Mr. Yellaiah Setty vs. The Assistant Commissioner of Income Tax and 2 others

THURSDAY ,THE SEVENTH DAY OF JULY TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 28453 OF 2022 Between: Mr. Yellaiah Setty, S/o Mr. S.Kanthaiah, Aged 68 years, Occ. Business, R/o 16-2-1461C12, Flat No, 202, Dayanand Nagar, Malakpet, Hyderabad - 500 036, Telangana. ...PETITIONER AND I The Assistant Commissioner of lncome Tax, Circle - 9(1), Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 004, Telangana. The Principal Commissioner of lncome Tax - 4, Hyderabad, Room No. 211, 2nd Floor, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 004, Telangana. 3. The Principal Chief Commissioner of lncome Tax, Andhra Pradesh and Telangana, Hyderabad, Room No, 922, gth Floor, B Block, lT Towers, 10-2-3, A.C. Guards, Hyderabad - 500 004, Telangana. ...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 of Mandamus or any other appropriate Writ, Order or Direction, declaring a. the order dated 08.04.2022, passed u/s 148A(d) of the Act, vide DIN and Notice No ITBA/AST/F/148A12022-2311042659226(1), by the 1st Respondent, for the Assessment Year 2015 - 16 and b the notice dated 11.04.2022, issued by the 1st Respondent, u/s 148 of the lncome Tax Act, 1961, vide DIN and Notice ITBA/AST/S/148 112022- 2311042689500( 1), for the Assessment Year 2015 - 16 2 i I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

as arbitrary, illega bad in law, void-ab-initio, violative of tlre principles of natural justice apart fron being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lr dia and Sec. 14BA of the lncome Tax Act, 1961, and consequently set a ;ide the same in the interests of justice. Petition und rr Section 151 CPC praying that in the c rcumstances stated in the affidavit filed ir support of the petition, the High Court nra,/ br., pleased to stay all fu(her proceer ings, including any recovery, pursuan' to the notice dated 11.04.2022, issuec by the 1st Respondent, u/s 148 of the lncome Tax Act, 196'l , vide DIN and ltotice ITBA/AST/S/148_112022- 23110a2689500('1), for the Assessment Year i 015 - 16, pending disposal of the above \Vrit Petition. Counsel for the Pe titioner:SRl. A V A SIVA KARTIKEYA Counsel for the Rr spondents: B NARASIMHA SARMA The Court made tt ? following: lA NO: I OF 2022 I

I i l THE HON'BLE THE CHIEF JUSTICE UJJAL BII(ryAN AND THE HON'BLE MRS JI'STICE ST'REPALLI NANDA WRIT PETITION No.28453 of 2022 ORf,IER: eer tLe Hon'ble th. ChieI Justice Ujjal Btu-Lgc,ft) Heard Mr. A.V.A.Siva Kartikeya, learned counsel for the petitioner and Mr. B. Narasimha Sarma, learned counsel for the respondents. 2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated O8.O4.2O22 passed by respondent No.1 under Section 148A(d) of the Income Tax Act, 196l (briefly, 'the Act' hereinafter), for the assessment yea-r 20l5-16. 3. Petitioner is an assessee under the Act. For the assessment year 2015-16, a noti.ce dated 22.03.2022 was issued by respondent No.1 under Section 14BA(b) of the Act. As per the said notice, it was stated that information 4ece.ed by respondent No.l suggested that income chargeable to tax for the assessment yea-r 20 I 5- 16 had ,I I

) escaped ass( ssment within the meaning of Section 147 of the Act. T re details of information and enqtrin, were enclosed to t re said notice as an Annexure 4. Petitior er submitted reply. Howeve ', by the impugrred o der dated O8.O4.2O22 reply of th,: pelitioner was not accr pted. Deciding that it is a fit case f cr isr;uance of notice unr er Section 148 of the Act, the imprrgnerl order was passed mentioning that prior approval wrrs otrtained from the spe :ified authority. 5. Accord ng to learned counsel for the petjtioner, respondent ,lo. t had gone beyond the four t ransactions mentioned ir the Annexure to the notice dated '.r.2,,O3i.2022. Respondent No.l had gone into the turnover of the petitioner as declared in its return. Had this asper:t been brought to t re notice of the petitioner by way o1'the notice, petitioner w uld have met the above queries of re:spondent No.l. He ai o submits that respondent No.1 took the view that petitio rer had failed to substartiate the nexus between u,i hdrar.r,n cash and non-cash credits, again

I 3 pointing out that this was not the subject matter of the show cause notice. 6. In the hearing, learned counsel for the petitioner has drawn our attention to Section 151A of the Act which deals with faceless assessment of income escaping assessment and submits that on the basis of the above statutory provision, noti{ication dated 29.03.2022 was issued by the Central Board of Direct Taxes. As per the said notification, insofar assessment, reassessment or recomputation under Section 147 ol the Act or issuance of notice under Section 148 of the Act is concerned, the same should be through automated allocation, but in the present case the impugned order was passed in a physical manner. 7. Learned Standing Counsel for Income Tax Department submits that the writ petition has been filed at a stage prior to issuance of notice under Section 148 of the Act. He submits that petitioner would have ample opportunity to have his say during the course of reassessment proceedings. Even if the petitioner remains aggrieved thereafter, he would have a hierarchy of

1 remedies. ' 'herefore, no interference is <:alled f.or at this stage. Insol u notification dated 29.O3.2022 is conr:emed, learned Sta rding Counsel submits that t-he n otice under Section 148 {(b) of the Act was issued prior t-hereto on 22.03.2022 to which learned counsel f<rr th,: petitioner submits tha the impugned order was passed thereaJter. 8. We ha re given our thoughtful considerz.tion to the rival submis ;ions made at the bar. i I I I t I i I 9. This is tJre newly in a paradigr reassessmer issuance of under Sectir enabling the the assessir: specifred au Section 148 reopening ol a case of proposed reassessment. In view of ;erted Section 148,4' in the Act, there has been r shift in the procedure followed for t under Section 147 of the Act. Prior to notice under Section 148 of the Act, a notice n 148A(b) of the Act is required tr be issued person concerned to submit reply tvhereafter 3 authority upon receipt of approval from the -hority is mandated to pass an c rcler under t(d) ol the Act, whether the case is Iit for not- Once it is decided that it is a case fit for

) "t reopening, consequential notice under Section 148 of the Act is issued. 10. In the above backdrop, the order under Section 148A(d) of the Act is at a stage prior to issuance of notice under Section 148 of the Act. Unless glaring omissions are demonstrated or the conditions precedent for exercise of the power to reopen assessment are not complied with, a writ Court would not ordinarily interfere with an order passed under Section la8A(d) of the Act inasmuch as the proceedings is at a very nascent stage even prior to issuance of the statutory notice under Section 148 of the Act. i 1. Further, \ /e are of the view that contentions raised by the petitioner can very well be raised in the reply to the notice issued under Section 148 of the Act. At this stage, preempting the authorities from proceeding further on the grounds urged in the writ petition would not be proper. We, therelore, decline to interfere in the matter. t:; t2 Writ petition is accordingly dismissed. I

6 13. Miscell rneous applications pending, if any, shall stand closed However, there shall be no order e-s to costs. //TRUE COPY// SD/.K.ONESIM DEPIJTY REGISTRAR / ( tl) SECTION OFFICER To, PM SB 1. OneCCto )RI.AVASIVA KART|KEYAAdvocate [CprJC] 2. One CC to { Rl. B NARASTMHA SARMA Advocare [OF UC] 3. Two CD Co1 ies. 4. One Spare ( opy Y N

HIGH COURT DATED:O7 10712021 WP.No.28453 of 2O 2 Dismissing the WP Without costs. ( -/ 9 ORDER qt1'J LuLg