Sri Thirupathi Rao Saineni vs. Income Tax Officer

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WP/25978/2022HC TelanganaHBHC01036296202206 November 2023Bench: P.SAM KOSHY,N.TUKARAMJI6 pages
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What did the High Court hold?

The High Court allowed the writ petition on the preliminary objection raised by the petitioner concerning the procedural flaw in the reopening proceedings. The Court noted that the amended provisions of the Act, effective from April 1, 2021, mandate specific procedures, including the issuance of a notice under Section 148A and providing an opportunity of hearing, with proceedings to be conducted in a faceless manner. The Court found that the reopening in this case was not drawn in accordance with these amended provisions but under the unamended provisions, rendering it unsustainable. The Court referred to its previous decision in W.P. No. 25903 of 2022 and batch, where similar petitions were allowed on the jurisdictional issue. The Court held that the impugned notice and order were quashed on the point of jurisdiction. Consequently, the right of the respondents to proceed further was reserved as envisaged in paragraphs 37 and 38 of the aforementioned batch order, which referred to the Supreme Court's decision in Ashish Agarwal. No order as to costs was made.

What were the facts?

The petitioner, Sri Thirupathi Rao Saineni, filed a writ petition before the High Court of Telangana challenging an order passed by the Income Tax Officer, Ward-15(1), Hyderabad, under Section 148A(d) of the Income Tax Act, 1961, dated April 22, 2022, and a notice issued under Section 148 of the Act dated April 22, 2022, for Assessment Year 2015-16. The petitioner contended that the reopening proceedings were initiated by the jurisdictional Assessing Officer, violating the amended provisions of the Act which mandate faceless proceedings and an opportunity of hearing. The respondent revenue did not dispute that a similar objection was decided by the same Bench in a batch of writ petitions on September 14, 2023.

What were the issues?

1. Whether the order passed by the respondent under Section 148A(d) of the Act and the notice issued under Section 148 of the Act for Assessment Year 2015-16 are illegal and passed in gross violation of the principles of natural justice and without application of mind, thereby warranting their being set aside? Assessee's Contention: The petitioner argued that under the amended provisions of the Act, effective from April 1, 2021, the respondents were required to issue a notice under Section 148A and provide an opportunity of hearing. The proceedings were also to be conducted in a faceless manner. However, in this case, the reopening was initiated by the jurisdictional Assessing Officer, which is contrary to the amended law. The petitioner relied on a batch of writ petitions decided by the same Bench on September 14, 2023, for this contention. Revenue's Contention: The learned counsel for the Department did not dispute that the objection regarding the procedural flaw was decided in the aforesaid batch matters. However, the counsel submitted that there were other objections raised by the petitioner.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

[ 337e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SIXTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P. SAM KOSHY AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NO: 25978 OF 2022 Between: Sri Thirupathi Rao Saineni, S/o. Sri S. Yeshwant Rao, 1-4-1741G4, Shirisha Apartment, Layola College Road, Old Alwal, Secunderabad - 50001 1, Telangana ...PETITIONER AND lncome Tax Officer, Ward -15(1), l.T. Towers, A.C. Gurads, Masabtank, Hyderabad -500004. ...RESPONDENTS Petition under Article 226 ot 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 the nature of WRIT OF MANDAMUS holding that the order passed by respondent u/s.148A(d) of the Act, dt.22.O4.2022 with DIN:|TBAlASTlFl148A12022-2311042821063(1) and the notice dated 22.04.2022 issued under section 148 of the Act with DIN:ITBfuAST/S/148 112022-2311042821451(1) for the assessment year 2015-16, as being illegal and passed in gross violation of principles of natural justice without application of mind and consequently set aside the same. lA NO: 1 OF 2022 Petition under Section 15'l CPC praying that in the circumstances 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.22.O4.2022 for the assessment yeat 2015-16 with DINATBA/AST/S/148 1 12022-2311042821 451(1) and all consequential proceedings thereto.

lA NO: 1 OF 2023 PetitionUnderSectionl5lCPCprayingthatinthecircumstancesstated in the affidavit filed in support of the petition, the High Court may be pleased to plirit tn" F"titioner to raiie the above Additional Affidavit legal contention in the writ petition in the interest of justice' Counsel for the Petitioner: SRI A.V. RAGHU RAM CounselfortheRespondent:Ms.B.SWAPNAREDDY(Jr.scFoRlNcoMETAx) The Court made the following: ORDER

THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI W.P. No. 2597a of 2o22 ORDER (per Hon'ble Si Justtce P.SAM KOSHY) Heard Mr. A.V. Raghu Ram, learned counsel for the petitioner and Ms. B. Sapna Reddy, learned Junior Standing Counsel for Income Tax appearing for the respondents. Perused the entire record. 2. The instant petition has been hled challenging the Assessment Order passed by respondent No. 1 under section 148A(d) of the Income Tax Act, 196I (hereinafter referred to as "the Act") dated 22.04.2022 for the Assessment Year 2015- 16. 3. One of the contentions that the petitioner has raised in the present writ petition is that under the amended provisions of the Act which came into effect from 01.04.2021, the respondents while proceeding under Section 148 of the Act were required to issue notice under Section 148A and provide an opportunity of hearing to the assessee. As per the amended provision of law, the proceedings to be drawn are also in a faceless manner. Whereas, it has been contended by the petitioner that in the instant case, reopening has been initiated by the Juridictional Assessing Officer. In respect of the said objection that the petitioner had raised, he relied upon the recent batch of writ petitions decided by this very Bench on 14.09 .2023 vide W.P.No.259O3 of 2022 and batch to the limited extent.

- \ * Etffi \ ':; \,/ ) 4. Learned counsel for the Department would not dispute of having decided the said objection in the aforesaid batch matters' However, Iearned counsel submits that apart from the afore said 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 concerned, this Bench, while disposing of 1S Department W.P.No.25903 of 2022 and batch had taken note of the same tn paragraph Nos.37 & 38 which is reproduced herein under: "37. Tint'. preliminary objection raised by the petitioner rs sustaine(l and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders ane "getting quashed on the point ofjurisdiction, we are not inclined to f,.o..""a ' further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate Proceedings." 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers uider Article 142 of the Constitution of India, Permitte'l the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain resewed to proceed further if they so want from the stage of the order of the Supremc Court in the case oI Ashish Agarwal, supra' 6. In view of the same, we are inclined to allow the present writ petition also on similar terms. Accordingiy, 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 unamended provision which is otherwise not sustainable' AshasbeenheldbythisBenchintheaforesaidbatchmatters,the

t- 7 l: 3 I right of the respondents would stand reserved as is envisaged in paragraph Nos.37 & 38 of the said batch. No order as to costs. . 7. Consequently, miscellaneous petitions pending, if any, shall stand closed sD/'P'c-rlru+fffHsl31g11 / /ffRUE COPY// sECmoFFICER '" ; Hi,=",gi;iiidl:.* ffi #;**:: X il"' BN GJP w-

HIGH COURT DATED:0611112023 ORDER WP.No.25978 of 2022 ALLOWING THE WRIT PETITION WITHOUT COSTS ( ,t6e STATC * OES I,A1C q v f o 21 N'0''l 'i[?3 () t ",trb r\ 6 D

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