Wp/27251/2007 Of Smt.hemalatha Rathi, Old Kabutarkhana, Hyderabad v. Income Tax Officer, A.c.guards, Hyderabad And Another

[ [32e5 ]] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY THIRD DAY OF NOVEMBERTWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYANANDTHE HONOURABLE SRI JUSTICE C.V, BHASKAR REDDY WRIT PETITION NO: 27251 OF 2007 Between: Smt Hemalatha Rathi, W/o Shri.Bhagavandas Rathi, R/o.22-2-104, OldKabutarkhana, Hyderabad. ..,PETITIONER AND1. lncome Tax Officer, Ward 9(2), 2nd Floor, Income Tax Towers, A.C.Guards,Hyderabad.1. lncome Tax Officer, Ward 9(2), 2nd Floor, Income Tax Towers, A.C.Guards,Hyderabad.2. The Commissioner of Income Tax-Vl, 7th floor, lncome Tax Towers,A.C.Guards, Hyderabad.A.C.Guards, Hyderabad. ...RESPONDENTSPetition under Article 226 of lhe Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue a writ direction or order especially one in the nature of writ ofmandamus declaring the notice issued by the 1st respondent on 20.03.2007under section 148 read with section 150(1) of the lncome Tax Act, 1961 forreassessing the income of the petitioner for the assessment year 1995-96 asbeing illegal, arbltrary, and against the provisions of the lncome Tax Act,1961and set aside the same. l.A. NO: 1 OF 2007(WPMP. NO: 35631 OF 2007) 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 initiated pursuant to the notice dated 20.03.2007issued by the 1st respondent for reassessing the income of the petitioner undersection 148 read with section 150(1) of the lncome Tax Act, 1961 for theassessment year 1 995-1 996.Counsel for the Petitioner: SRI ROHAN ALOOR Counsel for the Respondents: SRI B. NARASIMHA SARMAThe Court made the following: ORDERThe Court made the following: ORDER THE HON'BLE THE CHIEF IUSTICE UIIAL BHUYANAND THE HON'BLI] SRI IUS'TICE C.V.BTIASKAR REDDYW.P.No. 27251 of 2007 ORDER, (,a' r,a. I ht: bb rhc Chiel Jarie Ltjia/ Bktyan) Heard \4r. Itohan Aloor, learned counsel for the pcdtionerand Mr. B.Narsin'rha Sarma, learned counsel for the respondcnts. 2. tsy frhng this petition uncler Article 22(t of the Consdrutionol India, petiti,rncr seeks quashiflg of thc nodce dated 20.03.2007issucd by resp,,,ndcnt No.1 2.r., lncomc Tax O[ficer, NTard 9(2),Hyderabad urrtlcr Section 118 r/w Scct-ion 150(1) of the Income'l'ax Act, 196 I tbrie fly'thc Act' hereinafter). 3. We fincl that by the ordcr dated 24.12.2007, this Court hadadmitted thc u rit petition lc-,r final hearing ancl granted interim stay. 4. RespontJcnts havc neithcr filed any counter-affidavit nor anyapplication for vacaring the stay. 5. Before rvc advcrt t() thc impugned notice, it would beappropriate to refer to the orders passed by the revenue authorities 6. Petitioncr is an assessee under the Act. By thc assessmentorder datcd 19.03.1996 passed by the asscssing officer underSection 143(3) of the Act for the assessment year 1993-94, toralincomc of the petitioner \vas assessed at Rs.41,94,430.00. Thisincluded income from long term capital gains to the extent ofRs.40,70,571.00. 7. Petitioncr frlcd appeal bcfore the Commissioner oF Income'fax (Appeals) V, Hyderabad (briefly 'CIT(A)' hereinafter).I Iowcver, the appeal filed by the petitioner was dismissed byCIT(A) uide the order dated 30.08.1996 8. Thereafter, pctitiooer filed further appeal before the IncomcTax Appellate Tribunal, Hyderabad Bench 'A', Hydcrabad @riefly'the Tribunal' he reinafter) which was registeredASI.T.A.No.1756/Hyd/1996 for the assessment year 1993-94. By thcorder dated 29.07.2005, appeal of the petitioner was pardy allowed.Regarding long term capital gun, view taken by the Tribunal wasthat petitioner had surrendered all her rights to get the constructedarca ofl the datc when the supplcmental dcvclopment agreement 7. Petitioncr frlcd appeal bcfore the Commissioner oF Income'fax (Appeals) V, Hyderabad (briefly 'CIT(A)' hereinafter).I Iowcver, the appeal filed by the petitioner was dismissed byCIT(A) uide the order dated 30.08.1996 8. Thereafter, pctitiooer filed further appeal before the IncomcTax Appellate Tribunal, Hyderabad Bench 'A', Hydcrabad @riefly'the Tribunal' he reinafter) which was registeredASI.T.A.No.1756/Hyd/1996 for the assessment year 1993-94. By thcorder dated 29.07.2005, appeal of the petitioner was pardy allowed.Regarding long term capital gun, view taken by the Tribunal wasthat petitioner had surrendered all her rights to get the constructedarca ofl the datc when the supplcmental dcvclopment agreement was executed rvhich became a sale agreemeflt. ['I'ransfer ]of landcontemplated by the f rrst dcvelopment agreemeflt did not takeplacc. It took place u,hcn the supplemental developmentalagrcement u,as crecuted. Thercfore, the endre amount pertainingto k)ng term capital gain should be brought to tax in the hands o[the pedrioner in the asscssmcflt r,1621 1995-96. 9. ,{t this stegc, wc mav mcntion that alreadv lor thc assessmentyear 1995-96, assessing officcr had passed assessment orderdated 13.02.1998 in respcct oI rhc petitioner under Section 143(3)of the r\ct. In thc said :lssessmcnt order, total rncome of thepetirioner rvas asscssed at Rs.29,60,670.00. 10. To givc cffcct ro the order of the ['fribunal ]dated 21 .07.2005,assessing oF|tcer i.e., rcspondcnt No.1 passed the consequentjalorder dated 21.12.2005 b,v amending the assessment already framed Ifor the assessme nt year 1,995-96. The capital gains amount wasadded to the tot:rl income of the petitioner whe reafter revised totalincome of the pctitioner rvas cluantihed at Rs.44,06,602.00. I \ 11. lt rvzs thcreaFtcr that thc irnpugned notice datcd 20.03.2007 came to be issued to thc pctitioner. Impugncdflotlcc dared20.03.2007 reads as under: Notice under Section 148 r.ws.150(1) of theIncome Tax Act, 1961 OfFrce of theIncome-tax Of6cer, !7ard-9 (2)13'h Floor, Gagan \rihar,Nampally, Hyderabad. PAN/GIR No.AEJHPR4824C Date: 20-03 2007 ToNlr Hemlatha Rathi,22-2- 104, Old Kabutarkhana,Hyderabad. Whereas I have reason to believe th^t yqgl_taqq4e [(tbe ]incone o/------ h res?ect oJ whichyt an astessable) tax fot the assessment yeer 1995-96 has escaped assessment within the meaning of S ecttort 747 of IncomeTax Act, 1961. I, therefore, proposc to assess / te-assess the income (z-conptte lossf fupnciatior albwance) for the said assessment yeat.I hereby require you to deliver to me within 5 &ys from the date o[service of this notice, a return in the prescnbed form of yoru-iaeolqe(the income oJ --- -- i, nspect of whicb 1ot ar assusabb) for the assessmeniyezr. sd/-o,T.N.RAVINDRANATH)Income-tax OfEcer, Watd-9(2)Hydetabad 1 1.1. The impugned notrce as cxtracted above indicates that theassessing officer: proposed to assess/re-assess the loss/depreciationallorvance of the petitioner lor the assessment year 1995-96. 12. At thrs stage, we malr ad\-crt to Section 150 of the Act whichreads as under: 150. Provision for cases where assessment is in pursuanceof an order on appeal, etc. (1) Notwithstanding anytfung contained in scction 149, thenotice uncler secrion 148 mav be issued at any time for thepurpose of- making an assessment or reassessment ofrecomputation in consequence of or to give effect to any findingor direction contained in an order passed by any authonty in anyproceeding under this act bl rvay of appeal, reference or rer.'rsionor by a courl in any prcceeding under any other law]. 1 1.1. The impugned notrce as cxtracted above indicates that theassessing officer: proposed to assess/re-assess the loss/depreciationallorvance of the petitioner lor the assessment year 1995-96. 12. At thrs stage, we malr ad\-crt to Section 150 of the Act whichreads as under: 150. Provision for cases where assessment is in pursuanceof an order on appeal, etc. (1) Notwithstanding anytfung contained in scction 149, thenotice uncler secrion 148 mav be issued at any time for thepurpose of- making an assessment or reassessment ofrecomputation in consequence of or to give effect to any findingor direction contained in an order passed by any authonty in anyproceeding under this act bl rvay of appeal, reference or rer.'rsionor by a courl in any prcceeding under any other law]. (2) The pror.rsions o[ sub- scction (1) shal] not apply in any casewhere any such assessment, reassessment or recomputation as isreferred to in that sub-section relates to an assessment year inrespect of u hich an assessment, reassessmeflt or recomputationcould not have been made at the time the order which was thesubject-matter of the appeal, reference or revision, as the casemay be, was made by reason of any other provision limiting thetime within which any action for assessmeflt, reassessment orrecomputatron may be taken. 12.1.. From a perusal <;F sub-section (1) of Scction 150 of the Act,wc find that thc said provision is basically to be employed alongwith Section 148 of the Act to give effect to orders passed inappeal, reference or revision. It is not intended to re-open anASSCSS1T1CNI.Already, order o[ the ['fribunal ]has been givcn e ffect toby the asscssing officer for the asscssment year 1995-96 by theconsequential order datcd 21.12.2005. That being the position, itwas not open to the asscssing ofltccr to have once again issued anotice undcr Section 148 read with Section 150 of thc Act toreopen the asscssment for the asscssment year 1995 96, that too,on a different issuc unconncctcd with the order of the Tribunal. 13. We further hnd that the impugned notice dated 20.03.2001has been issued after almost a period of nine years from the date o[passing of the assessment order dated 13.02.7998. That being theposlflon,we afe of the view that thc impugnednottcedated 20.03.2007 issued by respondent No.1 is without [jurisdiction.]'fhe same is hereby set aside and quashed.14. Consequendy, the writ petition is allowed. No costs. I I As a scquel, miscellaneous Petitions, [pending ][if ][any, ][stand] closed SD/- N. RAJ GOPALASSISTANGI$TRARrq\\'ilrtSECTINOFFICER //TRUE COPY// To 1.OneCC to SRI ROHAN ALOOR Advocate 2.OneCC to SRI B. NARASIMHA SARMA AdvocateloPUClTwoCD CopiesKKSGJPP|.(q.TwoCD CopiesKKSGJPP|.(q. 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