Ia Nono :1 Of[[2O24 v. Prasad Senior Sc For Income Tax

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) I\/ONDAY, THE TWENTY NINTH DAY OF APRILTWO THOUSAND AND TWENTY FOUR . PRESENT THE HON'BLE SRI JUSTICE SUJOY PAULANDTHE HON'BLE SRI JUSTTCE N. TUKARAMJI WRIT PETITION NOS:11520 1156111568 & 11 579 0F 2024 WP NO: 11 520 0F 2024 Between: Prabhavathi Constructions, Rep.by its Arlanaging partner Vuddanti Srinlvasal^a9,_plo.V,Anjaneyutu, [Oc'c. ][aus-iie:-", ]ndi;Edri b0 years, Rl/o. H.No.1_98 I 85 I 2, S a in asar, Mad ha pu r, Ransa Redd"y 500 b6j, i"r,iirir;;.:i#;;.;l^a9,_plo.V,Anjaneyutu, [Oc'c. ][aus-iie:-", ]ndi;Edri b0 years, Rl/o. H.No.1_98 I 85 I 2, S a in asar, Mad ha pu r, Ransa Redd"y 500 b6j, i"r,iirir;;.:i#;;.; AND 1Assessment Unit,, National Faceless Assessment Centre, lncome Tax-'Department. A/inistrv of Finance,. noorn f.fo.+Oi, ini?oor, e_Hamp, Jawaharlal Nehru Sladium, Delhl 1 i 0 OOs. [-]Assessment Unit,, National Faceless Assessment Centre, lncome Tax-'Department. A/inistrv of Finance,. noorn f.fo.+Oi, ini?oor, e_Hamp, Jawaharlal Nehru Sladium, Delhl 1 i 0 OOs. [-]2Ihe lncome Tax Officer.. Ward 15(1), A.C.Guards, Hyderabad, TelanganaState 500 004.State 500 004. ...RESPONDENTS Petition under Articre 226 of the constitution of rndia praying that in thecircumstances stated l'in the affidavit fired therewith, the High court may bepleased to issue a writ or order or direction, more preferabry in the nature of writof I\,4andamus, hording the order passed by the 2nd respondent herein under sec_circumstances stated l'in the affidavit fired therewith, the High court may bepleased to issue a writ or order or direction, more preferabry in the nature of writof I\,4andamus, hording the order passed by the 2nd respondent herein under sec_148A(d) of the lncome Tax Act, dated. 23.O4.2O22 with DIN NoticeNo.A/3A/AST/Fl148Ar2o22- 23t1o42828841(1) for the A.y. 2018-19 as iilegar,arbitrary, bad in Law and violation of principles of Natural Justice apart from beingarbitrary, bad in Law and violation of principles of Natural Justice apart from beingviolative of Provisions of sec.14gA and 149 of the Act also contrary to the circularissued by cBDT and provisions of sec.lsrA of the Act consequenfly set aside thesameissued by cBDT and provisions of sec.lsrA of the Act consequenfly set aside thesame lA NO: 1 oF 2024 Petition under Section 'l 51 cpc praying that in the circumstances stated inthe affidavit filed in support of the petition, the High court may be preased to Suspend [the ][Operation of the ][Order ][dated dated ][23 o4'2O22 ][with ] [Notice ][N o']ITBA/AST/Fl14BAl2o22-2311042828841(1)fortheA.Y'2o1B.19passedbythe2nd respondent, [pending ][disposal ][of ][the ][above ][writ ][petition] Counsel [for ][the Petitioner: ][Ms" ] Counsel [for ][Respondents: Ms' B' ] [REDDY' COUNSEL FOR]SRI J. V, SENIOR SC WP NO: [1][1561 ][0] [2024] Between: Katta venkateswara [Rao, s/o.Katta ][satyanarayana, ][Aoed ][at)out ][48 ][years']haveii [( ]Ru ral)' [Khammam]R/o H. No.4-2-46lA, [Srinaga-r' ][t;[;; ii;;;a'd' ]b-i.trl"i, [f"trngana ][State-507 ][002 ]...pEIroNER ...pEIroNER AND 1Assessment [Unit, National Faceless Assessment ][Centre ][lnconle ][Tax]Deoartment. Ministry [ot ][ri"rfiiJ.Ho;; ][N;;0i ][' ][2nd ][floor' ][Ramp' Jawaharlal]Nehru Stadium, [[Delhi -110 003']][[Khammam-So7 003']]Deoartment. Ministry [ot ][ri"rfiiJ.Ho;; ][N;;0i ][' ][2nd ][floor' ][Ramp' Jawaharlal]Nehru Stadium, [[Delhi -110 003']][[Khammam-So7 003']] Nehru Stadium, [[Delhi -110 003']]ifr"'ri,i'r.i1'ii [oni."t, ][wJ'oIr, ][Avakar ][Bhavan' ][[Khammam-So7 003']]State ifr"'ri,i'r.i1'ii [oni."t, ][wJ'oIr, ][Avakar ][Bhavan' ][[Khammam-So7 003']]State Telangana 2 -,.RES'.NDENTS ...pEIroNER AND 1Assessment [Unit, National Faceless Assessment ][Centre ][lnconle ][Tax]Deoartment. Ministry [ot ][ri"rfiiJ.Ho;; ][N;;0i ][' ][2nd ][floor' ][Ramp' Jawaharlal]Nehru Stadium, [[Delhi -110 003']][[Khammam-So7 003']]Deoartment. Ministry [ot ][ri"rfiiJ.Ho;; ][N;;0i ][' ][2nd ][floor' ][Ramp' Jawaharlal]Nehru Stadium, [[Delhi -110 003']][[Khammam-So7 003']] Nehru Stadium, [[Delhi -110 003']]ifr"'ri,i'r.i1'ii [oni."t, ][wJ'oIr, ][Avakar ][Bhavan' ][[Khammam-So7 003']]State ifr"'ri,i'r.i1'ii [oni."t, ][wJ'oIr, ][Avakar ][Bhavan' ][[Khammam-So7 003']]State Telangana 2 -,.RES'.NDENTS Petition [under ][Article ][226 ][of ][lhe ][Constitution ][of ][lndia ][praying ][that in ][the]circumstances [.161sfl ][rin the ][affidavit ][filed ][therewith' ][the ][High ][Court ][may ][be]pleased to issue [a ][Writ ][or order or ][direction' ][more preferably ][in ][the ][nature of Writ]of Mandamus, [holding ][the order ][passed by ][the ][2nd respondent herein under ][Sec']of [the ][lncome ][Tax ][Act' ][dated ][25 ][03 ][2023 ][with ] [Notice]148A(d) No.ITBA/AST/Ft148N2o22.2311051276236(1)fortheA.Y-2015.1e'relevanttotheAN 2016-17 [as ][illegal; ][arbitrary, ][bad ][in ][Law ][and ][violation ][of ][Principles ][of ][Natural]Justice apart [from ][being violative ][of ][Provisions ][of ][Sec ][148A ][and ][149 ][of ][the ][Act]also contrary [to ][the ][Circular ][issued ][by ] [and ][provisions ][of ][S;ec ][151A ][of ][the]Act consequently [set aside ][the ][same ][and ][to pass] IA NONO:1 OF [[2O24]] IA NONOOF [[2O24]]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]the [Operation ][of ][the ][Order dated ][dated25 ][03 ]['2023 ][tlith ] [Notice]Suspend No.ITBA/AST/F [t148A12022-23t1051276236(1) ][for the ] [2015-16 ][relevant ][to ][the]A.Y 2016-17 [passed by the ][2nd ][respondent' ][pending disposal ][of ][the ][above ][writ]petition Counsel for the petitioner: Ms.. AyyAGARt JAYASHREE Counsel for Respondents: lVls. B. SAPNA REDDy, COUNSEL FORSRI J. V. PRASADSENIOR SC FOR INCOME TAX WP NO: 11568 0F 2024 Between: Vangala Anil Kumar Redcly, S/o R/o"H. No. 1 -1 00, Kannekat, r.riorrin"Ji, V.Narsimha Reddy, Aged about ["rvl ]6;ffj' -'ddd ;;8, [.T;tfi ]49 vears.:;.; .PETITIONER AND 1. Assessment Unit, National Faceless Assessment Centre, lncome TaxDepartment, Ministry of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^R""; N;;di, z"Jtiii.i,'dnrii,d,-^N;;di, z"Jtiii.i,'dnrii,d,-^z"Jtiii.i,'dnrii,d,-^[[" ][']][[']]Department, Ministry of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^R""; N;;di, z"Jtiii.i,'dnrii,d,-^N;;di, z"Jtiii.i,'dnrii,d,-^z"Jtiii.i,'dnrii,d,-^[[" ][']][[']] Department, Ministry of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^R""; N;;di, z"Jtiii.i,'dnrii,d,-^N;;di, z"Jtiii.i,'dnrii,d,-^z"Jtiii.i,'dnrii,d,-^_ [Jawahartat ][Nehru ][Siadium, ]Dettri [_ ]i iO OOi. [[" ][']][[']]2. The lncome Tax Officer, Ward - 1, f.reiiniif Under Bridge, Nalgonda _ 508001, Telangana State.2. The lncome Tax Officer, Ward - 1, f.reiiniif Under Bridge, Nalgonda _ 508001, Telangana State. Department, Ministry of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^of Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^Finance, R""; N;;di, z"Jtiii.i,'dnrii,d,-^R""; N;;di, z"Jtiii.i,'dnrii,d,-^N;;di, z"Jtiii.i,'dnrii,d,-^z"Jtiii.i,'dnrii,d,-^_ [Jawahartat ][Nehru ][Siadium, ]Dettri [_ ]i iO OOi. [[" ][']][[']]2. The lncome Tax Officer, Ward - 1, f.reiiniif Under Bridge, Nalgonda _ 508001, Telangana State.2. The lncome Tax Officer, Ward - 1, f.reiiniif Under Bridge, Nalgonda _ 508001, Telangana State. Petition under Articte 226 of the Constitution of tndia ,rrr;frtil3i",;tlil:circumstances stated,in the affidavit fired therewith, the High court may bepleased to issue a writ or order or direction, more preferabry in the nature of writof Mandamus, hording the order passed by the 2nd respondent herein under sec.pleased to issue a writ or order or direction, more preferabry in the nature of writof Mandamus, hording the order passed by the 2nd respondent herein under sec.148A(d) of the rncome Tax Act, dated.19.04.2022 with DrN NoticeNo.IrBA/AST/Fr14BAt2o22- 23r1042783070(1) for the F.y.2o14-1s rerevant ro theA.Y. 2o15-16 as iflegar, arbitrary, bad in Law and vioration of principres of NaturarNo.IrBA/AST/Fr14BAt2o22- 23r1042783070(1) for the F.y.2o14-1s rerevant ro theA.Y. 2o15-16 as iflegar, arbitrary, bad in Law and vioration of principres of NaturarJustice apart from being viorative of provisions of Sec.148A and .r 49 of the Actalso contrary to the circurar issued by GBDT and provisions of Sec.151A of theAct consequently set aside the sameAct consequently set aside the same 1A NO: 1 oF 2024 Petition under section 151 cpc praying that in the circumstances stated inthe affidavit fired in support of the petition, the High court may be preased tosuspend the operation of the order dated. dated.l g.o4.2o22 with DrN NoticeNo.IrBA/AST/F1148N2022-23t1o427\3oro(1) for the F.y.2014-1s retevant to theA Y 201 5-1 6 passed by the 2nd respondent, pending disposar of the above writpetition Counsel for the Petitioner: Ms.. AYYAGARI JAYASHREE Counsel for Respondents: SRI VIJHAy K. pUNNA SENIOR SC FOR INCOME TAX -'- .31 "' WPNO: [11579][ oF ][2024] Between: Katta Venkateswara [Rao, ][S/o.Katta ][S,atyanarayana, ][Ase{ ][at,out.,4B ][years,]Rio. H No.4-2-4Oln, [Sriilba=r'6ofony, ][t<nanapuram haveli ][(Rurrrl) ][Khammam]ijiitrict, [retangana ][State ][- ][507 ][0o2' ]...pErroNER ...pErroNER AND 1. Assessment [Unit, National Faceless Assessment ][Centre' ][lncome ][Tax][[2nd ][floor' ][E-Ramp']][[floor' ][E-Ramp']][[E-Ramp']][[2nd ][floor' ][E-Ramp']][[floor' ][E-Ramp']][[E-Ramp']] Assessment llenartment. ti,tinistrv [oi iinance, ][Room ][No ][40'1 ]' [[2nd ][floor' ][E-Ramp']][[floor' ][E-Ramp']][[E-Ramp']][['1 ]][10 ][003j]llenartment. ti,tinistrv [oi iinance, ][Room ][No ][40'1 ]' [[2nd ][floor' ][E-Ramp']][[floor' ][E-Ramp']][[E-Ramp']][['1 ]][10 ][003j] Ir"iri rrrut Nenru Nenru [[S(adium, Delhi ][- ]][[- ]][['1 ]][10 ][003j] Ir"iri rrrut Nenru Nenru [[S(adium, Delhi ][- ]][[- ]]2. The lncome [rrx ][oniSE']WiJ-'i ]' [nvir'* ][art'van' ][Khammam ]['507 ][003']State. State. Telangana ...RESPoNDENTS PetitionunderArticle226oftheConstitutionoflndiaprayingthatinthecircumstances [stated ][i ][in ][the ][affidavit ][filed ][therewith' ][the ][High ][Court ][may ][be]pleased to issue [a ][Writ ][or order or ][direction' ][more preferably in ][the ][nature of Writ]of Mandamus, [holding ][the ][order passed by ][the ][2nd ][respondent herein ][under]Sec.'148A(d) [of ][the ][lncome ][Tax ][Act ][dated'06 ][04 ][2022 ][with ] [Notice]No.ITBA/ASTF148At2o22-23t1o42584724(1)fortheA.Y.2o14-l5relevanttotheA.Y 2015-16 [as ][illegal, arbitrary, bad ][in ][Law ][and ][violatton ][of ][Principles ][of ][Natural]Justice [apart from being ][violative ][of ][Provisions ][of ][Sec 148A ][and ][149 ][of the ][Act]also contrary [to ][the Circular ][issued ][by ] [and ][provisions ][of ][Sec'151A ][of ][the]Act consequently [set ][aside the ][same] lA NO:1 OF 2024Petition underSection 151 [CPC praying ][that ][in ][the ][circumstances stated ][in]the affidavit [filed ][in Support of ][the ][petition, the High Court ][may ][be pleased ][pleased]to Suspend [the ][Operation ][of ][the ][Order ][dated ][dated ]['0 ][6 ]['o4'2O22 ][rvith ] [Notice]No.ITBA/AST/F1148N2o22-2311042584724(1)fortheA.Y.2014-1{jrelevanttotheA.Y 2015-16 [passed ][by ][the ][2nd respondent' ][pending disposal ][of ][the ][above writ]petition Counsel for [the Petitioner: Ms" ] Counsel for [Respondents: Ms' B' ] [REDDY' COUNSEL FOR]SRI J. V. PRASADSENIOR SC The Court [made the ][following: ] ..d-.'.n.t [.]7 .t THE HONOURABLE SRI JUSTTCE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE N. TUKARAMJI WRITPETITION NOs.1l52O 11s5111568 & 11579 0F 2024 COMMON ORDER: (per Hon'ble Jushce Sujog paul) Ms. Jayashree, learned counsel appears lbr thepetitioner(s), Ms. B. Sapna Reddy, iearned counsel representingSri J.V. Prasad, learned Standing Counsel for the respondentsIncome Tax Department in W.p.Nos. 11520, 11561 & 11579 of2024 ar,d Sri Vij hay K punna, learned Senior Standing appearsfor the respondents-lncome Tax Department in W.p.No. 1 156g of2024. 2. Regard being had to the similarity of the questioninvolved, on the joint request of the parties, the matters areanalogously heard ald decided by this common order. 3. It is common ground taken by the learned counsel forthe petitioner(s) that in furtherance of Financ e Act, 2O2I, re_assessment process stood modified but the respondents have nottaken care of it and therefore notices issued under Section l4gof the Income Tax Act, 1961 cannot sustain judicial scrutiny.Since notices are bad in law, the consequential orders are alsobad in law. 4. During the course of hearing, [learned counsel ][for ][the]parties agrced that curtains on this [issue ][are ][final1y ][drarvn by]this Court in a batch of [lr'rit ][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 ][14.09.2O23.] 4. 5. This Court in the said order [dated ][14.09.2023 in]W.P.No.25903 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, ][2O21, ][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]Department 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. 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]Department 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 obiection raised by the [petitioner is sustained ][and]all these writ [petitions ]stands allowed on this [very ]iurisdictional [issue.]Since the impugned notices and orders are getting [quashed ][on ][the]point of iurisdiction, we are not inclined to proceed further and [decide] \ the other issues raised by the petitioner which stands reserved to beraised and contended in an appropriate proceedings.raised and contended in an appropriate proceedings.38. Since the Hon,ble Supreme Coud had, in the case of AshishAgarwal, supra, as a one-time measure exercising the powers underArticle 142 of the Constitution of lndia, permitted the Revenue toproceed under the substituted provisions, and this Court allowing thepetitions onry on the procedurar fraw, the right conferred on theArticle 142 of the Constitution of lndia, permitted the Revenue toproceed under the substituted provisions, and this Court allowing thepetitions onry on the procedurar fraw, the right conferred on theRevenue would remain reserved to proceed further if they so wantfrom the stage of the order of the supreme court in the case of AshishAgarwal, supra.39. No order as to costs.,,Agarwal, supra.39. No order as to costs.,, 6. In view of the consensus arrived, the impugned ShowCause notices and consequential orders passed in this batch ofwrit petitions are set aside. Liberty is reserved to both the partiesto take respective stand and to proceed in accordance with lawas per paragraph No.3g of the order dated 14.09.2023 inW.P.No.259O3 of 2022. 7. The writ petitions are allowed. No costs.Interlocutoryapplications, if any pending, shall also stand closed. SD/.C.PRAVEEN KUMARASSISTANT REGISTRAR//TRUE COPYIIsEcTtoN oFFtcER To, HIGH COURT DATED: [2910412024] lHE 14:o[R]6(oo2 a ,tuu :zr/zto*oespATT;HEO COMMON WP NOS: [11520,11561,11568 ][& ][11579 OF 2024] J10 ALLOWING WITHOUT