RAMA TRADING COMPANY vs. Office Of the Assistant Commissioner of Income Tax Circle 1,

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WP/4867/2024HC TelanganaHBHC01009422202426 February 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, following its previous decision in WP.No.25903 of 2022 & batch. The Court held 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 was unsustainable. The Court reiterated the findings from paragraphs 37 and 38 of its earlier order. Paragraph 37 stated that the preliminary objection regarding jurisdiction was sustained, and the writ petitions were allowed on that ground, with other issues raised by the petitioner being reserved for appropriate proceedings. Paragraph 38 clarified that while the petitions were allowed on procedural grounds, the Revenue's right to proceed further, if they wished, from the stage of the Supreme Court's order in Ashish Agarwal, remained reserved. Consequently, the present writ petition was allowed on similar terms, with the rights of the parties reserved as envisaged in the previous order. No order as to costs was made.

What were the facts?

The petitioner, Rama Trading Company, filed a writ petition challenging an order passed by the National Faceless E-Assessment Centre. This order, dated 05-02-2024, completed the assessment for the Assessment Year 2019-20 under Section 147 read with Section 144B of the Income Tax Act, 1961, determining the total income at Rs. 4,78,78,811. The petitioner argued that this order was arbitrary, illegal, without jurisdiction, and violative of natural justice and constitutional provisions. The assessment year in question is 2019-20. The petition seeks to declare the order void and set it aside. The respondents include various income tax authorities, including the Assistant Commissioner of Income Tax, Principal Chief Commissioner of Income Tax, Central Board of Direct Taxes, National Faceless Assessment Center, and the Union of India.

What were the issues?

1. Whether the assessment proceedings initiated under Section 147 of the Income Tax Act, 1961, for the Assessment Year 2019-20, were required to be conducted in accordance with the amended provisions, including issuing a notice under Section 148A and providing an opportunity of hearing to the assessee, as mandated by amendments effective from 01.04.2021? Assessee's Contention: The petitioner contended that the respondents failed to follow the amended provisions of the Act, specifically the requirement to issue a notice under Section 148A and provide a hearing before proceeding with the assessment under Section 147. The petitioner relied on a previous judgment by the same Bench in WP.No.25903 of 2022 & batch, dated 14.09.2023. Revenue's Contention: The learned Standing Counsel for the respondent-Department did not dispute that the objection regarding procedural non-compliance was decided in the aforementioned batch of writ petitions. However, the revenue noted that the petitioner had raised other objections in the present writ petition.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A

AI-generated summary — verify with the full judgment below

[ 337e ] HIGH COURT FOR THE STATE OF IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY THE HoNouR$r-e sAtNJDuslcE N.TUKARAMJT WRIT PETITION NO:4867 OF 2024 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 order passed by the rncome Tax Authorities (National Faceless E-Assessment centre completed the assessment uls 147 r/w Section 144-8 of the rncome Tax Act, 1g61 vide DrN and Notice Between: RAMA TRADING CO,lVlpANy, R"p,. by its partner, Avunoori Ravikumar S/o AvunooriVenkatesham ased. about _,ie yeirs, -o[r']ir.rn..J i:i-i ob,"r,rrn-ir.r'tono PEDDAPALLY, KARtMNAcAn orsr,-s6si 27, i;i;;srnr, rndia pAN. AAypA4 1 e8B Assessment Y ear. 2019-20 AND ...PET!T!ONER 1- office of the Assistant commissioner of lncome Tax circle 1, KARII!,|NAGAR, Telangana State 2 ll.:^l^rll"lpgf Cjrlef Commissioner of tncome Tax Tetangana and A.p, Hyoerabad, Towers, AC Guards, Masab Tank, Hyderlbad SOO OZg, Telangana. 3. The Central Board of Direct Taxes, Represented by its Chairman, Department of Revenue. Ministrv of Finance, Government-of-ti.'olr, s"ii"t.i;irIdr'idi;;", New Dethi - i 10 OOf. 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi 5. The Union of lndia, Represente-d_ by its Secretary to the Government, Department of Revenue, frrtinistry of finin"e, f.f"* Delhi - 110 001. ...RESPONDENTS Petition under Articre 226 of the c,onstitution of rndia praying that in the

No.dated O5-O2-2O24 in ITBA/AST/S/14712023-2411060515453(1) for the assessment year-2O19-2O determining the total income of Rs. 4,78,78,8111 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, 196i, and consequently set aside the same. Counsel for the Petitioner: SRI T.CHAITANYA KUMAR counser ror the Respondenr Nos.1 . .i8ll8y}.iffl,I""+:ymlb Counsel for the Respondent No.S: Dy. Solicitor General of lndia The Court made the following: ORDER

THE HONOURABLE SRI JUSTTCE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI UIRIT PETITION No.4867 OF 2024 ORDER:@erHon'ble Sri Justice P.SAM KOSHY) 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 on oppropriate writ order or direction more porticulorly one in the noture of Writ ol Mondomus decloring the order possed by the lncome Tox Authorities Notiondl Foceless E-Assessment Centre completed the ossessment U/S 147 r/w Section 1448 of the lncome Tox Act 1967 vide DIN ond Notice No doted 05/02/2024 in ITBA/AST/S/147/202324/10ffi5154537 for the ossessment yeor 2019/20 determining the totol income of Rs 4,78,78,811/- os orbitrory illegol bad in low without jurisdiction void ob initio violotive of the principles of notutol justice oport from being violotive of Articles u 19(1)(9) ond 265 ol the Constitution of lndio ond Sec 7484 of the lncome Tox Act 7967 ond consequently set oside the some in the interests oJ justice"- 2. One of the contentions that the petitioner has raised in the present Writ Petition is that under the amended provisions 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 Section 148A and provide an opportunity of hearing to the

2 PSI(,J d. JVIE J W.P.No.4867 of 2O24 assessee. As per the amended provision of law, 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 14.09.2023 wherein this Court disposed of the batch of writ petitions to the limited extent. 4. On the other hard, 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 tl.e 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 learned counsel for the respondent-Department is concerned, this Bench, while disposing of said batch of writ petitions, had taken note of

3 I I PSK,.T & NTR,J W.P.No.4867 oJ 2O24 the same at paragraph Nos.37 & 38 which are reproduced herein under: "37. The preliminary objection raised bg the petitioner is sustained and all tlese uit petitions stands ollowed on this very jurisdictional issue. Since the impugned noties and orders are getting quashed on tLrc point of jurisdiction, u)e are not inclined to proceed furtter and decide the otler issues raised bg the petitioner which stands reserued to be raised and contended in an app ropiate p roceeding s. " "38. Since tle Hon'ble Supreme Court had, in tLte case of Ashish Aga nual, supro, as a one-time measure exercising tle pouers under Article 142 of the Constitution of India, permitted tte Reuenue to proeed under the substituted prouisions, and this Court allowing tle petitions only on the procedural Jlaw, the right confened on tle Reuenue would remain resetued to proceed furtler if tleg so uont from the stage of the order of tlre Supreme Court in the case of Ashish Aganua\ supro.' 6. In view of the sarne, we are inclined to a-llow 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 i I

4 PSK,J & NTR.J w.P.No.4a6T oJ 2Oi4 envisaged at paragraph Nos.37 & 3g of the said order passed in the batch of writ petitions. No order as to Consequently, miscellaneous petitions shall stand closed. costs. pending, if any, SD/- V. KAVITHA ASSISTANT REGISTRAR- //TRUE COPYII To, SECTION OFFICER I *fr"ffff!fllucommissioner or lncome rax circre 1, KARTMNAGAR, 2. The Principal Chief Commisgioner of lncome_ Tax .Telangana and A.p, iJfl?'r'rt#; lr Towers, ec crrio.l'na"s?b"'ranr, Hyderabad s00 or8, 3. The C-enkal Board of Direct Taxes, Represented i:['; jnl!#"6tzorFinance,6;5;;;;i;'?11::33I[iJi"?"f;,1ffi l: 4. I heh.National Faceless Assessment Center, lncome Tax Department, New 3 *{ i:i#ff H-i,fit;ffifu',.tl#i*;ff il ; ; /. One CC to SRI T.CHA 3 ?#s 33 3;[!:,*, KKS s

I I HIGH COURT DATED:2610212024 ORDER WP.No.4867 of 2024 ALLOWING THE WRIT PETITION WITHOUT COSTS 0)t,o'a' b- ;dd?, 0 4 APn IWl a {+ R o ( oo z * * o IH€ $ Fsp rrEo ATC 14

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