Karumanchi Savithri vs. Union of India and 2 others

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WP/32075/2022HC TelanganaHBHC01046508202214 September 2023Bench: P.SAM KOSHY,LAXMI NARAYANA ALISHETTY3 pages
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What did the High Court hold?

The High Court, considering the interim protection already granted by the Hon'ble Supreme Court while remanding matters back, was inclined to grant interim protection to the present petition. Accordingly, an interim stay was granted as prayed for until the next date of hearing. The matter was directed to be listed before the appropriate Bench having roster. The court did not decide the constitutional validity of Section 147A or the merits of the challenge to the impugned order and notice, as it was an interim order.

What were the facts?

The petitioner, Karumanchi Savithri, filed a writ petition challenging Section 147A of the Income Tax Act, 1961, as inserted by the Finance Act, 2026. She also challenged an order dated 07.04.2022 passed by the Income Tax Officer (ITO), Ward 1, Kothagudem, under Section 148A(d) of the Act, deeming her case fit for issuing a notice under Section 148 for Assessment Year 2015-2016. A consequent notice under Section 148 dated 15.04.2022 was also challenged. The petitioner argued that these actions were taken without following due procedure, were arbitrary, and violated principles of natural justice and the Constitution. An interim application was filed seeking a stay on further proceedings, including tax collection, pursuant to the impugned order and notice.

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 law) 2. Whether the order passed by the Income Tax Officer under Section 148A(d) dated 07.04.2022, deeming the petitioner's case fit for notice under Section 148 for AY 2015-2016, and the consequent notice under Section 148 dated 15.04.2022, are void, illegal, arbitrary, without authority of law, violative of Article 14 of the Constitution of India, and violative of principles of natural justice and the Income Tax Act, 1961? (Question of mixed law and fact) Assessee's Contentions: The petitioner argued that the impugned order and notice were passed without following the due procedure contemplated under the Income Tax Act, 1961. The actions were alleged to be arbitrary, without authority of law, and violative of Article 14 of the Constitution and principles of natural justice. The petitioner sought to declare Section 147A unconstitutional. Revenue's Contentions: The judgment does not record specific contentions from the respondents (Union of India, Principal Chief Commissioner of Income Tax, and Income Tax Officer).

Which sections of the Income-tax Act were involved?

Section 147A,Section 148A,Section 148

AI-generated summary — verify with the full judgment below

[ 3386 ] : PRESENT: THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WP NO: 32075 OF 2022 Between Karumanchi Savithri, D/o Kakarla Chinnaramchandraiah Aged about. 61 years, Occ. Housewife, Resident of H No. 7-40, Sarapaka, lvlain Road, Bhurgampad, KHAIVItMAtM 507 1 20, TELANGANA, .....PETITIONER AND 1. Union of lndia, Represented by its Secretary, Department of Revenue, IMinistry of Finance, North Block, New Delhi - 1 10001 2. Principal Chief Commissioner of lncome Tax, 10rH Floor "D" Block lT Towers, A.C. Guards, Hyderabad 500004 3. lncome Tax Officer, Ward 1, 6-12-38, Ganesh Temple lMain Road, Kothagudem 507101 .....RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit fiied therewith, the High Court may be pleased to issue a Writ, Order or Directiorr more particularly one in the nature of Writ of ltlandamus declaring (1)Section "l47Aof the lncome Tax Act, 1961 as insefted by the Finance Act, 2026 as unconstitutional, ultra vires the Constitution of lndia, and void and cieclaring (ii) the action of 3rd Respondent in passing the Order under clause (d) of section 148A of the lncome Tax Act, 1961 dated 07.04.2022 in Flle No.ITBA/ASTlFl14BN2022-2311042645452(1) ("lmpugned Order") duly assessing that Petitioner's case is a fit case for issuance of notice under section 148 of the Act for Assessment Year 2415-2416 and (iii) the consequent notice under Section 148 of the lncome Tax Act dated 15.04.2A22 without following due procedure as contemplated under the provisions of the lncome Tax Act, 1961as being void, illegal, arbitrary, without authority of law, violative of Article 14 of the Constitution of lndia and violative of principles of naturaljustice and also violative of provisions of lncome Tax Act, 1961 and pass such further order or orders as this Hon'ble Court deems fit and proper in the circumstances of the case." HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE TWENTY EIGHTH DAY OF JULY TWO THOUSAND AND TWENTY SIX

(Prayer is amended as per C.O.dt. 28.07.2026 vlde LA.No. 1 of 2026 in W.P.No.32075 ot 2022.1 l.A. NO: 1 OF 2022 Petition under Section 151 of C.P.C 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 including collection of tax pursuant to the impugned order under clause (d) of section 148A of the lncome Tax Act, 1961 dated 0710412022 in File No ITBA/ASTlFl148N2022-23110426 45452(1) passed by the 3rd Respondent and the consequent notice under Section 148 of the lncome Tax Act vide his file S.No. 128l148l13XPPK2642PllTOlW-1 /KTDM dated 15.04.2022, Pending disposal of WP No 32075 of 2022, on the file of the High Court. The petition coming on for hearing, upon perusing the petition and the grounds filed in support thereof and upon hearing the arguments of SRI K Vijay Kumar Advocate for the Petitioner, Assistant Solicitor General Of lndia Advocate for the Respondents, and the Court made the following. ORDER Gonsidering the interim protection already granted by the Hon'ble Supreme Court while remanding the matters back, we are inclined to grant interim protection to the present petition as well. Accordingly, there shall be interim stay as prayed for, till the next date of hearing. Let the matter be listed before the appropriate Bench having roster. sd/- M.XaGAMANT ASSISTANT REGISTF.AR ro ( To, //TRUE COPY// SECTI N OFFICER 1. The Secretary, Union of lndia, Department of Revenue, Ministry of Finance, North Block, New Delhi - 1 10001 2. Principal Chief Commissioner of lncome Tax, 'lOrH Floor "D" Block lT Towers, A.C. Guards, Hyderabad 500004 3. lncome Tax Officer, Ward 1, 6-12-38, Ganesh Temple Main Road, Kothagudem 507101 [RR 1 -fO 3 By SPAD] 4. One CC to Sri. K VIJAY KUIUAR Advocate IOPUC] 5. One spare copy

HIGH COURT PSK, J & LNA, J DATED i 28-07 -2026 ORDER WP.No.32075 of 2022 INTERIM STAY ii;' .s ,1', -)0 iiJ IT i.: u \ -.. r G\''l t t' '., _-. t. ' ', .... j-:., Jl- ri

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