Manohar Rao Vangapally vs. Union of India and 4 Others

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WP/28884/2021HC TelanganaHBHC01045941202112 July 2022Bench: SUREPALLI NANDA,UJJAL BHUYAN6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the petitioner's challenge on the ground of non-compliance with Section 148A had been addressed by the Supreme Court in Union of India v. Ashish Agarwal. Following this precedent, the respondents had issued a notice to the petitioner on 01.06.2022, to which the petitioner had submitted a reply on 21.06.2022, including arguments on the 'change of opinion' aspect. In light of these developments, the Court directed the Income Tax Officer, Ward 4(1), Hyderabad, to pass an appropriate order in accordance with the law. The writ petition was disposed of based on this direction, and miscellaneous applications, if any, were closed without costs.

What were the facts?

The petitioner, Manohar Rao Vangapally, filed a writ petition before the High Court of Telangana challenging a notice issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Ward 4(1), Hyderabad, for the Assessment Year 2017-18. The notice sought to reopen the petitioner's assessment. The petitioner contended that the procedure prescribed under Section 148A of the Act was not followed, rendering the notice void. Additionally, it was argued that the reopening constituted a 'change of opinion' as the petitioner's return had already been scrutinized and a regular assessment order passed under Section 143(3). The High Court had previously granted a stay on the impugned notice.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2017-18 is void for non-compliance with the procedure prescribed under Section 148A of the Act? 2. Whether the reopening of assessment amounts to a 'change of opinion' by the assessing authority, rendering the notice invalid? Assessee's Contentions: - The procedure under Section 148A was not followed before issuing the notice under Section 148, making the notice void. - The reopening of the assessment, after a regular assessment order under Section 143(3) was passed, amounts to a 'change of opinion' by the assessing authority. Revenue's Contentions: - The judgment does not record specific contentions made by the revenue in response to the petitioner's arguments in the final order.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 143(3)

AI-generated summary — verify with the full judgment below

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWELFTH DAY OF JULY TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 28884 OF 2021 Between: Manohar Rao Vangapally, S/o. V. Ranga Rao, Aged 65 years, Residing at Plot No. 399, Road No. 81, Phase-lll, Jubilee Hills, Hyderabad - 500 033. ...PETITIONER AND 1 Union of lndia, Represented by its Revenue Secretary, Ministry of Finance, Department of Revenue, Office of Ministry of Finance, Room No. 46, North Block, New Delhi - 1 10 001 . lncome Tax Officer, Ward 4 (1), Hyderabad. lncome Tax Officer, Ward 4(2), Hyderabad. Additional Commissioner of lncome Tax, Range-4, Hyderabad. Commissioner of lncome Tax, Rnage-4, Hyderabad. ...RESPONDENTS Petition Under Article 226 oI lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or a direction, particularly one in the nature of a Writ of Mandamus declaring the action of the Respondents, particularly Respondent No. 2, in issuing the lmpugned nottce under Section 148 dated 30.06.2021 bearing Notice No. ITBA/ AST/S/1 4812021-2211- 330'1 7549(1) read along with the letter daled 0711012021 bearing Letter No. Letter No. ITBA/ ASItFt17t2O21-2211036222065(1) seeking to reopen the assessment of the Petjtioner for the Assessment Year 2017-18 as being without jurisdiction, arbilrary, illegal, unconstitutional and in contravention of the lncome Tax Act, 1961 , and consequently. (a) Set aside the lmpugned Notice dated 3010812021 bearing Notice No. ITBA/ AST/S/1 4812021-2211-33017549(1) issued by the 2nd Respondent (b) Set aside the Letter dated O711012021 bearing Letter No. Letter No. ITBA/ ASTlFl1712021-2211036222065(1) issued by the 2nd Respondent, 2 3 4 5

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 stay all further proceedings arising out of the lmpugned notice under Section 148 dated 30.06.2021 bearing Notice No. ITBA/ AST/S/1 4812021-2211-33017549(1) read along with the letter dated 0711012021 bearing Letter No. Letter No. ITBA/AST/F/1 7 I 2021 -221 I 036222065(1 ) issued by the 2nd Respondent. Counsel forthe Respondent No.1 : SRI.NAMAVARAPU RAJESHWAR RAO(ASSGI) Counsel for the Respondent Nos.2 to 5 : SRI.B.NARASHIMA SHARMA The Court made the following: ORDER |.A.NO:1 OF 2021 Counsel for the Petitioner : SRI.AVINASH DESAI

THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN AND THE HON'BLE MRS JUSTICE SUREPALLI NANDA Writ Petition No.28884 of 2O2L ORDER: Per the Hoi'ble the Chief Justrce IJJJaI BhuAan) Heard Mr. Avinash Desai, learned counsel for the petitioner; Mr. B. Mukharjee, learned counsel for respondent No.1; and Ms. Sapna Reddy, learned counsel for respondents No.2 to 5. 2. By filing this petition under Article 226 ol the Constitution of India, petitioner has assailed legaiity and validity of the notice dated 30.06.2021 issued by the Income Tax Officer, Ward a( 1), Hyderabad, under Section 148 of the Income Tax Act, 196 1 (briefly, 'the Act' hereinafter), for the assessment year 2017- 18. 3. This Court by order dated 16.11.2021 had issued notice and granted stay. Relevant portion of the order dated 16.11.2021 reads as under: "According to learned counsel for the petitioner, the procedure prescribed under Section 148A of the Act was not followed before issuing the impugned notice,

2 which has rendered the impugned notice void' His further contention is that return of income filed by the petitioner was subjected to scrutiny, whereafter, regular assessment order was passed under Section i43(3) of the Act. By way of the impugned notice, the assessing authority is seeking to review the assessment already made, which is nothing but a cha;rge of opinion' Issue noti.ce, returnable in six weeks. Mr. B.Narasimha Sarma, learned Senior Standing Counsel for Income Tax waives notice for all the respondents. Respondents to file counter alfrdavit by tJle next date. In the meanwhile, there shall be stay of the impugned notice dated 30.06.2021." 4. Learned counsel for the petitioner submits that insofar the challenge on the ground that assessing authority did not follow the procedure under Section 148A of the Act is concerned, the same has been answered by the Supreme Court in Unlon of India v. Ashish Agarwalr' Following the said decision, respondents have issued notice to the petitioner on 01.06.2022 to which petitioner has submitted reply on 21.06.2022 including on the point of change of oPinion. ' zoii scc online sc 543

J 5. In view of the aforesaid, respondent No.2 i.e', Income Tax Officer, Ward 4(1), Hyderabad, shall now pass appropriate order in accordance with 1aw' 6. This disposes of the writ petition 7. Miscellaleous applications pending, if any, sha-ll stand closed. However, there shall be no order as to costs' SD/. P, PADMANABHA REDDY ASSISTANT REGISTRAR ,TRUE COPY// eD SECTION OFFICER To l.TheRevenueSecretary,Unionoflndia,lr4inistryofFinance'Department^of ' idr6.i,., otiice ot rrrrinirtrv ot Finance,'Room No. 46, North Block, New Delhi - 110 001. 2. The lncome Tax Officer, Ward 4(1), Hyderabad' 5. The tncore Tax Officer, W ard 4(2), Hyderabad' i. i'riu AoJitionaiCommissioner of 'lncome Tax, Range-4, Hyderabad' s. fhu Cor.issioner of lncome Tax, Rnage-4'-Hyderabad ' O. One CC to SRI.AVINASH DESAI, Advocate [OPUq i. o;; cc i" sni.r.rnrr,rAVARAPU RAJESHWAR RAo es-g.G^l) [oPUC] 8. o;; cc io Sni.e.runRASHlMA SHARIUA, Advocate IoPUC] 9. Two CD CoPies 10. One spare coPY S.A GJPN-, \

HIGH COURT DATED:1210712022 ORDER WP.No.28884 ot 2021 DISPOSING OF THE W.P WITHOUT COSTS. 1B JUL 2[TI e 5l A l'E :'..t.>l i'- \ c t: 'N1 blt \f' ./.io //** J Ct it') i\ /."r ..\ , 0

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