Agiru Santhosh Kumar vs. Income Tax Officer

Agiru Santhosh Kumar, S/o. Agiru Narender, Aged about 43years, Occ; Business, Rl/o. 1 1.9-1 1 5, Lakshmi Colony Nagar Telangana - 500060. [ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original J urisdiction) SATURDAY. THE TWENTY FIRST DAY OF SEPTEN/BER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 25703 OF 2024 Between: .....PETITIONER AND 1. lncome Tax Officer, Ward 9(1), Hyderabad, Aaykar Bhawan, Opp. LB Stadium, Basheerbagh Hyderabad- 500004, Telangana. 2. The Principal Chief Commissioner of lncome Tax, AP and TS, '1Oth Floor, C- Block, l.T.Towers, 10-2-3, A.C.Guards, Hyderabad -500004. 3. Assessment Unit, National Faceless Assessmenl Centre, lncome Tax Department, Ministry of Finance Room No. 401 , Znd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi- 1 10003. ....-RESPONDENTS Petition Under Arlicle 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 the nature of Writ of Mandamus, declaring the Assessment Order dated 18.02.2024 passed by the 3rd Respondent u/s 147 rlw section 144 B of the lncome Tax Act for A.Y. 2016-17 vide DIN No. ITBA/AST/5114712023-24/1061079578(1) and the notice u/s 148 dated 24.03.2023 vide DIN No. ITBA/AST/S/148-112022' 2311051224444(1), issued by the JAO (1st Respondent) instead of FAO (3rd Respondent) as void, illegal and contrary to the Principles of Natural Justice.

|.A.NO:1 OF 2024 Petition Under Section 15'1 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the Assessment Order dated 18.02.2024 passed by the 3rd Respondent u/s 147 rlw section 144 B of the lncome Tax Act for A.Y. 2016-1 7 vide DIN No. ITBA/AST/SI1 47 12023-241 1 061 079578(1 ). Counsel for the Petitioner : SRI PARIKSHITH KUTUR Counsel forthe Respondents : Ms BOKARO SAPNA REDDY (Jr. SC FOR tNcoME TAX) The Court made the following ORDER I

THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO ONN 25703 F2 ORDER: (per Hon'ble Justice Sujog Paul) Heard Sri K.Parikshith Kutur, Iearned counsel for the petitioner(s) and Ms.B.Sapna Reddy, learned Junior Standing Counsel for Income Tax Department for the respondents' 2. The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2027' re' assessment process stood modified but the respondents have not taken care of it and therefore, notice issued under Section 148 of the Income Tax Act, 1961 cannot sustain judicial scrutiny. Since notice is bad in law, the consequential orders are a-lso bad in law' 3. During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W'P'No'25903 of 2022 and other connected matters, decided by common order dated 14.09.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 'O9 '2023 '

2 4. This Court in the said order dated 14.09,2Q23 in W.P.No.25903 of 2022, held as under: "35. In vlew of the aforeaeid discuasions, it 16 by now very clear that the procedure to be followed by the respondent- Department upon treating the notices i6sued for reassessme!t being under Section 148A, the subaequent proceedings was mandatorily required to be undertaken under the substituted provi6ion6 as [ald down under the Finance Act,2021. In the absence of which, we are constrained to hold that the procedure idopted by the .espondent-Department is in contravention to the statute l.e. the Finance Act,2O21, at the first instance. Secondly, lt is also ln dlrect contravertior to the directiv€s lssued by the Hon'ble Supreme Court in the ca6€ ofAshish Agarwal, supra. 36. For all the aforesaid reasoDs, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, no! sustainable. The notices so issued and the procedure adopted being per se illegal, deservea to be and are accordingly set aside/quashed. As a consequence, all the lmpugned orders getting quaahed, the cons€quential orders passed by the respondent Department pur6uant to the notices ia6ued undcr Section 147 and 148 would alEo get quashed and it is ordercd accordingly, The reaaon we are quashing the consequential order is on the principles that when the lnltiation c,f the proceedlngs itself was procedulally wtong, the aubsequent orders also BetE nullllied automatically. 37. The preliminary objection ralsed 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 poiat ofjurisdictior, s'e are not inclined to proceed further and declde the other iasues rai6ed by the petitioner whlch stands reserved to be raised aud contended ia an {pproprlate proceedlngs. 38. Since the Hor'ble Supreme Court hqd, in the case of Ashlsh Agarwal, supra, as a one-time measure exercising the powers under Arttcle 142 of the Constitutlon of ltrdla, pcrmitted the Revenue to proceed under the substltuted provislons, end this Court alloslng the petitlons only on the procedural naw, the right conferr€d on the Reveru€ would temain reserved to paoceed further if they so want from the !--- i

3 stag€ of the order of the Supreme Court in the cese of Ashish Agerwal, supra. 39. No order aE to costs." 5. In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this writ petition 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.O9.2023 in W.P.No.25903 ol 2022. 6. The writ petition is allowed. No costs. Interlocutory applications, if any pending, shall a-lso stand closed. ,TRUE COPY// SD/. P. PADMANABHA REDDY ASSISTAN REGISTRAR S ION OFFICER To ' " 1. Th" lncome Tax Officer, Ward 9(1 ),- Hy-derabad' Aaykar Bhawan' Opp LB Stadium, Basheerbagh Hvderabad- 500004' I elanoena' 2. The Principar cnier comil]Jst"li orl"tonit ij*'"np and TS' l oth Floor' C- - eioir, i.f.iowers, 1o-2-3, A.C Guards, Hyde^rabad -500004' o. ir'," i"""""ment'unif -rtiriion,r i"gt"si Assessment Centre' lncorne Tax Deoartment, [,4inistry oi-Fln'nt" Room No 401 2nd Floor' E-Ramp' Jawaharlal Nehru Strdium, Delhi- 110003' +. b.J Cc to sRl PARIKSHITH KUTUR, Advo-cale. [oPUCl 5. one cc to Ms. BbjiARO''EA-F'NA -REDDV (Jr 'SC FOR lNCOtvE TAX) [OPUC] 6. Two CD CoPies ., SA t,/ / /

g HIGH COURT DATED:21 10912024 ORDER WP.No.25703 <tf 2024 ALLOWING THE W.P WITHOUT COSTS. U. b + HES ( r{ oo 14 rtB 2m 2 t * ^T cts