Wp/12702/2024 Of Mrs. Arunmyee Pasumarthy v. The Income Tax Officer

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD, (Special Original Jurisdiction) I FRIDAY, THE THIRD DAY OF MAYTWO THOUSAND AND TWENTY FOURi IPRESENT THE HONOURABLE SRI JUSTICE SUJOY PAULANDAND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 127020F 2024 Between: Mrs., Arunmyee. Pasumarthy, W/o [pVSR ]Murthy, Aged 51 years, Occ. Self_gnployed. and.... Company Director, R/o.Villa No.26, Luxurb Greens,gnployed. and.... Company Director, R/o.Villa No.26, Luxurb Greens,Opp.Kendriya Vidyalaya, New Bowenpally, Secunderabad _ 500 Oi 1,Telangana.Telangana. ...PETITIONER o*o ' 1. The lncome Tax Officer, Ward 11(1), Hyderabad, Room No.507,Sth F loor. [Signature Tower ][Towers, ][Kondapur, ][Hyderabad-SOO0g4.]2. The Principal.Commissioner Of lncomd Tax 2, 6th floor, Signature TowerTowers, Kondapur Hyderabad-TelanqanaTowers, Kondapur Hyderabad-Telanqana 3. The Principal Chief Commissioner Oilncome Tax, Room No 922 gth Floor BBlock lT Towers.10-2-3, AC Guards Hyderabad TelanganaBlock lT Towers.10-2-3, AC Guards Hyderabad Telangana ...RESPONDENTS 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 issue a Writ, order or directron more particularly one in the nature ofcircumstances stated [.in ]the affidavit filed therewith, the High Court may bepleased to issue a Writ, order or directron more particularly one in the nature ofWrit of Mandamus declaring the action of Respondent No. 1 in issuing the a.Notice under clause(b) of section 14BA of the lncome-tax Act,1g6.t Dated.25lo 1 12024 Dl N and Notice No. trBA/AST/F/i 4BA( scN y2023- 24 t 1 060 1 4g3g}(1 )for the Assessment Year 2017-18 b. order passed u/s 14gA(d) of the lncome TaxAct, 1961 dated 2710312024, vide DtN and Notice No. |rBA/AST/F/148AI2022-2311042901615(1 ) foflthe Assessment [year ]2017-18, and c. Sec. 14g NoticeNotice under clause(b) of section 14BA of the lncome-tax Act,1g6.t Dated.25lo 1 12024 Dl N and Notice No. trBA/AST/F/i 4BA( scN y2023- 24 t 1 060 1 4g3g}(1 )for the Assessment Year 2017-18 b. order passed u/s 14gA(d) of the lncome TaxAct, 1961 dated 2710312024, vide DtN and Notice No. |rBA/AST/F/148AI2022-2311042901615(1 ) foflthe Assessment [year ]2017-18, and c. Sec. 14g Noticedated 30/03/2024 ol the tncome Tax Act, 1961, vide DIN and Notice.ITBA/AST/S/14 8-112023-24110636791 16( 1 ) for the Assessment year 2017-18, asarbitrary, lllegal, bad rtin :law, without jurisdiction, void-ab-initio, violative of theITBA/AST/S/14 8-112023-24110636791 16( 1 ) for the Assessment year 2017-18, asarbitrary, lllegal, bad rtin :law, without jurisdiction, void-ab-initio, violative of theprinciples of natural justice apart from being viotative of Articles 1a, 19(1 )(g) and 265 of the Constitution of lndia and Sec. 148A, [149, 151A of ][the ][lncome Tax ][Act']1961 , and consequently set aside the same in the [interests ][of ][justice.] lA NO: 1 OF 2024 Petition under Section 151 CPC [praying ]that in [the ][circumstances ][stated ][in]ithe affidavit filed in sufport of the [petition, ]the [High Court may be pleased ][to ][direct]ithe Respondent to stay all further [proceedings, including any recovery, pursuant ][to]the notice dated 30/03/2024, [issued by ][the ][1st Respondent, ][u/s ][.148 ][of ][the ][lncome]lTax Act, 1961, vide DIN and Notice. [112023-2411063679116(1)]for tie Assessment Yedr 2017-18, [pending ]disposal [of ][the ][above Writ Petition; ][and],lpass such other ordelibr orders may deem fit and [proper ]in the circumstances ofthe case, as the procbdure laid down under Sec.148A [of ][the Act has not ][been]followed and the [precondition ],for issuance of [notice ][u/s. ][148 ][of ][the ][Act ][is absent]pending disposal of the Writ petition Counsel for the Petiti6ner: SRI MANIDEEP Counsel forthe Resp6ndents: M/s. [J. ] [M/s. ] I R.PISUPATI, SENTOR SC FOR The Court made the following: ORDER Counsel for the Petiti6ner: SRI MANIDEEP Counsel forthe Resp6ndents: M/s. [J. ] [M/s. ] I R.PISUPATI, SENTOR SC FOR The Court made the following: ORDER THE HONOURABLE AND THE HONOURABLE [SRI JUSTICE N. ][TUI(ARAMJI] WRIT [N][o.L27o2][ oF ][2024] ORDER: fircr [Hon'bte ][Justice ][SujoA ][Paul)] Heard Sri [Manideep ][Madhavarapu' ][learned counsel for]the petitioner [and ][Ms. ][J. ][Sunitha, ][learned ][Junior ][Standing]Counsel represents [Ms.Sundari R'Pisupati' learned ][Senior]Standing [Counsel ][for ][Income ][Tax ][Department ][for ][the]'respondents The ground ground [[taken ][by ][the ][learned counsel ][for ][the]][[by ][the ][learned counsel ][for ][the]][[the ][learned counsel ][for ][the]][[learned counsel ][for ][the]][[for ][the]][[the]] 2. The ground ground [[taken ][by ][the ][learned counsel ][for ][the]][[by ][the ][learned counsel ][for ][the]][[the ][learned counsel ][for ][the]][[learned counsel ][for ][the]][[for ][the]][[the]]petitioner is that [in ][furtherance ][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 ][Ta-x ][Act, ][1961 ][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]that [curtains ][on ][this ][issue ][are ][{inally ][drawn ][by]parties agreed this Court in [a batch ][of ][u'rit ][petitions, ][W'P'No'25903 of ][2022]and other connected [matters, ][decided ][by ][common ][order] dated 14.09.2023. The parties agreed that this matter may bedisposed of in terms of the Common Order dated 14.O9.2023.4. This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: dated 14.09.2023. The parties agreed that this matter may bedisposed of in terms of the Common Order dated 14.O9.2023.4. This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under: "35. In view of thc aforesaid discussiotrs, it is by Eow veryclcer that the proccdure to b€ followed by the .e6pondent-DepartEent upon treatlag the notlces issu€d for reessesstnentbeing under Sectloa 148A, the subsequeat proceedings wesEandatorily rcqulred to be uDdertaken uEder the substitut€dprovisioas as laid dosn undcr thc Finatce Act, 2021. In thcabsence of which, we are constr.ined to hold that theprocedure adoptcd by the reapondent-DepartErent is incontraventioE to the stitute i.e. the FinaDce Act, 2021, at thefirst instance. Secondly, lt is also in direct contravention tothe directives issucd by the Hoo'ble Suprcme Court in th€case of Ashish Agarsal, supra.36. For all the afore8ald reasons, the impugned notices issuedand the proceediags drarra by the respoEdeot-Depe.tmcnt isneither teoable, Bor sustainable. The notices so issued andthe procedure adopted being per se illegal, deserves to bc andare accordingly sct aslde/queshed. As a consequencc, all theimpugned orders getthg quashed, the consequcntial orderspassed by the respoadent DepartEent pursuant to the noticcsissued under Sectlon 147 aEd 148 would also get quashed andit is ordered accorditrgly. The reason we ere quashing theconsequential otdct is oo the principles that when theiDitiation of the proceedlngs itself was procedurally wrong,the subsequent ordcrE also gets rullified automaticatly.37. The prelirainary objection raised by the petitioner issustained and all thcse writ petitions stands allowed on thiswery jurisdictional issue, Slnce the imputned noticeG andotders [qre ]gettiug quashed on the point ofjurisdiction, we arenot inclined to proceed further and decidc thc other issuesraised by the petitlotrer which stands reserved to be raisedaEd contended in an appropriate proceedings.38. Since the Hon'ble Suprem€ Court had, in thc case ofAshish Agarwal, supra, as a one-timc mcasure exercising thePowcrs [under ]Article 142 of the Constitution of India,clcer that the proccdure to b€ followed by the .e6pondent-DepartEent upon treatlag the notlces issu€d for reessesstnentbeing under Sectloa 148A, the subsequeat proceedings wesEandatorily rcqulred to be uDdertaken uEder the substitut€dprovisioas as laid dosn undcr thc Finatce Act, 2021. In thcabsence of which, we are constr.ined to hold that theprocedure adoptcd by the reapondent-DepartErent is incontraventioE to the stitute i.e. the FinaDce Act, 2021, at thefirst instance. Secondly, lt is also in direct contravention tothe directives issucd by the Hoo'ble Suprcme Court in th€case of Ashish Agarsal, supra.36. For all the afore8ald reasons, the impugned notices issuedand the proceediags drarra by the respoEdeot-Depe.tmcnt isneither teoable, Bor sustainable. The notices so issued andthe procedure adopted being per se illegal, deserves to bc andare accordingly sct aslde/queshed. As a consequencc, all theimpugned orders getthg quashed, the consequcntial orderspassed by the respoadent DepartEent pursuant to the noticcsissued under Sectlon 147 aEd 148 would also get quashed andit is ordered accorditrgly. The reason we ere quashing theconsequential otdct is oo the principles that when theiDitiation of the proceedlngs itself was procedurally wrong,the subsequent ordcrE also gets rullified automaticatly.37. The prelirainary objection raised by the petitioner issustained and all thcse writ petitions stands allowed on thiswery jurisdictional issue, Slnce the imputned noticeG andotders [qre ]gettiug quashed on the point ofjurisdiction, we arenot inclined to proceed further and decidc thc other issuesraised by the petitlotrer which stands reserved to be raisedaEd contended in an appropriate proceedings.38. Since the Hon'ble Suprem€ Court had, in thc case ofAshish Agarwal, supra, as a one-timc mcasure exercising thePowcrs [under ]Article 142 of the Constitution of India, IrerEitted [the ][Revenue ][to ][procced ][under ][the ][substltutcd]provisiors, and tbis Court [qllowing ]thc [pctitions ][oaly on ][the]proccdur.l flaw, the right conferred on th€ [Revcnue ][would]rgtllain rc6elved to Proceed [further ][if ][they ][eo ][want from ][the]stage of the osdcr of the [suPreme ][court ][ln the ][cesc ][of ][A6hlsh]Agarwal,8upra.39. Ito ordcr es to costs.' 5. In view of the consensus arrived, [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 ][14.09.2023 ][in]W.P.No.259O3 of 2022. 6. The writ petition is [allor.r'ed. ][No costs. ][Interlocutory]applications, if any [pending, ][shall ][also ][stand ][closed'] SD/.T.TIRUMALA ASSISTANT REGISTRARI//TRUE COPY//AF-SECTION OFFICER to ,. an" tncome Taxiofficer, iow"ii, Ward 11(1)' Hyderabad'.Room No'507' 5th Floor'' Hvderabad-500084 ,. an" tncome ' an" tncome ailnaff" tncome i"i"li Taxiofficer, iow"ii, Kondaplr' Hvderabad-500084Hvderabad-500084[[tax ][2 ][6th ][floor' ]][[2 ][6th ][floor' ]][[6th ][floor' ]][[floor' ]][Signature ] iow"ii, Kondaplr' Hvderabad-500084Hvderabad-500084- , Th; fowers, Princioar Kbndapur commiiiinei'o-fl;;# Hyderabad-Telangana[[tax ][2 ][6th ][floor' ]][[2 ][6th ][floor' ]][[6th ][floor' ]][[floor' ]][Signature ][Tower]3. The Pdncipar [Cniet ][co''irfiis!t;;'"of ][l;";'" ][rax' ][Room No e22 gth ][Floor ][B]" BH"k it'iil"*'10-'-i, AC Guards Hvderabad.Telanqanat*oPruoclteucrrgl:::3ilXrgtfg^'5''JHBlex+':tlli*i1ffi 6. Two CD [CoPies]PSK.IiMR.1, ,)\(' HIGH COURT , DATED:0310512024 ORDERWP.No.12702 ot 2024 ALLOWING THE WRIT PETITIONWITHOUT COSTS. [!t\AC-r,.tr!- \$\" , ,.; [.: ][iz.l ]4.(\)-/o'/ 6 JUii 2t24C)o,./tDESp/.i i ':r