PRIMARY AGRICULTURE CO-OPERATIVE SOCIETY LIMITED vs. Office Of The Income Tax Officer Ward-2

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WP/5626/2024HC TelanganaHBHC01010907202404 March 2024Bench: P.SAM KOSHY,N.TUKARAMJI6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, agreeing with the petitioner's contention 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 relied on its previous judgment in WP.No.25903 of 2022 & batch, dated 14.09.2023. In that batch of cases, the Court had sustained the preliminary objection on jurisdictional grounds and allowed the writ petitions, quashing the impugned notices and orders. The Court explicitly stated that it was not inclined to decide other issues raised by the petitioner, reserving them to be raised in appropriate proceedings. The Court 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. Consequently, the rights of the parties were reserved as envisaged in paragraph Nos. 37 and 38 of the previous order. No order as to costs was made.

What were the facts?

The petitioner, Primary Agriculture Co-operative Society Limited, Pegadapally, filed a writ petition challenging notices issued by the Income Tax Department for Assessment Year 2018-19. The petitioner contended that the reopening proceedings, initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessment Officer (FAO), were void, illegal, and contrary to the provisions of the Income Tax Act and principles of natural justice. Specifically, the petitioner argued that under the amended provisions effective from 01.04.2021, reopening proceedings under Section 148 of the Act require a notice under Section 148A and an opportunity of hearing, conducted in a faceless manner. The notice in question was dated 19.04.2022.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated 19.04.2022, is void, illegal, and contrary to the provisions of the Income Tax Act and principles of natural justice, given that it was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessment Officer (FAO) and without providing an opportunity of hearing under Section 148A, as required by the amended provisions effective from 01.04.2021? Assessee's Contentions: The petitioner argued that the amended provisions of the Act, effective from 01.04.2021, mandate that reopening proceedings under Section 148 must be initiated by issuing a notice under Section 148A and providing an opportunity of hearing to the assessee. Furthermore, these proceedings are required to be conducted in a faceless manner. The notice issued by the JAO instead of the FAO violates these provisions and principles of natural justice. Revenue's Contentions: The learned Senior Standing Counsel for the respondent-Department did not dispute that the objection regarding the procedural irregularity was decided in a previous batch of writ petitions. However, the revenue pointed out that the petitioner had raised other objections as well.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

[ 337e ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY,THE FOURTH DAY OF MARCH TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY ANO THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 5626 OF 2024 Between: PRIMARY AGRICULTURE CO-OPERATIVE SOCIETY LIMITED, Pegadapally,represented by its Secretary of the Society, Thadakamadla Gopal Reddy S/O Raji Reddy aged 49 years,Pegadapally Vill and Mdl' Karimnagar Dist 505531 , Telangana,lndia. PAN. AABAP7423Q Assessment Year' 2o18-19 ...PETrroNER AND 1 . Office Of The lncome Tax Officer Ward-2, Karimnagar Telangana State. 2. The Principal Chief Commissioner of lncome Tax Telangana qlq &?' Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad 500 028' Telangana. 3. The Clntral Board of Direct Taxes, Represented by its Chairman, Department of Revenue, Ministry of Finance, Government of lndia, Secretariat Buildings' New Delhi - 110 001. 4. The National Faceless Assessment Center, lncome Tax Department, New Delhi. 5. The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Ministry of Finance, New Delhi -"1 10 001. ...RESPONDENTS Petition under Article 226 ot the 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 ihe nature of Writ of Mandamus, declaring the subsequent notices issued by the (National Faceless E-Assessment Centre). and the notice u/s 148 Ol. 19-04-2022 in ITBA/AST/St148 112022- 23t1042782430(1) issued by the JAO(1st respondent) instead of FAO(31 .d respondent), as void, illegal, and contrary to the provisions of lncome-tax Act and contrary to the Principles of Natural Justice Counsel for the Petitioner: SRl. THANNERU CHAITANYA KUMAR Counsel for the Respondent Nos.lto4: M/s. SUNDARI R. PISUPATI (Sr SC for lncome Tax Dept) Counsel for the Respondent No.5: SRI GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSITY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PEIITIOIT No.5626 OF 2o24 ORIIER:@er Hon'ble Si Justie P.SAM KOSHY) Heard Mr.T.Chaitanya Kumar, leamed counsel for the petitioner and Ms.Sundari R. Pisupati, learned Senior Standing Counsel for the Income Tax Department for respondents. Perused the material available on record. 2. The instant Writ Petition has been hled by the petitioner under Articl e 226 of the Constitution of India seeking for the following relief: "to issue on oppropriote writ order or direction more porticulorly one in the noture of Writ of Mondomus decloring the subsequent notices issued by the (Notional Foceless E-Assessment Centre) ond the notice u/s 749 Dt 19.04.2022 in ITBA/AST/S/148 1/2O22-23/1U2782430(1) issued by the JA0(1't respondent) insteod of FAO(jd respondent), os void, illegol, ond controry to the provisions of lncome-tox Act ond contrcry to the Principles of Noturol justice". 3. One of the contentions that the petitioner has raised in the present Writ Petition is that under the amended provisions of the Act which carne into effect from ,7

2 PS,K,J & NTR'J w.P.IiIo.5626 o:f 2024 Ol.O4.2O2l,therespondents,whileproceedingunder 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 instant case' reopenlng 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 l4.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 respond.ent-Department does not dispute that the said objection was decided in the aforesaid batch of Writ Petitions.However,hefurthercontendedthatapartfrom the aforesaid objection, there have been other various objections also which the petitioner has raised in the writ petition.

3 I t PSK,J & NTR,J W.P.No.5626 of 2024 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 preliminary objection raised by the petitioner is sustained ond all these uit petitiorts stands allowed on this uery juisdictional issue. Since the impugned notices and orders are getting quosled on tlrc point of jurisdiction, u)e are not inclined to proceed further and decide the other issues raised bg the petitioner uhich stands reserued to be raised and contended in an oppropiate proceeding s. " "38. Since the Hon'ble Stpreme Court had, in tte case of Ashish Aga ru.tal, supra, os a one-time measure exercising the pouers under Article 142 of the Constitution of India, permitted the Reuenue to proceed under tle substituted prouisions, and this Court allouing the petitions only on the procedural J7au, tLrc right conferred on the Reuenue would remain reserved to proceed further if ttteg so want from the stage of tle order of tle Supreme Court in the cose of Ashish Agarual, 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-arnended provision which is otherwise not sustainable.

4 PSK,J & NTR,J w-P.No.5626 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. SD/- T. JAYAS ASSISTANT REGIST //TRUE COPY// SECTION OFFICE R a R E To,1 rhe orrice or rhe rn-come ll[PJi:?i,Y3f"'tf ?81fi3il]":lnfB: t"* ':Il:J,l[:3'"r"|;'J""",1u'a;"*;]ir'ii.,iii""r'Hvi"iziuosoooza' 'IiH"B:g.l:'"^f; ii$s&ffi :ls:s.[:l;:"TIl'sf 'lL[]3!;Jl[?]iffi f, :fiH" New Delhi - 110 001 Tax Department, New +. i[J r[r'ril'"rt' Ficeless Assessrnent center' I ncome Delhi. q The Secretary, Union or lndia'-Government' Departrnent of Revenue' Ministry i, g# :: [ $n tffiwdSn"mr','rH]$ffiti'n'ff1r," tNotn toPuc] 9. Two CD CoPies BM GJP I {'' , I I i I

HIGH COURT DATED:04/0312024 ORDER WP.No.5626 o12024 ALLOWING THE WRITPETITION WTHOUT COSTS k 1Y\E S rAr€ $ B fiN ?n24 * oesp.qtc t'v a.(; f,c 1..) t Oo+" q \ i l i l

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