Smt. Sailaja Devi Malagani vs. The Income Tax Officer

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WP/26311/2024HC TelanganaHBHC01051057202428 April 2025Bench: P.SAM KOSHY,NARSING RAO NANDIKONDA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court has not decided the merits of the case. Instead, it has directed that the matter be listed for hearing before an appropriate Bench as per the roster, considering the amendment and challenge made to the vires of Section 147A of the Income Tax Act, 1961. In the interim, the Court has granted a stay of the impugned order. This interim stay is granted in light of the order passed by the Hon'ble Supreme Court in Diary No. 2196 of 2026 and batch decided on 10.04.2026. No finding has been given on the constitutional validity of Section 147A or the legality of the impugned notice and order. The operative direction is to list the matter for hearing and to maintain an interim stay.

What were the facts?

The petitioner, Smt. Sailaja Devi Malagani, has filed a writ petition before the High Court for the State of Telangana at Hyderabad. The petition challenges an order dated 30.08.2024 passed by the Income Tax Officer, Ward-6(1) under Section 148A(d) of the Income Tax Act, 1961, and a notice dated 30.08.2024 issued under Section 148 of the Act, both pertaining to the Assessment Year 2018-19. The petitioner also seeks a declaration that Section 147A of the Income Tax Act, 1961, as inserted by the Finance Act, 2026, is unconstitutional and void. The respondents include the Income Tax Officer, the Assessment Unit of the National Faceless Assessment Centre, and the Union of India.

What were the issues?

1. Whether Section 147A of the Income Tax Act, 1961, as inserted by the Finance Act, 2026, is unconstitutional, ultra vires the Constitution of India, and void? (Question of constitutional law) 2. Whether the order dated 30.08.2024 passed under Section 148A(d) and the notice dated 30.08.2024 issued under Section 148 of the Act for Assessment Year 2018-19 are without jurisdiction, arbitrary, illegal, bad in law, void ab initio, and violative of Sections 148A, 149, and 151 of the Act, as well as contrary to CBDT circulars? (Question of mixed law and fact) Assessee's contentions: The petitioner argues that Section 147A of the Income Tax Act, 1961, is unconstitutional. They also contend that the impugned order and notice are without jurisdiction, arbitrary, illegal, and violative of specific sections of the Act and CBDT circulars. The petitioner relies on an order of the Hon'ble Supreme Court in Diary No. 2196 of 2026 and batch decided on 10.04.2026. Revenue's contentions: The judgment does not record any specific contentions made by the respondents.

Which sections of the Income-tax Act were involved?

Section 147A,Section 148A,Section 148,Section 149,Section 151

AI-generated summary — verify with the full judgment below

43447 | IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY NINTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION NO: 26311 OF 2024 Between: Smt. Sailaja Devi Malagani, D/o. Sri Narasimha Rao, Aged about 57 years, Occupation. House Wife, No.40'1 , 8-3-1046, Narayan Reddy Saraswathi Apts., Srinagar Colony, Ameerpet, Hyderabad - 500073. ...PETITIONER AND 1. The lncome Tax Officer, Ward- 6(1), l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. 2. Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No.401 , 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium- Delhi - 110003. 3. Union of lndia, Represented by its Secretary, Department of Revenue, Ministry of Finance, North Block, New Delhi - 1 10002. (RR 2 and 3 are impleaded as per court order dated 29.09.2026 vide lA.No.2 of 2026 in WP No.2631 1 of 2024) ...RESPONDENT Petition under Arlicle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, For the reasons aforesaid, it is most respectfully prayed that this Hon'ble Court may be pleased to: (i). issue a Writ in the nature of a declaration declaring Section 147 A ot the lncome Tax Act, 1961 as inserted by the Finance Act, 2026 as u nconstitutional, ultra vires the Gonstitution of lndia, and void and consequently strike down the same;

(ii). issue a writ of Mandamus decraring the order dated 30.0g.2024 bearing DIN & Notice No. |rBA/ASTtFt14BN2o24-25/1068194978(1) passed u/s. 148A(d) of the Act by the Respondent for the Assessment year 201g-19; and iii). the notice dated 30.08.2024 issued by the Respondent under section 148 of the Act [with DtN and Notice No.|TBA/AST/S t14B 1t2024- 2511068195328(1) for the assessment year 2018-19; as being without jurisdiction, arbitrary, illegal, bad in law, void ab initio, apart from being violative of provisions of section 14gA and section 149 of the Act and also contrary to the circular issued by CBDT and provisions of section 1514 of the Act, and consequently set aside the order dated 30.0g.2024 passed u/s. 148A(d) of the Act and the notice under section 148 dated 30.0g.2024 lor the assessment year 2018-19 and pas,s such further or other orders, directions or writs as this Hon'ble court may deem fit and proper in the facts and circumstances of the case and in the ,nterest of justice. (Prayer is amended as per Court Order dt: 29.09.2026 vide lA.No.3 ot 20261 Counsel for the Petitioner: SRI A.V.RA.GHU RAM Counsel forthe Respondent No.1: Ms. BOKARO SAPNA REDDY, SR. SC FOR INCOME TAX Counsel for the Respondent Nos.2 & 3: SRI N.BHUJANGA RAO, DEPU]Y SOLICITOR GENERAL OF INDIA The Court made the following: ORDEF Let the matter be listed for hearing before an appropriate Bench as per roster irr the light of amendment and challenge made to the vires of provisions contained in section 147-A ol the lncome Tax Act,'1961. avtlA

Meanwhile, there shall be interim stay of the impugned order, in the light of the order granted by the Hon'ble Supreme Court vide its order in Diary No.2196 ot 2026 and batch decided on 10.04.2026. SD/. C.DEEPIKA ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To 1. The lncome Tax Officer, Ward- 6(1), l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. 2. Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No.401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium- Delhi - 110003. 3. The Secretary, Union of lndia, Department of Revenue, IVlinistry of Finance, North Block, New Delhi - '1 '10002. 4. The Section Officer, Writ Division Bench Section, High Court for the State of Telangana, at Hyderabad. 5. The Section Officer, Posting Section, High Court for the State of Telangana, at Hyderabad. 6. One CC to SRI A.V.RAGHU RAM, Advocate [OPUC] 7. One CC to SRI N.BHUJANGA RAO, DEPUTY SOLICITOR GENERAL OF rNDrA [OPUC] 8. One CC to Ms. BOKARO SAPNA REDDY, Sr. SC FOR INCOIVE TAX loPUCl 9. Two CD Copies PSK. PB Vk

HIGH COURT DATED: 2910912026 ORDER WP.No.26311 of 2024 DIRECTION o 2 DRAFTS ..--.. ittg -' iA [ 6 NO\] 2]2S itl t t )) z c) .\ rlU \ic,. \\.'/w { + ] -" i l-i lir .u{nA Yy_^-, 7flrow

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