Wp/21247/2024 Of Surabhi Restaurant And Bar v. The Assistant Commissioner Of Income Tax Circle 13(1)

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) WEDNESDAY,THE SEVENI'H DAY OF AUGUSTTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 21247 OF 2024 Between: SURABHI RESTAURANT and BAR, Rep of the its Proprietor BAIKADI SATHIREDDY, S/O.YADI REDDY BAIKADI, Aged about 54 years, Occupation.Business, Rl/O. H.No.4-4-8711 Ecll Main Road Nacharam, Hyderabad500076,Telangana, lndia- PAN. Assessment Year. 2020-21 ...PETITIONER AND1. The Assistant Commissioner of lncome tax circle '13('l ), AaykarBhava n, Basheerbagh, Hyderabad1. The Assistant Commissioner of lncome tax circle '13('l ), AaykarBhava n, Basheerbagh, Hyderabad 2- The Principal Chief Commissioner of lncome Tax Telangana and AP,Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028,TelanganaHyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028,Telangana 3. The Central Board of Direct Taxes, Represented by its Chairman, Departmentof Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings,New Delhiof Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings,New Delhi 4. The National Faceless Assessment Center, lncome Tax Department, NewDelhiDelhi 5. The Union of lndia, Represented by its Secretary to lhe Government,Depa(ment of Revenue, Ministry of Finance, New DelhiDepa(ment of Revenue, Ministry of Finance, New Delhi ...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 drrection more particularly one in thenature of Writ of fvlandamus, declaring the impugned notice dated. 27.03.2O24 for4.Y.2020-21 passed u/s 148A(d) of the Act vicie DIN No. ITBA/AST/F1148Al2O23-2411063481256('l )and the consequential notice u/s 148 dated 27 .O3.2O24 videDIN No. ITBA/AST/S/148 112O23-2411O634U1486(1),' issued by the JAO(1strespondent) instead of FAO(3rd respondent),as void, illegal, and contrary to theprovisions of lncome-tax Act and contrary to the Principles of Natural Justice Counsel for the Petitioner: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.1&2: MS. BOKARO SAPNA REDDY (Jr. SCFOR TNCOME TAX) Counsel for the Respondent Nos.3 to 5: SRI B.MUKHERJEE FOR SRI GADIPRAVEEN KUMAR DY. SOLICITOR GENERAL OF INDIAThe Court made the following: ORDER THE HONOURABLE SRI JUSTICE SUJOY PAULAND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION No.21247 OF 2o24 ORDER: (per Hort'ltla,Iustice Sujog Paul) Heard Sri Thanneru Chaitanya Kumar, learned counselfor the petitioner(s), Ms. B.Sapna Reddy, learned JuniorStar-rding Coun sel lor lncome Tax Department. for therespondents Income Tax Department and Sri B. Mukherjee,Iearned counsi'l representing Sri Gadi Praveen Kumar,Iearned Depllty Solicitor General of India, for theresponden ts [- ]Cen tral Government2. The grour-rd taken by the learned counsel for thepetitionr:r(s) is that in furtherance of Finance Act, 2021, re-assessment process stood modified but the respondents havenot taken care of it and therefore notice issued under Section148 of lhe lncome Tax Act, 196 I cannot sustain judicialscmtiny. Since notice is bad in law. the consequential ordersare also bad in law 3. During thc course of hearing, learned counsel for theparties agreed th:rt curtains on this issue are finally drawn bythis Court in a l>atch of writ petitions, W.P.No.25903 of 2022and other connccted matters, decided by comm on order dated 14.09.2023. [Tlne ][parties ][agreed ]that this [matter ][may ][be]disposed of in terms of the Common Order dated I 4.O9.20234. This Court in the said order dated 14.09.2023 rnW.P.No.25903 of 2022, held as under 3. During thc course of hearing, learned counsel for theparties agreed th:rt curtains on this issue are finally drawn bythis Court in a l>atch of writ petitions, W.P.No.25903 of 2022and other connccted matters, decided by comm on order dated 14.09.2023. [Tlne ][parties ][agreed ]that this [matter ][may ][be]disposed of in terms of the Common Order dated I 4.O9.20234. This Court in the said order dated 14.09.2023 rnW.P.No.25903 of 2022, held as under '35. [In ][view ][of the ][aforesaid ][discussions, ][it ][is by ][now ][very]clear that the procedure to be followed by the respondent-DepartmeEt upoa treating the Eotices issued for reassessroetrtbeitrg under Section 148A, the subsequent proceedings wasmandatorily requircd to be undeitaken under the substitutedprovisions as laid down under the Finaace Act,2O2l. ln theabsence of which, we are constrained to hotd that theptocedure adopted by the respondent-DepartEent is incontraveatioa to the statute i.e. the Financc Act,2O21, at thefrrst instance. Secondly, it is also in direct conttaweotion tothe dlrectives issued by the Hon'ble Supreme Court ln thecase of Ashish Aga!'wal, supra. 36. For all the aforesaid rcasons, the impugaed Eotices issuedand the proceedings drawu by the respondent-Department isaeither tenable, nor sustainable. The notices so issued andthe ptocedure adopted being per se illegal, deserves to be andare accordiDgly set aside/quashed. As a coasequence, all theimpugned orders gettilg quashcd, the coDsequential ordercpassed by the respondent DepartEeDt pursuant to the noticesissued under Sectioa 147 and 148 would also get quashed andit is ordered accordlEgly. The reason we are quashing theconsequential order is on the principles that wh€n theinitiatioE of the proceedi[gs itself was procedurally wrong,the subscqueat orders also gets trullified automatically. 37. The pretirEinary objection raised by the petitioner issustaincd and all these writ petitions ataEds allowed on thisvery jurisdictional issue. Since the impugaed notices andorders are getting quashed oa the point ofjurisdiction, we erenot itrclined to proceed further and decide thc other issuesraised by the petitioner which stands tesereed to be raisedalld contended in an appropriate proceedings.38. Since the Hon'ble Supreme Court had, in the casc ofAshish Agarwal, supra, as a ole-time measure exetcising the--powers [under ][Article ][142 ][of the ][Constitution ][of ][India,] - I 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 aeserved to [ploceed ]further [if ][they ][so ][want from ][the]stage of the order of the [Supteme ][Court ][in ][the ][case ][of ][Ashish]Agarwal, supta.39. No order as to costs." 5. In vieu, of the consensus arrived, [the ][impugned ][Show]Cause notice and consequential orders [passed ][in ][this ][writ]petition are set asrde. Liberty is [reserved ][to both the ][parties]to take respectir,.e stand and to [proceed ][in ][accordzrnce ][with]law as p(3r paragraph No.38 [of ]the [order ][dated ][14.0').2023 ][in]W.P.No.25903 d''2022. 6. The Writ Petition is allowed. No costs' [Interlocutory]applications, if any [pending, ][shal1 ][aiso ][stand ][closed] SD/-MOHD. ISMAILASSISTANT REGISTRAR'!!,'tSECTION OFFICER //TRUE COPY' To, 1. The Assistant Commissioner of lncorne tax circle 13(1), AaykarB havan, Basheerbag h, HyderabadB havan, Basheerbag h, Hyderabad 2. The Principal Chref Commissioner of lncome Tax Telangana and AP,Hyderabad. lT Towers, AC Guards, Masab Tank, Hyderabarl 500 028,TelanganaHyderabad. lT Towers, AC Guards, Masab Tank, Hyderabarl 500 028,Telangana 3. The Chairman. Central Board of Direct Taxes, Department of Revenue,Ministry of F-inance, Government of lndia, Secretariat Buildings, New DelhiMinistry of F-inance, Government of lndia, Secretariat Buildings, New Delhi 4. The National Faceless Assessment Center, lncome Tax Department, NewDelhiDelhi SD/-MOHD. ISMAILASSISTANT REGISTRAR'!!,'tSECTION OFFICER //TRUE COPY' To, 1. The Assistant Commissioner of lncorne tax circle 13(1), AaykarB havan, Basheerbag h, HyderabadB havan, Basheerbag h, Hyderabad 2. The Principal Chref Commissioner of lncome Tax Telangana and AP,Hyderabad. lT Towers, AC Guards, Masab Tank, Hyderabarl 500 028,TelanganaHyderabad. lT Towers, AC Guards, Masab Tank, Hyderabarl 500 028,Telangana 3. The Chairman. Central Board of Direct Taxes, Department of Revenue,Ministry of F-inance, Government of lndia, Secretariat Buildings, New DelhiMinistry of F-inance, Government of lndia, Secretariat Buildings, New Delhi 4. The National Faceless Assessment Center, lncome Tax Department, NewDelhiDelhi 5. The Ser;retary to the Government, Union of lndia, Departmerrt of Revenue,[\,4rnrstry of Finanr:e, New Delhi[\,4rnrstry of Finanr:e, New Delhi 6, One CC) to SRI THANNERU CHAITANYA KUN4AR Advocate toPUC]toPUC] 7. One CC to lr/S BOKARO SAPNA REDDY (Jr. SC FOR TNCOMETAX) Advocate TAX) Advocate cl& 8One CC to Sri Gadi Praveen Kumar, DeJ_ruty Soticitor General of lndia [OpUC] Two CD Copies l HIGH COURT DATED:0710812024 ORDER WP.No.21247 of 2024 ALLOWING THE WRIT PETITIONWITHOUT COSTS yff, ;\,Z.i .biiil[il.tt,'J__-.. Qi:1 r,;,