Wp/23823/2024 Of Smt. Durgabai Shinde v. The Income Tax Officer

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) IVONDAY, THE SECOND DAY OF SEPTEIUBERTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAULAND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS: 23759 AND 23823 OF 2024 W.P.No.23759 ot 2024 Between: Smt. Bhanupriya Dasari Karre, D/o. Sri [\,4ohan Rao Dasari, Aged about 50 years,Occupation Private Service, H.No.10-2-241, Flat No.4D, Laxmi Towers, Street No.5,Ashwini Colony. West Marredpally, Secunderabad 500026. .....PETITIONER AND 1. Assessment Unit,, National Faceless Assessment Centre, lncome TaxDepartment, Ministry of Finance, Room No. 401 ,Znd Floor, E-Ramp,Jawaharlal Nehru Stadium, Delhi 1.10 003.Department, Ministry of Finance, Room No. 401 ,Znd Floor, E-Ramp,Jawaharlal Nehru Stadium, Delhi 1.10 003. 2. The lncome Tax Officer, Ward 10(1), l.T. Towers, A.C. Guards, ft/asabtank,Hyderabad - 500004.Hyderabad - 500004. .....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 pass an order or direction, especially one in the nature of WRIT OFMANDAMUS holding that the notice dated 1510412022 issued by 2nd Respondentunder section 148 of the Act (with DIN and Notice No.lTBNASTlsll4BA12O22-23110427 47769(1 )) as being without [jurisdiction, ]arbitrary, illegal, bad in law, voidab initio, apart from being violative of provisions of section 148A and section 149of the Act and also contrary to the circular issued by CBDT and [provisions ]ofsection 151A of the Act, and consequently set aside the notice under section 148 dated 1510412022 and the assessment and penarty orders passed by 1stRespondent for asst. year 2o1g 'l 9 under section 1 47 r.w.s 144 r.w.s 1448 and272A(1Xd) of the Act, respectrvely. l.A.NO:1 OF 2024 Petition Under section 151 cpc praying that in the circumstances stated inthe affidavit fired in support of the petition, the High court may be preased to staythe affidavit fired in support of the petition, the High court may be preased to staythe collection of tax and penarty demands raised by 1st Respondent for theAy.201 8-19 and stay the pending penalty proceedings. Counsel for the Petitioner : SRI A.V.RAGHU RAM !9_u19et [for the Respondents ][: ][Ms. ] REDDY (Jr. SC FORTNCOME TAX) W.P.NO:23823 OF 2024 Between: wrfe' lgt QgOgO-a1 2-2-j 109/90, ,Shi1de, Bagh [W/o. Sri prakash ]Amberpet, canga aowti,'nrinerpet, [Shinde, ]Aoed about 51 years, HyoeiauaJ'- Occ.Housesooor-al' .....PETITIONER AND 1. The lncome Tax Officer, Ward - 16(3), l.T. Towers, A.C. Guards, Masabtank,Hyderabad - 500004.The lncome Tax Officer, Ward - 16(3), l.T. Towers, A.C. Guards, Masabtank,Hyderabad - 500004. 2. Assessment Unit, National Faceless Assessment Centre, lncome TaxDepartment, Room No.401, 2nd Ftoor, E_Rili, iilrhiirri ru"nir'diroiur,Delhi.Assessment Unit, National Faceless Assessment Centre, lncome TaxDepartment, Room No.401, 2nd Ftoor, E_Rili, iilrhiirri ru"nir'diroiur,Delhi. 3. The lncome Tax Officer, Ward 15(i ), Hyderabad, l.T.Towers, A.C. Guards,15(i ), Hyderabad, l.T.Towers, A.C. Guards,Masabtank, Hyderabad. 4. Assessment Unit, Nation_al Faceless Assessment Centre, lncome TaxDepartment. Ministrv of Finance, noom No. +Oi, Z"if nobi, E-nJ"ip','Jawahartat Nehru Siadium, Oetn-i - iiO oo3. ['- ]" [-"']Assessment Unit, Nation_al Faceless Assessment Centre, lncome TaxDepartment. Ministrv of Finance, noom No. +Oi, Z"if nobi, E-nJ"ip','Jawahartat Nehru Siadium, Oetn-i - iiO oo3. ['- ]" [-"']S fn9]1_c.om,e Tax0fficer, Ward - 15(1), I.T. Towers, A.C. Guards, Masabtank,Hyderabad - 500004.Hyderabad - 500004. .....RESPONDENTS PetitionUnder Article 226 of the Constitution of lndia praying that in thecircumstancesstated in the affidavit filed therewith, the High Court may bepleased to pass an order or direction, especiafly one in the nature of wRrr oF I I 4. Assessment Unit, Nation_al Faceless Assessment Centre, lncome TaxDepartment. Ministrv of Finance, noom No. +Oi, Z"if nobi, E-nJ"ip','Jawahartat Nehru Siadium, Oetn-i - iiO oo3. ['- ]" [-"']Assessment Unit, Nation_al Faceless Assessment Centre, lncome TaxDepartment. Ministrv of Finance, noom No. +Oi, Z"if nobi, E-nJ"ip','Jawahartat Nehru Siadium, Oetn-i - iiO oo3. ['- ]" [-"']S fn9]1_c.om,e Tax0fficer, Ward - 15(1), I.T. Towers, A.C. Guards, Masabtank,Hyderabad - 500004.Hyderabad - 500004. .....RESPONDENTS PetitionUnder Article 226 of the Constitution of lndia praying that in thecircumstancesstated in the affidavit filed therewith, the High Court may bepleased to pass an order or direction, especiafly one in the nature of wRrr oF I I IilANDAN/US holding that the notice daled 27.03.2023 issued by 3rd Respondentunder section 148 of the Act with DIN and Notice No.ITBA/AST/S/148 112022-2311 05 1 388549 1 as beingwithout.jurisdiction, arbitrary, illegal, bad in law, voidab initio, apart from being violative of provisions of section 14BA and section 149of the Act and also contrary to the circular issued by CBDT and provisions ofsection 1 51A of the Act, and consequently set aside the notice under section ['l ]48daled 27.03.2023 and the assessment order passed by 1 Respondent for asst.year 2016-17 under section 147 r.w.s 1 44 of the Act. l.A.NO:1 OF 2024 Petition Under Section 151 CPC praying that in the circumstances stated inthe affidavit filed in support of the petition, the High Court may be pleased to staythe collection of demand raised by 1st Respondent pursuant to passingassessment order for the Ay.2016-1 7 and stay the pending penalty proceedings.Counsel for the Petitioner : SRI A.V.RAGHU RAM Counsel for the Respondents : SRI J.V.PRASAD (SC FOR INCOME TAX)The Court made the following ORDER THE HONOURABLE SRI JUSTICE ANDTHE HONOURABLE SRI [JUSTICE NAMAVARAPU RAJESHWAR ] WRIT PETITION NOs.23759 [3a23 ][0F ][2024] COMMON ORDER[(per ]Hon'ble [SP,J)] Sri A.V.Raghu Ram, learned [counsel, ][appears ][for ][the]petitioner(s) and Ms.B.Sapna [Reddy, ][learned ][Junior ][Standing]Counsel for lncome Tax Department, [appears ][for ][the]respondents. 2. Regard being had to the similarity [of the ][question]involved, on the [joint ]request [of ][the ][parties, ][the ][matters ][are]analogously heard and [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 ][Act, ][2O21-, ][re-]assessment process stood [modilied ][but ][the ][respondents ][have ][not]taken care ol it and therefore [notices issued ][under ][Section ][148]of the Income Tax Act, [196 ][1 ]cannot [sustain ][judicial ][scrutiny.]Since notices are bad in law, the [consequential orders ][are ][also]bad in law. 4. During the course of hearing, learned [counsel ][for ][the]parties agreed that curtains on this issue are [finally ][drawn ][by]this Court in a batch of writ petitions, [W.P.No.259O3 ][of ][2022]and other connected matters, decided by [common ][order ][dated] I 14.O9.2023. The parties agreed that this matter may be disposedof in terms of the Common Order dated 14 .O9 .2023. - JThis Court in the said order dated 14.09.2023 inW.P.No.25903 of 2022, held as under "35. ln view of the aforesaid discussions, it is by now very clear thatthe procedure to be followed by the respondent-Department upontreating the notices issued for reassessment being under Section148A, 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-Oepartment is incontravention to the statute i.e. the Finance Acl, 2021, at the firstinstance, Secondly, it is also in direct contravention to the directivesissued by the Hon'ble Supreme Court in the case of Ashish Agarwal,supra. - JThis Court in the said order dated 14.09.2023 inW.P.No.25903 of 2022, held as under "35. ln view of the aforesaid discussions, it is by now very clear thatthe procedure to be followed by the respondent-Department upontreating the notices issued for reassessment being under Section148A, 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-Oepartment is incontravention to the statute i.e. the Finance Acl, 2021, at the firstinstance, Secondly, it is also in direct contravention to the directivesissued by the Hon'ble Supreme Court in the case of Ashish Agarwal,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 setnor 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 148would also get quashed and it is ordered accordingly. The reason wequashed, the consequential orders passed by the respondentDepartment pursuant to the notices issued under Section 147 and 148would 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.the initiation of the proceedings itself was procedurally wrong, thesubsequent orders also gets nullified automatically. 37. The preliminary obiection raised by the petitioner is sustained andall these writ petitions stands allowed on this very jurisdictional issue.Since the impugned notices and orders are getting quashed on thepoint of iurisdiction, we are not inclined to proceed further and decidethe other issues raised by the petitioner which stands reserved to beraised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of AshishAgarwal, supra, as a one-time measure exercising the powers underArticle 142 of the Constitution of lndia, permitted the Revenue toproceed under the substituted provisions, and this Court allowing theArticle 142 of the Constitution of lndia, permitted the Revenue toproceed under the substituted provisions, and this Court allowing thepetitions 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 ][in]W.P.No.25903 of 2022. 7The Writ Petitions are allowed. [No costs. Interlocutory]if applications, any [pending, ][shall ][also ][stand ][closed.]SD/. N. CHANDRA SEKHAR RAO//rRUEcoPY// ASSISTANT REGISTRARil),' sEcr'lo{ oFFrcER I 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 ][in]W.P.No.25903 of 2022. 7The Writ Petitions are allowed. [No costs. Interlocutory]if applications, any [pending, ][shall ][also ][stand ][closed.]SD/. N. CHANDRA SEKHAR RAO//rRUEcoPY// ASSISTANT REGISTRARil),' sEcr'lo{ oFFrcER I To1.The lncome [Tax ]Officer, [Ward ][- ][16(3), ][l-T. ][Towers, ][A.C. ][Guards, Masabtank,]Hyderabad [- 500004.]2.The Assessment Unit, [National Faceless Assessment Centre, ][lncome ][Tax]Department, Room [No.401, 2nd Floor, E-Ramp, Jawahadal Nehru Stadium, Delhi.]3.Th6 lncome Tax Officer, Ward [15(1), ][Hyderabad, l.T.Towers, A.C. Guards,]Masabtank, Hyderabad.4.The Assessment Unit, [National Faceless Assessment Centre, ][Income ][Tax]Department. t\,4inistry [of Finance, Room ][No. ][4O1, ][2nd Floor, E-Ramp, Jawaharlal]Nehru Stadium. Delhi - ['1 ]10 003.The lncome Tax Officer, Ward [- ][15(1), ][l.T. ][Towers, ][A.C. ][Guards, ][Masabtank,]Hyderabad - 500004.t)One CC to SRI A.V.RAGHU [RAM, ][Advocate ] 7One CC to SRI J.V PRASAD [(SC FOR INCOME ][TAX) ][Advocate ] One CC to [/s. BOKARO [(Jr. ] [INCOME TAX) (OPUC)]9Two CD CopiesSAGJP'n I HIGH COURT DATED:0210912024 nt's [r,].lr(.Qr,((ulz tnru zczi2C!+ tc COMMON ORDERWP.Nos.23759 AND23823 of 2024 ALLOWING THE WRIT PETITIONSWITHOUT COSTS. 11cog\od &--