Supreme Court In Union Of India v. Ashish Agarwall, The Aforesaid Notice Wa

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) THURSDAY, THE TWENTY EIGHTH DAY OF JULYTWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYANAND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NOS: 28880 AND 28893 OF 2022 W.P.No.28880 of 2022 Between:Sri Tulasi Rao Naineni, S/o. Sri (Late) N. Narayana Rao, H.No.716,Vivekanandanagar Colony, Kukatpally, Hyderabad 500072. ...PETITIONER ANDThe lncome Tax Officer, Ward -11(1), Signature Towers, Opp. Botanical Gardens,Kondapur, Hyderabad 500084. .RESPONDENT Petition Under Article 226 of the Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may bepleased to pass an order or direction especially one in the nature of WRIT OFMANDAMUS holding that the order dated 30.06.2022 [passed ]under section148A(d) of the Act with DIN and Order No. ITBA/COM/F/1712022-2311043686811(1), for Assessment Yeat 2O14-15, and the notice dated30.06.2022 issued under section 148 of the Act with DIN and DocumentNo.ITBA/AST/M|148 112022- 2311943691934(1) for assessment year 2014-15 asbeing illegal, arbitrary and unsustainable on facts and in law being against thespirit of the provisions of section 148A of the Act and consequgntly set aside thesame. |.A.NO:1 OF 2022 Petition Under Section 151 CPC praying that in the circumstances statedin the affidavit filed in support of the petition, the High Court may be pleased tostay all further proceedings pursuant to issuance of notice dated 30.06.2022under section 148 of the Act with DIN and Document No.ITBA/AST/M/148112022-2311043691934( 1 ) for assessment year 2014-15.in the affidavit filed in support of the petition, the High Court may be pleased tostay all further proceedings pursuant to issuance of notice dated 30.06.2022under section 148 of the Act with DIN and Document No.ITBA/AST/M/148112022-2311043691934( 1 ) for assessment year 2014-15. Counsel for the Petitioner : SRI.K.VASANT KUMARCounsel for the Respondents : Ms.K.MAMATA CHOUDARY (SC) W-P.NO: 28893 OF 2022 Between: Sd Tulasi Rao Naineni, S/o. [Sri (Late) N. Narayana Rao, H.No.716']Vivekanandanagar Colony, [Kukatpally, Hyderabad ][- ][500072.] ...PETITIONER AND The lncome Tax Officer, Ward [-1 ][1(1 ]), [Signature Towers, Opp. Botanical ][Gardens,]Kondapur, Hyderabad - 500084. ...RESPONDENT 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 pass an order or direction especially one [in ][the ][nature ][of WRIT ] MANDAMUS holding that the order [dated ][30.06.2022 ][passed under ][section]of the Act with DIN and [Order ][No.ITBA/COMlFl1712022-]14BA(d) 2311043686674(1), for Assessment Year [2013-14, ][and ][the ][notice ][dated]30.06.2022 issued under section [148 ]of [the ][Act ][with ] [and ][Document]No.ITBA/AST/Ml 1 48 I 12022-2311 043691 935(1 ) [for ][assessment ][year ][201 ][3-1 ][4 ][as]being illegal, arbitrary and unsustainable [on facts ][and ][in ][law being against ][the]spirit of the [provisions ]of section 148A [of the ][Act ][and consequently set aside the]same. l.A.NO:1 OF 2022 Petition Under Section 15'1 CPC [praying ]that [in the ][circumstances ][stated]in the affidavit filed in support of the [petition, ]the [High ][Court ][may ][be ][pleased ][to]stay all further [proceedings pursuant ]to issuance of [notice dated ][30.06.2022]under section 148 of the Act with DIN and [Document ][No.]ITBA/AST/M/1 48 [1 ]I 2022-23 I 104369 [1 ]935( [1 ]) [fo ][r ][assessment ][y ][ear ][2O1 ][3-1 ][4.] Counsel for the Petitioner : SRI.K.VASANT Counsel for the Respondents : Ms.K.MAMATA CHOUDARY [(SC)] The Couft made the following COMMON ORDER THE HON'BLE THE CHIEF JUSTICE UJJAL AND THE HONOURABLE M l.A.NO:1 OF 2022 Petition Under Section 15'1 CPC [praying ]that [in the ][circumstances ][stated]in the affidavit filed in support of the [petition, ]the [High ][Court ][may ][be ][pleased ][to]stay all further [proceedings pursuant ]to issuance of [notice dated ][30.06.2022]under section 148 of the Act with DIN and [Document ][No.]ITBA/AST/M/1 48 [1 ]I 2022-23 I 104369 [1 ]935( [1 ]) [fo ][r ][assessment ][y ][ear ][2O1 ][3-1 ][4.] Counsel for the Petitioner : SRI.K.VASANT Counsel for the Respondents : Ms.K.MAMATA CHOUDARY [(SC)] The Couft made the following COMMON ORDER THE HON'BLE THE CHIEF JUSTICE UJJAL AND THE HONOURABLE M WRIT PETITION Nos.2888O & 28893 [of2022] COMMON ORDER:(Per the Hon'ble the Chief Justlce Ujjal Bhtgan) Heard Mr. K.Vasant Kumar, [learned counsel ][for ][the]petitioner and Ms. K.Mamata Choudary, [learned ][Standing]Counsel for Income Tax [Department ][for ][the ][respondent.] 2. Petitioner is aggrieved by orders [dated 30.06.2022]passed by the respondent under [Section ][148A(d) ][of ][the]Income Tax Act, 196 1 [(briefly referred ][to ][hereinafter ][as ][the]Act') for the assessment [years ]2Ol3-14 [and ][2014- ][15.] 3. Petitioner is an assessee under [the Act having ][the]status of an individual. [He ][is ][also ][an ][assessee ][under the'Act]having the status HUF. for the assessment the assessment assessment [[yeat ][2074-15,]][[2074-15,]]Admittedly 4. Admittedly for the assessment the assessment assessment [[yeat ][2074-15,]][[2074-15,]]petitioner as the individual did not file [aly ][income ][tax ][return']Respondent had issued [notice ][to ][the ][petitioner ][on ][17 ][.O4.2O2L]under Section 148 [of ]the [Act. ][Following order ][passed ][by ][the] Supreme Court in Union of India vs. Ashish Agarwall, theaforesaid notice was construed to be notice under Section148A of the Act. Accordingly petitioner was required to showcause the source of investment for the construction of thebuilding called NSN Enclave. Petitioner submitted responseon 27.05.2022 stating that the source of the investment wasadvance received from M/s. Bhavya's Construction privateLimited. In addition, certain portion of the investments camefrom the family savings. These investments were disciosed inthe income tax return filed by the petitioner as HUF for theassessment year 2012-13. Respondent did not accept theexplanation of the petitioner and gave the following reasonsfor such non-acceptance: "(i) The assessee failed to furnish verifiableevidence in support of his claim of the source of investment inthe NSN Enclave.(ii) On perusal of the assessment order copy of theassessee's HUF, it is lound that the assessing officer hasdetected the assessee's undisclosed capital gain ofRs.2,58,54,703/-. Hence, the assessee submission of his HUFreturn of Income and computation for the A.y. 2012- 13 does I{ HCJ & SNJ W.P.Nos.28880 & 28893 of 2022 not bring any supporting evidence for the source of hisinvestment in the NSN Enclave. The assessee has not fi1ed return of income for A.Y.2Ol4-15 artd failed to admit any income for the A.Y.2014-15.Further, in absence of any satisfactory explanation in responseto the letter issued to the assessee on 2O.O5.2O22, it tsconcluded that the total value of above tra-nsaction is incomechargeable to tax in the hands of assessee for AY 2014- 15." 5. Taking the view that income in the form of assetchargeable to tax which had escaped assessment would bemore tharr Rs.SO lakhs, it has been held to be a fit case toinitiate proceedings under Section 147 of the Act andtherefore directed issuance of notice under Section 148 of theAct. Consequently, notice under Section 148 of the Act wasissued on 30.06.2022 itself. Following the proceedings held on the proceedings held on proceedings held on held on on 12.07.2022, 5. Taking the view that income in the form of assetchargeable to tax which had escaped assessment would bemore tharr Rs.SO lakhs, it has been held to be a fit case toinitiate proceedings under Section 147 of the Act andtherefore directed issuance of notice under Section 148 of theAct. Consequently, notice under Section 148 of the Act wasissued on 30.06.2022 itself. Following the proceedings held on the proceedings held on proceedings held on held on on 12.07.2022, 6. Following the proceedings held on the proceedings held on proceedings held on held on on 12.07.2022,learned counsel for the petitioner has liled a memo ofadditional material papers enclosing therewith returns Illedby the HUF for the assessment year 2Ol2-13 onwards uptoassessment year 2016-17. However, the fact remains that forthe assessment year under consideration i.e., assessmentyegr'2014-15, petitioner in his individual status did not fiie tl ti return. Learned counsel for the [petitioner ]submits that [s:ince]there r.r,as no taxable income, petitioner did not file return. We are unable to are unable to unable to to accept such contention ofcontention ofof 7 . We are unable to are unable to unable to to accept such contention ofcontention ofofiearned counsel for the petitioner. The order under Section1a8(d) of the Act is not even at the interlocutory stage. It is ata stage prior to issuance of notice under Section 148 of theAct. The conclusions reached b..,, the respondent are only forthe purpose as to whether it is a fit case for reopening and forissualce of notice under Section 148 of the Act-. These arenot conclusive findings of the respondent. B. Therefore, in the facts and circumstances of thecase, we are not inclined to interfere and interdict theproceedings midway through. Petitioner would have a,ll therights and opportunities to defend himself in the proceedingsunder Sectl on 147 of the Act. If petitioner continues toremain aggrieved thereafter, he has before him a hierarchy ofremedy by u,ay of appeals. In such circumstances, we are notinclined to invoke our writ jurisdiction under Article 226 ofthe Constitution of India I t HC] & SNJW.P.Nos.2888O & 28893 of 2022 5 9 . Writ Petitions are accordingly dismissed. Hou,evcr, there sha1l be no order as to costs. 10. Miscellaneous applications pending, if any, in theWrit Petitions, shall stand closed. SD/.I.NAGALAKSHMIDEPUTY REGISTRAR\//TRUE COPY//?SECTION OFFICERTo1One CC to SRI.K.VASANT KUIVAR, Advocate 2One CC to MS.K.MAMATA CHOUDARY, Advocate ?Two CD Copies 4One spare copyS ASWq HIGH COURT DATED:2810712022 COMMON ORDERWP.Nos.28880 AND 28893 of 2022 nt"*'- i(\-<\:.1-01 liri 2012.' [t:]l:'!. DISMISSING THE WRIT PETITIONSWITHOUT COSTS.at)./Y