Wp/22224/2024 Of Rakshit Drugs Pvt Ltd v. The Assistant Commissioner Of Income Tax Circle 3(1)

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Originat Jurisdiction) MONDAY, THE NINETEENTH DAY OF AUGUSTTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRIJUSTICE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAOwRtT PETITION NO| 22224 0F 2024 Between: RAKSHIT DRUGS PVT LTD, Rep by its Director PALEM SRINIVAS, S/o.KOTESWARA RAO PALEM, Aged about 48 years, Occupation Business, Rl/o425l3rt Rakshit House Sanjeeva, Reddy Nagar Colony Ameerpet, Hyderabad500038, Telangana, lndia. PAN AABCR5S42G Assessment Year 2019-20 ...PETITIONER AND 1. The Assistant Commissioner of lncome tax Circle 3(1), Signature Towers,Kondapur, Sherlingampally, Ranga Reddy District, Hyderabad.Kondapur, Sherlingampally, Ranga Reddy District, Hyderabad. 2. The Principal Chief Commissioner of lncome Tax Telangana and A P,Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028,Telangana.Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028,Telangana. 3. The National Faceless Assessment Center, lncome Tax Department, NewDelhiDelhi ...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 particularly one inthe nature of Writ of Mandamus, declaring the impugned notice. dated.the nature of Writ of Mandamus, declaring the impugned notice. dated.07.04.2023 for A.Y. 2019-20 passed u/s 148A(d) of the Act vide DIN No. ITBA/ASTlFl148A12023-2411051934319(1)and the consequential notice u/s 148 dated1O-O4-2O23 DtN and Notice No.iTBA/AST/S/148 -1t2}23-24t1051956436(1),-1t2}23-24t1051956436(1), issued by the JAO [(1st ][respondent) instead ][of ] [(3rd ][respondent), as ][void,]to [the ][provisions ][of ][lncome-tax ][Act ][and ][contrary ][to ][the]illegal, and contrary Principles of Natural [ustice.] Counsel for the [Petitioner: ] Counsel for the [Respondent No.'l ][& 2: ] [J.V.PRASAD'] Sr. SC FOR INCOME TAX Counsel for the [Respondent ][No.3: SRI B.MUKHERJEE, REP' ] SRI GADI PRAVEEN [KUMAR,]DEPUTY SOLICITOR GENERIAL The Court made the [following: ] THE HONOURABLE SRI JUSTICE SUJOY PAT'LAND THE IIONOURABLE SRI JUSTICE NAMAVARAPU RAJESIIWAR RAO WRIT PETITION No.22224 0F 2024 ORDER: (per Hon'ble Justice Sujoy paul) Heard Sri Thanneru Chaitanya Kumar, learned counselfor the petitioner, Sri J.V.Prasad, learned Senior StandingCounsel for Income Tax Department appearing forfor the petitioner, Sri J.V.Prasad, learned Senior StandingCounsel for Income Tax Department appearing forrespondent Nos.l ald 2 ald Sri B. Mukherjee, learnedcounsel representing Sri Gadi Praveen Kumar, learnedDeputy Solicitor General of India, for respondent No.3.2. The ground taken by the learned counsel for thecounsel representing Sri Gadi Praveen Kumar, learnedDeputy Solicitor General of India, for respondent No.3.2. The ground taken by the learned counsel for thepetitioner(s) is that in furtheralce of Finance Act, 2021, re-assessment process stood modified but the respondents havenot taken care of it and therefore notice issued under Section148 of the Income Tax Act, 1961 cannot sustain judicialscrutiny. Since notice is bad in law, the consequential ordersare also bad in law.assessment process stood modified but the respondents havenot taken care of it and therefore notice issued under Section148 of the Income Tax Act, 1961 cannot sustain judicialscrutiny. Since notice is bad in law, the consequential ordersare also bad in law. 3. During the course of hearing, learned counsel for theparties agreed that curtains on this issue are hnally drawn bythis Court in a batch of writ petitions, W.P.No.259O3 of 2022..--a4d other connected matters, decided by common order 3. During the course of hearing, learned counsel for theparties agreed that curtains on this issue are hnally drawn bythis Court in a batch of writ petitions, W.P.No.259O3 of 2022..--a4d other connected matters, decided by common order dated 14.09.20i13. [The ][parties ][agreed ][that ][this matter ][may ][bc]in [tt:rms ][of ][the Common ][Order ][dated ][14 ][09'20-13']disposed of 4 . This Cou rt [ir-r ][the ][said order dated ][14 ] [2023 ][in]W.P.No.259O3 [c'f ][2022, ][held ][as ][under:] "35. In [vie*' ][of ][tte ][aforesaid discussloas' ][it ][is by ][lrow ][very]clear that the Procedure [to ][be ][followed ][by the ][resPondent-]Departmetrt uPou [treatlng the ][notices ][issued ][for ][leas-sessEent]beilg uDder [Section ][148A, ][the ][subscquent proceediags ][was]mandatority [lequired to ][be undertaken uEdel ][the ][substituted]provisions as [laid ][down ][under ][the Fi[ance Act' 2021' ][h ][the]absence of [tshicll, ][we ][ale ][coEstrained ][to ][hold ][that ][the]procedure adopted [by tte ][resPoodent-D€PartEent ][ls ][ia]cotrtravention [to the statute ][i ][e' the ][Filance Act' ][2O21' ][at ][the]flrst iustance. [Secondly, ][it ][is ][also ][ln ][direct ][contravention to]the diiectiwes [issued ][by the ][Hon'ble ][SuPreEe ][Court ][itl ][tbe]case of Ashish [Agatwal, suPra'] 36. For alt [the ][aforesaid ][reasous, ][the iEl'u8ned ][lotices ][issued]and the [proceedilgs ][altawn ][by the ][tespoadent'DepartoeDt ][is]neither tenable, [nor ][sustaiaable' ][ThG ][aouces ][so ][issued ][add]the procedure [adoPted ][being per ][se ][illegal, ][deserves ][to ][be aud]are accordingly [set ][aside/quasbed' As a ][cotrsequence' ][all ][the]impugncd orders [gettiog ][quashcd, ][the ][consequential otders]passed by the xespoEdeot [DePartdeDt ][putsua'nt ][to ][the ][notices]issued under [Section ][147 ][aod ][148 ][would ][also get quashed and]it is ordered [accordiogty. The teason ][se ][are quashing the]consequential otder [is ][oE ][the ]Pri[clples [that ][when ][the]iuitiation of the Procecdings [itself ][was procedurally ][wro[g']the subsequent [orders also gets ][Dullitie'l autoEatically']37. Tltc [pretiminary objection ][ratsed ][by ][the ][Petitioner ][is]sustaiacd and [aU ][thesc ][writ ][petitions ][sta[ds ][atloEed ][o! ][this]very [jurisdictional ][issue. ][siEce ][the ][iEPugtred ][trotices ard]orders are [getting ][quashed ][oo the ][point ][of ][jurtsdictiou' ][we ][are]not incliaed to [proceed ][furthet ][and ][dccide ][the other ][issues]raiseal ty the Petitiouer [which ][starrds teserved ][to ][be ][raised]and coEtetrded [ia ][en aPPropriate proceeditrgs'] 38. Since the [tlou'ble ][SuPrellc ][court ][ha'l, ][i[ ][the ][case ][of]Ashish Agarwal, [suPra' as a ][one-ti6e ][Deesure Gxercising the]powers under Atticle [142 ][of ][t_he ][Constitutlon ][of ][IEdia'] perEitted the ReveDue to proceed u[der the substitutedprovislotrs, and thls Court atlowilg the pctitiols only on theptocedural flaw, the right conlerred on the Revcnue wouldtemain tesereed to proceed further if they so walrt fto[l thetemain tesereed to proceed further if they so walrt fto[l thestage of tie order of the Supreme Court in the case of AshishAgarEal, supra.39. No order as to costs..AgarEal, supra.39. No order as to costs.. 5. In view of the consensus arrived, the impugned ShowCause notice and consequential orders passed in this writpetition are set aside. Liberty is reserved to both the partiesto take respective stand and to proceed in accordance withlaw as per paragraph No.38 of the order dated 14.09.2023 inW.P.No.25903 of 2022. 6. The writ petition is allowed. No.costs. Interlocutoryapplications, if any pending, shall also stand closed. sJl'a.v.s. PRASADASSISTAN[BEGISTRAR//TRUE COPY// .xSECTION OFFICER 5. In view of the consensus arrived, the impugned ShowCause notice and consequential orders passed in this writpetition are set aside. Liberty is reserved to both the partiesto take respective stand and to proceed in accordance withlaw as per paragraph No.38 of the order dated 14.09.2023 inW.P.No.25903 of 2022. 6. The writ petition is allowed. No.costs. Interlocutoryapplications, if any pending, shall also stand closed. sJl'a.v.s. PRASADASSISTAN[BEGISTRAR//TRUE COPY// .xSECTION OFFICER To,1The Assistant [commissioner ][of ][lncome ][tax circle ][3(1), signature ][Towers,]r'.i"a"'pri,'Sr,Lrri"gJmp;tlv, [Ranga Reddv District Hvderabad]1The Assistant [commissioner ][of ][lncome ][tax circle ][3(1), signature ][Towers,]r'.i"a"'pri,'Sr,Lrri"gJmp;tlv, [Ranga Reddv District Hvderabad]2The Princioal lT Chief [Towers, ][Commissioner ] [Guards,][of]Ivlasab lncome Tank, Tax [Telangana][HYderabad]ANd 500 A 028,[P,]HyOerabad, TelanganaHyOerabad, Telangana 3. The National [Faceless Assessment ][Center' ][lncome ][Tax ][Department' ][New]DelhiDelhi4One CC to SRI [THANNERU CHAITANYA KUMAR' Advocate 4 5One CC to SRI [J.V.PRASAD, ][Sr' ][SC FOR INCOME TAX ]t)One CC to [GADI PRAVEEN KUMAR' ][DEPUTY. ] 5'iiil'DjA, [ffisii 6brrt ][torlhl ][stai" ][oi ][t"lahsana ][at Hvderabad ][[oPUC]]t)One CC to [GADI PRAVEEN KUMAR' ][DEPUTY. ] 5'iiil'DjA, [ffisii 6brrt ][torlhl ][stai" ][oi ][t"lahsana ][at Hvderabad ][[oPUC]] 7.Two CD CoPiesBSRMP 6MP 6 HIGH COURT DATED: 1910812024 ORDERWP.No.22224 of [2024] ALLOWING [PETITION'] WITHOUT COSTS E@c{.,* ,. ,, [.| ]'[f- ]st[:\]tt!4./ .,.[,^]c1j ..>tir [,l']ir [j-_l],rl1t Dti [rZ4\'.'i,/\{'.4,^_.