M/s. Sreehari Wines vs. Income Tax Officer

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WP/3938/2024HC TelanganaHBHC01007549202415 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 preliminary objection raised by the petitioner that the proceedings were not drawn in accordance with the amended provisions of the Income Tax Act but under the un-amended provisions, rendering them unsustainable. The Court referred to its previous judgment in WP.No.25903 of 2022 & batch, dated 14.09.2023, where similar preliminary objections were allowed. The Court noted that in the said batch, the preliminary objection regarding the jurisdictional issue was allowed, and the impugned notices and orders were quashed on that point. The Court explicitly stated that it was not inclined to proceed further with other issues raised by the petitioner, as they could be raised in an appropriate proceeding. The rights of the parties were reserved as envisaged in paragraphs 37 and 38 of the previous order, which allowed the revenue to proceed from the stage of issuance of notice under Section 148A if they so desired, as a one-time measure permitted by the Supreme Court in the case of Ashish Agarwal. The operative direction was to allow the writ petition on the stated preliminary objection.

What were the facts?

The petitioner, M/s. Sreehari Wines, filed a writ petition challenging an order dated 23.04.2022 passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice dated 23.04.2022 under Section 148 of the Act, both pertaining to Assessment Year 2018-19. The petitioner contended that these actions were initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessment Unit (FAO), which is contrary to the amended provisions of the Act that mandate faceless proceedings. The petitioner also argued that the proceedings were not conducted in accordance with the amended provisions, which require issuing a notice under Section 148A and providing an opportunity of hearing. The respondents, represented by the learned Standing Counsel, did not dispute the petitioner's objection regarding the authority issuing the notice but indicated that other objections were also raised.

What were the issues?

1. Whether the impugned order dated 23.04.2022 passed under Section 148A(d) and the consequential notice dated 23.04.2022 under Section 148, for AY 2018-19, issued by the JAO instead of the FAO, are void, illegal, and contrary to the provisions of the Income Tax Act and principles of natural justice? (Question of law and fact, concerning Section 148A and Section 148 of the Income Tax Act, 1961). Assessee's Contention: The proceedings initiated by the JAO instead of the FAO are illegal as the amended provisions of the Act, effective from 01.04.2021, mandate faceless proceedings and require the FAO to issue such notices. The petitioner relies on a previous judgment by the same bench in WP.No.25903 of 2022 & batch, dated 14.09.2023. Revenue's Contention: The revenue does not dispute that the objection regarding the issuing authority was decided in the aforementioned batch of writ petitions. However, they point out that the petitioner has raised other objections as well.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FIFTEENTH 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: 3938 0F 2024 t 337e I ...PETITIONER Between: M/s' sreehari w ines. 4-6-6.2.NACHARAM, H'DERABAD 500076,Terangana, Rep By. Partne(J. Nageswara Rao) AND 1 2 lncome Tax Officer. Ward 15(1 ), I T Tower, AC Guards, Masab Tank, Hyderabad - 500004. Principal Commissioner Of lncome Tax 4, 1Oth Floor, C-Block, l.T. Towers, 1 0-2-3, A.C. Guards, Hyderabad-500004 3. National Faceless Assessment Centre, The Assessment Unit, lncome Tax Department, Nationar Faceress AisdssmLnt'"Gntre, Derhi, Ministrv of Finance, Room No. 4o1, 2nd Ftooi-Ei;;;, Jr"*l[irur'iviih,il"Silli;: Delhi-1 10003 4' Pr. commissioner of rncome Tax- 4, 1Oth Froor, c-Brock, r.T. Towers, 10-2-3, A.G. Guards, Hyderabad-500004. 5. The Assessment Unit, lncome Tax Department, National Faceless Assessment.Centre, Delhi. Ministry_of Flnanc-iRooin f.fo.'+ti-, ZnO Fffi, E: Ramp, Jawaharlal Nehru Stadium,belhi-1 iOOOb''-- ...RESPONDENTS Petition undei Articre 226 0f the constitution of lndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to issue an appropriate writ, order or direction more particurarry one in the nature of writ of Mandamus, decraring the impugned order dt.23.04.2022 tor A.Y. 2018-19 passed u/s 148A(d) of the Act vide DtN No. |rBA/AST/Ft148N2022_ 2311042829414(1 )(Exhibit p-1 ) and the consequentiar notice u/s 148 dt. 23.04.2022 vide DrN No. |rEA/AST/sr14B-1/2022- 23r1o42830s14(1), issued by

.,/ the JAO(1st respondeht) instead of FAo (3rd respondent),as void, iflegar, and contrary to the provisions of rncome-tax Act and contrary to the principres of Natural Justice. lA NO: 1 oF 2024 Petition under section 15'r cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to stay all further proceedings pursuant to the notice uls 14g dt. 23.o4.2022 vide DIN No. ITBA/AST tgt14B_1t2O22- 23t 1042830514(1)issued by the 1st Respondbnt(JAO)for A.y. 2018-lginstead of 3rd respondent(FAO), and may pass such other order(s) as the Hon'bre court deems fit and proper in the interests of substantial justice, as otherwise the petitioner wourd be put to irreparabre ross and severe injury. Counsel for the petitioner: SRI MANMOHAN DUNDU Counsel for the Respondents: SRI J.V.PRASAD (SC FOR INCOME TAX) The Court made the foflowing: ORDER I i I i

*;, THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No. 393a oF 2024 ORDER:@erHon'ble Sri Justice P.SAM KOSHfl) The instant Writ Petition has been filed by the petitioner under Articl e 226 of the Constitution of India seeking for the following reliet "...to issue an appropriate writ, order, or direction more particularly one in the nature of writ of mandamus declaring the impugned order, dated 23.04.2022 for A.Y. 2018-19 passed under Section l48A(d) of the Act, vide DIN No.ITBA/AST/ F /148A/ 2022-23/1O428294L4(tl and the consequential noLice under Section 148, dated 23.04.2022 vid,e DIN No.ITBA/AST/ S / 148_L /2022-23 / to4283os l4(l) issued by the JAO (1"t respondent) instead of FAO 13'a respondent) as void, illegal, and contra-ry to the provisions of Income Tax Act and contrary to ttre kinciples of Natural Justice and pass.. ." 2. One of the contentions that the petitioner has raised in the present Writ Petition is that under the amended provisions of tl.e Act which cEune into effect from 01.O4.2O2I, 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

2 PSK,J & NTR,J W.P.No.3938 oJ 2024 assessee, As per the amended provision of [aw, 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 .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 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 leamed counsel for the respondent-Department is concerned, tltis Bench, while dispsing of said batch of writ petitions, had taken note of

3 PSI(,J&.t\[rR,J W.P.No.3938 oJ 2O24 the same at paragraph Nos'37 & 38 which are reproduced herein under: "37. TIE preliminary objection raised bg the petitioner ii ""ttirna and atltheie wit petitions stands alloued ';;br" ";rA jurisdictionat issue' Since tLe impugted noties ani irders ore getting qtasled on the point of iiii.ii.", we are notlncliied to proceed furtler and 'i"Ji"ii'.rt*r isszes raised bg the petitioner uhich .tii" ,.""-ed. to be rabed and contended in on appropiate Pro ceeding s. " "38. Sine the Hon'ble Supreme Court had' in tle case of Ashish Agarutal, supra' as a one-time -meosure Jxercbing tie pouters under Article 142 of the iiiidrii"" o7 tid;a, permitted the Reuenue to proceed "ili ** iubstitu{ed prouisiotts, and this court it iirg ilo p"tition" only on tte proccdural flau' tle iru i"f.o"a on tle Reienue raould remain reserued tX ir.*ii inler if they so want from ttLe stag-e -of the lrilr-ii-ti supieme- Court in the case of Ashish Agarual, suPra." 6. In view of the same, we are 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 \

4 PSK,J & .l\l:r&J W.P.No.3938 oJ 2O24 en\dsaged at paragraph Nos.37 & 38 of the said order passed in the batch of writ petitions. No order as to costs. 8. Consequently, miscellaneous petitions pending, if any, shall stand closed. SD/.N. SRIHARI ASSISTA NT REGIS //TRUE COPY// SECTION OFFICER inr#ff#m;m+*,s*ffi ;rr*ffi:;nmm*ffil#*t*;#= BSK GJP w To,

HIGH COURT DATED:1510212024 ORDER WP.No.3938 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS qft." o\s -(HI S14; o (J ( * c * (\ 2J nn nu rl^TCHF-t) \o &*

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