Wp/13895/2024 Of Burra Yellaiah v. Office Of The Income Tax Officer Ward 2

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) THURSDAY,THE SIXTH DAY OF JUNETWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI HONOURABLE SRI SRI JUSTICE SUJOY PAUL THE HONOURABLE SRI HONOURABLE SRI SRI JUSTICE SUJOY PAUL. ANDTHE HONOURABLE SRI JUSTTCE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO:13895 AND 13965 0F 2024 W.P.NO:13895 oF 2024 Between:BURRA YELLAIAH,.SIg B_UBRA KANAKATAH, Aged abour 44 years, Occ.Business, Rt/o. 1-7-54 Rajanna. Wines, dandni Nagar, V"rnrf L*0,Karimnagar 50500'l , Telangaria, lndia. Assessment year. Zdl€_$ .-PETITIONER AND 1.Office of The lncome Tax Officer Ward 2, Karimnagar, Telangana State.2.The Principa.lCtief Commissioner of lncome Tix - Teta"nganJ int A.p ,Hyderatrad, lT Towers, AC Guards, lvlasab Tank, Hyderab-id-_ SO-O Oig,Telangana.2.The Principa.lCtief Commissioner of lncome Tix - Teta"nganJ int A.p ,Hyderatrad, lT Towers, AC Guards, lvlasab Tank, Hyderab-id-_ SO-O Oig,Telangana.3The Central Board of Direct Taxes, Represented by rts Chairman, Departmentof Revenue, .lyinLslry of Finance, Government of tirOia, Secreta.iat Eiritdi;g;:New Delhi - 1 10 001.of Revenue, .lyinLslry of Finance, Government of tirOia, Secreta.iat Eiritdi;g;:New Delhi - 1 10 001.4The National Faceless Assessment Center, lncome Tax Department, NewDelhi.Delhi. 5The Union oJ^lndia, Represented by its Secretary to the Government,I-leparlment of Revenue, Ministry of Finbnce, New Delhi - 110 001I-leparlment of Revenue, Ministry of Finbnce, New Delhi - 110 001 ...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 an appropriate writ, order or direction more partrcularly one inthe nature of writ of lMandamus declaring the order passed by the lncome TaxAuthorities (National Faceless E-Assessment centre) completed the assessmentuls 147 read with section 1448 of the lncome-tax Act Date of order z6lo3t2oz4.DlNlrBA/AST/sl 1 47 12023-241 10633524s3(1) for the Assessmenr year 201 B-19determining the total income of Rs. 3'1 ,85,9301as arbilrary, rllegal. bad in law,wilhout lurisdiction, void-ab-initio, violative of the principles of natural iustice apartfrom being violative of Articles 14, 19(1Xg) and 265 of the constitution of lndia and Sec l4SAofthelncomeTaxAct,l96l,andconsequentlysetasidethesame in the [interests ][of ][justice] Counsel for [the Petitioner: ][SRI' ] Counsel for [the ][ResPondent Nos' 1&2: ] [J. ] [lT For]SUNDARI R (Sr SC for lncome [Tax ][DePt)] cou n se [I fo ][r ][the ][Res ][po ][nde ][n ][t ] [os' ][3to ][5 ][:"s ][Rl ] !t#[?t^i[ [XI6Fi * r,u W.P. NO: [13965 ][0F ][2024] Between: NAGARAJUAGNooRI,S/oVENKATESHWARLY.AGNooRl,Aged.about38,iiii, o.trprlion [Businesl, ][n17o ][i- ][sl ][Nandhipahad ][, ][Miryalguda ][Nalgonda]6oEzoz, ittS;gina. [lndia ][Assessment Year ][2015- ][16 ] ...pETtTloNER AND and Sec l4SAofthelncomeTaxAct,l96l,andconsequentlysetasidethesame in the [interests ][of ][justice] Counsel for [the Petitioner: ][SRI' ] Counsel for [the ][ResPondent Nos' 1&2: ] [J. ] [lT For]SUNDARI R (Sr SC for lncome [Tax ][DePt)] cou n se [I fo ][r ][the ][Res ][po ][nde ][n ][t ] [os' ][3to ][5 ][:"s ][Rl ] !t#[?t^i[ [XI6Fi * r,u W.P. NO: [13965 ][0F ][2024] Between: NAGARAJUAGNooRI,S/oVENKATESHWARLY.AGNooRl,Aged.about38,iiii, o.trprlion [Businesl, ][n17o ][i- ][sl ][Nandhipahad ][, ][Miryalguda ][Nalgonda]6oEzoz, ittS;gina. [lndia ][Assessment Year ][2015- ][16 ] ...pETtTloNER AND 1Office of The [lncome Tax Officer ][Ward 1' ][Nalgonda' Telanoana State']The Principal [cniet ][commisiion"f ][ot ][in"o'i" ][Tax ][- ][Teianoana ][and ] [P']Hii"ijtiilr [-ro*ei' ][ni""C",jriot, ][N/|"iio ][-r'nt, ][Hvdera6iad ][- ][500 ][028']Telanoana.The Principal [cniet ][commisiion"f ][ot ][in"o'i" ][Tax ][- ][Teianoana ][and ] [P']Hii"ijtiilr [-ro*ei' ][ni""C",jriot, ][N/|"iio ][-r'nt, ][Hvdera6iad ][- ][500 ][028']Telanoana.3iill'i%ii;l Board [of ][Direcr ][Taxes, Represenred-by its ][chairman, ][De_partment];i'h;;;;;, [N,l,.,iitrv ][ot ][rinurrce'-co,ernment ][of ][lhdia' ][Secretariat ][Buildings'];i'h;;;;;, [N,l,.,iitrv ][ot ][rinurrce'-co,ernment ][of ][lhdia' ][Secretariat ][Buildings']4fr,'. New Delhi t riiio"rr [- ][1 ][10 ][Faceless Assessment ][001 ][.][Center, ][lncome ][Tax ][Department' ][New]5if,'" Delhi." Un,on of India, Represented by its -Secretary to the Government'ou"pri#Jit [olr ][n"u"nr", ][Minitt,v ][of Finbnce, New Delhi ][- ][t ]].1*O=0,1io*oa*r,5if,'" Delhi." Un,on of India, Represented by its -Secretary to the Government'ou"pri#Jit [olr ][n"u"nr", ][Minitt,v ][of Finbnce, New Delhi ][- ][t ]].1*O=0,1io*oa*r, Petition under [Arlicle ][226 ][of ][the ][Constitution ][of ][lndia ][praying ][that in ][the]circumstancesstatedintheaffidavitfiledtherewith,theHighCourtmaybepleased to issue an [approprrate ][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 ][the ][assessment]U/S147r/WSectionl44.BofthelncomeTaxAct,lg6lvideDlNandNoticeNo.dated 26- 03- [2024 ITBA/AST/Si ][14 ][712023- 2411063413873(1 ][) ][for ][the ][assessment]year2ol5.16determiningthetotalincomeofRs.50,10,000/-aSarbitrary,illegal,badinlaw,withoutjUriSdictlon,Void-ab-initio,violativeoftheprinciplesofnaturaljustice apart from being [violalive ][of ][Articles ][14' ][19(1)(9) ][and 265 ][of ][the] constitution of lndia and sec. r4BA of the lncome Tax Act, 1961, andconsequently set aside the same in the interests of justice Counsel for the Petitioner: SRt. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos. [,t&2: ]SRI VIJHAY K pUNNA (sENtoR SC FOR rTD) Counsel for the Respondent Nos 3 to 5. : SRI GADI PRAVEEN KUMAR, DY. SOLICITORGENERAL OF INDIA The Court made the following: COMMON ORDER THE HONOURABLE ANDTHE HONOURABLE [NAMAVARAPU RA'IESHWAR ] WRIT PET [NOS.][ 13895 ][& ][1][3965][ oF ][2024] coMMON [O] [ (per ][Hon'ble ][SP,J)] Sri Thanneru [Chaitanya ][Kumar' ][learned ][counsel] for [the ][petitioner(s), ][Ms' J'sunitha' ][learned Junior]appears. Standing Counsel [for ][Income ][Tax ][Department ][appears ][for ][the]respondents-Income [Tax Department ][in ][W'P'No'1389!i ][of ][2024 ]'Sri Vijhay [K Punna, learned Senior Standing ][Counsel ][lbr ][Income]Tax Department [appears ][for ][the ][respondents-Income ][Tax]in [W.P.No.13965 ][of ][2024 ][and ][Sri ][B' ][I\{ukherjee']Department learned counsel [representing ][Sri ][Gadi ][Praveen ][Kumar' ][learned]Deputy Solicitor [General ][of India ][appears ][for ][the ][respondents-]Central Government [in ][both ][the ][writ ][petitions'] WRIT PET [NOS.][ 13895 ][& ][1][3965][ oF ][2024] coMMON [O] [ (per ][Hon'ble ][SP,J)] Sri Thanneru [Chaitanya ][Kumar' ][learned ][counsel] for [the ][petitioner(s), ][Ms' J'sunitha' ][learned Junior]appears. Standing Counsel [for ][Income ][Tax ][Department ][appears ][for ][the]respondents-Income [Tax Department ][in ][W'P'No'1389!i ][of ][2024 ]'Sri Vijhay [K Punna, learned Senior Standing ][Counsel ][lbr ][Income]Tax Department [appears ][for ][the ][respondents-Income ][Tax]in [W.P.No.13965 ][of ][2024 ][and ][Sri ][B' ][I\{ukherjee']Department learned counsel [representing ][Sri ][Gadi ][Praveen ][Kumar' ][learned]Deputy Solicitor [General ][of India ][appears ][for ][the ][respondents-]Central Government [in ][both ][the ][writ ][petitions'] Regard being being [[had ][to the ][similarity ][of the ][question]][[to the ][similarity ][of the ][question]][[similarity ][of the ][question]][[of the ][question]][[question]] 2. Regard being being [[had ][to the ][similarity ][of the ][question]][[to the ][similarity ][of the ][question]][[similarity ][of the ][question]][[of the ][question]][[question]]involved, on [the ][joint ][request ][of ][the ][parties' ][the ][matters ][are]analogously [heard and ][decidecl ][b-v ][this ][common order'] It is common is common common [[ground taken ]][[by the ][learned counsel ][for]][[learned counsel ][for]][[for]] 3. It is common is common common [[ground taken ]][[by the ][learned counsel ][for]][[learned counsel ][for]][[for]]the petitioner(s) [that ][in ][furtherance ][of ][Financ ][e ][Act' ][2O2l ]' [re-]assessment [process stood ][modified ][but ][the ][respondents have ][not]taken care of it and [therefore notices issued ][under ][Section ][148]of the Income [Tax ][Act, ][196 ][i ][cannot ][sustain ][judicizrl ][scrutiny'] Since notices are bad in law, the consequential orders are alsobad in lawbad in law 4. During the course of hearing, leamed counsel for theparties agreed that curtains on this issue are finally drawn bythis Court in a batch of writ petitions, W.p.No.259O3 of 2022and other connected matters, decided by common order datedL4.O9.2023. The parties agreed that this matter may be disposedof in terms of the Common Order dated 14.O9.2O23. 5. This Court in the said order dated 14.09.2023 inW.P.No.259O3 of 2022, held as under: "35. In view of the aroresaid discussions, it is by now very clear thatthe procedure to be followed by the respondent_Oepartment uponthe procedure to be followed by the respondent_Oepartment upontreating the notices issued for reassessment being under Section148A, the subsequent proceedings was mandatorily required to be148A, the subsequent proceedings was mandatorily required to beundertaken under the substituted provisions as laid down under theFinance Act, 2021. ln the absence of which, we are constrained to holdthat the procedure adopted by the respondent-Department is inthat the procedure adopted by the respondent-Department is incontravention to the statute i.e. the Finance Act, 2021, at the firstinstance- Secondly, it is also in direct contravention to the directivesissued by the Hon'ble Supreme Court in the cas€ of Ashish Agarwal,supra.supra. 36. For all the aforesaid reasons, the impugned notices issued and theproceedings drawn by the respondent-Department is neither tenable,nor sustainable. The notices so issued and the procedure adoptedbeing per se illegal, deserves to be and are accordingly setaside/quashed. As a consequence, all the impugned orders gettingquashed, the consequential orders passed by the respondentDepartment pursuant to the notices issued under Section 147 and 14gwould also get quashed and it is ordered accordingly. The reason weare quashing the consequential order is on the principles that whenthe initiation of the proceedings itself was procedurally wrong, thesubsequent orders also gets nullified automatically. 3 36. For all the aforesaid reasons, the impugned notices issued and theproceedings drawn by the respondent-Department is neither tenable,nor sustainable. The notices so issued and the procedure adoptedbeing per se illegal, deserves to be and are accordingly setaside/quashed. As a consequence, all the impugned orders gettingquashed, the consequential orders passed by the respondentDepartment pursuant to the notices issued under Section 147 and 14gwould also get quashed and it is ordered accordingly. The reason weare quashing the consequential order is on the principles that whenthe initiation of the proceedings itself was procedurally wrong, thesubsequent orders also gets nullified automatically. 3 37. The [preliminary ][obiection ][raised by the petitioner ][is ][sustained ][and]allthesewritpetitionsstandsallowedonthisveryjurisdictionalissue.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 ][be]raised and [contended 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 of [the ][Constitution ][of ][lndia' ][permitted ][the ][Revenue ][to]proceed under the substituted Provisions, [and ][this ][Court allowing the]petitions only on the [procedural ][flaw, ][the ][right ][conferred ][on ][the]Revenue would [remain ][reserved ][to ][proceed ][further ][if ][they ][so ][want]from the stage [of ][the ][order ][of the ][Supreme ][court ][in the ][case ][of Ashish]Agarwal, suPra.39. No order [as ][to costs."] 6. In view of the [consensus ][arrived, ][the ][impugned ][Show]Cause notices [and ][consequential ][orders ][passed ][in ][this ][batch of]writ petitions [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 ][rn]W.P.No.259O3 [of ][2022.] 6. 7. The writ petitions [are ][allorved No ][costs' ][Interlocutory] if [any ][pending, shall ]applications, "'" ="t3[$$f,]frXoo"rrsHAMBAASSISTANT ISTRAR//TRUE COPY//vSECTION OFFICER 6. In view of the [consensus ][arrived, ][the ][impugned ][Show]Cause notices [and ][consequential ][orders ][passed ][in ][this ][batch of]writ petitions [are set ][aside' Liberty is ][reserved ][to ][both ][the parties]to take respective [stand ][and to ][proceed ][in ][accordance ][with ][law]as per paragraph [No.38 ][of ][the ][order ][dated ][14'09'2023 ][rn]W.P.No.259O3 [of ][2022.] 6. 7. The writ petitions [are ][allorved No ][costs' ][Interlocutory] if [any ][pending, shall ]applications, "'" ="t3[$$f,]frXoo"rrsHAMBAASSISTANT ISTRAR//TRUE COPY//vSECTION OFFICER To,1.The Office [of ][The ][lncome Tax ][Offrcer ][Ward ][2' ][Karimnaoar' Telanoana State']2.The [principat ]cnief [comnii!;;;; ][;ilncome_Tax ][-"T.lanoanla ][and ][A.P.,]H,[#;"i:"ft"i;;";., [Ai'c""ij'- ][r"r"iu 'rant' ][Hvdera6ad ][- ][500 ][028']Telanoana.1.The Office [of ][The ][lncome Tax ][Offrcer ][Ward ][2' ][Karimnaoar' Telanoana State']2.The [principat ]cnief [comnii!;;;; ][;ilncome_Tax ][-"T.lanoanla ][and ][A.P.,]H,[#;"i:"ft"i;;";., [Ai'c""ij'- ][r"r"iu 'rant' ][Hvdera6ad ][- ][500 ][028']Telanoana.1iili'ciiir'n.,r", [centrat ][Board ][of ][Drrecr ][Taxes- Represenred ][bv ][rts ][chairman,]Government of [lnbia' ][Secretariat]Deoartment of [Revenue, ][I,i;itil;;'i;u;t; ]Buildings, [New Delhi ][- ][110 ][00'1 ][']4.The National [Faceless ][n.i6stt"nt ][Center' lncome ][Tax ][Department' ][New]Delhi.5.ifre ["becretarv, Union ][of ][lndia, ][the ][Government' ][Department ][of ][Revenue']frrf inisirv of Fin'ance, [New Delhi ][- ][1 ][10 001]tl-l5#"i6;;' [s ]ili [rHnr.r ][ruriu ][c ][HATTANYAT(lll['iovo ][gqtg ][IqPUC]]7.il; dd i" sni [viJnv ]-Sur.rOaii [x ][pUur'lA ]'n'prsupnrt [. ][sFNloR ][s9 ](Sr [FpS ]SC [lrD ]tor lnccme [IoPUC]]Tax Dept)8.SilE tt*t""SN,rr toPUClg. bne CC to SRIGADI PRAVEEN [KUIVAR, ][DY. ][SOLICITOFi ] Government of [lnbia' ][Secretariat]Deoartment of [Revenue, ][I,i;itil;;'i;u;t; ]Buildings, [New Delhi ][- ][110 ][00'1 ][']4.The National [Faceless ][n.i6stt"nt ][Center' lncome ][Tax ][Department' ][New]Delhi.5.ifre ["becretarv, Union ][of ][lndia, ][the ][Government' ][Department ][of ][Revenue']frrf inisirv of Fin'ance, [New Delhi ][- ][1 ][10 001]tl-l5#"i6;;' [s ]ili [rHnr.r ][ruriu ][c ][HATTANYAT(lll['iovo ][gqtg ][IqPUC]]7.il; dd i" sni [viJnv ]-Sur.rOaii [x ][pUur'lA ]'n'prsupnrt [. ][sFNloR ][s9 ](Sr [FpS ]SC [lrD ]tor lnccme [IoPUC]]Tax Dept)8.SilE tt*t""SN,rr toPUClg. bne CC to SRIGADI PRAVEEN [KUIVAR, ][DY. ][SOLICITOFi ] INDIA [oPUC] 1O. Two CD CoPies ?r^{^ B f\4 HIGH COURT DATED:0610612024 COMMON WP.No's.13895 [13965 ] ALLOWING WITHOUT @l"q9 \+{,,-q ['] II{ J L' / -- \.r. ',;r,.'"; \l)1 I JUL 2024g{'Ito6.S PN TCIreo.