M/s Siyora Developers Private Limited vs. The Income Tax Officer
What did the High Court hold?
The High Court, in a common order, allowed all three writ petitions. The Court noted that it was common ground that the reassessment process had been modified by the Finance Act, 2021, and the respondents had not taken this into account. The Court relied on its own previous common order dated 14.09.2023 in W.P. No. 25903 of 2022 and connected matters. In that prior order, the Court had held that the procedure adopted by the respondent-Department was in contravention of the Finance Act, 2021, and the directives of the Supreme Court in the case of Ashish Agarwal. Consequently, the impugned notices and proceedings were found to be neither tenable nor sustainable and were set aside/quashed. As a result, all consequential orders were also nullified. The Court specifically stated that it was quashing the consequential orders on the principle that when the initiation of proceedings is procedurally wrong, subsequent orders automatically get nullified. The preliminary objection raised by the petitioners was sustained, and the writ petitions were allowed on this jurisdictional issue. The Court reserved the right for the Revenue to proceed further if they wished, from the stage of the Supreme Court's order in Ashish Agarwal, as a one-time measure. In the present cases, the impugned show cause notices and consequential orders were set aside, with liberty reserved for both parties to proceed in accordance with law as per paragraph 38 of the aforementioned order.
What were the facts?
These three writ petitions, W.P. Nos. 25695, 25704, and 25914 of 2024, were filed before the High Court for the State of Telangana at Hyderabad. The petitioners are M/s Siyora Developers Private Limited and Mr. Cheruku Jangaiah Goud. They challenged orders and notices issued by the Income Tax Department, including orders passed under Section 148A(d) and notices under Section 148 of the Income Tax Act, 1961, for various assessment years (2017-18, 2015-16, and 2018-19). Consequential penalty orders under Sections 271(1)(c), 271(1)(b), 271F, 270A, and 272A(1)(d) were also challenged. The petitioners sought to declare these actions arbitrary, illegal, void, and violative of natural justice and constitutional provisions. The respondents include the Income Tax Officer, Assessment Unit of the National e-Assessment Center, and the Principal Chief Commissioner of Income Tax.
What were the issues?
1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, and consequential orders are illegal and liable to be set aside, considering the modifications brought about by the Finance Act, 2021, in the reassessment process? (Question of law) Assessee's contention: The reassessment process was modified by the Finance Act, 2021, and the respondents failed to adhere to these modifications, rendering the notices issued under Section 148 unsustainable. Consequently, all subsequent orders are also bad in law. Revenue's contention: Not explicitly recorded in the judgment, but impliedly, the revenue would defend the validity of the notices and orders issued. 2. Whether the impugned orders and penalty proceedings are barred by limitation and violative of principles of natural justice? (Question of mixed law and fact) Assessee's contention: The orders and penalty proceedings are arbitrary, illegal, barred by limitation, void-ab-initio, and violative of principles of natural justice, as well as Articles 14, 19(1)(g), and 265 of the Constitution of India, and Section 14BA of the Income Tax Act, 1961. Revenue's contention: Not explicitly recorded in the judgment.
Which sections of the Income-tax Act were involved?
Section 148A,Section 148,Section 147,Section 144,Section 144B,Section 271(1)(c),Section 271(1)(b),Section 271F,Section 270A,Section 272A(1)(d),Section 14BA
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: COMMON ORDER
lr I / THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RA''ESHU/AR RAO \IIRIT PETITIoN NOS.25 695, 25704 AND 259t4 0F 2024 coMMON ORDER {per Hon'ble SP,J) Sri A.V.A. Siva Kartikeya, learned counsel appears for the petitioners, Ms.B.Sapna Reddy, learned Junior Standing Counsel for income Tax Department appears for the respondents in W.P.No.25695 of 2024 and Ms' J'sunitha' learned Junior Standing Counsel for Income Tax Department appears for the respondents in W.P.Nos.257O4 and 25914 of 2024'
Regard being had to the similarity of the question involved, on the joint request of the parties' the matters are analogously heard and decided by this common order'
It is common ground taken by the learned counsel for the petitioner(s) that in furtherance of Finance Acl' 2O2l' 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.
During the course of hearing, learned counsel for the - parties agreed that curtains on this issue are finally drawn by 2 this Court in a batch of writ petitions, W.p.No.25903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14.09.2023. 5 This Court in the said order dated 14.09.2023 in W.P.No.25903 of 2022, held as under:
"35. ln view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. ln the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the I'lon'ble Supreme Court in the case of Ashish Agarwal, supra.
For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable- The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent Department pursuant to the notices issued under Section 147 and l rlg would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.
The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proccedings.
Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under '1
3 Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Cou( allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.
No order as to costs."
In view of the consensus arrived, the impugned Show Cause notices and consequential orders passed in this batch of writ petitions 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 14.09.2023 in W.P.No.259O3 of 2022. 7 . The writ petitions are allowed. No costs. Interlocutory applications, if any pending, shall also stand closed. To, BIV
The lncome Tax Officer,-Wa1d 3(1), Hyderabad, Signature Towers, Opposite Botanical Gardens, S.y N9, 6(P) of Kondapur, Sy.-No. 37(p) of Kotha'guda, Serlingampally Mandal, Hyderabad - 500 0S4, Ranga Reddy Di-strict, Telangana
The Principal Chief Commissioner of lncome Tax, Andhra pradesh and I"]qlgrnr, Hyderabad Rogln-ryo. q22, 9th Ftoor, B Btock, l.T.Towers, .10-2-3, AC Guards, Hyderabad - 500 004, Telanqana.
Assessment Unit, lncome Tax Departm-ent, National e-Assessment Center, New Delhi, Room No. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003
The lncome Tax Officer. Ward 17(1), Hyderabad, Siqnature Towers. Sv. No 6,(P) 0 Kandapur. Sy. No. 37(p) of Kothiguda, Oppos-ite Botancal Garderis Serilingampally Mandal, Ranga Reddy -District, Hyderabad 5OO 084. Telangana.
One CC to SRI A V. A: SIVA KARTIKEYA, Advocate [OPUC]
One CC to Ms. BOKARO SAPNA REDDY (Jr.- SC FoR INCoIUE TAX)[OPUC]
One CC to Ms J. SUNITHA, Jr. SC FOR TNCOME TAX DEPARTMENT loPUCl B Two CD Copies te qv( \ //II K. AMIT,IAJI AS S I STA N T R.EG.I\S/'E4] l)1t--' SECTION OFFICER l I
1 1 6 HIGH COURT DATED:21 10912024 :\ t .( o oo 2 5 Nlu pgza fa.q rcireo * "l COMMON ORDER WP.Nos.25695 ,25704 AND 25914 OF 2024 ALLOWING ALL THE WRITPETITIONS WITHOUT COSTS 1* \\ 1 \o LV a A
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- Nitinbhai Nanalal Badani, Rajkot vs CIT (Appeals), National Faceless Appeal…ITA 658/RJT/2025[2020-21]Status: Disposed19 Oct 2026AY 2020-21
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