Wp/10523/2024 Of M/S Pacs Surangal Moinabad v. The Income Tax Officer

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) IMONDAY,THE TWENTY SECOND TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE SUJOY ANDTHE HONOURABLE SRI JUSTICE [N.TUKARAMJI] WRIT PETITION NO: 10523 OF 2024 Between: M/s PACS Surangal Moinabad, [Rl/o. ][Kanakamamidi Moinabad, Rangareddy ][-]501 504, Telangana Represented [by its Chief ][Executive ][Officer, P. ][Manohar]Reddy, S/o. tr/r. Chandra Reddy Patlolla. ...pETlTtoNER AND The lncome Tax Officer, Ward 8(1), [Hyderabad, Signature ][Towers, ][Opposite]Botanical Gardens, Sy. No.. 6(P) [of ][Kondapur, ][Sy. ][No.. ][37(P) of ][Kothaguda,]Serilingampally Mandal, [Hyderabad ][- ][500 ][084, ][Ranga Reddy ][District,]Telangana.Botanical Gardens, Sy. No.. 6(P) [of ][Kondapur, ][Sy. ][No.. ][37(P) of ][Kothaguda,]Serilingampally Mandal, [Hyderabad ][- ][500 ][084, ][Ranga Reddy ][District,]Telangana.2Assesiment Unit, lncome [Tax ][Department, National e-Assessment ][Center,]New Delhi, Room No.. [401 ], 2nd [Fioor, E-Ramp, Jawaharlal ][Nehrlu Stadium,]New Delhi - 110 003.New Delhi, Room No.. [401 ], 2nd [Fioor, E-Ramp, Jawaharlal ][Nehrlu Stadium,]New Delhi - 110 003.3The Principal Commissioner of [lncome ][Tax ][- ][2, ][H-yderabad' ][Signalure]Towers, Ofposite Botanical [Gardens, ][Sy. ][No.. 6(P) ][of ][KondaPlr'.Sy-. ][No..]37(P) of Kothaguda, Serilingampally [tVandal, ][Hyderabad ][- ][500 ][084, ][Ranga]Reddy District, Telangana. Towers, Ofposite Botanical [Gardens, ][Sy. ][No.. 6(P) ][of ][KondaPlr'.Sy-. ][No..]37(P) of Kothaguda, Serilingampally [tVandal, ][Hyderabad ][- ][500 ][084, ][Ranga]Reddy District, Telangana. ...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 a Writ of Mandamus or any other appropriate [Writ, ][Order or]Direction, declaring the order [passed ][by ][the ][1st ][Respondent, ][u/s ][147 ][of ][the]lncome Tax Act, 1961, dated [01 ][.O3.2024, ][bearing ][DlN.. ] [lsl147l2O23-]24t1061816976( [1 ]), for the Assessment [Year ][2019 ][- ][20' ][as ][arbitrary, ][illegal, ][bad]in law, void-ab-initio, violative of [the ][principles ][of ][natural ][justice ][apart ][from ][being]violative of Articles 1a, 19(1)(g) [and ][265 ][of ][the constitution ][of ][lndia and sec.]'148A of the lncome Tax Act, 1961 , and consequently set aside the same in theinterests of [justice] lA NO: 1 OF 2024 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, including any recovery, pursuant to the notice issuedby the 1st Respondent, uls 147 of the lncome Tax Act, 1961, dated 01 .O3.2024,bearing DIN.. |rBA/AST lsl14712023-241i06181697 6(1 ), for the Assessment year2019 - 20, pending disposal of the above Writ [petition] Counsel for the Petitioner: SRI A. V, A. SIVA KARTIKEYA Counsel for the Respondents: M/s. SUNITHA REP M/s SUNDARI R plSUpATl(Sr SC for lncome Tax Dept) The Court made the following: ORDER THE HONOURABLE SRI JUSTTCE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE N. TUKARAMJIWRIT PETITION No.1O523 OF 2024 ORDER:(per Hon'ble SP,J) Heard Sri A.V.A.Siva Kartikeya, learned counsel for the petitioner and Ms.Sunitha, representing Ms.Sundari R Pisupati,learned Standing Counsel for Income Tax for the respondents. The ground taken by the learned counsel for ground taken by the learned counsel for taken by the learned counsel for by the learned counsel for learned counsel for for the Counsel for the Petitioner: SRI A. V, A. SIVA KARTIKEYA Counsel for the Respondents: M/s. SUNITHA REP M/s SUNDARI R plSUpATl(Sr SC for lncome Tax Dept) The Court made the following: ORDER THE HONOURABLE SRI JUSTTCE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE N. TUKARAMJIWRIT PETITION No.1O523 OF 2024 ORDER:(per Hon'ble SP,J) Heard Sri A.V.A.Siva Kartikeya, learned counsel for the petitioner and Ms.Sunitha, representing Ms.Sundari R Pisupati,learned Standing Counsel for Income Tax for the respondents. The ground taken by the learned counsel for ground taken by the learned counsel for taken by the learned counsel for by the learned counsel for learned counsel for for the aThe ground taken by the learned counsel for ground taken by the learned counsel for taken by the learned counsel for by the learned counsel for learned counsel for for thepetitioner is that in furtherance of Finan ce Act, 2O2l ,re-assessment process stood modified but the respondents have nottaken care of it and therefore notice issued under Section 148 ofthe Income Tax Act, 1961 cannot sustain judicial scrutiny. Sincenotice is bad in law, the consequential orders are also bad inlaw.taken care of it and therefore notice issued under Section 148 ofthe Income Tax Act, 1961 cannot sustain judicial scrutiny. Sincenotice is bad in law, the consequential orders are also bad inlaw. 3. During the course of hearing, learned counsel for thethe course of hearing, learned counsel for thecourse of hearing, learned counsel for theof hearing, learned counsel for thehearing, learned counsel for thefor thetheparties agreed that curtains on this issue are finally drawn bythis Court in a batch of writ petitions, W.P.No.259O3 of 2O22and other connected matters, decided by common order dated14.O9 .2023. The parties agreed that this matter may be disposedof in terms of the Common Order dated 14.O9.2023:_- During the course of hearing, learned counsel for thethe course of hearing, learned counsel for thecourse of hearing, learned counsel for theof hearing, learned counsel for thehearing, learned counsel for thefor thethe This Court in the sa-id order dated 14 .O9 .2023 tn W.P.No.25903 of 2022, held as under: "35. ln view of the aforesaid discussions, it is by now very clear that theprocedure to be followed by the respondent-Department upon treating theprocedure to be followed by the respondent-Department upon treating thenotices issued for reassessment being under Section 149A, thesubsequent proceedings 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 constrained to hold that theprocedure adopted by the respondent-Department is in contravention tothe statute i.e. the Finance Act, 2021, at the first instance. Secondly, it isalso in direct contravention to the directives issued by the Hon'bleSupreme Court in the case of Ashish Agarwal, supra.the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it isalso in direct contravention 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-Department is n€ither tenable, norproceedings drawn by the respondent-Department is n€ither tenable, norsustainable. The notices so issued and the procedure adopted being perse illegal, deserves to be and are accordingly set aside/quashed. As ase illegal, deserves to be and are accordingly set aside/quashed. As aconsequence, all the impugned orders getting quashed, the consequentialorders passed by the respondent Departmenl pursuant to the noticesissued under Section 147 and 148 would also get quashed and it isorders passed by the respondent Departmenl 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 oI the proceedings itself wasprocedurally wrong, the subsequent orders also gets nullifiedautomatically.automatically. 37. The preliminary obieclion raised by the petitioner 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 slands 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 exercising the powers under Article 142 ofsupra, as a one-time measure exercising the powers under Article 142 ofthe Constitution of lndia, permitted the Revenue to proceed under thesubstituted provisions, and this Court allowing the petitions only on thesubstituted provisions, and this Court allowing the petitions only on theprocedural flaw, the right conferred on the Revenue would remainreserved to proceed further if they so want from lhe stage of the order ofths Supreme Court in the case of Ashish Agarwal, supra.39. No order as to costs.,'ths Supreme Court in the case of Ashish Agarwal, supra.39. No order as to costs.,' 5. In view of the consensus arrived, the impugrred ShowCause notice and consequential orders passed in this writpetition are set aside. Liberty is reserved to both.the parties totake respective stand and to proceed in accordance with law asper paragraph No.38 of the order dated 14.O9.2023 inW.P.No.259O3 of 2022. 6. The writ petition is a_llowed. No costs. Interlocutoryapplications, if any pending, shall also stand closed. SD/. V. HARI ASSISTANT [REGt][S]ARSECTION OFFICER //TRUE COPY// To, 6v HIGH COURT DATED:2210412024 ORDER WP.No.10523 ot 2024 ALLOWING THE WRIT,PETITIONWITHOUT COSTS .'-.';?il 16:$i:3 0 fittv 20zl\.(/{'i,:1'\.:SP/:.1ri: [. ]-. --"5,