Kishan Vennampelli vs. The Office of the Assistant Commissioner of Income Tax Circle-I

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WP/1974/2024HC TelanganaHBHC01003715202429 January 2024Bench: P.SAM KOSHY,N.TUKARAMJI8 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition on the preliminary objection raised by the petitioner that the proceedings were not drawn in accordance with the amended provisions of the Income Tax Act, 1961, but under the un-amended provisions, rendering them unsustainable. The Court referred to its previous order in W.P.No.25903 of 2022 & batch, dated 14.09.2023, where it had sustained the preliminary objection on jurisdictional grounds and quashed the impugned notices and orders. The Court held that since the petitions were allowed on procedural flaws, the rights conferred on the Revenue would remain reserved to proceed further from the stage of the order of the Supreme Court in the case of Alnic Agarwal, supra, if they so desired. The Court explicitly stated that it was not inclined to decide other issues raised by the petitioner, which stood reserved to be raised in appropriate proceedings. The rights of the parties were reserved as envisaged in paragraphs 37 and 38 of the previous order.

What were the facts?

The assessee, Kishan Vennarlapatti, filed a writ petition before the Telangana High Court challenging an order dated 08.11.2023 passed by the National Faceless E-Assessment Centre. This order, issued under Section 147 read with Section 144B of the Income Tax Act, 1961, determined the assessee's total income at Rs. 47,36,261/- for the Assessment Year 2016-17. The assessee also challenged the notices issued under Section 148A(b) dated 07.03.2023 and Section 148A(d) dated 25.03.2023. The petition sought to declare the assessment order arbitrary, illegal, without jurisdiction, void-ab-initio, and violative of principles of natural justice and constitutional provisions. The assessee also sought to suspend recovery proceedings pending disposal of the writ petition.

What were the issues?

1. Whether the proceedings initiated under Section 147 of the Income Tax Act, 1961, by the respondent authorities, were conducted in accordance with the amended provisions of the Act, specifically requiring the issuance of a notice under Section 148A and providing an opportunity of hearing to the assessee, especially when such proceedings are to be conducted in a faceless manner. Assessee's Contention: The assessee argued that the reopening of assessment was initiated by the Jurisdictional Assessing Officer, which is contrary to the amended provisions of the Act that came into effect from 01.04.2021. The assessee relied on a previous judgment by the same bench in W.P.No.25903 of 2022 & batch, dated 14.09.2023. Revenue's Contention: The learned Standing Counsel for the respondent-Department did not dispute that the objection regarding the procedure was decided in the aforesaid batch of writ petitions. However, the revenue contended that there were other objections raised by the petitioner apart from the procedural one.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A

AI-generated summary — verify with the full judgment below

[ 337e ] IN THE THE J MON COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THE TWENTY NINTH DAY OF JANUARY THOUSAND AND TWENry FOUR PRESENT URABLE SRI JUSTICE P. SAM KOSHY AND OURABLE SRI JUSTICE N. TUKARAMJI f il*,, ".r,r,o* "o, ,nro or roro Between: I t Kishan Vennarlpttti, "ro. Mogilaiah, aged about 53 years, occ: Business, F/o. 20-136/4l Vidyanagar, Huzurabad Village and Mandal, Karimnagar District-5054681T€langana State, lndia, Pan No. A|LPVB609H. ll?. t* .-"" .i,^fit.i.tlnt co,,r.sioner or rncome rax circ "-, '#". Karimnagar Distridt,, Tetangana State. 2. The Principr' "li!"orrissioner of lncome Tax Telangana And A P Hyderabad, lT forters AC Guards Masab Tank Hyderabid 5oo 028 . I;:::ffi ""1I", Direcr raxes Represenred By rts chairman, Department of Revenue Mintst[ of Finance Govemment of lndia Secretariat Buildings , i;l-T:::", ,rdr... Assessment center, rncome rax Department New Delhi 5. The Union Departmen rne Jo[r ot,Joitrn.p,",. t of Re9enue Min nted By lts Secretary To The Govemment, istry of Finance New Delhi nt o. e N m e s c s SE o N S a h a e t ,| re 1 t h t fl u I d N e D let e p id m co n e nt e T m e S S sse n A E e c A SS e n o t c Fdtel l+if-s lil a n a e N S s( e r 7 4 o 1 th S A U ro of com ax ct 96 nd I I i I I Petition under circumstances if pleased to issue h Direction, declarihg ITBNASTtsl147t202 determining the authorities (National ..RESPONDENTS cle 226 of the Constitution of lndia praying that in the the affidavit filed therewith, the High Court may be of Mandamus or any other appropriate Writ, Order, or order dated 08.11.2023 in DIN and Notice No. 1 057809057 ( 1 ) for the Assessrnent Year N16-17 me of Rs.47,36,2611- passed by the respondent less E-Assessment Centre, Ministry of Finance, New nt Year 2016-17 vide order notices lncome Tax Delhi for the

!TBA/AS7tst147 t202 11057809057(1) for the Assessment Year 2O16-17 II liritome loid-ab-i lndia and Sec. l48Alofnthe lncome Tax Act, '1961, and consequenfly set aside the same in the interdstS of justice. determining the total of Rs.47,36,261/- as arbitrary, illegal, bad in law, without jurisdiction, nitio, violative of the principles of natural justice apart from being violAti0e of Articles 1a, 19(t Xg) and 265 of the Constitution of lA No: 1 oF 2024 I * Petition ,nd"rffir,on 151 CPC praying that in the circumstances stated in the affidavit filed irl,Sitpport of the petition, the High Court may be pleased to suspend the ordei UhdEr Section 147 rlw 144 (B) dated.08.11-2023, including any recovery, pursuAntto vide DIN & order U/S 'l 56 IT8A/45T/5/156|202Z- 24t105780915t1t) foftG Assessment Year 2O16-17 notice U/S i48-A (b) dated. 07.03.2023 and notic6'Under Section 14S-A, (d) Dt.2S.O3.2023, tTBA/AST/F/148- N2022-23-1051617063fi) for the Assessment Year 2016 -'17, pending disposat of the above Writ Petftifi: counsel tor nle Petitlot counset tortne nesl* counset ,or,n" *""Jot" fn" Cor.t,nra" rn" fi,f* r: SRI T. CHAITANYA KUMAR ent No.1 to 4: M/s. DOMINIC FERNANDES (SR. SC for CBIC) nt No.S: SRI GADI PRAVEEN KUMAR, OY. SOLICITOR GENERAL OF INDIA ing: ORDER

'7" THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUI{ARAMJI IIIRIT PETITION No.1974 0F 20.24 ORDER:(per H on'ble Si Justice P'SAM KOSHY) The instant Writ Petition has been frled by the petitioner under Article 226 of the Constitution of India seeking for the following relief: "to issue a Writ of Mandamus or anA otLer appropriate Wit Orde, o, Directioi declaring the order dated O8 11 2023 in DIN and Notice No rrBA/isl/s/ 147/202324/ 1057809057 1 for the Assessment Year 201617 detennining tle totol i"ilrrn o1 Rs.47,36,261/- possed bg the respondent autloitiei National Faceless E-Assessmen! Centre Minbtry ij fi"""n Neut Delhi for the Assessment Year 2016 17 uide irder notices Income Tax Authorities Notional Faceless E-Assessment Centre completed the assessm'ent U/ S 147 ,/i S."tion 1448 of tlte Iicome Tax Act 1961 uide DIN and Notice No ITBA/ AST/ S/ 147/ 202324/ 10578090571 for the Assessmen, Year 2O1617 detennining tle total income of Rs.47,36,261/ - as arbitrary itlegal bad in lau rt-tithout iu*ai"tion uoid-ab-initio uiolatiue of the pinciple^s- of natural fiiiii" apart Trom being uiolatiue of Articles 14 .1919 and 265 'o7 tne ionsit ttion of india and Sec 148A of the Incom'e Tax ict 1961 and consequentlg set aside the same in the interests of justice". 2. One of the contentions that the petitioner has raised in the present Writ Petition is that under the amended provisions of the Act which carne into effect from Ol.O4.2O2l, the respondents, while proceeding under Section 148 of the Act, were required to issue notice under

2 PSI(,J&,IYrR.J W.P.No.t974 of 2Oi+ Section 14gA and provide an opportunit5r of hearing to the assessee. As per the amended provision of law, the proceedings to be drawn are also in a faceless manner. 3. Whereas, learned counsel for the petitioner contended that, in the instant case, reopening has been initiated by the Jurisdictional Assessing Officer. In support of his contention, he relied upon the recent judgment rendered by this very Bench in Wp.No.2S903 of 2022 & batch, dated 14.Og.2023 wherein this Court disposed of the batch of writ petitions to the limited extent. 4. On the other hand, learned Standing Counsel for the respondent- Department objection was decided does not dispute that the said in the aforesaid batch of Writ Petitions However, he further contended that apart from the aforesaid objection, there have been other various objections also which the petitioner has raised in the writ petition. 5. So far as this contention of the learned counsel for the respondent-Department is concerned, this Bench, while dislo$ng_q. said batch of writ petitions, had taken goJr' of i i I t I I li rl .lI n

3 PSK,J & NTR,J W.P.No.79Z4 oJ 2O24 the same at paragraph Nos.37 & 3g which are reproduced herein under: I I ".37 The. preliminary objection raised bg th.e petittoner ts sustained and all these wit petitions standZ allouLed on thi.s uery juri"sdictional issue. Since the impugned notices and orders are getting quoslrcd. on tle point of juri.sdiction, we are not incliied. to proceed furtitir and decide tle otloer issues raised. by ihe petitLner which stan-d.s reserued to be ratsed. ind iontended. in an appropriate pro ee ding s.. "38. Sine the Hon'ble Supreme Court had., in the case of Alhish Aganaal, supra, as a one-time measure elercising the powers und.er Article 142 of tLLe Constitut-ion of India, permitted. the Reuenue to pioceed. und.er the substituted_ proui.sions, and. thi Court allgtDtng the petitions onlg on the procedurol flau, tLe ight conferred on th-e Reuenue uLould remain' reseraed. to proceed further if tteg so want from the stage of the o.rder ol tle Supreme Court in tfle case oi alni"n Agaru.n| supra." 6. In view of the sarne, we are inclined to allow the present writ petition also on similar terms. Accordingly, the present Writ Petition stands allowed on the objection of the petitioner that the proceedings have not been drawn in accordance with the amended provision but under the un-amended provision which is otherwise not sustainable. 7. As has been held by this Bench in the aforesaid batch matters, the rights of the parties would stand reserved as is z

{ ( 4 PSK,J & NTR,J W.P.No.79Z4 oJ 2O24 envisaged at pa_ragraph Nos.37 & 3g of the sard order passed in the batch of writ petitions. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stald closed. iI SD/. N. CHANDRA SEKHAR RAO ASSTSTANT REG|STRIR w //TRUE COPY// To, SECTION OFFICER 'l . The Office of t sistant Commissioner of lncome Tax Circle-1, Karimnagar, 2. Karimnagar District, Telangana State. The Principal Chief Commissioner Of lncome Tax Telangana And A P Hyderabad, lT Towers AC Guards Masab Tank Hyderabad 500 028 3. The Chairman, Telangana tJf,urt..n Board ent of Revenue Ministry of Finance Government of lndia The Centrtl Of Direct Taxes Secretariat Buildings New Delhi 4. The National Fdceless Assessment Center, lncome Tax Department New Delhi .rItfi" o 5. The Secreta overnment, Department of Revenue Ministry of Finance, ThEU idh of lndia New Delhi 6. One CC to SRI NNERU CHAITANYA KUMAR, Advocate loPUcl 7. One CC to SRI MtNrc FERNANDES (SR. SC for CBIC) [OPUC] 8. Two CD Co pte BN GJP ; I I I

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J[ HIGH COU DATED:29l ALLOWNG T WTHOUT CO l i Jco ( * o'( za b\r lHE SI4 1 1 l,ti,q 2024 a' l-se41g H r--c * -__:_.- + ORDER WP.No.1974 024 WRIT PETITION Coqi', c-^V' \(\ [DC- S

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