Musharaff Mehdi Syed vs. Deputy Commissioner ofIncome Tax

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WP/4962/2024HC TelanganaHBHC01009505202426 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 proceedings initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) were not in accordance with the amended provisions of the Income Tax Act, 1961. The Court relied on its previous decision in WP No. 25903 of 2022 & batch, dated 14.09.2023. The reasoning was that the amended provisions, effective from 01.04.2021, mandate faceless proceedings and a specific procedure for issuing notices under Section 148A. The Court found that the impugned order and notice were unsustainable on this procedural ground alone. Consequently, the impugned order and notice were quashed. The Court also noted that, as per its earlier order in the batch matters, the rights of the parties would stand reserved, as envisaged in paragraphs 37 and 38 of that order, which referred to the Supreme Court's decision in Ashish Agrawal. The Court did not decide any other issues raised by the petitioner, stating they were reserved for appropriate proceedings.

What were the facts?

The petitioner, Musharaff Mehdi Syed, filed a writ petition challenging an order dated 12.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice under Section 148 dated 12.04.2023, both for Assessment Year 2019-20. The petitioner contended that these actions were initiated by the Jurisdictional Assessing Officer (JAO), the 1st respondent, instead of the Faceless Assessing Officer (FAO), the 3rd respondent, which is contrary to the amended provisions of the Act that came into effect from 01.04.2021. The petitioner argued that the amended provisions require proceedings to be conducted in a faceless manner and that the issuance of notices by the JAO violates these provisions and principles of natural justice. The respondents did not dispute the petitioner's objection regarding the authority issuing the notice but raised the point of other objections raised by the petitioner.

What were the issues?

1. Whether the order dated 12.04.2023 passed under Section 148A(d) and the consequential notice under Section 148 dated 12.04.2023 for AY 2019-20, issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), are void, illegal, and contrary to the provisions of the Income Tax Act and principles of natural justice? Assessee's Contention: The petitioner argued that under the amended provisions of the Act effective from 01.04.2021, proceedings under Section 148 must be initiated by issuing a notice under Section 148A and providing an opportunity of hearing. Furthermore, these proceedings are to be conducted in a faceless manner. The petitioner relied on a judgment by the same Bench in WP No. 25903 of 2022 & batch, dated 14.09.2023, which allowed writ petitions on similar grounds. Revenue's Contention: The learned Senior Standing Counsel for the respondent-Department did not dispute that the objection regarding the issuing authority was decided in the aforementioned batch of writ petitions. However, the revenue contended that there were other various objections raised by the petitioner in the writ petition.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

[ 337e ] 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 AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO:4962 OF 2024 Between: Musharaff Mehdi Syed, S/o Syed Yusaf Nawab Age.62years Occ.Business 8-2- 293l82lLl33OlA, Road No.12, Banjara Hills MLA Colony, Hyderabad - 500034, Telangana. .....PETITIONER AND 1 . Deputy Commissioner of lncome Tax, Circle (1 ),1 T Tower, Ac Guards, Masab Tank, Hyderabad- 500004. 2. Principal Commissioner Of lncome Tax, Hyderabad -'1 , 1Oth Floor, C-Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004 3. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 4O1 ,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 '10003. .....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 Writof Mandamus, declaring the impugned order dt. 1210412023 lor A.Y.2019-20 passed u/s 148A(d) of the Act vide DIN No. ITBA/AST|F|149N 2022-23 I 105204807 8('l )and the consequential notice u/s 148 at.1210412O23 vide DIN No. ITBA/ASTlsl148-112022-2311052049078(1 ), issued by the JA0(1st respondent) instead of FAO(3rd respondent),as void, illegal, and contrary to the provisions of lncome-tax Act and contrary to the Principles of Natural Justice. |.A.NO:1 OF 2024 d

petition Under Section 1 51 CpC praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay a' further proceedings pursuant to the notice u/s 14g dt. 12/04/2023_ vide DIN No.ITBA/AST/F t14B_112022- 23t1OS2O4gOtB(1)_ issued by the 1.r Respondent(JAO)for A.y. 2019-20instead of 3rd respondent(FAO). Counsel for the petitioner: SRI DUNDU MANMOHAN Counsel for the Respondents : SRt VIJHAY K.PUNNA The Court made the following ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No.4962 0F 2024 ORDER: (per Ho n'ble Si Justice P.SAM KOSHfl) Heard Mr.Dundu Manmohan, learned counsel for the petitioner and Mr.Vijhay K. punna, Iearned Senior Standing Counsel for the Income Tax Department for respondents. Perused the material available on record. 2. 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 oppropriote writ order or direction more porticulorly one in the noture of Writ ol Mondomus decloring the impugned order dt 12/04/2023 for A Y 201920 possed u/s 148Ad ol the Act vide DtN No ITBA/AST/F/148A/ 202223 / 1OS2O4BO7B(1) oN the consequentidt notice u/s 148 ot 12/04/2023 vide DIN No |TBA/AST/S/1481/202221/1052049078(1) issued by the JAo 1st respondent insteod of FAO3td respondent os void illegol ond controry to the provisions of lncome tox Act ond controry to the principles of Noturol !ustice". One of the contentions that the petitioner has raised the present Writ Petition is that under the amended AND 3. in

2 PSI(,J & MTR,J W.P.No.4962 of 2024 provisions of the Act which carne into effect from Ol.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 assessee. As per the amended provision of law' the proceedings to be drawn are also in a faceless manner' 4. Whereas, learned counsel for the petitioner contended that, in the instalt 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.Og.2023 wherein this Court disposed of the batch of writ petitions to the limited extent' 5. 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 a-lso which the petitioner has raised in the writ petltron

3 PSK,J & NTR,J W.P.No.4962 oJ 2O24 6. 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 the same at paragraph Nos.37 & 3g which are reproduced herein under: ?7 fhe preliminary objection rai.sed_ bg the petitioner is sustained and all *Ese uit petitions standi alloued_ on this uery jurisdictional issue. Since the impugned. ?d:n-? and orders are getting quoshed on tlrc point of jurisdiction, u)e are not inclined to proceed furtier and decide the otLer issues raised bg the ptiiioner tthbh stands reserued to be raised and- contended. in an approp riote proceeding s., "38. Sine the Hon'ble Suprem.e Court had, in tLe case of Ashish Aganuol, supra, as a one-time measure elerctsing the powers under Article 142 of the Constihttion of Indta, permitted. tlrc Reuenue to pioceed, under the substituted prouisions, and thii Court allotuing the petitions only on the proedurat ftaut, th.e right confered on the Reuenue uould remain reserved to proceed further if theg so uant from the stage of the order of the Supreme Court in .tLe case oj ein5n Agontal, supra." 7 . In view of the same, we are inclined to allow the present writ p€tition 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 othenrise not sustainable.

4 PSI(,J & MTR,J W.P.No.4962 of 2024 8. As has been held by this Bench in the aforesaid batch matters, the rights of the parties would stand reserved as is envisaged at paragraph Nos'37 & 38 of the said order passed in the batch of writ petitions' No order as to costs' Consequently, miscellaneous petitions pending' if any' shall stand closed Ass,siRlirci:5'.jilA V //TRUE COPY/' SECTION OFFICER ro r. rn".oo"1;y*ffiffi,;.,o*,. elrncome rax, circle (1),1 T Tower' Ac Guards' I tgglffiffi,,,-i.'*pr#l--d; :, SA KKSw

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HIGH COURT DATED:2610212024 ORDER WP.No.4962 of 2024 ALLOWING THE W.P WITHOUT COSTS. l HE S-I4I6 O 2 APfi 21I7I SPATCHtsv ( Joo i * Z# -tr"-

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