Wp/24816/2024 Of Karunakar Reddy Kunta v. The Assistant Commissioner Of Income Tax

HIGH COURT FOR AT HYDERABAD(Special Original Jurisdiction) TUESDAY, THE TENTH TWO THOUSAND PRESENT . . THE HONOURABLE ANDTHE HONOURABLE SRI JUSTICE WRIT PETITIO N NO: 24816 [2024] Between: Karunakar Reddy [Kunta, ][S/o. ][Sanga ]Seldy^. [Kunta ].Age^ [5,5 ][y-e?,[s']Occ: Business, Villa [t ]to- 95, [Prestige ][Park ][R/o ][Gundla ][Pochampally']Kompally, K.V.Rangareddy, [Telangana ][- ][500 ][100.] ,..PETITIONER AND 1 . The Assistant Commissioner [of lncome ][Tax, ][Circle f - ][9(1)' ][l'T ][Towers,]A.C.Guards, Masab [Tank. ][Hyderabad - 500 004.]A.C.Guards, Masab [Tank. ][Hyderabad - 500 004.] 2. The Cenkal Board of [Direct ][Taxes, ][Rep. by ][its Chairman, Department ][of]Revenue,MinistryofFinance'Governmentoflndia'Secretar.attsUlldlngs'New Delhi [- ]['l ][10 ]001.Revenue,MinistryofFinance'Governmentoflndia'Secretar.attsUlldlngs'New Delhi [- ]['l ][10 ]001. 3. The Principal Chief Commissioner [of lncome ][Tax, Andhra ][Pradesh ][and]Telangana Hyderabad- [500 004]Telangana Hyderabad- [500 004] ...RESPONDENTS 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]pbased to issue a Writ. order or orders, [direction ][or ][more ][part'rcular{y ][one ][in]nature of writ of Mandamus [declaring that the order passed ][uls ][147 ][ilw ][ser. ][144]rtw 144(b) of the lncome [Tax ][Act ][196'l ][on ][21-02-2024 ][by ][the ]['1"t ][respondent with]DIN No. ITBA/AST/S/14712023- [2411061253675(1) ][for the Assessrnent Year 2018-]19 pursuant to the notice [dl.2g-03-2022, ][the ][order ][u/s ][148A(d) ][dL.27-O4-2O22 ][and]notice issued u/s [1 ][48 ][dt. ][27 ][-04-2022 ][as ][illegal, ][bad ][in ][Law, ][void abinipio, ][unfair]from [being violatrve of provisions ][of ][sec. ][148 ] [and Sec. ][149 ][of ][the]arbitrary, apart Act and also contrary [to ][the ][circular issued by ][the ] [and ][provisions ][of ][sec.]151 0f the Act and [violatron ][of ][Article ][14 ][0f ][the ][constitution ][of ][lndia ][and] / [consequently ][set-a-side ][the ][Assessment ][Order passed ][by ][the ][1't ][respondent]/ daled.21-02-2024 and all consequential [proceedings pursuant there to] lA NO: 1 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]all further proceedings subsequent to [the ][order ][passed ][by ][the ][1'r ][respondent with]DIN No. ITBA/AST/S/'14712023-2411061253675(1) [for the Assessment Year ][2018-]19, including any recovery [pending ]disposal of the Writ [Petttion] Counsel for the Petitioner: SRI SRINIVAS GANGISHETTI Counsel for the Respondent Nos.1 and 3: MS. BOKARO (Jr. SC FOR lNcoME TAx) Counsel for the Respondent No.2: SRI DOMINIC [FERNANDES,]sc FoR cBlc IoPUC] The Court made the following: ORDER THE HOI{OI'RA.BLE SRI JUSTICE SUJOY AND THE HONOI'RABLE SRI JUSTICE [RA"'ESIIWAR ] WRIT PETITION No.24a15 OF 2o24 ORDER: (per Hon'ble Justice Sujoy [Paul)] Heard Sri G. Srinivas, learned counsel for [the] petitioner(s), Ms. B. Sapna Reddy, learned Junior StandingCounsel for Income Tax Department, for respondent [Nos. ][1 ]&3 and Sri Dominic Fernandes, learned Senior [Standing]Counsel for CBIC, for respondent No.2.Counsel for Income Tax Department, for respondent [Nos. ][1 ]&3 and Sri Dominic Fernandes, learned Senior [Standing]Counsel for CBIC, for respondent No.2. The ground taken by the learned counsel by the learned counsel the learned counsel learned counsel [[for ][the]][[the]] The Court made the following: ORDER THE HOI{OI'RA.BLE SRI JUSTICE SUJOY AND THE HONOI'RABLE SRI JUSTICE [RA"'ESIIWAR ] WRIT PETITION No.24a15 OF 2o24 ORDER: (per Hon'ble Justice Sujoy [Paul)] Heard Sri G. Srinivas, learned counsel for [the] petitioner(s), Ms. B. Sapna Reddy, learned Junior StandingCounsel for Income Tax Department, for respondent [Nos. ][1 ]&3 and Sri Dominic Fernandes, learned Senior [Standing]Counsel for CBIC, for respondent No.2.Counsel for Income Tax Department, for respondent [Nos. ][1 ]&3 and Sri Dominic Fernandes, learned Senior [Standing]Counsel for CBIC, for respondent No.2. The ground taken by the learned counsel by the learned counsel the learned counsel learned counsel [[for ][the]][[the]] 2. The ground taken by the learned counsel by the learned counsel the learned counsel learned counsel [[for ][the]][[the]]petitioner(s) is that in furtherance of Finance Act, 2021, [re-]assessment process stood modihed but [the ][respondents ][have]not taken care of it ald therefore notice issued under [Section]148 of the Income Tax Act, 196 I cannot sustain [judicial]scrutiny. Since notice is bad in lan', the consequential [orders]are also bad in law. 3. 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 14.O9.2O23. The parties agreed that this matter [may ][be]disposed of in terms of the Common Order dated 14.09.2023 4. This Court in the said order dated 14.09.2023 in W.P.No.259O3 of 2022, held as under: "35. lo [view ]of the aforesrid [dlscusslona, ][it ][is by ][noe ][very]clear that the proccdure to be folloscd by the rcspondeEt-DepartEcnt upoa trertlEg the aotlces lssucd fot rcasseasEentbeing uoder SectloE l.lEA, thc aubacqucnt [proceedlEgs ][was]Eandatorily required to be uBdcrtaleB urder the substitutedproeisioEs as l,aid doF! under thc Flnaacc Act,2O2l. lo theabsetrce of whlch, wc are coustralned to hold that theprocedure adoptcd by thc reapoDdert-DepartEert is incontraventioD to the strtcte l.e. tbe Fiaqace Act, 2O21, [et ][the]Iirst instance. Secondly, lt i6 also ia dircct contravention tothe directives l$ucd by the Hotr'ble SnpreEe Court in thecase of Ashish Agarsel, sEpn.36. For alt the [qforcsald ]rc.aoa8, the lmpug:ned notices iasuedand the proceedingE drasr by thc reepoadeat-Dcpaitment [is]neither tetrable, Eor sustalE8blc. Thc noticea ao issued andthe procedure sdopted betlg per se lllegal, deserves to be audare accordingly set aslde/qurahed. A8 [q ]co!6equeEce, all [the]impugoed ordera gettlag qlrashcd, the coEaequcntial ordcrspassed by the respoEdeEt DepcrtEelt purauant to th€ noticesissued under sectioE 147 rrd 148 would abo get quashed andit is ordered accordiEgly. Thc rcason wc are quashint theconsequential order is oa the prlnclples that when theinitiation of the procecdlEgs ltself eas Procedurally wrong,the subseque[t orderE 8Lo [gets ]aullllicd autoEatically.37. The prelimirary obJcctlon raised by the [petitioner ][is]sustained and all these wrlt [petitioa6 ]stends allorPed [on ]thisvery jurisdictiotral ieeue. Slnce the lEpugEed uotices andordcrs are getting qua8hed on the point ofJurisdiction, [qre ]arenot inclined to proceed further and decide the other issuesraised by the petitioDcr shlch Btands reserved to be raisedand contended in aE approprlate proceediags-38. Since the Hon'ble Suprcme Court had, ln the case ofAshish Agarwal, supra, aa E olre-tirne meeBure cxercising [(he]powers under Article 142 of the Constitution of India, I \ I \ pcrEitted the Rcvcnue to Proceed [under ][the ][sub8tituted]proviiiona, end thls Court elloEing [the ]PeutioDs [only ][on the]procedural llaw, the right [coaferred ][on ][the ][ReveEue ][would]reEaia re6ervcd to Procecd [frirther ][if ][they ][60 ][seEt ][ftoDr ][the]atage of the [order of ][the ][SuPteEe ][Court ][iE ][the ][case ][of Ashiah]Agarral, sugra.39. No order as [to ][costs."] 5. In -view of the [consensus ][arrived, ][the ][impugned ][Show]Cause notice and [consequential ][orders ][passed ][in ][this ][writ]petition 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'O9'2023 ][it]W.P.No.25903 of [2022.] 6. The Writ Petition is [allowed. ][No ][costs ][lnterlocutory]applications, if [any ][pending' shall ][also stand ][closed'] SD/- K. ASSISTANTEGISTRAR //TRUE [COPY'/] SECTION To,1The Assistant [Commissioner of lncome Tax' ][C^ircle ][f ][- ][9(1)' ][l ] [Towers']n C.6u"'idi, C.6u"'idi, [[tlasab ][Tank, ]][[Tank, ]][[Hvderabad ]][- ][500 ][0-04][[of ]][Revenue'][-]1The Assistant [Commissioner of lncome Tax' ][C^ircle ][f ][- ][9(1)' ][l ] [Towers']n C.6u"'idi, C.6u"'idi, [[tlasab ][Tank, ]][[Tank, ]][[Hvderabad ]][- ][500 ][0-04][[of ]][Revenue'][-] n C.6u"'idi, C.6u"'idi, [[tlasab ][Tank, ]][[Tank, ]][[Hvderabad ]]2?nz dt Ministry "iffi',i,-ine of Finance, [co*ri#"ni'6dno"irlsb.i"iiriat ][Gntiii'e-;id ][oioi,""t ][Taxes. Deoartment ][Buiuings, ][l.lew Delhi ][[of ]][Revenue'][-]110 001.Ministry "iffi',i,-ine of Finance, [co*ri#"ni'6dno"irlsb.i"iiriat ][Gntiii'e-;id ][oioi,""t ][Taxes. Deoartment ][Buiuings, ][l.lew Delhi ][[of ]][Revenue'][-]110 001.JThe Principal Chief [Commissioner ][of ][lncome Tax' Andhra Pradesh ][and]telanoand HYderabad- [500 ][004'][[I]]telanoand HYderabad- [500 ][004'][[I]] 4o"n3 ic' 6' dri [S-rin ][ivi" ][Ga ][ngishetti, ][Advoca-te ][[o ] [u ][c ][[I]]qone cc to [Ms. ][Bokaro ][d;#iilii ][iii-sc-i91q"gme ][rax) ][toPucl]b. dc ii sii [oominc r",handes, Sc ][ror ][cBlcloPucl]il; qone cc to [Ms. ][Bokaro ][d;#iilii ][iii-sc-i91q"gme ][rax) ][toPucl]b. dc ii sii [oominc r",handes, Sc ][ror ][cBlcloPucl]il; . . Two CD CoPies. Two CD CoPies 7 TJGJPGJP 1/ HIGH COURT DATED: 1 0 l0gl2024 ORDERWP.No.24816 ot 2024 ALLOWING THE WRIT PETITIONWITHOUT GOSTS ?/,/tr/L*t l tlC [Sl{/](((to1 i or[ 212+(t.t Dlc