Wp/24638/2024 Of Primary Agriculture Coop Society Limited v. The Assistant Commissioner Of Income Tax Circle 1

HIGH COURT FOR THE STATE AT HYDERABAD(Special Original Jurisdiction) MONDAY,THE NINTH DAY OF SEPTEMBERTWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU WRIT PETITION NOS: 24638 AND 24655 W.P.No: 24638 OF 2024 Between: PRIMARY AGRICULTURE COOP SOCIETY [Limited, ][Rep. ][By ][its ][Secretary]BODAKUNTLA VIJENDER, SIo.RAJAIAH [BODAKUNTLA, ][Occupation.]Business Aged about 41 [years, ]R/o. [KundaramV, ][Mandal ][Kalvasrirampoor,]Dist Karimnigar 505174, Telangana, lndia. [Assessment Year.2018-19] ...PETITIONER AND 1The Assistant Commissioner of lncome Tax Circle [1, ][Karimnagar, lncome Tax]2The Office, Prin6ipal Aayakar Chief Bhavan, Near Commissiondr Natraj Theatre, of lncome [Karimnagal Telangana ][Tax ][Telangana ][State- ]4i--qlfd 2The Office, Prin6ipal Aayakar Chief Bhavan, Near Commissiondr Natraj Theatre, of lncome [Karimnagal Telangana ][Tax ][Telangana ][State- ]4i--qlfd Hyderabad, lT Towers, AC Guards, [Masab ][Tank, ][Hyderabad ][500 ][028']TelanganaTelangana3The liational Faceless Assessment Center, [lncome ][Tax ][Department' ][New.]DelhiDelhi4The Central Board of Direct Taxes, Represented [by ][its Chairman, Department]of Revenue, Ministry of Finance, Government [of ][lndia, ][Secretariat Buildings']New Delhi 110 001.of Revenue, Ministry of Finance, Government [of ][lndia, ][Secretariat Buildings']New Delhi 110 001.5The Union of lndia Represented by its [Secretary ][to ][the ][Government,]Department of Revenue, Ministry of Finance, [New ][Delhi-1 10001]Department of Revenue, Ministry of Finance, [New ][Delhi-1 10001] ...RESPONDENTS Petition under Article 226 oI the Constitution [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, declaring the order [passed by ][the ][lncome Tax]Authorities (National Faceless E-Assessment Centre) [completed ][the ][assessment]UtS 147 r.w.s 144 read with section 1448 of the [lncome{ax ][Act ][Date ][of]09-02-2024, DIN ITBA/ASTlSl147 12023-2411060713598(1) [for ][the ][Assessment]Year 2018-1 9 determining the total income of Rs. [25,41 ],995/-as [arbitrary, ][illegal,] bad in law, without.lurisdiction, void-ab-initio, violatlve of the [principles ][of ][natural]justice apart from being violatrve of Articles 14, 19(1Xg) and 265 of theConstitution 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: SRl. THANNERU CHAITANYA KUMARCounsel for the Respondent Nos. 1&2: Ms. J. SUNITHA JT SC FOR INCOME TAX DEPARTMENT Counsel for the Respondent Nos.3to5: SRI P. SHASHIDHAR REDDY W.P.No: 24655 OF 2024 Between: SHYIAKUIVIAR THAKDIKAHALA, S/O MALLIKARJUNA THADIKAHALA, Aged about 50 years, Occupation Business, R/o Flat [1 ][11,]Block A , Splendour Apts Gajularamaram, Hyderabad 500055 Telangana,lndia. Assessment Year 2018- 19...PETITIONER AND ...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 order [passed ]by the lncome TaxAuthorities (National Faceless E- Assessment Centre completed the assessmentUIS 147 r. w. s 144 read with section 1448 of the lncome Tax Act, 1961 vide DINand Notice No. dated 13-02-2024 ITBA/ASTiS/14712023-2411060872165(1) forthe assessment year 2018- 19 determining the total income of Rs. 10,55,28,475l- AND ...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 order [passed ]by the lncome TaxAuthorities (National Faceless E- Assessment Centre completed the assessmentUIS 147 r. w. s 144 read with section 1448 of the lncome Tax Act, 1961 vide DINand Notice No. dated 13-02-2024 ITBA/ASTiS/14712023-2411060872165(1) forthe assessment year 2018- 19 determining the total income of Rs. 10,55,28,475l- as arbitrary, illegal, bad in law, without [jurisdiction, void- ab- initio, violative ][of ][the]principles of natural [justice ]apart from being [violative ][of ][Articles ][1a, 19(1Xg) ][and]265 of the Constitution of lndia and Sec. [148A of ][the ][lncome Tax ][Act, ][1961, ][and]consequently set aside the same [in ]the [interests ][of ][justice] Counsel for the Petitioner: SRI. Gounsel for the Respondent Nos. [1&2: ][Ms. ][B. ] [REDDY,](Jr. SC FOR INCOME TAX) Counsel for the Respondent [Nos.3to5: ] [B. ] SRIGADI PRAVEEN KUMAR,DY. SOLICITOR GENERAL The Court made the following: ,/ THE HONOURABLE SRI JUSTICE SUJOY PAULAND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NOS.24638 AND 24655 OF 2024 COMMON ORDER (per Hon'ble SP,J) Sri Thanneru Chaitanya Kumar, learned counsel appears for the petitioner(s), Ms. J.Sunitha, learned JuniorStalding Counsel for Income Tax Department, appears forrespondent Nos.1 and 2 in W.P.No.24638 of 2024, Ms.B.SapnaReddy, learned Junior Standing Counsel for Income TaxDepartment, appears for respondent Nos. 1 and 2 lnW.P.No.24655 of 2024, Sri P. Shashidhar Reddy, learnedcounsel, appears for respondent Nos.3 to 5 in W.P.No.24638 of2024 and Sri B. Mukherjee, learned counsel representingSri Gadi Praveern Kumar, Iearned Deputy Solicitor General ofIndia, appears lor respondent Nos.3 to 5 in W.P.No.24655 of2024 2Regard being had to the similarity of the questioninvolved, on the joint request of the parties, the matters areanalogously heard and decided by this common order. It is common is common common ground taken by the learned counsel forby the learned counsel forlearned counsel forcounsel for 3. It is common is common common ground taken by the learned counsel forby the learned counsel forlearned counsel forcounsel forthe petitioner(s) that in furtheralce of Financ e Act, 2027 , re-assessment process stood modified but the respondents have nottaken care of it and therefore notices issued under Section 148 of the Income Tax Act, 196 1 cannot sustain judicial scrutinv.Since notices a-re bad in law, the consequential orders are alsobad in law 4. 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.25903 of 2022and other connected matters, decided by common order dated14.O9.2023. The parties agreed that this matter may be disposedof in terms of the Common Order dated 14 .O9 .2023. 5This Court in the said order dated 14.09.2023 inW.P.No.259O3 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 Act, 202,1, 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. 5This Court in the said order dated 14.09.2023 inW.P.No.259O3 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 Act, 202,1, 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. Fo. all the aforesaid reasons, the impugned notices issued and theproceedings drawn by the respondent-Depa(ment 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 [,148]would 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 [,148]would also get quashed and it is ordered accordingly. The reason weare quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, thesubsequent orders also gets nullified automatically.subsequent 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 thepetitions only on the procedural flaw, the right conferred on theRevenue would remain reserved to proceed further if they so wantfrom the stage of the order of the Supreme Court in the case of AshishAgarwal, supra. 39. No order as to costs." 6In vierv of the consensus arrivedthe impugned ShowCause notices and consequential orders passed in this batch ofwrit petitions a-re set aside. Liberfy is reserved to both the partiesto take respective stand and to proceed in accordance with lawas per paragraph No.38 of the order dated 14.09.2023 inW.P.No.25903 ol 2022 The Writ Petitions are a-llowed. No costs. Interlocutory 7 applications, i| 211, pending, shall also stand closed SD/- C. PRAVEEN ASSISTANT REGISTRAR.\-.'SECTION OFFICER //TRUE COPY// To,1The Assistant [Commissioner ][of ][lncome ][Tax Circle ]['1, ][Karimnagar,.lncome]i;; Offi"", A"yakar [Bhavan, Near Natraj ][Theatre, ][Karimnagar Telangana]State.1The Assistant [Commissioner ][of ][lncome ][Tax Circle ]['1, ][Karimnagar,.lncome]i;; Offi"", A"yakar [Bhavan, Near Natraj ][Theatre, ][Karimnagar Telangana]State. State.2in?-principat Chief [Commissioner ][of ][lncome ][Tax ][Telanoana ][and ][AP']ivi"ljilloi rr r"*"i.. [Ac' ][clriJs ][-vrsru ][rank. ][Hvcjeraiad 500 ][028,]Telangana2in?-principat Chief [Commissioner ][of ][lncome ][Tax ][Telanoana ][and ][AP']ivi"ljilloi rr r"*"i.. [Ac' ][clriJs ][-vrsru ][rank. ][Hvcjeraiad 500 ][028,]Telangana 3. The National Faceless [Assessment Center, lncome ][Tax ][Department, New']DelhiDelhi //TRUE COPY// To,1The Assistant [Commissioner ][of ][lncome ][Tax Circle ]['1, ][Karimnagar,.lncome]i;; Offi"", A"yakar [Bhavan, Near Natraj ][Theatre, ][Karimnagar Telangana]State.1The Assistant [Commissioner ][of ][lncome ][Tax Circle ]['1, ][Karimnagar,.lncome]i;; Offi"", A"yakar [Bhavan, Near Natraj ][Theatre, ][Karimnagar Telangana]State. State.2in?-principat Chief [Commissioner ][of ][lncome ][Tax ][Telanoana ][and ][AP']ivi"ljilloi rr r"*"i.. [Ac' ][clriJs ][-vrsru ][rank. ][Hvcjeraiad 500 ][028,]Telangana2in?-principat Chief [Commissioner ][of ][lncome ][Tax ][Telanoana ][and ][AP']ivi"ljilloi rr r"*"i.. [Ac' ][clriJs ][-vrsru ][rank. ][Hvcjeraiad 500 ][028,]Telangana 3. The National Faceless [Assessment Center, lncome ][Tax ][Department, New']DelhiDelhi 4. The Chairman, Central Board [of ][Direct Taxes, ][Department ][of ].Reverue, -Ministry of Finance, Government [of ][lndia, Secretariat Buildings, New ][Delhi ]\110001.Ministry of Finance, Government [of ][lndia, Secretariat Buildings, New ][Delhi ]\110001.5. The Secretary ,Union of [lndia ][to ][the ][Government, Department ][of ][Revenue,]fi/inistrv of Finance. New Delhifi/inistrv of Finance. New Delhi o. ine Adsistant Commissioner of [income tax circle 12(1), Hyderabad Aaykar]Bhawan, Opposite Lb Stadium, [Basheer ][Bagh, ][Hyderabad, ][Telangana']500084Bhawan, Opposite Lb Stadium, [Basheer ][Bagh, ][Hyderabad, ][Telangana']500084 7. One CC to SRl. THANNERU [KUMAR, ][Advocate ] B. One CC to Ms J. SUNITHA , [Jr ] loPUClB. One CC to Ms J. SUNITHA , [Jr ] loPUClg bne ci to sRt. GADI PRAVEEN KUMAR, DY. sollclroR GENERALoF rNDrA oF rNDrA 10.One CC toMs. B.'SAPNA REDDY, [Jr. SC FOR INCOME ] IOPUC] 11.Two CD CopiesB I\4GJPB I\4GJP HIGH COURT DATED:09109t2024 tI1UE [Sl ][q,.](((I1l llru 2uul)'J[c]cf't*o€spATcHf_\aS\?t)\,U >M\ COMMON ORDER WP.No's.24638 AND 24655 OF 2024 ALLOWING BOTH THE WRITPETITION SWITHOUT COSTS