Sri Arun Raj Goud Balagoni vs. Deputy Commissioner of Income Tax, Circle -1(1)

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WP/26064/2022HC TelanganaHBHC01036368202206 November 2023Bench: P.SAM KOSHY,N.TUKARAMJI6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition on the preliminary objection raised by the petitioner regarding the procedural flaw. The Court held that the proceedings were not drawn in accordance with the amended provisions of the Income Tax Act, 1961, but under the unamended provisions, which is not sustainable. The Court referred to its previous decision in W.P.No.25903 of 2022 and batch, where similar objections were sustained, and the writ petitions were allowed on the jurisdictional issue. The Court noted that the impugned notices and orders were being quashed on the point of jurisdiction, and therefore, it was not inclined to proceed further and decide other issues raised by the petitioner. The Court reiterated that the right of the respondents to proceed further would stand reserved, as envisaged in paragraphs 37 and 38 of the aforesaid batch judgment, which referenced the Supreme Court's decision in Ashish Agarwal. Consequently, the writ petition was allowed on similar terms, with no order as to costs.

What were the facts?

The petitioner, Sri Arun Raj Goud Balagoni, filed a writ petition challenging an order dated 26.04.2022 passed by the Deputy Commissioner of Income Tax, Circle-1(1), Hyderabad, under Section 148A(d) of the Income Tax Act, 1961, and a notice dated 26.04.2022 issued under Section 148 of the Act for the Assessment Year 2015-16. The petitioner contended that the proceedings were initiated under the unamended provisions of the Act, violating the amended provisions that came into effect from 01.04.2021, which require issuing a notice under Section 148A and providing an opportunity for hearing in a faceless manner. The petitioner argued that the reopening was initiated by the jurisdictional Assessing Officer, contrary to the amended procedure. The respondent revenue did not dispute the facts but highlighted other objections raised by the petitioner.

What were the issues?

1. Whether the notice issued under Section 148 and the order passed under Section 148A(d) for Assessment Year 2015-16 are illegal, arbitrary, and barred by limitation, being passed in gross violation of the principles of natural justice, specifically concerning the procedural requirements under the amended provisions of the Income Tax Act, 1961, effective from 01.04.2021? Assessee's Contentions: - The proceedings were initiated under the unamended provisions of the Act, whereas the amended provisions, effective from 01.04.2021, require issuing a notice under Section 148A and providing an opportunity for hearing in a faceless manner. - The reopening was initiated by the jurisdictional Assessing Officer, which is contrary to the amended procedure. - Relied on a batch of writ petitions decided by the same Bench on 14.09.2023 (W.P.No.25903 of 2022 and batch). Revenue's Contentions: - The revenue did not dispute the objection regarding the procedural flaw in the amended provisions. - Submitted that there were other various objections raised by the petitioner in the writ petition.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

[ 3379 ] HIGH GOURT 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: 26064 OF 2022 Between: Sri Arun Raj Goud Balagoni, S/o. Sri Balraj Goud Balagoni, 1-8-31271711, Chikkadapally, Hyderabad - 500020, Telangana. ...PETITIONER AND Deputy Commissioner of lncome Tax, Circle -'l ( 1), l.T. Towers, A.C. Gurads, Masabtank, Hyderabad - 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 pass an order or direction, especially one in the nature of WRIT OF MANDAMUS holding that the order daled 2610412022 passed by respondent u/s.'148A(d) of the Act, for the assessment year 2015-16 with Dl N. ITBA/AST/F I 1 48N2O22-23l1 04285 1 966( 1 ) and the notice dated 26.04.2022 issued under section 148 of the Act with DlN.lTBfuASTlsll4S-112022- 2311042852025('1) for assessment year 2015-16 as being illegal, arbitrary and barred by limitation apart from being passed in gross violation of principles of natural justice, ard consequently set aside the same lA NO: 1 OF 2022 Petition under Section 151 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 daled 2610412022 issued by the respondent u/s.148 of the Act, for the assessment year 2015-16 with DIN: ITBA/AST/S/148 1 12022-2311042852025( I ) and all consequential proceedings thereto

lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circunlstances stated in the affidavit filed rn support of the petition, the High Court may be pleased to permit the Petitioner to raise the above Additional Affidavit legal contention in the writ petition in the Interest of JUStice Counsel for the Petitioner: SRl. A. V. RAGHU RAM Counsel for the Respondents: M/s. B. SAPNA REDDY, JUNIOR STANDING COUNSEL FOR INCOME TAX The Court made the following: ORDER

THE HON'BLE Szu JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI W.P. No. 26064 of 2022 ORDER: per .lro n'ble Sri Justi<x p.S t KOSHfi) . Heard Mr. A.V. Raghu Ram, learned counsel for the petitioner and Ms. B. Sapna Reddy, learned Junior Starding Counsel for Income Ta-x appearing for the respondents. Perused the entire record. 2. The instant petition has been tiled challenging the Assessment Order passed by respondent No. 1 under section l4gA(d) of the Income Tax Act, 196 1 (hereinafter referred to as "the Act") dated 26 .O4 .2022 for thc Assessment Year 2015-16. 3. One of the contentions that the petitioner has raiscd in the present writ petition is that under the amended provisions of the Act which came into effect from Ol.O4.2O2l, the respondents while proceeding under section 148 of the Act were required to issue notice under Section 148,{ and provide an opportunitlr of hearing to the assessee. As per the amended provision of law, the proceedings to be drawn are a,lso 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.Og.2023 vide W.P.No.259O3 of 2022 and batch to the limited extent.

\ 2 4. Learnerl cottnsel for the Department would nrlt dispute of having decicl,:cl thc s:rid oblcction in the aforesaid batch mattcrs However, lcarned counsel submits that objection, tht'rc hatc been other various petilioner har raiscd in thc rlrtt petition. 5. So fal as this contention of the Department ls W.P.No.2590ll of. apart from thc aloresaid ob.jcctions also which the learned counsel lor the concernecl, this Bcnch, while disposing of 2022 and batch had taken note o[ the same in paragraph Nos.37 & 38 which rs reproduced herein under "37. The preliminary objection raised by the petitioner rs sustain,:d aird atl these $ rit petitions stands allowed on tl)is very jurisdicrional issue. Since the impugne<l notices and ordr:rs are letting luashcd on the point otjurisdiction, lvc are not inclined to [rocecd [urthcr and deci(le the othcr issues raised lry the petition:r \!,hrch stands rcscn'ed to be raised and contended in an appropriate proceedings." 38. Srnce the Hon'ble Supreme Court had, in the case of Ashish Agaru,al, supra, as a one-time measure exercising the pou'ers uider ,\rticli: 142 ot |ne Constitution of India, permitted the Revenur: to proceed under the substituted provisions, and this Court altowing the p€titions only on the procedural flaw, the right conferrtd on the Revenue would remain reserved to proceed further if thel so want from the stage of the order of the Srtpreme Court in the case of Ashish Agarwal, supra. 6. In view of the sarne, we are inclined to allow tho present wrlt petitionalsoonsimilarterms.Accordingly,thepresentwritPetition stands aliowed on the objection of the petitioner that thc proceedings have not becn drawn in accordance with the amended provision but under the unamended provision which is otherwise not sustainable. As has been helcl by this Bench in the aforesaid batch matters, the

.r** '" 3 I right of the respondents would stand resen,ed as is envisaged in paragraph Nos.37 & 38 of the said batch. No order as to costs. 7. Consequently, misccllaneous petitions pending, if any, shall stand closed. To, SD/- C. PRAVEEN KUMAR ASSISTAIIT REGISTRAR I //rRUE coPY// s#roN oFFtcER I 1. The Deputy Commissioner of lncome Tax, Circle -1(1)' IT Towers, A C' Gurads, Masabtank, Hyderabad - 500004. 2. One cc to SRl. A. V. RAGHU RAM, Advocate [OPUC] a. O;; CC to tvtlt. B. SAPNA REDDY, Junior SC for lncome Tax Dept) [OPUC] 4. Two CD Copies BtV GJPT\ r\",..-

HIGH COURT DATED:0611112023 ORDER WP.No.26064 of 2022 ALLOWING THE WRITPETITION WITHOUT COSTS ilt 16E 51416: 2 2 N0\i 2[8 I DEspA.TCS6O z I \6 \\ wry

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