Vimalakar Reddy Eppa vs. The Principal Commissioner of Income Tax

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WP/19946/2023HC TelanganaHBHC01036169202306 February 2024Bench: P.SAM KOSHY,N.TUKARAMJI6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the impugned notice dated March 31, 2023, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2019-20, was not sustainable in law. The Court noted that both parties' counsel agreed that the notice could not have been issued by the Jurisdictional Officer due to amendments to the Income Tax Act effective March 29, 2022, which stipulated that such notices ought to be issued by a Faceless Authority. The Court relied on its previous decisions in W.P. No. 25903 of 2022 and batch, which allowed similar writ petitions on the sole ground that the notice was issued by the Jurisdictional Authority. Consequently, the impugned notice was set aside and quashed. Liberty was reserved for both sides. The writ petition was allowed.

What were the facts?

The petitioner, Vimalakar Reddy Eppa, filed a writ petition before the High Court of Telangana challenging a notice dated March 31, 2023, issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Ward 15(1), Hyderabad. This notice was for reopening the assessment for Assessment Year 2019-20. The petitioner contended that the notice was issued on incorrect grounds, without following due process, specifically by not passing an order under Section 148A(d) before issuing the Section 148 notice, and that the issuance of the Section 148 notice itself was illegal and arbitrary. The respondents were the Principal Commissioner of Income Tax and the Income Tax Officer.

What were the issues?

1. Whether the notice issued by the Jurisdictional Officer under Section 148 of the Income Tax Act, 1961, is valid in light of the amendments carried out to the Act with effect from March 29, 2022, which mandated issuance by a Faceless Authority. Assessee's Contentions: - The notice under Section 148 was issued by the Jurisdictional Officer, which is impermissible after the amendments effective March 29, 2022. - The notice was issued without following the mandatory procedure under Section 148A(d). - The issuance of the notice was illegal, arbitrary, and in violation of natural justice. Revenue's Contentions: - The judgment records that the learned counsel for the respondents accepted that the impugned notice could not have been issued by the Jurisdictional Officer in light of the amendments.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d)

AI-generated summary — verify with the full judgment below

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY ,THE SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE iloNoURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 19946 OF 2023 [ 337e ] 4 lncome Tax Masab Tank, Between: AND 1 2 Vimalakar Reddy Eppa, S/o. Chinnaiah Eppa Aged 44 yrs. R/o. Plot No. 41 52 Si Harsha Residency, Laxminagar Colony [\/ansoorabad R.R. District 500068, Telangana ...PETraoNER The Principal Commissioner of lncome Tax, Hyderabad Towers, Irlasab Tank, Hyderabad, Telangana -500004 lncome Tax Officer Ward '15(1), lncome Tax Towers, Hyderabad, Telangana- 500004 ...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, Order or Direction, more particularly one in a nature of Writ of Certiorari to quash the notice issued by Respondent No. 2 AO dated 31- 03-2023 u/s 148 of the lncome Tax Act, 1961 thereby reopening the assessment of the Petitioner (PAN - AAYPE15994) for AY 2019-20, on the basis of incorrect and untrue reasons and also without following the due process of law, by not passing an order u/s 148A (d) of the Act, before issuing a notice u/s 148 of the lncome Tax Act, 1961 and also the issuance of Notice u/s. 14BA (b) of the lncome Tax Act, 1961 itself being illegal and arbitrary and in gross violation of the principles of natural justice lA NO: 1 OF 2023 Petition under Section 151 cPC praying that in the circumslances stated in the affidavit filed in support of the petition, the High court may be pleased to

direct the Respondent Nos. 2 to stay the reassessment proceedings in the case of the Petitioner (PAN - AAypEt 5ggA) for Ay. 2019-20, in the interest of justice Counsel for the petitioner: SRt p. SOMA SHEKAR REDDY Counsel for the Respondents: M/s. B. SApNA REDDY REp sRt J. v. PRASAD (SC FOR TNCOME TAX) The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUI(ARAMJI WRIT PETITION No.19946 OF 2023 ORDER:1per Hon'bte Sri Justice P.SAM KOSHY) Heard Sri P. Soma Sekhar Reddy, learned counsel for the petitioner and Ms.B.Sapna Reddy, learned counsel representing Sri J.V.Prasad, learned Standing Counsel appearing for the respondents. 2. Challenge in the present Writ Petition is to the notice, dated 31.O3.2023, issued under Section 148 of the Income Ta-x Act, 196 1 3. A perusal of the record would reveal that the impugned notice has been issued by the Jurisdictional Officer for Ward No.15(1), Hyderabad. 4. During the course of hearing, it has been argued and accepted by the learned counsel appearing for both the sides that the impugned notice could not have been issued by the Jurisdictional Officer in the light of the amendment that was carried out to the Income Ta-x Act, which stood amended u'ith effect from 29.O3.2022 and the subsequent

2 PSK,J & MTR,J W.P.No.19946 o.f 2023 amendment and the notice ought to have been issued by the Faceless Authority. 5. This Court, in W.P.No.25903 of 2022 and batch allowed the Writ Petitions uide order, dated 14.09.2023 which is further being followed in other series of Writ Petitions of similar nature, a_11 of which, have been allowed on the sole ground that the notice could not have been issued by the Jurisdictional Authority 6. In the light of the aforesaid series of Writ petitions, which have been decided by this Court, the impugned notice, dated 31 .O3.2O23 (Annexure P- i), issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2Ol9-20 also u'ould not be sustainable in the eye of law and the same, for similar terms as has been decided in W.P.No.25903 of 2022 and batch, deserves to be and is accordingly set-aside / quashed. The liberty protected on either side r.r.ould stald reserved in the instant case as weil.

3 PSI(,J & ]VTR,J W.P.No.19946 oJ 2023 7. Accordingly, this Writ Petition stands allowed. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any shall stand closed. SD/. P. PADMANABHA R ASSISTANT REGI //TRUE COPY// DDY RAR To, i !iIII The Principal Cominission Towers, Masab Tank, HYd The lncome Tax Officer W SECTION OFFICER er of lncome Tax, Hyderabad 4 lncome Tax erabad. Telanqana -500004 ard 1 5(1 1, lncdme Tax Towers, Masab Tank' 1 2 3 4 Hvderabad, Telangana- 500004 iri,"""b C i"' s n r. pl -S o un s H E KA R R E D D Y' Ad v9 qa!9. Io- f gc. l. 5;; c6 io sni.l. v. Fnnsno, (sc FoR INCoME rAX) [oPUC] Two CD Copies BM GJP [b j 1 I I Ij

HIGH COURT DATED:0610212024 ORDER WP.No.19946 of 2023 ALLOWING THE WRITPETITION WITHOUT COSTS $-;qici (,.. 0 7 t4/,n ?0?4 * a- 0c oo 14 14: S E H 1 o k t' zo * I S C t -r-r\'\* I ; { I !I J

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