NEXGEN PROPERTIES vs. Income Tax Officer Ward15(1),

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WP/5627/2024HC TelanganaHBHC01010945202404 March 2024Bench: P.SAM KOSHY,N.TUKARAMJI8 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition on the grounds that the proceedings were not drawn in accordance with the amended provisions of the Income-tax Act but under the un-amended provisions, which is unsustainable. The Court referred to its previous judgment in WP.No.25903 of 2022 & batch, dated September 14, 2023, where similar writ petitions were allowed on the jurisdictional issue. The Court noted that in paragraph 37 of that judgment, it was held that all writ petitions stood allowed on the jurisdictional issue, and since the impugned notices and orders were being quashed on that point, the Court was not inclined to proceed further and decide other issues raised by the petitioner, which were reserved to be raised in appropriate proceedings. Paragraph 38 of the said order mentioned that the Supreme Court, in the case of Ashish Agrawal, had permitted the Revenue to proceed under the substituted provisions as a one-time measure, and since the present Court was allowing the petitions only on procedural flaws, the rights conferred on the Revenue would remain to proceed further if they so wanted 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.

What were the facts?

The petitioner, Nexgen Properties, filed a writ petition challenging an assessment order dated January 31, 2024, for Assessment Year 2018-19. This order was passed as a consequence of an order under Section 148A(d) dated April 26, 2022, and a notice under Section 148 dated April 26, 2022. The petitioner contended that the notice under Section 148 was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), and that the proceedings were not conducted in accordance with the amended provisions of the Income-tax Act, which came into effect from April 1, 2021. These amended provisions mandate issuing a notice under Section 148A and providing an opportunity of hearing in a faceless manner.

What were the issues?

1. Whether the assessment proceedings initiated under Section 147 read with Section 144 and 144B of the Income-tax Act for AY 2018-19 are void, illegal, and contrary to the provisions of the Income-tax Act and principles of natural justice, due to the notice under Section 148 being issued by the JAO instead of the FAO, and the proceedings not being conducted in a faceless manner as per the amended provisions of the Act. Assessee's Arguments: - The reopening of assessment was initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO). - The proceedings were not conducted in a faceless manner as required by the amended provisions of the Act, which came into effect from April 1, 2021. - Relied on a previous judgment by the same Bench in WP.No.25903 of 2022 & batch, dated September 14, 2023. Revenue's Arguments: - The revenue did not dispute that the objection regarding the issuance of notice by the JAO instead of the FAO 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 147,Section 144,Section 144B,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 FOURTH 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: 5627 OF 2024 Between: Nexgen Properties, Rep. By Managing Partner' 6-73 Canara Nagar- U^ppal Busbepot, MedipallyMedchal, Malkajgiri, Hyderabad, Telangana - 500098 ...PETITIONER AND 1. lncome Tax Officer Ward15(1), I T TOWER, AC Guards, Masab Tank' Hvderabad - 500004 2. The Principal Commissioner Of lncome Tax Hyderabad 4' 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad - 500004- 3. National Faceless Assessment Centre, Delhi, The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Qelhi, Ministry of Financ6, Room No. 401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-'1 10003. 4. The Principal Commissioner of lncome Tax Hyderabad - 4' 1Oth Floor, C- Block, l.T. Towers, 10-2-3, A.C. Guards, Hyderabad-500004. 5. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 4O1,2nd Floor, E- Ramp,JawaharlalNehruStadium,Delhi-110003 ...RES'ONDENTS Petition under Article 226 of 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 the nature of Writ of Mandamus, declaring the Assessment Order dt.31 .01 .2024passed by the 3rdrespondent u/s 147 r.w.s 144 r.w.s. 1448 of the lncome-tax Act for A.Y.2018-19 vide DIN No. ITBA/AST lS 1147 12023- 24t1O60322525(1), which is passed as a conseqrrence of the order passed u/s 14SA(d) dt.26.04.2022 vide DIN No. ITBtuAST/F/'148N2O22- 23t1O42861513(.1 )and notice u/s 148 dt.26.04.2j22 vide DIN No.ITBA/AST/S/148 1t2O22- 2311042862877(1), issued by the JAO(1st respondent) instead of FA0(3rd

respondent), as void, illegal, and contrary to the provisions of lncome-tax Act and contrary to the Principles of Natural Justice. lA NO: 1 OF 2024 Petition under section 1s1 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings pursuant to the Assessment order dt.31 .01 .2o24passed by the 3rd respondent u/s 147 r.w.s 144 r.w.s. 1448 of the lncome{ax Act for A.y. 20'18-19 vide DIN No. ITBA/AST/SI147t2023-24 t1060322525 (1). Counsel for the Petitioner: SRI DUNDU MANMOHAN Counsel for the Respondents: SRI J.V.PRASAD, SC FOR INCOME TAX The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI WSTICE N.TUKARAMJI WRIT PETITION No.5627 oF 2o24 ORDER: (per Hon'ble Sri Justice P.SAM KOSHY) Heard Mr.Manmohan Dundu, learned counsel for the petitioner and Mr.J.V.Prasad, learned 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 Article 226 of the Constitution of India seeking for the following relief: "to issue on dppropriate writ order or direction more porticulorly one in the noture ol Writ of Mondomus decloring the Assessment Order dt 31.01.2024 possed by the j'd respondent u/s 747 r w s 744 r w s 1448 of the lncome tox Act lor A.Y 2078-19 vide DIN No.|TBA/AST /5 /147 /2023 24/106oj22525(1), which is possed os o consequence of the order possed u/s 148A(d) dt 26.U.2022 vide otN No. ITBA/AST/F/148A/2O2223/1042861511(1) ond notice u/s 748 dt 26.04.2022 vide DIN No |\BA/AST/S/148 1/2022 2i/1O428628741) issued by the JAO\" respondent) insteod of FA0(3'd respondent), os void, illegol ond controry to the provisions of lncome tox Act ond controry to the Principles ol Noturol Justice". 3. One of the contentions that the petitioner has raised in the present Writ Petilion is that under the amended

2 PSI(,J & MTR,J W.P,No.5527 oJ 2O24 provisions of the Act which carne into effect from Ol .O4.2021 , 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 instant case, reopening has been initiated by the Jurisdictional Assessing Officer. In support of his contention, he relied upon the recent judgment rendered bv this very Bench in WP.No.259O3 of 2022 & batch, dated 14.O9 .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 also which the petitioner has raised in the writ petition.

3 PSK,J & NTR,J W.P.No.5627 of 2024 6. So far as this contention of the learned counsel for the respondent-Department is concemed, 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. ThE preliminary objection raised bg the petittoner is sustained and. att tlese tuit petitions stands allowed on this uery juisdictional issue. Sine the impugned notices and orders are getting quashed on tlrc point of jurisd.iction, u)e are not inclined to proceed further and -decide the other issues roised bg tlrc petitioner uhich stands reserued to be raised and contended in an appropriate proceeding s. " "38. Sine tlrc Hon'ble Stprem.e Court had, in tLe case of Ashish Agarutal, supra, as a one-time meosure ixercbing tle pouters under Article 142 of the Constitttiion of Indio, permitted the Reuenue to proceed under the substituted prouisions, and this Court altowing tle petitions onlg on the proedural fiaut, the right conferred on the Reuenue uould remain resented to proceed further if tleg so utant from the stage of the ortler of tle Supreme Court in the ca* of Ashish Agaruta| supro." I 0 7 . In view of the sarne, 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(,J & MTR,J W.P.No.5627 of 2O24 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/- N. CHANDRA SEKHAR RAO ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To 1 2 3 lncome Tax Officer Ward15(1), I T TOWER, AC Guards, Masab Tank, Hyderabad - 500004 The PrinciLal Commissioner Of lncome Tax Hyderabad 4, lOth Floor, C- Block, l.T Towers, 10-2-3, A.C. Guards, Hydeiabad - 500004. 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 One CC to SRI DUNDU MANMOHAN, Advocate [OPUC] one cc to sRt J,V pRASAD, SC FOR TNCOME TnX 1OPuc1 Two CD Copies 4 5 6 PSK. GJP

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HIGH COURT DATED:0410312024 ORDER WP.No.5627 of 2024 ALLOWING THE WRIT PETITION WITHOUT GOSTS. $E S T41e ( o L) 0 6 APB 2tl2{ O6'SPATcaf zo t @c"(i* Gua-

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