Sri Ajay Kumar Maduri vs. The Income Tax Officer

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WP/10362/2023HC TelanganaHBHC01019152202318 April 2023Bench: N.TUKARAMJI,UJJAL BHUYAN5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to entertain the writ petition. The Court observed that the petitioner's explanation to the notice issued under Section 148A(b) was indeed considered by the respondent, and an opportunity of being heard was provided. The Court clarified that the stage of Section 148A is prior to the issuance of a notice under Section 148, which initiates reassessment proceedings. At the Section 148A stage, the assessing authority is required to put the assessee on notice of the reasons for reopening the assessment. The Court stated that whether the consideration of the assessee's explanation was erroneous or not would be subject to further proceedings that commence upon the issuance of the notice under Section 148. Therefore, the Court was not inclined to invoke its writ jurisdiction at this stage. The writ petition was dismissed.

What were the facts?

The petitioner, Sri Ajay Kumar Maduri, filed a writ petition before the High Court of Telangana challenging an order passed by the Income Tax Officer (ITO), Ward-1, Warangal, under Section 148A(d) of the Income Tax Act, 1961, dated March 31, 2023. This order pertains to the assessment year 2016-17. Concurrently, the petitioner challenged the consequential notice issued under Section 148 of the Act, also dated March 31, 2023. The petitioner sought to set aside these actions, alleging illegality, arbitrariness, and violation of natural justice. The petitioner also sought suspension of the operation of the Section 148 notice and all consequential proceedings.

What were the issues?

1. Whether the order passed by the respondent under Section 148A(d) of the Income Tax Act, 1961, and the consequential notice under Section 148 of the Act for assessment year 2016-17 are illegal, arbitrary, and passed in gross violation of the principles of natural justice without application of mind? (Question of law and mixed fact and law, turning on Sections 148A and 148 of the Act). Assessee's Contention: The petitioner argued that the respondent failed to consider the explanation furnished in response to the notice under Section 148A(b). Specifically, the petitioner claimed possession of Rs. 40.00 lakhs, which was reinvested in a fixed deposit. The respondent erred by computing this amount twice, leading to a higher figure of Rs. 80.00 lakhs. The petitioner relied on bank statements annexed to the affidavit. Revenue's Contention: The judgment does not record any specific arguments made by the respondent.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

[ 3311 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD . (Special Original Jurisdiction) TUESDAY, THE EIGHTEENTH DAY OF APRIL TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTiCE N.TUKARAMJI WRIT PETITION NO: 10362 OF 2023 Between: Sri Ajay Kumar Maduri, Sri Venkata Narayana, H.No.14-1-206, Revenue Colony, Bondalakunta, Warangal - 506002. ...PETITIONER AND The lncome Tax Officer, Ward - 1, 3rd Floor, tt/ayuri Complex, Opp. TSNPDCL Bhavan, Nakkalagutta, Hanamkonda, Warangal - 506001. ...RESPONDENT 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 pass an order or direction, especially one in thd nature of WRIT OF MANDAMUS holding that the order passed by respondent u/s.148A(d) of the Act, dt.31.03.2023 with DlN.lTBAlASTlFl148A12022-2311O51757489(1) and the notice dated 31.03.2023 issued under section 148 of the Act with DIN.ITBA/ASTlsl148- 112022-2311051762644(1) for the assessment year 2016-17, as being illegal, arbitrary and passed in gross violation of principles of natural justice without application of mind, and consequently set aside the same. Petition under Section 151 CPC praying that in the clrcumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the notice issued by the respondent u/s.148 of the Act, dt.31.03.2023 for the assessment year 2016-17 with DIN.ITBA/AST/S/148- 112022-231105'1762644 (1 ) and all consequential proceedings thereto. Counsel for the Petitioner: SRI A.V. RAGHU RAM Counsel for the Respondents: Ms. B. SAPNA REDDY FOR J.V.PRASAD (sc FoR rNcoME TAX) The C0urt made the following: ORDER lA NO: 1 OF 2023

THI HON'BLE THE CHIEF. JUSTICE UJJAL BLI(NIAN AND rHE HON'BLE SRI JUSTICE N. TUKAR,F.]!] JI WRIT PETITION No. 1O362 of 2O:2it ORDER: P( tt-,e l;on'bte the ChLc.J ,lustLce qi(1t Bhuttatl) Heai i Mr. A.V.Raghu Ram, learned cc:Lusel 1br the petitioner nd Ms. B.Sapna Reddy, learned cc;.lnst:j for the respondr:n s. 2. Ohall nge made in this writ petition is r_o the or-cler dated 31 O: .2023 passed by the respondent unrler Section 14BA(d) ,lf the Income Ta-x Act, 196 1 (brielt1,, ".he Act, hereinerfter) for the assessment year ?O16_2Oi 7 as ,,vell as the conse:qr ential notice dated 31.03.2023 is;tLed bv the responderlt tnder Section 14g of the Act. 3. Learnr I counsel for the petitioner st b mit s that responder.t lid not consider the exptalation firrnished by the petrtionr r in response to notice under Sec.tirtn I agA(b) '\-- of the Act. \fter referring to bank statements arrnt:xed to

l the affidavit, he submits that petitioner is in possession of Rs.4O.OO lakhs which has again been invested in fixed deposit. Respondent fell in error in computing the said amount twice therebY arriving at a higher figure of Rs.80.00 lakhs' 4. On going through the impugned order' we find that petitioner's explanation to the notice issued by the respondent was considered by the respondent' An opportunity of being heard was also provided to the petitioner. It was thereafter that Lhe impugned order came to be passed. 5. We may mention that the stage of Section 148A of the Act is prior to issuance of the notice under Section 148 of the Act whereby reassessment proceedings are initiated' Thus the order passed under Section i48A(d) of the Act is at a stage prior to issualce of such notice' At this stage' the assessing authority is required to put on notice the assesseethereasonsforseekingtoreopentheassessment

bi the' as sr'ssing authorit_r' cannot be a glor, n C f rr judicral Errone rr-,; consideration oI the explanation ,rl th,' assessee rei,iew,. I he <:onsideration u,hether erroneous or not \\,ould be sub;c t to further proceedrngs that rvoull t:omnrcnce upon iss ralce of notice under Section I z 8 ol the Act. Thercfore at this stage, \ ,e are not inclined t r i''rvoke our ancl .tl:;i, i(, grant the asscssce atn opporiLrr tr i i' hearing- lr r-rt r u ris, iction 6. Wc, therefore , decline to entertarn the -,i ri petition, rvhich is : cr:ordingl5, dismissed. Misr ellaneous applications pending, rl arrr,, shall stan(l c or ed. However, there shall be no ordcr as to costs. SD/. N. CHA]ICIRA SEKHAR RAO ASSIS'TA].IT REGISTRAR //TRUE COPY// siEcflohlbFFrcER To,1. One CC to Sf I A.V. RAGHU RAM, Advocate [OPUC] 2. One CC to M: . B. SAPNA REDDY, Advocate [OPUC] 3. Two CD Copi s BN GJP ,I:_- \ _*<r__1

HIGH COUF T DATED:1 810 412023 {dS ORDER WP.No.1036:l of 2023 DISMISSING THE WRIT PETITION WITHOUT C( STS ".rr* o s 2)

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