The Primary Agriculture Co- Operative Society Ltd vs. The Income Tax Officer

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WP/4346/2024HC TelanganaHBHC01008421202420 February 2024Bench: P.SAM KOSHY,N.TUKARAMJI8 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, holding that the assessment proceedings were not drawn in accordance with the amended provisions of the Income Tax Act, 1961, but under the un-amended provisions, which rendered the proceedings unsustainable. The Court relied on its previous decision in W.P. No. 25903 of 2022 & batch, dated September 14, 2023. In that judgment, the Court had sustained the preliminary objection regarding jurisdiction and quashed the impugned notices and orders. The Court noted that while the Supreme Court, in the case of Ashish Agrawal, permitted the Revenue to proceed under substituted provisions as a one-time measure, allowing the petitions on procedural flaws preserved the Revenue's right to proceed from the stage of the Supreme Court's order. 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. No order as to costs was made.

What were the facts?

The petitioner, The Primary Agriculture Co-Operative Society Ltd, Pandavapur, filed a writ petition challenging an assessment order dated March 17, 2023, for Assessment Year 2018-19. The order, passed by the National Faceless E-Assessment Centre, determined the total income at Rs. 11,59,74,063. The petitioner argued that the assessment proceedings were initiated under Section 147 read with Section 144-B of the Income Tax Act, 1961, but failed to comply with the amended provisions effective from April 1, 2021, which mandate issuing a notice under Section 148A and providing an opportunity for hearing. The petitioner contended that the reopening was initiated by the Jurisdictional Assessing Officer, contrary to the faceless assessment procedure. The revenue did not dispute the procedural flaw but argued that other objections were also raised by the petitioner.

What were the issues?

1. Whether the assessment proceedings initiated under Section 147 read with Section 144-B of the Income Tax Act, 1961, for Assessment Year 2018-19, are illegal and void ab initio for non-compliance with the amended provisions requiring a notice under Section 148A and an opportunity of hearing, as mandated by the Income Tax Act, 1961, effective from April 1, 2021? Assessee's contentions: The petitioner argued that the amended provisions of the Act, effective from April 1, 2021, require the issuance of a notice under Section 148A and an opportunity of hearing before proceeding under Section 148. They further contended that the reopening was initiated by the Jurisdictional Assessing Officer, which is contrary to the faceless assessment procedure. The petitioner relied on a previous judgment by the same Bench in W.P. No. 25903 of 2022 & batch, dated September 14, 2023. Revenue's contentions: The revenue acknowledged that the objection regarding the procedural flaw was decided in the aforementioned batch of writ petitions. However, they contended that the petitioner had raised other objections as well.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

I { The Primary Agriculture Co- Operative Society Ltd, Pandavapur 4 191 Pandavapur, Kaddam Kaddam, Adilabad 504106, Telangana lndia represented by its Secretary Kasula Rajendar S/o Kasula Pedda Rajanna aged about 48 years Rl/o Lingapur, Telangana PAN AAEAT4201 H Assessment Year 2018- 19 [ 337e 1 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTIETH 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:4346 OF 2024 Between: ...PETITIONER AND 1 The lncome Tax Officer, Ward- 1, Nirmal Nirmal District, (Earstwhile Adilabad District) Telangana State. The Principal Chief Commissioner of lncome Tax - Telangana and A. P, Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 028, Telangana. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings, New Delhi - 110 001 . The National Faceless Assessrnent Center, lncome Tax Department, New Delhi. The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, IVlinistry of Finance, New Delhi - 110 001. ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the order passed by the lncome Tax Authorities (National Faceless E- Assessment Centre completed the assessment lJlS 147 r/w Section 144- B of the lncome Tax Act, 1961 vide DIN and Notice No. 2 3 \ 4 5

'dated 17- 03- 2023 in ITBA/AST/S/14712022- 2311050929146('l ) for the assessment year 2018- 19 determining the total income of Rs. 1 1 ,59,74,0631 as arbitrary, illegal, bad in law, without jurisdiction, void- ab- initio, violative of the principles of natural justice apart from being violative of Articles 1a, 19(1)(g) and 265 of the Constitution of lndia and Sec. 148A of the lncome Tax Act, 1961, and consequently set aside the same. Counsel for the Petitioner : SRI THANNERU CHAITANYA KUMAR counserror the Respondents No.1to4 , iss.rffii#fr??y:ilio Counsel for the Respondent No.5 : SRI GADI PRAVEEN KUMAR, DY.SO.GEN The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSITY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No.4346 OF 2o24 ORI)ER:@er Hon'ble Si Justice P.SAM KOSHY) The instant Writ Petition has been frled bv the petitioner under Article 226 of the Constitution of India seeking for the following relief: "...to issue an appropriate writ, order, or direction more particularly one in the nature of Writ of Mandamus declaring the order passed by ttre Income Tax Authorities (National Faceless E- Assessment Centre) completed the assessment under Section 147 read with Section 1zt4-B of the Income Tax Act, 1961 vide DIN and Notice, dated L7.o3.2o23 in ITBA/AST/ S / t47 I 2o22-2s / tosog2 9146(l) for the assessment year 2Ol8-19 determining the total income of Rs.11,59,74,063/- as arbitrary, illegal, bad in law, without jurisdiction, void ab initio, violative of the principles of natural justice, apart from being violative of Articles 1+, 19(1)(9) and 265 of the Constitution of India and Section 148.{ of ttre Incorire Tax Act, 1961 and consequently set aside the same in the interests ofjustice and pass..." 2. One of the contentions that the petitioner tras raised in the present Writ Petition is that under the amended pro\dsions of the Act which came into effect from OL.O4.2O2L, the respondents, while proceeding under Section 148 of the Act, were required to issue notice under

2 PSK,J & N[R,J W.P,No.4345 oJ 2O24 Section 148A and provide an opportunity of hearing to the assessee. As per the amended provision of law, the proceedings to be drawn are also in a faceless m€rnner. 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.25903 of 2022 &, batch, dated 14.09 .2023 wherein this Court disposed of tl:e batch of writ petitions to the limited extent. 4. On the other hald, 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 ,,wit petition. 5. So far as this contention of the learned counsel for the respondent-Department is concerned, this Bench, while dispsing of said batch of writ petitions, had taken note of

3 PSK,J & NTR,J W.P.No.4346 oJ 2O24 the same at paragraph Nos.37 & 38 which are reprduced herein under: '37. The preliminary objection raised bg the petttioner is sustained and all these uit petitions stands allotued on this uery juri.sdictional i.ssue. Since the impugned notices and orders are getting qtashed on the point of jurisdiction, u)e are not inclined to proceed furth.er and decid.e the otLLer issues raised bg tlrc petitioner uhich stands reserued to be raised and contended in an appropriate proceeding s. " "38. Since tte Hon'bLe Supreme Court ha.d., in the case of Ashish Aga naa\ supra, as a one-time meosure exercisirLg the pouers under Article 142 of the Constitution of India, permitted the Reuenue to proceed under tLe substituted proui.sions, and thi,s Court allouing tle petitions onlg on tle procedural flau-t, the right confened on the Reuenue would remain reserued to proceed further if theg so uant from tle stage of the order of the Supreme Court in the case of Ashish Aganaal, supra." 6. In view of the same, we are inclined to allow the present writ petition also on similar terms. Accordingty, the present Writ Petition stands allowed on the objection of the petitioner that the proceedings have not been drawn in accordance with the arnended provision but under the un-amended provision which is otherwise not sustainable. 7. As has been held by this Bench in the aforesaid batch I I I I matters, the rights of the parties would stand reserved as is

4 PSK,J & NTR,J W.P.No.4346 oJ 2O24 envisaged 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 stald closed. 'o'.,. -n" rncome Tax officer, ward- 1, Nirmal Nirmal District, (Earstwhile Adilabad SD/- N. CHANORA SEKHAR RAO ASSISTANT REGISTRAR //TRUE coPY/' h- . SECT]ON OFFICER District) Telangana State z. in,j"pi*ipri'cnLi commissioner of lncome-Tax - Telangana "!9^A:^i' - ivi"iror,ii-iT To*er., Ac Guards, Masab Tank' Hyderabad - 500 028' Telangana. a. ine dfiJirman, Central Board of Direct Taxes, Department of. Reyer.tu.e' " rviin"iri.v oi Firince, corernment of tndia, secretariat Buildings, New Delhi - 110 001. +. ine f.laiional Faceless Assessment Center, lncome Tax Department, New Delhi. S. iie'Secretary to the Government, Union of lndia, Department of Revenue' Ministrv of Firiance, New Delhi - 1 10 001 ' 6. 5;;t6i; snrrn-Ar'rrlenu cHAITANYA KUMAR, Advocate [oPUC]-^-..^- i. il; ca 6 aRi suNDACI R PtsuPAT|, (sr sc for lncome Tax Dept)' [oPUC] f. il; ca i; sci cAor pneveeN KUMAR. (Depury.soticitor General of lndia), - HiSi, Corrt tor. in" State of Telangana at Hyderabad [OPUC] 9. Two CD CoPies. BSK GJP b

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L , I HIGH COURT DATED:2010212024 ORDER WP.No.4346 of 2024 e $o 3t' H q7fi:i ..r' .,/ t ..:.r :\ ...' s. i. -..\--.. ti riE S14 /c- ( .i' ,i It) t?t i ALLOWING THE WRIT PETITION WITHOUT COSTS 6['r,18 t I

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