Constitution Of Lndia And Sec. 148A Of The Lncome Tax Act, 1961 , Andconsequently Set Aside The Same In Lhe Interests Of Justiceconsequently Set Aside The Same v. Prasad (Sc For Tncome Tax

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) WEDNESDAY ,THE TWENTY FOURTH DAY OF APR{LTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY ANDTHE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 10815 OF 2024 Between: Krishna Reddy Mereddy, S/o Amrutha Reddy [trilereddy, ]4Sed_63 [Years, ]_OrccBusiness, [pUci ]8273 Vermont Pl Manassas [VA 20111 USA Rep ][by its ] Holder Kavitha Mereddy, W/o Krishnareddy [Mereddy ][Aged about ][55 ][Years,]Occupation Business, [RJo ]Hno 3 [12 ]5 [2 ][Sri ][Sai Nagar Colony ][Mansoorabad]Hayaihnagar KV Ranga Reddy Telangana 500068 [Telangana, ][lndia]Assessment Yeat 2016-17 ...pETraoNER AND 'l . Offiee Of The lncorne Tax Officer, Ward-g(1), Hyderabad, Te{angana S{at€.2. The Prineipal Chief Commissioner Of lneome [Tax ][Telangana ][And ][AP,]Hyderabad,lT Towers, AC Guards, Masab [Tank, ][Hyderabad]2. The Prineipal Chief Commissioner Of lneome [Tax ][Telangana ][And ][AP,]Hyderabad,lT Towers, AC Guards, Masab [Tank, ][Hyderabad] 3. The Central Board Of Direct Taxes, Represented [By ][lts Chairman,Department]of Revenue, Ministry of Finance, Government [of ][lndia, ][Secretariat ][Buildings,]New Delhiof Revenue, Ministry of Finance, Government [of ][lndia, ][Secretariat ][Buildings,]New Delhi 4. The National Faceless Assessment Center. [lncome ][Tax ][Department, New]Delhi.Delhi. Delhi.5. The Union Of lndia, Represented By [lts ][Secretary ][To ][The]Government,Department of Revenue, [I\/inistry ][of ][Finance, New Delhi]Government,Department of Revenue, [I\/inistry ][of ][Finance, New Delhi] ...RESPONDENTS 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 an appropriate writ, order or direction more [particularly ]one [in]the nature of Writ of Mandamus, declaring the [order ][passed by ][the ][lncome ][Tax]Authorities (National Faceless E-Assessment [Centre completed ][lhe ][assessment]lJlS 147 r/w Section 144-8 of the lncome Tax Act, 1961 vide DIN and [Notice ][No.]dated 04-01-2024 ITBA/AST lsl147l2o23-24l1059389888( [1 ]) [for ][the ][assessment]year 2016-lTdetermining the total income of Rs. 72,00,000/- as arbitrary, illegal,bad in law, without [jurisdiction, ]void-ab-initio, [violative ][of ][the principles ][of ][natural]justice apart from being violative of Articles 14, 19(1 )(g) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961 , andconsequently set aside the same in lhe interests of justiceconsequently set aside the same in lhe interests of justice Counsel for the Petitioner: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. 1&2: M/s. BySAPNA REDDY REpsRt J. v. PRASAD (SC FOR TNCOME TAX) Counsel for the Respondent Nos.3to5: SRI B. MUKHERJEE REpSRI GADI PRAVEEN KUMAR,DY. SOLICITOR GENERAL OF INDIA The Court made the following: ORDER THE HONOURABLE SRI JUSTICE ANDTHE HONOURABLE SRI JUSTICE [N. ]TUKARAMJI WRIT PETITION No.1O815 2024 ORDEB: [(per ]Hon'bte sP,J) Heard Sri T. Chaitanya Kumar, [learned counsel ][for ][the] petitioner, Ms. B. Sapna Reddy, learned counsel [representing Sri]J.V. Prasad, learned Standing Counsel for [Income ][Tax]Department for respondent Nos. L [and ]2 [and ][Sri B. ][Mukheq'ee,]learned counsel representing Sri [Gadi ][Praveen ][Kumar, ][learned]Deputy Solicitor General of India [for respondent ][Nos.3 ][to ][5.] The ground taken by the ground taken by the taken by the by the [[learned counsel ][for ][the]][[for ][the]][[the]] The Court made the following: ORDER THE HONOURABLE SRI JUSTICE ANDTHE HONOURABLE SRI JUSTICE [N. ]TUKARAMJI WRIT PETITION No.1O815 2024 ORDEB: [(per ]Hon'bte sP,J) Heard Sri T. Chaitanya Kumar, [learned counsel ][for ][the] petitioner, Ms. B. Sapna Reddy, learned counsel [representing Sri]J.V. Prasad, learned Standing Counsel for [Income ][Tax]Department for respondent Nos. L [and ]2 [and ][Sri B. ][Mukheq'ee,]learned counsel representing Sri [Gadi ][Praveen ][Kumar, ][learned]Deputy Solicitor General of India [for respondent ][Nos.3 ][to ][5.] The ground taken by the ground taken by the taken by the by the [[learned counsel ][for ][the]][[for ][the]][[the]] 2. The ground taken by the ground taken by the taken by the by the [[learned counsel ][for ][the]][[for ][the]][[the]]petitioner is that in furtleerance of Finance [Act, 2021, ][re-]assessment process stood modilied but [the respondents ][have ][not]taken care of it and therefore [notice issued ][under Section ][148 ][of]the Income Tax Act, 1961 cannot [sustain ][judicial ][scrutiny. ][Since]notice is bad in law, the consequential [orders ][are ][also ][bad ][in]law. During the course of hearing, course of hearing, of hearing, hearing, [[learned ]][[counsel ][for ][the]][[for ][the]][[the]] 3. During the course of hearing, course of hearing, of hearing, hearing, [[learned ]][[counsel ][for ][the]][[for ][the]][[the]]parties agreed that curtains on this [issue ][are ][finall-v ][drawn ][by]this Court in a batch of writ [petitions, ][W.P.No.25903 ][of ][2022]and other connected matters, decided [b1][ common ][order ][dated] 14 .O9.2023. The parties agreed that this matter may be disposedof in terms of the Common Order dated 14.O9 .2023.of in terms of the Common Order dated 14.O9 .2023. 4This Court in the said order dated 14 .O9 .2023 inW.P.No.25903 of 2022, held as under: "35. ln view of the aloresaid discussions, it is by now very clear that theprocedure to be followed by lhe respondent-Department upon treating thenotices issued for reassessment being under Section 148A, thenotices issued for reassessment being under Section 148A, thesubsequent p.oceedings was mandatorily required to be undertakenunder the substituted provisions as laid down under the Finance Act,under the substituted provisions as laid down under the Finance Act,2021. ln the absence of which, we are consfained to hold that theprocedure adopted by the respondentoepartment is in contravention tothe statute i.e. the Finance Act, 2021, at the first instance. Secondly, it isthe statute i.e. the Finance Act, 2021, at the first instance. Secondly, it isalso in direct contravenlion to the directives issued by the Hon,bleSupreme Court in the case of Ashish Agarwal, supra.36. For all the aforesaid reasons, the impugned notices issued and theproceedings drawn by the respondent-Deparlment is neither tenable, norsustainable. The notices so issued and the procedure adopted being perse illegal, deserves to be and are accordingly set aside/quashed. As a36. For all the aforesaid reasons, the impugned notices issued and theproceedings drawn by the respondent-Deparlment is neither tenable, norsustainable. The notices so issued and the procedure adopted being perse illegal, deserves to be and are accordingly set aside/quashed. As aconsequence, all the impugned orders gefting quashed, the consequentialorders passed by the respondent Dspartment pursuant to the noticesissued under Section 147 and 148 would also get quashed and it isorders passed by the respondent Dspartment pursuant to the noticesissued under Section 147 and 148 would also get quashed and it isordered accordingly. The reason we are quashing the consequential orderis on the principles that when the initiation of the proceedings itself wasis on the principles that when the initiation of the proceedings itself wasprocedurally wrong, the subsequent ordors also gets nullifiedautomatically.automatically. 37. The preliminary objection raised by the petltioner is sustained and allthese writ petitions stands allowed on this very jurisdictional issue. Sincethe impugned notices and orders are getting quashed on the point ofjurisdiction, we are not inclined to proceed further and decide the otherissues raised by the petitioner which stands reserved to be raised andcontended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal,supra, as a one-time measure ex€rcising the powers under Article 142 ofsupra, as a one-time measure ex€rcising the powers under Article 142 ofthe Constitution of lndia, permitted the Revenue to proceed under thesubstituled provisions, and this Court allowing the petitions only on thesubstituled provisions, and this Court allowing the petitions only on theprocedural flaw, the right conferred on the Revenue would remain t To, reserved to [proceed ]further if they so [!,Yant ][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 drrived, 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.O9.2023 [in]W.P.No.25903 of 2022. 6The writ petition is allowed. No costs. [Interlocutory]applications, if any pending, shall also stand [closed.] SDI G. SIREESHAASSISTANT REGISTRARSECTIOOFFICER //TRUE COPY// 1. The Office Of The lncome Tax Officer, Ward-9(1), [Hyderabad, Telangana]State.State. 2. The Principal Chief Commissioner Of lneome [Tax ][Telangana ][And ][AP,]Hyderabad,lT Towers, AC Guards, Masab Tank, HyderabadHyderabad,lT Towers, AC Guards, Masab Tank, Hyderabad3. The Chairman, Central Board Of Direct Taxes, [Department ][of ][Revenue,]l\ilinistry of Finance, Government of lndia, Secretariat Buildings, [New ][Delhi]l\ilinistry of Finance, Government of lndia, Secretariat Buildings, [New ][Delhi]4. The Nrtional Faceless Assessment Center, [lncome Tax Department, ][New]Delhi.Delhi. 5- The Secretary to the Government, Union [Of lndia, ][Department ][of Revenue']Ministry of Finance, New DelhiMinistry of Finance, New Delhi 6. One CC to SRl. THANNERU CHAITANYA [KUMAR, ][Advocate ][OPUCI7. One CC to SRl. GADI PRAVEEN KUIVIAR, DY. SOLICITOR rNDrA IOPUC]7. One CC to SRl. GADI PRAVEEN KUIVIAR, DY. SOLICITOR rNDrA IOPUC]s One Cc to SRl. J. V. PRASAD [(SC ]FOR [INCOI\4E ][TAX) ][OPUCI 9. Two CD Copies B I\,1KKSKKS HIGH COURT DATED:2410412024 ORDER WP.No.10815 of 2024 ALLOWING THE WRITPETITIONWITHOUT COSTS 0 7[oB][ r.1I ][S'q]c(fo0 5 uu 2itfif'9't