Wp/22981/2024 Of Manohar Rao Puppala v. The Assistant Commissioner Of Income Tax Circle 1

[ [3411 ]I HIGH COURT (SPecial Original [Jurisdiction)] FRIDAY, THE TWO THOUSAND PRESENT THE HONOURABLE ANDTHE HONOURABLE [JUSNC.d ] WRIT PETITIONNOs:22981 [an][ d22988]oF 2024 WRIT PE [ NO: ][229][810] Between:TUANOHAR [PUPPALA, ][S/O.]RANGA ' RAO [PUPPALA, Age$ about ][72]i-nq oharoorcamp' Jagtial Karimnagar-bp'pszosc [nt.essment ][Y-ear' ][201 ][5-1 ][6]ng'A'E:rcXil,,?Hi,l [ffi ][[3] ...PETITIONER AND 1The Assistant Commissioner [of ][lncome Tax Circle ][1 ][' ][Karimnaoar' lncome Tax]office, [Aayakar Bhavan, ][r'r"lli'r''iiii ][ii"iJii"l ][kuii'n'gar ][Tel'nsana ][state']office, [Aayakar Bhavan, ][r'r"lli'r''iiii ][ii"iJii"l ][kuii'n'gar ][Tel'nsana ][state'] The Principal [Chief, ][Commissioner ][of ][lncome-Tax ][- ][Telanoana and ] [P']rurasao ranr<' [Hvderabad ][-500 ][028']rurasao ranr<' [Hvderabad ][-500 ][028']Hyderabad, [lT ][Towers' ]Telangana.^i"6iiijt' Telangana.^i"6iiijt' 2 3.TheCentralBoardofDirectTaxes,-Represented,bVitsChairman,Departmentof Revenue, [Ministry ][;i'Fi;;;'-b"v6rnment ][of thoia' ][Secretariat Buildings']New Delhi [- ][110 ][001 ]'of Revenue, [Ministry ][;i'Fi;;;'-b"v6rnment ][of thoia' ][Secretariat Buildings']New Delhi [- ][110 ][001 ]' 4. The National [Faceless Assessment ][Center' ][lncome ][Tax ][Department' ][New]Delhi.Delhi. 5. The Union [of ][lndia, ][Represented ]- [by ][rts ][.Secretarv ][to ][the ][Government']Department [or ][neu"n'"liInL"iv'""t"ri"l"Je' ][ruew ][oettrl ][- ][1 ][10 ][001 ][']Department [or ][neu"n'"liInL"iv'""t"ri"l"Je' ][ruew ][oettrl ][- ][1 ][10 ][001 ]['] ...RESPONDENTS Petition under [Article ][226 ][of ][lhe ][Constrtution ][of ][lndia ][praying ][that in ][the]circumstances [stated ][in ][the ][affidavit ][filed ][therewith' ][the ][High ][Court ][may ][be]pleased to issue [an ][appropriate ][writ' ][order ][or ][direction more ][particularly ][one ][in]the nature [of Writ ][of ][Mandamus declarrng ][the order passed by the lncome ][Tax]Authorities [(National ][Faceless E-Assessment ][Centre ][completed ][the ][assessment]U/S 147 [r.w.s ][144 read ][with section ][1448 ][of the ][lncome Tax ][Act' ][1961 vide ] and Notice No. dated 1810312024 |TBA/AST/S/147 t2O23-24t10628254O4(1) forthe assessment year 2015-16 determininq the total income of Rs. 1,19,91,1541as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of theprinciples of natural justice apart from being viotative of Articles 14, 19(i Xg) and265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961, andconsequently set aside the same in the interests of justice. Counsel for the Petitioner: SRI THANNERU CHA|TANYA KUMAR Counsel for the Respondent No.1 & 2: M/s. J.SUNITHA, Jr. SC FOR INCOME TAX Counsel for the Respondent No.3 to 5: SRI P.SHASHIDHAR REDDy, SC FOR CENTRAL GOVT, WRIT PETITION NO: 22988 0F 2024 Between: RADHA KRISHNA CHINNAMSETTY, S/o- CHINNAMSETTYSATYINARAYANA, Aged about 71 years, Occupation. Business, RJo. H No1i ].+1 |:lt\agar,.Tiruvuru [Ta ][Tiruvuru, ][Krishria ][527235, ][Tetangana, ][tndia.]PAN. Assessment [year. ]2015-i6 ...PETITIONER AND 1The lncome Tax Officer Ward 1, Khammam/, lncome Tax Office, RajeevGunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam Telangana Stat'e_Gunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam Telangana Stat'e_ 2The Principal Chief Commissioner of lncome Tax, -Telangana and A.p,lyderabad, [lT ][Towers, ] [Guards, Masab ][Tank, ][Hyderab-ad ][- ]500 [02S:]Telangana.lyderabad, [lT ][Towers, ] [Guards, Masab ][Tank, ][Hyderab-ad ][- ]500 [02S:]Telangana. WRIT PETITION NO: 22988 0F 2024 Between: RADHA KRISHNA CHINNAMSETTY, S/o- CHINNAMSETTYSATYINARAYANA, Aged about 71 years, Occupation. Business, RJo. H No1i ].+1 |:lt\agar,.Tiruvuru [Ta ][Tiruvuru, ][Krishria ][527235, ][Tetangana, ][tndia.]PAN. Assessment [year. ]2015-i6 ...PETITIONER AND 1The lncome Tax Officer Ward 1, Khammam/, lncome Tax Office, RajeevGunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam Telangana Stat'e_Gunt, Rajiv Chowk, Near Kinnerasani Theatre, Khammam Telangana Stat'e_ 2The Principal Chief Commissioner of lncome Tax, -Telangana and A.p,lyderabad, [lT ][Towers, ] [Guards, Masab ][Tank, ][Hyderab-ad ][- ]500 [02S:]Telangana.lyderabad, [lT ][Towers, ] [Guards, Masab ][Tank, ][Hyderab-ad ][- ]500 [02S:]Telangana. 3The Central Board of Direct Taxes, Represenled by its Chairman, Departmentof Revenue, Ministry of Finance, Government of lhdia, Secretariat Eiuildings,New Delhi - 1 10 001of Revenue, Ministry of Finance, Government of lhdia, Secretariat Eiuildings,New Delhi - 1 10 001 4The National Faceless Assessment Center, lncome Tax Department, NewDelhi.Delhi. 5The Union o-f_lndra, Represented by its Secretary to the Government,ueparlment of Revenue, Ministry of Finance, New Delhi - 110 001.ueparlment of Revenue, Ministry of Finance, New Delhi - 110 001. .RESPONDENTS Petition under Article 226 0f the constitution of lndia praying that in thecircumstances staled in the affidavit fired therewith, the High court may bepleased to issue an approprrate writ, order or direction more particularry one inthe nature of writ of I\,4andamus, decraring the order passed rry the lncome Tax Authorities (National [Faceless E-Assessment ][centre ][completed ][the ][assessment]U/S147r.w'sl44readwithSectionl44BofthelncomeTaXAct,l96lvideDlNand Notice No. [dated ][16-02-2024 ][ITBA/AST/S/147t2023'2411O61054902(1 ][) ][for]theassessmentyear20l5-l6determiningthetotalincomeofRs.S0,l0,000i-asarbitrary'illegal,badinlaw'withoutjUriSdiction'void-ab.initio,violatiVeoftheprinciplesofnaturaljusticeapartfrombeingVlolativeofArticleSla'19(1)(g)and265 of the Constitution [of lndia ][and ][Sec ][l4BA of the ][lncome Tax ][Act' ][1 ][961 ][' ][and]consequently [set aside ][the ][same ][in ][the interests ][of ][iustice'] Counsel for [the Petitioner: ] Counsel for [the Respondent ][No'1 ][& ][2: M/s' ][SAPNA-REDDY'] Jr. SC FOR Counsel for [the ][Respondent No'3 ][to ][5: SRI P'SHASHIDHAR REDDY']SC FOR [CENTRAL GOVT.] The Court [made ][the ][following: ] I THE HONOURABLE SRI JUSTICE SUJOY PAUL THE HoNouRABLE sRr *"rr"t*orooroaro*u RA*rEsrrwAR RAoRA*rEsrrwAR RAo WRIT PETITION NOS.229A1 e, 229AA OF 2024 COMMON ORDER ber Hon,bte Sp,J) Sri Thannenr Chaitanya Kumar, learned counsel, appears for the petitioners, Ms. J.Sunitha, learned JuniorStanding Counsel for Income Tax Department, appears for therespondent(s)-rncome Tax Department in w.p.N o.229g1 of 2024and Ms. B.Sapna Reddy, learned Junior starrding counsel forIncome Tax Department, appears for the responden t(s)_IncomeTax Departmenl in W.p.No.229gg of 2024 and Sri p. ShashidharReddy, learned Standing counsel for centrar Government,appears for respondent(s)_Central Government in both the writ petitions 2. Regarcl being had to the similarity of the questioninvolved, on rhe loint request of the parties, the matters areanalogously heard ald decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e AcL, 2021, re_assessment process stood modified but the respondents have nottaken care of it and therefore notices issued under Section l4gof the Income Tax Act, 196 1 curr[ annot sustastain judicizrJ scrutiny.\ Since notices ar-e bad t, f.*, ti"bad in law.in law.law. consequential orders are also bad in law.in law.law. 4. During the < o""t of hearing' learhearing' learlear-ned counsel petitions 2. Regarcl being had to the similarity of the questioninvolved, on rhe loint request of the parties, the matters areanalogously heard ald decided by this common order. 3. It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Financ e AcL, 2021, re_assessment process stood modified but the respondents have nottaken care of it and therefore notices issued under Section l4gof the Income Tax Act, 196 1 curr[ annot sustastain judicizrJ scrutiny.\ Since notices ar-e bad t, f.*, ti"bad in law.in law.law. consequential orders are also bad in law.in law.law. 4. During the < o""t of hearing' learhearing' learlear-ned counsel <parties of hearing' learhearing' learlear-ned counsel agreed for the*", . tains on this issue this court in a batcr I of writ n"''' drawn bypetitions' *''*t *t'5903 and other connected of 2022tters' decideo o, r4.og.2o23.The ". order datedpartie agreed that this of in terms -"tt' be disposedof the com, non order dated 14.0e.";r:: This Court in the sard 5 order dated14.o9.2023 ln W.P.No.2590 3 of 2022, beldas under: "35. ln view of the aforesaid the procedure ;il;J i'":ussions, [it ][is bv now ][very ][crear ]thatbv the treatins rhe respondent-oepa.t,bv the treatins rhe respondent-oepa.t,1484, the subsequent ".r,;-,:;:;": o.o""j]l'"'"""""r";;;;;;;:#:t"ff;*:= undertaken o.o""j]l'"'"""""r";;;;;;;:#:t"ff;*:= undertaken Finance Act, '"*'',n" ; ;;:uted "ro",nlllln" proyisions as taid down mandatorilv required under to rhebethat the procedure' .ffin"" "t [*hich, ][we ][are ][constrained ]to hordcontravention to the statute , l'.-tn"-.t""'ondent-Department is ininstance. Finance Act, 2021, at the rirstr*""0,r,'n;"jil l".jt" direct contravention supra. issued by ,n" ,.r1oi ;;;' re court in the case of Ashish to the directivesAgarwal.contravention to the statute , l'.-tn"-.t""'ondent-Department is ininstance. Finance Act, 2021, at the rirstr*""0,r,'n;"jil l".jt" direct contravention supra. issued by ,n" ,.r1oi ;;;' re court in the case of Ashish to the directivesAgarwal. 36- For all the aforreasons' the impugned notices proceedings oo*"""'o issued and theby the respondent-Department nor sustainable. [.,n ]is neither tenable,being per "" ,,., notices deserves so issued and to be .- th("'J procedure adoptedaside/quashed' o"egal' consequence' by the respondent-Department nor sustainable. [.,n ]is neither tenable,being per "" ,,., notices deserves so issued and to be .- th("'J procedure adoptedaside/quashed' o"egal' consequence' quashed, the cor "u [tnt ]''o"Ji"i"t"ttt:':'iH:Department or."r"n""ou"nt'"1 olclers passed by the respondeniwourdarsor"r*H:'i"".i:'ffi""","Ti::"Tffi:TJi:"1*the are quashing initiation the corder is on the principles that wheno, ,n,on""Ou"n,,al :'rarrvwrons,thewourdarsor"r*H:'i"".i:'ffi""","Ti::"Tffi:TJi:"1*the are quashing initiation the corder is on the principles that wheno, ,n,on""Ou"n,,al :'rarrvwrons,the \ \-srrhcon-.",",0.*",i"Tii'.f,,,*.,"'i"iL::"",iJ:ff 37. The [preliminary ][obiection ][raised by ][the ][petitioner ][is ][sustained ][and]all these [writ ][petitions stands allowed ][on ][this ][very ][iurisdictional ][issue']since [the ][imPugned ][notices and ][orde6 ][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 ][Gou't ][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.Inviewoftheconsensusarrived,theimpugnedShowCause [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]of the order [dated ][l4'O9'2O23 in]as per [paragraPh ][No'38]W.P.No.25903 [of ][2022.] 7The Writ Petitions [are ][allowed. ][No costs' ][Interlocutory]if [any ][pending, shalt ][also ][stand ][closed]applications, sD/- P PADMANABRES,IiRRX //TRUE COPY// COPY// //TRUE COPY// COPY// \ iL _ro. 1 . ori"",A")",iiliE:;;l:;,"fr Th_e Assista . ori"",A")",iiliE:;;l:;,"fr Th_e Assista ori"",A")",iiliE:;;l:;,"fr Th_e Assista Th_e Assista Assista nt Comr:::lr,:,:: ' jTr{fl"?,[21i,];{!!prgr,,tncompr3ZZ,',"frZi,"JnT*?,,;,i3yy,1r. ,:,' n;:,:,:""" [[x*irruiri'iiXila'lfo{^lr*]]" .'ir,il;':;;i##;i::;l{,:,W'J^E"iE;'a:.ffiirr;,:,,rr,r:*u", *,uit ,,","" o- nriJi:p:*;:."o;;f,;Hs;l " r, I f rE ?;;;:: :: ^A; _ro. sEcTKii(OFFtCER1 . ori"",A")",iiliE:;;l:;,"fr Th_e Assista . ori"",A")",iiliE:;;l:;,"fr Th_e Assista ori"",A")",iiliE:;;l:;,"fr Th_e Assista Th_e Assista Assista nt Comr:::lr,:,:: ' jTr{fl"?,[21i,];{!!prgr,,tncompr3ZZ,',"frZi,"JnT*?,,;,i3yy,1r. ,:,' n;:,:,:""" [[x*irruiri'iiXila'lfo{^lr*]] sEcTKii(OFFtCER 3ZZ,',"frZi,"JnT*?,,;,i3yy,1r. ,:,' n;:,:,:""" .'ir,il;':;;i##;i::;l{,:,W'" .'ir,il;':;;i##;i::;l{,:,W'J^E"iE;'a:.ffiirr;,:,,rr,r:*u", /,/'l/i /I 5. The National Faceless Assessment Center, Income Tax Department, NewDelhi.Delhi. t H"r":::[,":ilrJin,tlf.,ooS;ilnmenr' H"r":::[,":ilrJin,tlf.,ooS;ilnmenr' Department or Revenue' tvrinistry or / 7. One CC to SRI THANNERU CHA|TANYA KUMAR, Advocate IOPUCI B. One CC to SRt P.SHASHTDHAR REDDY, SC FOR CENTRAL GOW.loPUClloPUCl 9. One CC to Mis. J.SUN|THA, Jr. SC FOR TNCOME TAX '10.One CC to IVI/s. SAPNA REDDY, Jr. SC FOR |NCO|VE TAX tOpUCl 1 1. Two CD Copies BSRGJP P/"LC.. HIGH COURT DATED: 23lOBl2O24 a\tc!1_i.'lr25 l,?7 20?l\. COMMON ORDER WP.Nos.22981 AND 22988 of 2024 ALLOWING BOTH THE WRIT PETITIONS,WITHOUT COSTS P^{C,,:*lq\Y*'