Sabeera Sultana vs. The Income Tax Officer

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WP/2669/2024HC TelanganaHBHC01005217202402 February 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, following its previous judgment in a batch of writ petitions (WP No. 25903 of 2022 & batch, dated 14.09.2023). The Court found that the proceedings were not drawn in accordance with the amended provisions of the Income Tax Act but under the unamended provisions, rendering them unsustainable. The Court held that the preliminary objection raised by the petitioner regarding the jurisdictional issue was sustained, and all the writ petitions were allowed on this ground. Consequently, the impugned assessment orders were quashed. The Court explicitly stated that since the orders were being quashed on the issue of jurisdiction, it was not inclined to proceed further and decide the other issues raised by the petitioner. These other issues were reserved to be raised in appropriate proceedings. The rights of the parties were reserved as envisaged in paragraphs 37 and 38 of the previous order, which allowed the revenue to proceed further from the stage of the Supreme Court's order in Ashish Agrawal, if they so desired, as a one-time measure.

What were the facts?

The petitioner, an individual, filed a writ petition challenging an assessment order passed by the National Faceless E-Assessment Centre for Assessment Year 2016-17. The assessment determined the total income at Rs. 46,83,470. The petitioner contended that the assessment was arbitrary, illegal, and violative of principles of natural justice and constitutional provisions. Specifically, the petitioner argued that the amended provisions of the Income Tax Act, effective from April 1, 2021, mandated issuing a notice under Section 148A and providing an opportunity for hearing before reopening under Section 148. The petitioner also argued that the reopening was initiated by the Jurisdictional Assessing Officer, contrary to faceless assessment procedures. The revenue did not dispute the procedural objection but highlighted other objections raised by the petitioner.

What were the issues?

1. Whether the assessment order passed by the National Faceless E-Assessment Centre for Assessment Year 2016-17, determining the total income at Rs. 46,83,470, is arbitrary, illegal, and violative of the principles of natural justice and constitutional provisions (Articles 14, 19(1)(g), and 265) and Section 148A of the Income Tax Act, 1961? Assessee's Contention: The assessment is illegal as it was initiated under the unamended provisions of the Act, failing to comply with the mandatory requirement of issuing a notice under Section 148A and providing an opportunity of hearing, as stipulated by the amended provisions effective from April 1, 2021. The reopening was also initiated by the Jurisdictional Assessing Officer, which is contrary to faceless assessment procedures. Revenue's Contention: While not disputing the procedural objection regarding Section 148A, the revenue contended that there were other various objections raised by the petitioner.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144B,Section 148A

AI-generated summary — verify with the full judgment below

I I a /-- F Home maker, H. NO lndian D 1 . The lncome Hyderabad, T 2. The PrinciPal Hyderabad, lT 3. The Central Department of Buildings, New' 4. The National Delhi 5. The Union Of Department of pleased to issue a Direction declaring t Centre) completed Act, 1961 vide DIN the Assessment Yea IT PETIT N NO: 2669 F 2024 [ 337e ] about 53 years, Occ. - 500059, Telangana, IN THE d COURT FOR THE STATE OF TELANGANA AT HYDERABAD (special Original Jurisdiction) , THE SECOND DAY OF FEBRUARY THOUSAND AND TWENTY FOUR PRESENT URABLE SRI JUSTICE P.SAM KOSHY AND URABLE SRI JUSTICE N.TUKARAMJI I THE THE I :::;.,,,"" -l il. ohammad Abdul Rasheed, 2-8351N3 Saidabad, Hyde ...PETITIONER r, Ward 9 (1), lncome tax Towers, A.C. Guards na State. f Commissioner Of lncome Tax Telangana And Ap, rs, AC Guards, Masab Tank, HYderabad Of Direct Taxes, Represented By lts Chairman, ue, Ministry of Finance, Government of lndia, Secretariat less Assessment Center; lncome Tax Department, New ...RESPONDENTS cle 226 of the Constitution of lndia praying that in the the affidavit filed therewith, the High Court may be f Mandamus or any other appropriate Writ, Order' or er passed by the 3rd (National Faceless E-Assessment sessrnent UIS 147 r/w Section 144-8 of the lncome Tax Notice No. ITBA/AST/S/1 47 12023-241 105895778('t ) for Aged rabad AN l[li, ***.ented By lts secretary To rhe Govemrnent, RbGnue, Ministry of Finance, New Delhi Petition underl circumstances stateC 6-17 determining the total income of Rs.46,83,4701 as I I I I I i ,t

i arbitrary, illegal, r principles of natu 265 of the Consti ( consequenfly set IiA NO: 't oF 2024 o"JlJ,.* ,,ril,,[tf" " trti# t rna ".id til. ", , without jurisdiction, void-ab_initio, vjotative of the part from being violative of Articles 14, 19(i)(g) and ia and Sec. 14gA of the lncome Tax Act, 1961 , and me in the interests of justice, and pass the affidavit rirea in tl Petition under n 't 51 CpC praying that in the circumstances stated in rt of the petition, the High Court may be pleased to suspend lhe order Section 141 rtw 144 (B) dated. 28-12_2023, including any recovery, p nt to vide order U/S 156 DIN Notice No rrBA/ASr/s/156/202t 1059157816(i )for the Assessment year 2016_11 Counsel for the p r: SRI THANNERU CHAITANYA KUMAR counset ror tre neslJJ nts: SRI J.V.PRASAD (SC FOR TNCOME TAX) e i trr" Corrt."a" tf.," fffl*ing: ORDER ItI I

7 THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUI(ARAMJI WRIT PETITION No.2669 oF2o24 9BDEB:(per Hon'ble Sn Justice P.SAM KOSHY) The instant Writ Petition has been filed by the petitioner under Articl e 226 of the Constitution of India seeking for the following relief: "to bsue a Wit of Mondamus or any other appropiate Wit Order or Drection declaing the order passed by the 3d respond.ent (Nationat Faceless E-Assessmenf Centre) ampleted. ttrc assessment u/ s I 47 r/ u Section 1448 of the Income Tax Act, 1961 uide DIN & Notice No.ITBA/AST/S/147/2023-24/105895778(1)'for the assessment year 2016-17 deterunining the totol income of Rs.46,83,47O/- as arbttrary itlegal bad in tau uoid-ab-initio uiolatiue of the principles of natural justice apart from bein4 uiolatiue o7 ertiit." 14 19(1)(9) and 265 of the Constitution of India and ansequenllA set a.side the some in the interests of justice". 2. One of the contentions that the petitioner has raised in the present Writ Petition is that under the amended provisions of the Act which czune into effect from Ol.O4.2O2l, 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 I

lr f-. 2 PSI(,J do MIR,J W.P.No.2669 of 2024 assessee. As per the amended provision of law' the proceedings to be drawn are also in a faceless manner' 3. Whereas, learned counsel for the petitioner contended that, in the instant case, reopening has been initiated by the Jurisdictional Assessing Officer' In support of his contention, he relied upon the recent judgment rendered by this very Bench in WP'No'259O3 of 2022 & batch, dated 14.Og.2023 wherein this Court disposed of the batch of writ petitions to the limited extent' 4- On the other hand, Iearned Standing Counsel for the respondent-DePartment does not dispute that the said objection was decided in the aforesaid batch of Writ Petitions. However, he further contended that apart from the aforesaid 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 respondent-Department is concemed, this Bench' while disposing of said batch of writ petitions, had taken note of \

7 3 PSK,J & NTR,J W.P.No.2669 o! 2024 the same at paragraph Nos.37 & 3g which are reproduced herein under: ?7. fhe. preliminary objection raised by the petitioner rs susramed and all tese writ petittons-stanfiZ a owed. on .thb uery jurbdictional issie. Since the impigned :?:r:.: ::d orders are g.etttng quastad on the iii"t o1 Junsdrcton, u)e e.re not inclined to proceed_ furtjher and. decide the other issues raised. by ine petitioiii-wnicn stands reserued to be raised ind. cintend.ed. in an app ropriate proeeding s. " "38. Since the Hon'ble Supreme Court had_, in the case of As.hlsh Aganaal, supra, as a one_time measure e::erasmg *re pou.ters under Article t 42 of the Constihttion of lndia, permitted tLe Reuenue to pioceed under the substituted proui,sions, and. thii Court all9ultng the petitions onlg on the procedural flau.,, the right confened on tlrc Reuenue uould. remain' reserued_ to procee-d further if theg so toant from the staqe of the o-rcler of the Supreme Court tn the case oj eini"n Agaru.tal, supra." t I 6. In view of the same, we zrre inclined to allow the present writ petition also on similar terms. Accordingly, 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 un-amended provision which is otherwise not sustainable. 7 . As has been held by this Bench in the aforesaid batch matters, the rights of the parties would stand reserved as is

}l..: 4 PSI(,J & MTR,J W.P.No.2669 of 2O24 en\risaged at pa-ragraph Nos.37 & 38 of the said order passed in the batch of writ petitions. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. 1. The lncome Hyderabad, T 2. The Principa SD/- P. PADMANABHA REDDY ASSISTANT REGISTRAR //TRUE COPY// SE N OFFICER Officer, Ward 9 (1 ), lncome tax Towers,A.C. Guards na State | ,Ghief Commissioner Of lncome Tax Telangana And Ap, Hvderabad, lT T6urbrs, AC Guards, Masab Tank, Hyderabad ! ela To, s 3. The Mini 4. The Delhi 5. The Secretary Ministry of Fi 6. One CC to SRI 7. One CC to SRI 8. Two CD Copie BSK GJP Chairmanl lC0 stry of Finahb4 National Fdcdl ntral Board Of Direct Taxes, Department of Revenue, Government of lndia, Secretariat Buildings, New Delhi ess Assessment Center, lncome Tax Department, New e Govemment, Union Of lndia, Department of Revenue, New Delhi NNERU CHAITANYA KUMAR, Advocate PRASAD, (SC FOR INCOME TAX). [OPU IOPUC] cl I

HIGH COURT DATED:02102 ORDER WP.No.2669 ALLOWING T WITHOUT CO 0r*''o 4 024 WRIT PETITION s S ,15 ttnn mzl t t o.€ 'i, o L) g$ sP I A c 14 16' S E H 1 o k { I

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