Mohammed Abdul Rehman vs. The Income Tax Officer

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WP/23353/2025HC TelanganaHBHC01046141202507 August 2025Author: P.SAM KOSHY,SUDDALA CHALAPATHI RAO7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, considering the contentions of the petitioner and the fact that the Section 148 notice issued by the jurisdictional Assessing Officer was not disputed by the learned Standing Counsel for the Department, along with the cited judgments of this Court in Kankanala Ravindra Reddy and the Supreme Court in Ashish Agarwal, was of the considered opinion that the Assessing Authority should have adopted a more pragmatic approach. While deciding the petition under Section 220(6) of the Act, the Assessing Authority ought to have kept the recovery proceedings in abeyance pending the appeal before the Appellate Authority. Consequently, the writ petition was disposed of by directing the Assessing Officer not to pursue recovery proceedings pursuant to the impugned order dated 28.07.2025 until the appeal for Assessment Year 2015-16 is finally decided. The Appellate Authority was directed to decide the appeal expeditiously, preferably within six weeks.

What were the facts?

The petitioner, Mohammed Abdul Rehman, filed a writ petition before the High Court of Telangana challenging an order dated 28.07.2025. This order rejected his application for stay of recovery proceedings filed on 25.07.2025, which was made in connection with an appeal filed under Section 246A of the Income Tax Act, 1961, for Assessment Year 2015-16. The petitioner contended that the assessment order itself was not sustainable because the notice under Section 148 was issued by the jurisdictional Assessing Officer, contrary to the amended provisions requiring a faceless process. He also cited a previous High Court order allowing a similar challenge for Assessment Year 2014-15 and a Supreme Court judgment. The impugned order directed the petitioner to pay 20% of the disputed demand pending the appeal.

What were the issues?

1. Whether the action of the 1st Respondent in rejecting the stay application of the Petitioner dated 24.07.2025, vide orders dated 28.07.2025, without granting an opportunity of being heard, is arbitrary and contrary to the provisions of the Income Tax Act, 1961, and consequently, whether the same is liable to be set aside? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness under the Income Tax Act, 1961). Assessee's contentions: The assessment order is not sustainable as the Section 148 notice was issued by the jurisdictional Assessing Officer, not facelessly as per amended provisions. A similar challenge for AY 2014-15 was allowed by this Court, and a Supreme Court judgment in Union of India & ors. v. Ashish Agarwal and others supports the assessee's position. The Assessing Authority ought to have granted interim protection pending appeal. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 246A,Section 220(6),Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
. [348e] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE SEVENTH DAY OF AUGUST TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION NO: 23353 OF 2025 Between: Mohammed Abdul Rehman, S/o. Sri lVlohammed Taher Ali, Aged. 52 years' Rl/o.7-'1-28141N1, Leela Nagar, Begumpet, Ameerpet, Hyderabad - 500015' Telangana. ...PETITIONER AND 1 2 The lncome Tax Offrcer, Ward - 6 (1), Hyderabad. The Assessment Unit, Government of lndia, lncome Tax Department' Ministry of Finance, Delhi. The Commissioner of lncome Tax (Appeals), lncome Tax Department, National Faceless Appeal Centre (NFAC), Delhi 1 10 003. Union of lndia, Rep. by its Secretary, t\Iinistry of Finance, 6A, 3rd Floor, Jeevan Deep Building, Sansad [Vlarg, New Delhi. ...RESPONDENTS 4 Petition under Article 226 o'f the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ of [\/andamus or any other appropriate Writ or Order or Direction declaring the action of the 1st Respondent in rejecting the stay Application of the Petitioner dated 2410712025 filed on 2510712025, without even granting an opportunity of being heard vide orders dated 2810712025 f or the Assessment Year 2015-16 under the lncome Tax Act,196',l as arbitrary, contrary to the Provisions of the lncome Tax Act, 1961 and consequently set aside the same as null and void and grant stay of collection of disputed demand as per section 156 of the lncome Tax Act,1961 pending disposal of the appeal before the 3rd Respondent. lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated rn the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further Proceedings in pursuance of the Assessnrent Order passed by the 2nd Respondent dated 2210312024, for the Assessment Year 2015-16, under the lncome Tax Act, 1961 pending disposal of the above Writ Petition, as otherwise, the Petitioner will be put to severe loss and hardship. Counsel for the Petitioner: MS. SHAIK VAHEEDA SUSHMA Counsel for the Respondent Nos.1 to 3: MS. BOKARO SAPNA REDDY (sENloR sc rNcoME TAx) Counsel for the Respondent No.4: SRI K.L.N. RAGHAVENDRA REDDY, REPRESENTING UNION OF INDIA

The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P.No.23353 OF 2025 OR-DER, (per Hon'ble Sri.lusrit'e P.Sam Koshy) Heard Ms.Shaik Vaheeda Sushma, leamed counsel for the pctitioner, Ms. Bokaro Sapna Reddy, learned Standing Counsel for Income Tax Department appearing for respondent Nos.l to 3 and Mr. K.L.N.Raghavendra Reddy, leamed counsel representing Union of India for respondent No.

4.

Perused the record.

2.

The present writ petition has been filed assailing the order daLed 28.07.2025 in directing the petitioner to pay 20o/o of the disputed demand, pending disposal of the appeal before the Appellate Authority for the Assessment Year 2015-16. 3. The petitioner herein had filed statutory remedy of an appeal under Section 246A of the Income Tax Act, 196l (for short, the 'Act') before the Appellate Authority. Atong with the Memo of Appeal, the petitioner had also preferred lntenm protection so far as the recovery proceedings are concerned under Section 220(6) of the Act. It is this application which stands

2 decided by the impugned order directing the petitioner for payment of the amounts stated above.

4.

The contention of the leamed counsel lor the petirioner is that the Assessrnent Order dated 28.07.2025 itself, in the light of the Division Bench ol this Court in the case ol' Kankanala Year 2014-15 vide W.P.No.l2348 of 2023 and the said writ petition stood allowed vide order dated 07.11.2023.1n rhe light of the aforesaid two decisions, there is all liketihood of the appeal pending before the Appellate Authority also having rhe same fate of the Assessmcnt Oider not being maintainable and being set as ide. ' 120231 156 t"r."nn.com 178(TELANGANA)

3 I I

5.

In the tight of the subsequent amendments brought in the Act as also in the light of the decision rendered by the Hon'ble Supreme Court in the case of Union of India & ors., v. Ashish Agarwal and others2, the Assessing Authority ought to had granted interim protection to the Assessee till finalization of the appeal which the Assessing Authority has not considered.

6.

The contention of the leamed counsel for the petitioner so far as the 148 notice issued by the jurisdictional Assessing Officer not being in dispute by the leamed Standing Counsel for the Department and also in the light of the aforesaid judgments rendered by this Court in the case of Kankanala Ravindra Reddy (supra l) and in the light of the judgment of the Hon'ble Supreme Court in case of Ashish Agarwal (supra 2), we are of the considered opinion that the Assessing Authority in the course of deciding the petition under Section 220(6) of the Act, ought to have taken a more pragmatic view and should had kept the recovery proceedings in abeyance, pending the appeal before the Appellate Authority. I I '2ozzSCC online SC 543(

- 4

7.

For the aforesaid reasons, we dispose of thc presc'nt writ petition at this juncture directing the Assessing Otflcer not to pursue with the recovery proceedings in terms of tlte impugned order dated 28.07.2025 till the appeal lor the Assessment Year 2015-16 is finally decided. 8 Considering the fact that the appeal was filcd in rhe year 2024, we expect that the Appellate Authority shall take up the appeal and decide the same at the earliest, preferabty. within a period of six (06) weeks ftom the date of receipt ol a copy of this order. There shall be no order as to costs. Conseqtrently, miscellaneous applications, perrding if any, shall stand closed. \ //II VANI SWAMY REGISTRAR \i SECTION OFFTCER To, '1 . The lncome Tax Officer, Ward _ 6 (1), Hvderabad. 2- The Assessment Unit. Governmeni ,ii iniiii, rn-.o-re Ta < Department. Ministry of Finance, Delhi.

3.

The Commissioner of lncome Tax (Appeals), lncome Tax Department, , Nationat Facetess Appeat Centre (Ni Ci 6;ihiiio oo: z+. r ne secretary. Union of lndia, Ministry oi Finance. 64. 3rd Floor, Jeevan _ Deep B^uitdin!. Sansad Nltrrs, irt"* DLini' ' "'"""" 5. one CC to Ms. Shaik V^aheeda Sushma Advocate tOpUCl 6 one CC to IVs. Bokaro Sapna neJoy (Se'"ioi3t'in.or" Tax) [opUC] 7 9lg p_C_lg_Sri K L.N RaghavenOr" ftJOJV,"ref,ris"nt,n,r Union of lndia[OPUC]

8.

Two CD Copies TJ GJP

HIGH COURT DATED:0710812025 ORDER B r' =::.-\ .,oi+ l"'] t,:) t * D 2 g AIJG 2025 WP.No.23353 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS q \ a\ I

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