Wp/26224/2024 Of Venkat Reddy Karrolla v. Income Tax Officer

HIGH COURT FOR THE STATE OF TELANGANA (Special Original Jurisdiction) TUESDAY, THE TWENTY FOURTH [DAY OF SEPTEI\iIBER]TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAULANDTHE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR WRIT PETITION NOs: 26224[26226 ][and ][26241 ] [2024] WRIT PETITION NO: 26224 OF 2024 Between: Venkat Reddy Karrolla, S/o Ram Reddy Aged [about ][S5years, ][Occ. ][Business,]4-7-8113, Road No.3,Revenue Colony, [Sa ]ngareddy-502001 ...PETITIONER AND 1lncome Tax Officer, Ward 9(1), Hyderabad, l.T. [Towers, ] [Guards, ][Masab]Tank Hyderabad- 500004, TelanganaTank Hyderabad- 500004, Telangana 2The Principal Chief Commissioner of [lncome ][Tax,, ] [85 ][TS, ][1Oth ][Floor, ] Block, l.T.Towers, 10-2-3, A.C.Guards, Hyderabad [-500004]Block, l.T.Towers, 10-2-3, A.C.Guards, Hyderabad [-500004] 3Assessment Unit,, National Faceless [Assessment ][Centre, lncome ][Tax]Department, Ministry of Finance Room No. [401 ], znd [Floor, ][E-Ramp,]Jawaharlal Nehru Stadium, Delhi- [1 ]10003Department, Ministry of Finance Room No. [401 ], znd [Floor, ][E-Ramp,]Jawaharlal Nehru Stadium, Delhi- [1 ]10003 ...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]pleased to issue a writ, order or direction, more [particularly ]one in the [nature of]Writ of Mandamus, declaring the Assessment [Order ][dated ][0710212024 ][passed ][by]the 3rd respondent uts 147 r/w section [1448 ][of the ][lncome Tax ][Act ][for ][A.Y.]2015-16 vide DIN No. ITBA/ASTlsl14712023'241106061 [1789(1)and ][the ][notice]u/s 148 dated 19.O4.2O22 vide DIN [No.|TBA/AST/S|14B-112022-]2311042783264(1), issued by the JAO [(1st ][Respondent) instead ][of ] [(3rd]Respondent) as void, illegal [and contrary ][to the ][Principles ][of ][Natural Justice.] lA NO: 1 OF 2024 Petition under section 1si cpc praying that in the circumstances statedin the affidavit filed in support of the petition, the High court may be pleased toin the affidavit filed in support of the petition, the High court may be pleased tostay all further proceedings pursuant to the Assessment order dated 07.02.2024passed by the 3rd respondent u/s 147 rlw section 1448 of the lncome Tax Act torA.Y 2017-18 vide DIN No. |rBA/ASTlst'r4712023-2411060611789(i) and maypass such other order(s) as the Honble court deems fit and proper in theinterests of substantial justice, as othenvise the petitioner would be put toirreparable loss and serve injury.passed by the 3rd respondent u/s 147 rlw section 1448 of the lncome Tax Act torA.Y 2017-18 vide DIN No. |rBA/ASTlst'r4712023-2411060611789(i) and maypass such other order(s) as the Honble court deems fit and proper in theinterests of substantial justice, as othenvise the petitioner would be put toirreparable loss and serve injury. Counsel for the Petitioner: SRI PARIKSHITH KUTUR Counsel for the Respondents: M/s. B.SAPNA REDDy, Jr. SC FOR INCOME TAXWRIT PETITION NO: 26226 0F 2024WRIT PETITION NO: 26226 0F 2024 Between: IVohd Abdul Naveed, S/o Mohd Abdul eadeer, Aqed about 39 years, OccBusiness, .No_ 23-2-46, Opp. Water tank. ['Mdgnatpura ].ludifee-'Coit,Hyderabad- 500002.Business, .No_ 23-2-46, Opp. Water tank. ['Mdgnatpura ].ludifee-'Coit,Hyderabad- 500002. ...PETITIONER AND 1lncome Tax Officer, Ward 9('l), Hyderabad, l. T. Towers AC Guards, MasabTank Hyderabad- 500004, TetanganaTank Hyderabad- 500004, Tetangana 2The.Principal Chief Commissioner of lncome Tax, Ap and TS, jOth Floor, C_Block, l. T. Towers, 10-2-3, A. C. Guards, Hyderabad - 500004Block, l. T. Towers, 10-2-3, A. C. Guards, Hyderabad - 500004 3Assessment Unit, National Faceless AssessmentCentre, lncome TaxDepartment, Ministry of Finance Room No 4O1.-2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- [.t ]10003Department, Ministry of Finance Room No 4O1.-2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- [.t ]10003 ...RESPONDENTS ...PETITIONER AND 1lncome Tax Officer, Ward 9('l), Hyderabad, l. T. Towers AC Guards, MasabTank Hyderabad- 500004, TetanganaTank Hyderabad- 500004, Tetangana 2The.Principal Chief Commissioner of lncome Tax, Ap and TS, jOth Floor, C_Block, l. T. Towers, 10-2-3, A. C. Guards, Hyderabad - 500004Block, l. T. Towers, 10-2-3, A. C. Guards, Hyderabad - 500004 3Assessment Unit, National Faceless AssessmentCentre, lncome TaxDepartment, Ministry of Finance Room No 4O1.-2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- [.t ]10003Department, Ministry of Finance Room No 4O1.-2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- [.t ]10003 ...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 a writ, order or direction, more particularly one in the nature ofwrit of Mandamus, declaring the Assessment order daled 14 02.2024 passed bythe 3rd respondent uls 147 r/w section i44B ot the lncome Tax Act for A. y.2016- 17 vide DIN No. IrBA/ASTtsl147t2o23- 24t1o6o}g1s47(1)and the noticeu/s 148 dated 25. 03. 2023vide DrN No. TTBAiAST/S/148 1r2o22- 2311051289717('1 ), issued by the JAO [(1st ][Respondent) instead ][of ] [(3rd]Respondent) as void, illegal and contrary [to ][the ][Principles of Natural ][Justice.]Respondent) as void, illegal and contrary [to ][the ][Principles of Natural ][Justice.] 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]all further [proceedings ][pursuant ]to the [Assessment ][Order ][dated]stay 14.02.2024 passed by the 3rd respondent uls [147 r/w ][section ][1448 ][of ][the]lncome Tax Act for A.Y 2016-17 vide DIN No. [ITBA/AST/S/14712023']2411060898547(1 )and may [pass ]such other [orde(s) ][as ][the ][Honble Court ][deems]fit and proper in the interests of substantial [justice, ][as otherwise ][the ][Petitioner]would be put to irreparable loss and serve [injury.] Counsel for the Petitioner: SRI PARIKSHITH Counsel for the Respondents: M/s. [B.SAPNA ][REDDY, ][Jr. ] WRIT PETITION NO: 26241OF 2024Between: Pramila Devi Inani, W/o. late Sri Venugopal lnani [Aged about ][8Syears, Occ]Business, Rl/o 15- 9- 58, Maharaj Gunj, Hyderabad , [Telangana ][- ][500012.] ...PETITIONER AND 1lncome Tax Officer, Ward 9( 1), Hyderabad, Aaykar [Bhawan, ][Opp ] Stadium, Basheerbagh Hyderabad- 500004, [Telangana]Stadium, Basheerbagh Hyderabad- 500004, [Telangana]2The Principal Chief Commissioner of lncome [Tax, AP ][and ][TS, ][1Oth ][Floor, ] Block, l. T. Towers, 10-2-3, A. C. Guards, [Hyderabad - 500004]Block, l. T. Towers, 10-2-3, A. C. Guards, [Hyderabad - 500004]3. Assessment Unit, National Faceless Assessment [Centre, Income ][Tax]Department, tVinistry of Finance Room No. [401 ], [2nd ][Floor, ] [Ramp,]Jawaharlal Nehru Stadium, Delhi- [1 ][10003]Department, tVinistry of Finance Room No. [401 ], [2nd ][Floor, ] [Ramp,]Jawaharlal Nehru Stadium, Delhi- [1 ][10003] ...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]pleased to issue a writ, order or direction, more [particularly ]one [in ]the [nature of]Writ of Mandamus, declaring the Assessment [Order ][dated ][19.03.2024 passed ][by]the 3rd Respondent u/s 147 rlw [section 144 B of ][the ][lncome ][Tax ][Act ][for ][A. ][Y.]2019- 20 vide DIN No. ITBA/AST/5114712023- [24116062930999(1) ][and the notice] u/s 148 dated 31 .03.2023 vide DIN No.ITBA/AST/Sl14B_1l2o2i-231105't809053(1), issued by the JAO (1st Respondent) instead of FAO (3rdRespondent) as void, illegal and contrary to the Principles of Natural Justice. lA NO: ['l ]OF 2024 ...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]pleased to issue a writ, order or direction, more [particularly ]one [in ]the [nature of]Writ of Mandamus, declaring the Assessment [Order ][dated ][19.03.2024 passed ][by]the 3rd Respondent u/s 147 rlw [section 144 B of ][the ][lncome ][Tax ][Act ][for ][A. ][Y.]2019- 20 vide DIN No. ITBA/AST/5114712023- [24116062930999(1) ][and the notice] u/s 148 dated 31 .03.2023 vide DIN No.ITBA/AST/Sl14B_1l2o2i-231105't809053(1), issued by the JAO (1st Respondent) instead of FAO (3rdRespondent) as void, illegal and contrary to the Principles of Natural Justice. lA NO: ['l ]OF 2024 Petition under Section 151 CPC praying that in the circumstances statedin the affidavit filed in support of the petition, the High Court may be pleased tostay all further proceedings pursuant to the Assessment Order dated19.03.2024 passed by the 3rd Respondent uls 147 r/w section 144 B of thelncome Tax Act for A. Y. 2019- 20 vide DIN No.ITBA/AST/S114712023-24116062930999(1 ) and may pass such other orde(s) as the Honble Courtdeems fit and proper in the interests of substantial justice, as otherwise thePetitioner would be put to irreparable loss and serve injury. Counsel for the Petitioner: SRI PARIKSHITH KUTUR Counsel for the Respondents: M/s. B.SAPNA REDDY, Jr. SC FOR INCOME TAXThe Court made the following: COMMON ORDER THE HONOURABLE SRI JUSTICE ANDTHE HONOURABLE [NAMAVARAPU RAJES}IWAR ] WRIT PETITION NOS.[26224 26226 ][e,26][24L O? ][2024] COMMON ORDER[(per ][Hon'ble ][SP,J)] Sri K. Parikshith, learned [counsel, appears ][for ][the]petitioner(s) and Ms. B.Sapna [Reddy, ][learned ][Junior ][Standing]Counsel for Income Tax [Department, ][appea-rs ][for ][the]respondents. Regard being had to the had to the to the the [[similarity ][of the ][question]][[of the ][question]][[question]] 2. Regard being had to the had to the to the the [[similarity ][of the ][question]][[of the ][question]][[question]]involved, on the [joint ][request ][of ][the ][parties, ][the ][matters ][are]alalogously 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 ][Finance Act, 2021, ][re']assessment [process stood ][modified ][but ][the ][respondents have ][not]taken care of it and [therefore notices issued ][under ][Section ][148]of the Income Tax [Act, ][1961 ][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'25903 ][of ][2022]and other connected [matters, ][decided ][by ][common order ][dated] \ 1,4.O9.2023. The parties agreed that this matter may be disposed-tof in terms of the Common Order dated 74.09.2023 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-Department 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. 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-Department 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 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 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.37. The preliminary objection 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 jurisdiction, 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 underArtictE 142 of the Constitution of lndia, permitted the Revenue toproceed under the substituted provisions, and this Court allowing theproceed 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 wantfrom the stage of the order of the Supreme Court in the case of AshishAgarwal, supra.39. No order as to costs."Agarwal, supra.39. No order as to costs." 6. 6. In view of the consensus arrived, the impugned ShowCause notices and consequential orders passed in this batch ofwrit petitions are set aside. Liberty 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 tnW.P.No.259O3 of 2O22. 7. The Writ Petitions are allowed. No costs. Interlocutoryapplications, if any pending, shail also stand closed. SD/. V. KAVITHAASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. The lncome Tax Officer, Ward 9(1), Hyderabad, Aaykar Bhawan, Opp LBStadium, Basheerbagh Hyderabad- 500004, TelanganaStadium, Basheerbagh Hyderabad- 500004, Telangana2. The Principal Chief Commissioner of lncome Tax, AP and TS, 1Oth Floor, C-Block, l. T. Towers, 10- 2- 3, A. C. Guards, Hyderabad [- ]500004Block, l. T. Towers, 10- 2- 3, A. C. Guards, Hyderabad [- ]5000043. The Assessment Unit, National Faceless Assessment Centre, lncome TaxDepartment, Ministry of Finance Room No. 4O1 , 2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- 110003Department, Ministry of Finance Room No. 4O1 , 2nd Floor, E- Ramp,Jawaharlal Nehru Stadium, Delhi- 1100034. One CC to SRI PARIKSHITH KUTUR, Advocate 5. One CC to M/s. B.SAPNA REDDY, Jr. SC FOR INCOIVE TAX 6. Two CD Copies BSRGJP[W] IIHIGH COURTDATED: 2410912024o[R][ THE ][si.4](r.(oo27 [1 L]zlilt,'.oaSn61 i.qr.i_COMMON ORDERWP.Nos.26224,26226 AND 26241 of 2024 ALLOWING ALL THE WRIT PETITIONS,WITHOUT COSTS a."?s<bt)q