Wp/24589/2024 Of Sri Komal Reddy Gottumukkula v. The Assistant Commissioner Of Income Tax

HIGH COURT FOR THE STATE AT HYDERABAD(Special Original Jurisdiction) FRIDAY, THE SIXTH DAY OF TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE ANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU WRIT PETITION NOS:24527 [ D 24589 ][0F ][2024] W.P.NO: 24527 OF [2024] Between: Sri Srinivasulu Veeramalla, [S/o. ][Sri ][Veeramalla ][Yadagiri, ][Aged ][about ].50years, Occ Business, 19- 5125ntA, Human [Nagar, Devarakonda, Nalgonda ][-]5o824B ...PETlrtoNER AND 1. The lncome Tax Officer, Ward [- ][1, Income ][Tax Office, Near Rail Under]Bridoe. Naloonda - 508001 [[.]]Bridoe. Naloonda - 508001 [[.]] [[.]]2. Assdssmeni Unit, National Faceless [Assessment Centre, lncome Tax]Deoartment. Ministrv of Finance, [Room No. ][401,2nd ][Floor, ] [Ramp']Jawaharlal Nehru Siadium, Delhi [- ][110 ][003. ]Deoartment. Ministrv of Finance, [Room No. ][401,2nd ][Floor, ] [Ramp']Jawaharlal Nehru Siadium, Delhi [- ][110 ][003. ] ...RES'ONDENTS Petition under Article [226 ][of the ][constitution ][of ][lndia ][praying ][that ][in ][the]circumstances stated in the [affidavit ][filed ][therewith, ][the ][High ][court ][may ][be]pleased to pass an order or direction, especially [one ][in ][the nature ][of ][wRlT ] MANDAMUS hog that the [notice ][dated ][28. ][04.2022 ][issued ][by ]['1st Respondent]under section 148 of the [Act ][(with ] [and ][Notice ][No. ] [112022-]2311042896411(1)) as being [without jurisdiction, arbitrary, illegal, bad ][in ][law, ][void]ab initio, apart from being [violative ][of ][provisions ][of ][section ]['148A ][and ][section ][149]of the Act and also contrary [to the ][circular issuec ][by ] [and ][provisions ][of]section 151A of the Act, and [consequently set aside ][the ][notice under ][section ][148]dated 28. 04.2022 [and ][the ][assessment order passed ][by ][1st ][Respondent for ][asst.]year 20 1 8- I 9 under section 147 r. w. s [144 of the Act.] lA NO: ['l ]OF 2024 Petition under Section 151 CPC [praying ][that ][in ][the ][circumstances stated ][in]the affidavit filed in support of the [petition, ][the ][High Court may ][be ][pleased ][to ][stay]the collection of tax raised by [1st ][Respondent ][for ][the ][Ay. ][2016- ]['17 ][pursuant ][to]passing assessment order and stay the pending [penalty ][proceedings ]u/s-271AAC(1),272A(1)(d) and 270A of the Act. Counsel for the Petitioner: SRI A.V.RAGHU Counsel for the Respondents: M/s. [B.SAPNA ][REDDY, ][Jr. ] W.P.NO: 24589 OF 2024 Between: Sri Komal Reddy Gottumukkula,S/o. Sri Mallareddy Gottumukkula, Agedabout 59 years, Occ. Business,8-4-721, Thirumal Nagar, Karimnagar [-]505001.,..PETITIONER AND 1. The Assistant Commrssioner of lncome Tax, Circle - 1, lncome [Tax ]Office,Aayakar Bhavan, Near Natraj Theatre, Karimnagar [- ]505001.Aayakar Bhavan, Near Natraj Theatre, Karimnagar [- ]505001.2. Asiessment Unit, Nataonal Faceless Assessment Centre, lncome [Tax]Department, Room No 401,2 nd Ftoor, E Ramp, Jawaharlal Nehru Stadium,DelhiDepartment, Room No 401,2 nd Ftoor, E Ramp, Jawaharlal Nehru Stadium,Delhi 3. Assessment Unit, National Faceless Assessment Centre, [lncome Tax]Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp,Jawaharlal Nehru Stadtum. Delhi -110 003. Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp,Jawaharlal Nehru Stadtum. Delhi -110 003. ...RES'ONDENTS AND 1. The Assistant Commrssioner of lncome Tax, Circle - 1, lncome [Tax ]Office,Aayakar Bhavan, Near Natraj Theatre, Karimnagar [- ]505001.Aayakar Bhavan, Near Natraj Theatre, Karimnagar [- ]505001.2. Asiessment Unit, Nataonal Faceless Assessment Centre, lncome [Tax]Department, Room No 401,2 nd Ftoor, E Ramp, Jawaharlal Nehru Stadium,DelhiDepartment, Room No 401,2 nd Ftoor, E Ramp, Jawaharlal Nehru Stadium,Delhi 3. Assessment Unit, National Faceless Assessment Centre, [lncome Tax]Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp,Jawaharlal Nehru Stadtum. Delhi -110 003. Department, Ministry of Finance, Room No. 401 ,2nd Floor, E-Ramp,Jawaharlal Nehru Stadtum. Delhi -110 003. ...RES'ONDENTS Petition under Article 226 ol the Constitution of lndia [praying ]that in thecircumstances stated in the affidavit filed therewith, the High [Court may ][be]pleased to pass an order or direction, especially one in the nature bf WRIT OFMANDAMUS holding that the order [passed ]by lst Respondent u/s.14BA(d) of theAct, d1.2710312024 with DIN and Notice No.ITBtuAST/F1148412023-2411063457051(1) and the notice daled 2710312024 issued under section 148 ofthe Act with DIN and Notice No ITBA/AST/S/148 112023-2411063470506(1) for theassessment year 2017-18, as being illegal, arbitrary and [passed ]in gross violationof principles of natural Justice without application of mind, and consequently setaside the same. lA NO: 1 OF 2024 Petition under Section [151 CPC praying ][that:n ][the ][circumstances stated ][in]the affidavit filed [in ][support ][of the ][petition, ][the ][High ][court ][may be ][pleased ][to]suspend the operation [of ][the ][notice issued by ][the ][1st ][Respondent uis.148 ][of ][the]Act, dt.27to3t2o24 for the [assessment ][year ][2017-18 ][with ] [and ][Notice]No.ITBA/AST/S t148 112023-24/1063470506(1) [and all ][consequential proceedings]thereto Counsel for the Petitioner: [A.V.RAGHU ] counset for the Respondents: [M/s. J.SUNITHA. ] The Court made the following: THE HONOURABLE SRI JUSTICE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.24527 AND 24549 0P 2024 COMMON ORDER (per Hon'ble SP,J) Sri A.V.Raghu Ram, learned counsel, appears for thepetitioners, Ms.B.Sapna Reddy, iearned Junior Standing Counselfor Income Tax Department, appears for the respondent(s)-Income Tax Department in W.P.No.24527 of 2024 and Ms. J.Sunitha, learned Junior Standing Counsel for Income TaxDepartment, appears for the respondent(s)-Income TaxDepartment in W.P.No.245B9 of 2024. 2Regard being had to the similarity of the questioninvolved,on the joint request of the parties, the matters areinvolved,on the joint request of the parties, the matters areanalogously heard and decided by this common order. 3. It is common ground taken by the learned counsel forthe petitioner(s) that in furtherance of Financ e Act, 2O2I, 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 cannot sustain judicial scrutiny.Since notices are bad in law, the consequential orders are alsobad in law. ,\\ a- l 4. During the [course ][of ][hearing, ][leamed ][counsel ][for ][the]that [curtains on ][this ][issue are ][Iinatly ][drawn ][by]parties agreed this Court in [a ][batch ][of ][writ ][petitions, W'P'No'25903 ][of ][2022]and other [connected ][matters, ][decided ][by ][common ][order ][dated]14.Og.2023. [The ][parties ][agreed ][that ][this matter ][may ][be disposed]of in terms [of ][the ][Common ][Order ][dated ][14'09'2023'] 5. This Court in the [said order dated ][l4'O9'2O23 ][in]W.P.No.259O3 [of ][2022., ][held ][as ][under:] ,\\ a- l 4. During the [course ][of ][hearing, ][leamed ][counsel ][for ][the]that [curtains on ][this ][issue are ][Iinatly ][drawn ][by]parties agreed this Court in [a ][batch ][of ][writ ][petitions, W'P'No'25903 ][of ][2022]and other [connected ][matters, ][decided ][by ][common ][order ][dated]14.Og.2023. [The ][parties ][agreed ][that ][this matter ][may ][be disposed]of in terms [of ][the ][Common ][Order ][dated ][14'09'2023'] 5. This Court in the [said order dated ][l4'O9'2O23 ][in]W.P.No.259O3 [of ][2022., ][held ][as ][under:] "35. ln [view ][of the ][aforesaid ][discussions, ][it ][is ][by ][now very clear that]the [procedure ][to ][be followed by ][the ][respondent-Department ][upon]the [notices ][issued ][for ][reassessment ][being under ][Section]treating 148A, the subsequent [proceedings ][was ][mandatorily required ][to ][be]undertaken [under ][the substituted provisions as laid down ][under ][the]Finance Act, [2021. ][ln ][the ][absence of ][which, ][we ate ][constrained ][to ][hold]that the [procedure ][adopted ][by ][the ][respondent-Department ][is ][in]contravention [to ][the ][statute i.e. ][the ][Finance ][Act' ][2021' ][at ][the first]instance. [Secondly, ][it ][is ][also ][in ][direct contravention ][to the ][directives]issued by the [Hon'ble ][Supreme ][Court ][in ][the case ][of ][Ashish Agarwal']s upra.36. For all the aforesaid [reasons, ][the impugned notices issued ][and ][the]proceedings drawn by [the ][resPondentoepartment ][is ][neither tenable']nor sustainable' [The notices ][so ][issued and ][the ][procedure ][adopted]being per se [illegal, ][deserves ][to ][be ][and ][are ][accordingly ][set]aside/quashed. [As ][a ][consequence, ][all ][the ][impugned orders ][getting]quashed, the consequential [orders ][passed ][by ][the ][respondent]Department [pursuant ][to ][the notices issued under Section ][147 ][and ][148]would also [get ][quashed ][and ][it ][is ordered ][accofdingly' ][The ][reason ][we]are quashing the [consequential ][order ][is ][on ][the ][principles ][that ][when]the initiation of the [proceedings ][itself ][was procedurally ][wrong' ][the]subsequent orders [also ][gets nullified automatically']37. The preliminary [obiection ][raised ][by the petitioner is sustained ][and]all these writ [petitions stands allowed ][on ][this ][very ][jurisdictional ][issue']Since the impugned notices [and ][orders ][are ][getting ][quashed ][on ][the-' ][.-]point of jurisdiction, we are not [inclined ][to ][proceed ][further and ][decide] \ the other issues raised by the [petitione{ ]which [stands resewed ][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." 6In view of the consensus arrived, the impugned [Show]Cause notices and consequential orders [passed ]in this batch ofwrit 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.3B of the order dated 14.09.2023 inW.P.No.25903 of 2O22 7The Writ Petitions are allowed. No costs. Interlocutoryapplications, if any pending, shall also stand closed.ASSTsTAS?lvESIYIXA,TTRUECOPY/' ,.YSEiTION OFFICER To 39. No order as to costs." 6In view of the consensus arrived, the impugned [Show]Cause notices and consequential orders [passed ]in this batch ofwrit 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.3B of the order dated 14.09.2023 inW.P.No.25903 of 2O22 7The Writ Petitions are allowed. No costs. Interlocutoryapplications, if any pending, shall also stand closed.ASSTsTAS?lvESIYIXA,TTRUECOPY/' ,.YSEiTION OFFICER To 1. The lncome [Tax ][Officer' Ward ][- ][1, ][lncome Tax ][Office' ][Near Rail Under]Bridoe. Naloonda [- 50800'l]' 6;;;;il;;t , X$8;iml;"iii,iir r,l"i"liirv [ru-rii"-", ]Finance, [i ][race ][less ]Rool-\9 [Assessm-ent^centre' ][401,2nd Floor' ] [ncome ][E- Ramp'][Tax]"i J"riinil"t Nehru [[Siadium ]][Delhi ][- ]['l ][10 ][003 ]-^^. .^.^.^Bridoe. 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Two CD CoPies PSK.\rGJP / HIGH COURT DATED:0610912024 COMMON ORDERWP.Nos.24527 AND 24589 of 2024 ALLOWING THE WRIT PETITIONSWITHOUT COSTS. 0t)[q]?hr)4^Qllz 1ESI/q(ol'!I3 1t 0EC 2024fZ'tParcttEo[*]