M/s. Sumadhura Builders and Constructions vs. Union of India

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WP/2706/2024HC TelanganaHBHC01005291202402 February 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition on the ground that the proceedings were not drawn in accordance with the amended provisions of the Income Tax Act, 1961, but rather under the un-amended provisions, which the Court found unsustainable. The Court referred to its previous decision in WP No. 25903 of 2022 & batch, dated September 14, 2023, where similar objections regarding jurisdiction were sustained. The Court noted that in that batch of petitions, all writ petitions were allowed on the jurisdictional issue, and the orders were quashed on that point. The Court stated that it was not inclined to proceed further and decide other issues raised by the petitioner, reserving those rights to be raised in appropriate proceedings. The Court also referenced paragraph 38 of its previous order, which acknowledged the Supreme Court's decision in 'Arshia Agarwal' and reserved the rights of the Revenue. Consequently, the present writ petition was allowed on similar terms, with the rights of the parties reserved as envisaged in paragraphs 37 and 38 of the previous order.

What were the facts?

The petitioner, M/s Sumadhura Builders and Constructions, filed a writ petition before the High Court of Telangana at Hyderabad challenging an order passed by the Income Tax Officer (Respondent No. 2) under Section 148A(d) and a notice issued under Section 148 of the Income Tax Act, 1961, dated April 19, 2022, and April 20, 2022, respectively. These actions were taken for the Assessment Year 2018-19. The petitioner contended that the proceedings were initiated under the un-amended provisions of the Act, violating the amended provisions that came into effect from April 1, 2021, which mandate a faceless assessment and require an opportunity of hearing. The petitioner specifically argued that the reopening was initiated by the Jurisdictional Assessing Officer.

What were the issues?

1. Whether the order passed by the Respondent No. 2 under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961, dated April 19, 2022, and April 20, 2022, respectively, are illegal, arbitrary, bad in law, void ab initio, and violative of the provisions of the Income Tax Act, 1961, and Articles 14, 19, and 265 of the Constitution of India, due to being initiated under un-amended provisions and lacking jurisdiction. Assessee's Contention: The petitioner argued that the amended provisions of the Act, effective from April 1, 2021, require notice under Section 148A and an opportunity of hearing, and that proceedings should be faceless. They contended that the reopening was initiated by the Jurisdictional Assessing Officer, which is contrary to the amended law. The petitioner relied on a previous judgment by the same Bench in WP No. 25903 of 2022 & batch, dated September 14, 2023. Revenue's Contention: The respondent-Department did not dispute that the objection regarding the amended provisions was decided in the aforementioned batch of writ petitions. However, they contended that there were other 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

[ 3s7s ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SECOND DAY OF FEBRUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 2706 OF 2024 Between: M/s Sumadhura Builders and Constructions, Represented by Yampalla Sanjeeva Reddy, Aged 60 years Occ.Partner in M/s. Sumadhura Builders and Constructions Having Office atH No. 6-2-136713, Opp Milk Chilling Centre, Hyderabad Road, Nalgonda, Telangana - 508001. ...PETITIONER AND 1 Union of lndra, Ministry of Finance Rep. by its Secretary, 166-8 North Block, New Delhi - '1 10 001. lncome Tax Officer, Ward 1, Nalgonda Near Rail, Under Bridge, Nalgonda, Telangana - 508001. The Principal Commissioner of lncome Tax-|, lT Towers, Ground Floor, A.C. Guards, Hyderabad, 500004 The National Faceless Assessment Centre, lncome Tax Department Ministry of Finance Govt. of lndia, New Delhi. .,.RESPONDENTS Petition under Afticle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to i. lssue a Writ, Order or Direction more particularly, one, in the nature of Writ of Mandamus, declaring the order passed by the Respondent No.2 in passing the Oider dated 19.04.2022 uls. 148A(d) and Notice issued by the Respondent No.2 under Section 148 of the lncorne Tax Act, '1961 dated 20 04 2022 as illegal, arbitrary, bad in law, void ab initio, and being violative of the provisions of lncome Tax Act '1961 and Articles 14,19 and 265 of the Constrtution of lndia and cons€quently, ii. Set aside the Order dated 19.04.2022 2 3 4

u/s. 148A(d) and the Notrce issued by the Respondent No.2 u/s 148 of the lncome Tax Act, 1961 dated 20.04.2022 calling for the return of tncome of the Petitioner for AY. 2018-19 and consequent proceedrngs as lacking in jurisdiction. Counsel for the Petitioner : SRI P.Soma Shekar Reddy counser for the Respondents: B}, 33i,'J,i6xt"tJ-l3lfiB,^ The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No.27O6 OF 2024 ORDER: (per Hon'ble Si Justice P.SAM KOSIilf) The instant Writ Petition has been filed by the petitioner under Article 226 of the Constitution of India seeking for the following relief: "to issue a Wit of Mandamus or ang other appropiate Writ Order or Drection declartng the order passed bg the respondent NO.2 in passing the order dated 19.04-2022 u/ s 148A(d) and Notice issued bg the respondent No.2 under section 148 of the Income Tax act, 1961 dated 2O.04.2O22 as arbitrary illegal bad in law uoid-ab-initio uiolatiue of the oinctples of natural justice opart from being uiolatiue of 'Articles la 19(1)(9) and 265 of tlY Con-stitution of India and consequentlg set aside the same in the interests of justice' . 2. One of the contentions that the petitioner has raised in the present Writ Petition is that under the arnended provisions of the Act which carne 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 assessee. As per the amended provision of law, the f roceedings to be drawn are also in a faceless manner p l

T ,+ 2 PSI(,J dr .lV:fR'.r w,P.No.27O6 oJ 2024 3. Whereas, learned counsel for the petitioner contended that, in the instant case, reopening has been initiated by the Jurisdictiona'l Assessing Ofhcer' In support of his contention, he relied upon the recent judgment rendered by this very Bench in WP'No'25903 of 2022 & batch, dated 14.O9.2023 wherein this Court disposed of the batch of writ petitions to the limited extent' 4. On the other hand, learned Standing Counsel for the respondent-Department does not dispute that the said objection was decided in the aJoresaid batch of Writ Petitions. However, he further contended that apart from the aforesaid objection, there have been other various objections atso which the petitioner has raised in the writ petition. 5. So far as this contention of the leamed counsel for the respondent-Department is concerned, this Bench, while disposing of said batch of writ petitions, had taken note of the same at paragraph Nos'37 & 38 which are reproduced herein under:

3 a PSK,J AL, NTR,J W.P,No.27O6 oJ.2OZ4 t I "37. The prelimina.ru obiection raised bg the pefitioner is susrained and all"thele writ petttionsstands allor.ued on this uery jurisdictionat .issi.e. si"..-li*i,$"g".a :?:*:^::! orders are s.euing quashed on the point o1 Junsd.tctton, u)e are not inclined to prrceed. furtie, and decide the ottter issues raised by in" p"itii""J_nt n stands reserued to be raised ind i.iii"ali ,:" "" approp riate proceeding s. " "38. Since the Hon,ble Suprem.e Court had_, in the case -ol fqfrsn Agarwal, supra, as a one-time measure exerc$tng ttle powers under Article 142 of the Constitut.ion of India, permitted the Reuenue lo iiou.a under the substituted prouisior*, and. tni{ Court allouing the petitions only on ttu p*;Ar;i" jatt, tne right anfened on the Reuenue would rematn reserued_ ::::n^."d,y"her if theg so tuant from the stage i1 the o-raer oJ trle supreme Court in the case oj arhi"h Agaru.nl, supra.,, I I 6. In view of the same, we are inclined to allow the present writ petition a_[so 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 wourd stand reserved as is envisaged at paragraph Nos.37 & 3g of the said order passed in the batch of writ petitions. No order as to costs.

4 PSK,J d6 M[R,J ' W.P.No.2706 of 2024 Consequently, miscellaneous petitions pending, if any, sha-ll stand closed. SD/. MOHD. ISMAIL ASSISTANT STRAR //TRUE COPY// I To, SECTION OFFICER The Secretary, Union of lndia, lvlinlstry of Finance, 166-B North Block' New Delhr - '1 10 001. in'e f "co.e- tax Officer. Ward 1, Nalgonda Near Rail, Under Bridge' Nalbonda. Telanqana - 508001. iiJ Fil-"lipa I Coinmissroner of lncome Tax-l, lT Towers, Ground Floor' A C' Guards Hyderabad, 500004 ihJ N;tioh;i Faceless Assessment Centre' lncome Tax Department Ministry of Finance Govt of lndia, New Delhi. One CC to SRI P.Soma Shekar Reddy, Advocate. {OPUCI O;; aC io Sri Gadi Praveen Kumar. Dy. Solicitor Gen. of lndia, [OPUC] Two CD Copies. 1. 2 3 4 6 7 BSK GJ \

HIGH COURT DATED:0210212024 t1R THE S l4 ? ( c 1_) At ir,!a 202{ a (('( .n I ORDER WP.No.2706 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS Y??

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