orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed fulther and decide the other issues raised by the petitioner which stands teserved to be raised and contended in an app.opriate proceedings. 38. Since th€ 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 India- perEitted the Revenue to proceed under the substituted provisions, and this Cou.t allowiag the petitions or1ly on the procedural flaw, the right colrferred on the Revenue would remai! reserved to proceed fu.ther if they so want ftom the 3 5. In view of the consensus arrived, the impugned Show rvrit petition aie 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.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. VENKAIAH ASSISTANT REGISTRAR //TRUE COPY' $ ----' SECTIdN.OFFICER To, BIV GJP 1 Jl \" !..pryC Tax Officer, Wgrd-1 , Nirmat, Income Tax Office, Nirmal_504.101 . 2. The Chief Commissioner of lncome Tax, Hyderabad, iOth Floor, i glo.k, i.f. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 3. The Assessment Unit, lncohe Tax Department, National Faceless Assessment Centre, Delhi, A/inistry of Finance, Room No. 4O1 ,Znd F6;;,- E_ Ramp, Jawaharlal Nehru Stadium,'Delhi-.1 10003. !. One CC to SRl. DUNDU SASHANK A/AN[/OHAN, Advocare IOPUCI 5. One CC to SRl. J SUNTTHA (JUN|OR SC FOR tNCOIME'TAitAdvocate toPUCl 6. Two CD Copies 5 stage of the order of the Supreme Court i! the case of Ashish Agarq,al, supra- 39. No order as to costs.\" Cause notice and consequential orders, if any, passed in this I I HIGH COURT DATED:2710812024 ORDER WP.No.23213 of 2024 ALLOWING THE WRITPETITION WITHOUT COSTS 6).ri4 1 2,- G 1.1-l E .S I 1.,' (-) c 7:- 2 3 |,ET lfftl v1 !)) "