Sri Devender Reddy Surukunta, vs. The Income Tax Officer,

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WP/5433/2024HC TelanganaHBHC01010511202401 March 2024Bench: P.SAM KOSHY,N.TUKARAMJI7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, holding that the proceedings were not drawn in accordance with the amended provisions of the Act but under the un-amended provisions, which is unsustainable. The Court relied on its previous judgment in W.P.No.25903 of 2022 & batch, dated September 14, 2023. In that judgment, the Court had sustained the preliminary objection raised by the petitioners and quashed the impugned notices and orders on the jurisdictional issue. The Court had also noted that the Supreme Court, in the case of Ashish Agarwal, had permitted the Revenue to proceed under the substituted provisions as a one-time measure. Since the present petitions were allowed only on the procedural fault, the rights conferred on the Revenue would remain reserved to proceed further from the stage of the Supreme Court's order in Ashish Agarwal, if they so wished. The rights of the parties were 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, Sri Devender Reddy Surukunta, filed a writ petition before the High Court of Telangana at Hyderabad challenging an order passed by the Income Tax Officer (ITO), Ward 503002, under Section 148A(d) of the Income Tax Act, 1961, dated April 8, 2022, along with a notice issued under Section 148 of the Act for the assessment year 2018-19. The petitioner contended that these actions were illegal, arbitrary, and passed in violation of natural justice and without application of mind. The petitioner also sought to suspend the operation of the notice. The assessment was initiated by the jurisdictional Assessing Officer.

What were the issues?

1. Whether the notice issued under Section 148A and the subsequent notice under Section 148 for the assessment year 2018-19 are illegal, arbitrary, and passed in gross violation of the principles of natural justice and without application of mind, turning on Section 148A and Section 148 of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that under the amended provisions of the Act, effective from April 1, 2021, the respondents were required to issue a notice under Section 148A and provide an opportunity of hearing. The proceedings were also to be conducted in a faceless manner. The reopening was initiated by the jurisdictional Assessing Officer, which was contrary to the amended provisions. 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 Contention: The learned Senior Standing Counsel for the respondent-Department did not dispute that the objection regarding the procedure was decided in the aforesaid batch of writ petitions. However, the revenue contended that apart from this objection, 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

Between: AND 1 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FIRST DAY OF MARCH TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 5433 OF 2024 The lncome Tax Officer, Ward 503002 1, 6-2-156/3, Subhash Nagar, Nizamabad Sri Devender Reddy_Surukunta, S/o. Sri Ramchandra Reddy Surukunta, Aged about 50 years, Sy. No.20 and 21, Srini Devetopers, Road i,lo.S, NeiiUtniiJ I rrupatht lemple, Goopanpally, Nizamabad 503003. ..PETITIONER [ 337e ] Centre, lncome Tax 2nd Floor, E-Ramp, 2. Assessment Unit, National Faceless Assessment Department, Ministry of Finance, Room No. 401 , Jawaharlal Nehru Stadium, Delhi 1 10 003. ..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 pass an order or direction, especially one in the nature of wRlr oF MANDAMUS holding that the order passed by 1st Respondent u/s.148A(d) of the Act, dt.o8.o4.2022 with DrN and Norice No.trBA/AST/Ft14BAl2o22- 2311042667383(1) and the notice dated 08.04.2022 issued under section .,l48 of the Act with DIN and Notice trlo.trBA/AST/st14B_1/2022-2311042669195(.1 ) for the assessment year 2O1B-19, as being illegal, arbitrary and passed in gross violation of principles of natural justice without application of mind, and consequently set aside the same. : ! ! I

lA NO: 1 OF 2024 Petition under Section i si cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to suspend the operation of the notice issued by the Respondent u/s.14g of the Act, dt-08.04.2022 for the assessment year 2019-.1 9 with DrN and Notice No.lrBA/AST/s 1148 112022-2311042669195(1 ) and ail consequentiat proceedings thereto. Counsel for the Petitioner: SRI A.V.RAGHU RAM Counsel for the Respondents: M/s. SUNDARI R.PASUpATl, Sr. SC FOR INCOME TAX The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI U/RIT PETITION No.5433 OF 2024 ORDER:/per Hon'ble Si,lustice P.SAM KOSHY) Heard Mr.A.V.Raghu Ram, learned counsel for the petitioner ald Ms.Sundari R.Pasupati, learned Senior Standing Counsel for the Income Tax Department for respondents. Perused the material available on record. 2. The instant Writ Petition has been fiied bv the petitioner under Articie 226 of the Constitution of India seeking for the following re licl: "to poss on order or directrcn especiotly one in the noture ol WRIT OF MANDAMUS holding thot the order possed by 1't Respondent u/s 148Ad of the Act dt 08 04 2022 with DtN ond Notice No ITBA/AST/F/148A/202221/10426671831 ond the notice doted 08 04 2022 issued under section 148 ol the Act with DIN ond Notice No ITBA/AST/S/148 1/202223/10426691951 for the ossessment yeor 2O18- 19 os being illegol orbitrory ond possed in gross violotion of principles oJ noturol justice without opplicotion of mind and consequently set oside the some". 3. One of the contentions that the petitioner has raised in the presen t Writ Petition is that under the amended '/

2 PSI(,J & / TR,J W.P.No.5433 of 2O24 provisions of the Act which came into effect from 01 .O4.2O21 , the respondents, while proceeding under Section i48 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 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.O9.2023 wherein this Courr clisposed of the batch of writ petitions to the limited extent. 5. On the other hald, learned Standing Counsel for the respondent-Department does not dispute that the said objection was decided in the a_foresaid batch of Writ Petitions. However, he further contended that apart lrom the aforesajd objection, there have been other various objections also nhich the petitioner has raised in the u,rit petition.

3 , PSK,J & lVrR,J W.P.No.5433 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 & 38 which are reproduced herein under: "37. TLE pretiminary objection raised bg the petitrcner is sustained and, all these urit petitions stdnds allouted on this uery juisdictional issue. Since tlrc impugned notices and orders ore getting quashed on the point of juisdiction, u)e are not inclined to proceed further and 'decide the other issues raised bg the petitioner u-'hich stc:nds reserued to be raised and contended in an ap p ro piate p ro ceeding s. " "38. Since tle Hon'ble Supreme Court had, in the case of Ashish Aganaal, supro, as a one-time meosure exercising the pouters under Article 142 of the Constitution of Indio, pennitted the Reuenue to proceed under ttrc substituted prouisions, and this Court allouting the petitions onlg on the procedural J7aut, the right confered on the Reuenue u.tould remain reserued to proceed furtler if theg so tuant from the stage of the order of tLrc Supreme Court in the case of Ashish Agorual, supra." 7. 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'

4 PSI(,J6,.IVTR,J W.P.No.5433 of 2O24 8 As has been held by this Bench in the a,oresaid batch matters, the rights of the parties would stald reserved as is envisaged at paragraph Nos.37 & 3g of the said order passed in the batch of writ petitions. No order as to costs. Consequently, miscellaleous petitions shall stand closed. pending, if any, SD/- P. PADMANABHA REDDY ASSISTANT REGISTRAR //TRUE COPY// r-\L\ ttk,' To, SECTION OFFICER 1. The lncome Tax Officer, Ward 503002 1, 6-2-15613, Subhash Nagar, Nizamabad 2. The Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ir/inistry of Finance, Room No. 401 , 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi 1 10 003. 3. One CC to SRI A.V.RAGHU RAM, Advocate [OPUC] 4. One CC to lV/s SUNDARI R.PASUPATI, Sr. SC FOR INCOIVE TAX [OPUC] 5. Two CD Copies BSR KI(S cwu

HIGH COURT DATED: 0110312024 ORDER WP.No.5433 of 2024 ALLOWING THE WRIT PETITION, WITHOUT COSTS 4Ic ',/ 1HE ST c^ ( ?* I I PF; :r,1 vz .\ -t D6'SPnTCP' I i 3 I { I I

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