SMT AKULA SUVARNA vs. ASSISTANT COMMISSIOENR AND 3 OTHERS

; Ii i ,i :l * il! I r : I i 13447 | IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE EIGHTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION NO: 7605 OF 2010 Between: resident of PETITIONER AND 1- Assistant commissioner of lncome Tax circle 3(2) Hyderabad 2. lncome Tax Officer, Ward-|, Nizamabad District 3. commissioner of lncome Tax, Andhra pradesh-ll, Hyderabad 4- Dep.uty Commissioner of lncome Tax, Circle 3(2),4th Floor, Aayakar Bhavan, Basheerbag h, Hyderabad ...RESPONDENTS 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, direction or order especially in the nature of writ of fVlandamus declaring the transfer file by the 3'd Respondent from the jurisdiction of the 2nd respondent to the lttand the 4th respondent as being bad in law, lllegal and unlawful, consequently, set aside the assessment order dt:30-3- 2001 passed bythe 1't respondentforthe block period from 1g8g-1g90 to lggg- 2000. Smt. Akula Suvarna, Wo.Sri A.Venkat, aged about 54 years, D. No.6-14-1 1 Namdevwada, Nizamabad

1.A. NO: 1 OF 2010(WPMP. NO: 9769 OF 2010) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased suspend the assessment order dt:30-3-2001 passed by the 1"r respondent for the block period from 1989-1990 to 1999-2000. Counsel for the Petitioner: MS. B. NISHITHA REPRESENTING SRI CH PUSHYAM KIRAN Counsel for the Respondents: MS. B. SAPNA REDDY, REPRESENTING MS. J. SUNTTHA (SR SC FOR INCOM TAX) WRIT PETITION NO: 7740 OF 2010 Between: Akul 14-1 D.No.6- ...PETITIONER D 1. Assistant Commissioner of lncome Tax, Circle 3(2), Secunderabad. 2. lncome Tax Officer. Ward-|, Nizamabad. 3. Commissioner of lncome Tax, Andhra Pradesh-ll, Hyderabad. 4. Deputy Commissioner of lncome Tax, Circle 3(2), 4th Floor, Aayakar Bhavan, Basheerbagh. Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praylng that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, direction or order especially in the nature of writ of mandamus declaring the transfer file by the 3'd respondent from the jurisdiction of the 2no respondent to the 1"t and the 4th respondent as being bad in law, illegal and unlawful, consequently set aside the assessment order dated 30.03.2001 passed by the 1st respondent for the block period from 1989-1990 to 1999-2000 AV 1N enkati, S/o. A. Narayana, aged about 57 years, resident of amdevwada, Nizamabad.

l.A. NO: 1 OF 2010(WPMP. NO: 9953 OF 2010) Petition under Section 151 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 assessment order dated 30.03.2001 passed by the 1tt respondent for the block period from 1989-1990 to 1999-2000 Counsel for the Petitioner: SRI CH. PUSHYAM KIRAN Counsel for the Respondents: MS. B. SAPNA REDDY, REPRESENTING MS. J. SUNTTHA (SR SC FOR TNCOM TAX) The Court made the following: COMMON ORDER

TN THB HIGH COURT ITOR TTIE STA'TE OF TELANGANA AT IIYDERABAT) TFIE HONOURABLE, SRI JUSTICE P.SAM KOSI{Y ANI) TT{E I{ONOURABLE SRI JUSTTCE NARSTNG RAO NANDIKONDA Writ Petition Nos. and 7740 of 2010 Dated: 18.02.2026 W.P.No.7605 of 2010: Between: Smt.Akula Suvarna AN t) Assistant Comrnissioner of Itrcomc'l'ax, Circle 3(2), Hyderabad and others. . . . Petitioner COMMON ORDER: (per Hon'hlc St'i Ju.stit'c l'.Sam Kosh.v) lleard Ms.B.Nishitha. learrted ct'runsel representing Mr.Ch.Pushyam Kiran, learrted coutrsel fbr the petitioners and Ms.B.Sapna Reddy, learned senior standing counsel representing Ms.J.Sunitha, learned senior standirrg counsel for lncome Tax appearing on behalIof t]re respoucletrts. Perused the record. 2. These are the two writ petitions filed challenging the order passed by the ITAT in two irppeals which are preferred by Respondents

2 the two petitioners in IT (SS) No.85/Hydl2003 and IT (SS) No.86/Hydl2003 decided on 29.0 I .20 1 0. 3. Viclc the impugned order, the Tribunal had dismissed the two appeals prelerred by the assessee challenging the order of Commissioner of Income Tax (Appeals), Guntur dated 3 1.03.2003 for the block assessrnent period 1988-99 to 1999-2000. 4. One of the prirnary contentions that the petitioners had raised befbre the CIT (Appeals) as also before the ITAT in the two appeals was the authority passing the assessment order lacking jurisdiction as no orders were passed under Section 127 transferring the assesstnent proceedings from the jurisdictional Assessing Oflicer to the Assesstnent Officer who has passed the assessmertt order. In addition it was also the contention that no such proceeclings uuder Section 127 having been concluded and no final orders under Section 127 having been passed. The Asscssing Officer lacks cotnpetence and also as a consequence is without jurisdiction.

3 I 5. Perusal of the orders of the trAT would go to show that the learned ITAT had decided the said issire against the assessee holding that merely because the responclents have failed to produce the order under Section 127 befbre thc Authorities by itself cannot be presumed that the order under Section 127 having not been passed. Fufther the Triburnal as also clr (Appeals) have also gone on to decide that the assessee has hinrself, lbilecl to produce cogent evidence bef,ore the autltorities to establish that no reasonable opportunity was given in the proceedings clrawn under Section 127 and the Tribunal went on to hold that the'fribunal as such does not have the authority ancl jr"rrisr-liction to clecicle the question whether the Assessing Authority lrad the juriscliction in the course of passing of the assessnlent orcler. Accorcling to the Tribunal, the assessee ougl-rt to have questionecl the aspect of jurisdiction by rvay of writ petition. 6. A perusal of the order of the -fribunal go to show that the Tribunal also has reached to the conclusion that it was not mandatorily required for the authorities to af'ford a reasonable opportunity of hearing befbre transt-erring the juriscliction of the

1 4 Assessing Authority under Section 127(2) and held that it was only a discretiorr of the Officer to give such an opportunity and that too only 'u,hcrever it is possible to do so' highlighting conjecture 'tnay' in the Section. The Tribunal further took cognizance of the fact that thc CIT (Appeals) during the course of the appellate proceedings had tried to call for the records from the Office of the Courutissioner who notified the cases of the appellant uuder Section 127 but could not obtain the details with which it could not be ascettainecl whether opportunities was given to the assessee and lvhcther atr order infact was passed under Section 127. 7 . lt is perlinent to take note of the fact that Tribunal itself in paragraph ll has rcfcrred to a judgment of the Hon'ble Suprenre Courl in the casc ol- A.ianthu Industries v. Central Boartl of Dircct Tuxes wltcrein the Hon'ble Supreme Court has categorically held that Section 127 mandatorily requires proceeding to the drawing under Section 127 after affording an reasonable opportunity of ltearing and further there is also a requirenrent of cornmunicating the order under Section 127 to be

5 served upon the assessee concerned. The ITAT only refused to decide tl-ris issue on the ground that the ITAT as such does not have the power to decide the jurisdictional issue of tlte Assessing Authority which ought to have been raised in a writ petition either before the High Court or before the Hon'ble Supreme Court. 8. In the aforesaid factual backclrop, it becomes necessary at this juncture to refer to Section 127 t:f the Income Tax Act dealing r,vith the 'Power of Transfer' which for ready rcf-erencc is reproduced hereunder: a, (l) The Principal Dircctor General or Director Gencral or Principal Chief Cornrnissioner or Chief Cornrnissioncr or Principal Commissioncr or Commissioner nlay, alter giving thc ilssessee a reasonable opportunity o1'being heard irr tlre rnatter, wherever it is possible to do so, ancl after recordirrg his reAsons fbr cloing so, transfer any case li'orn ollc or nl()re ./\ssessiug Officers subordinate to hirn (whetlrer with or u,ithout c()ncuneut jurisdiction) to any other Assessing OIIicer or Assessing Offlcers (whether with or without collcLlrreltt jurisdiction) also subordinate to hirn. (2) Where the Assessing Otlicer or Assessing Oflicers from rvhom the case is to be transf'errecl and the Assessing Officer or Assessing Officers to rvhom the case is to bc transf'erred ar.e_.not suborclinate to the same Principal Director \\< (

I 6 Celeral or Director Ccneral or Principal Chief Cornmissioner or Chief Commissioner or Principal Comtnissioner or Cornurissioller,- (a) wherc thc I'}rirrcillal Dircctor Geueral or Director Ccncral or Principal Chicf Cottrtnissioner or Chief Cornurissioner or Principal Cotntnissitlllcr or Cotnmissiouer to whom such Assessing Ofliccrs arc subordinate are iu agreetncnt, thcn the Principal Director Gottcral or Director General or Principal Chief Cotntnissiottcr or Chief Commissioner or Principal Cotntnissioncr or Corntnissioner from whose jurisdiction tlte case is to be transt'cn'ed may, after giving the assessee a reasonable opportultity of being heard in the tnatter, rvhcrcver it is possible to clo so, atld after recording his reasons for doir-rg so, pass the orcler; (b) whcre thc Principal f)ircctors Gcueral or Directors General or Principal Clricf Cotntnissioner or Chief Cornrnissioncr or Principal Comrttissiollcr or Cornmissioner afloresaid are not in agrecltrcrtt, thc otder transferring the case may, sitnilarly, bc passcd by the Board or any such Principal Director General or Dircotor Gcttcral or Principal Chief Cornrnissiouer or Chicf Cottrtnissioner ot Principal Commissioner or Cotnmissioncr as the Board lnay, by rrotifrcation in the Official Gazettc, authorisc in this behalf. (3) Nothing in sub-scction (l) or sutr-section (2) shall be deerned to requirc atry suclt oppofiuttity to he given where the transfier is frotn any Asscssing Ol'liccr or Assessing Officers (whcther with or witlrout corlcurrellt jurisdiction) to any other Assessing Of'fircer ot Asscssirtg Ollicers (whether with or without concurrcttt juristlictiorr) and the offices of all such officers arc situatccl in the satnc city. locality or place. (4) The tratrsf'er of a case utrdcr sutr-section (l) or sub- section (2) may be tnaclc at ally stage of the proceedings, and shall not render necessary the rc-issuc of any notice already issued by the Assessing Offrcer or Assessing Officers fiom whorn the case is transfcrrccl."

7 i [Explanation.-ln section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.] 9. A plain reading of the provision of Section 127 very specifically envisages the authorities to give a reasonable opportunity of being heard wherever it is possible to do so and only after recording of reasons should the authority transfer any case from one or ffrore assessing officers to any other assessing officer. The perusal of the order of the cIT (Appeals) also would go ro show that this ground was strongly contended before the CIT (Appeals) as well and to ascertain this facr, the cIT (Appeals) has directed the officers of the respondent to produce the records with which it could be ascertained whether the requirement under Section 127(l) had been met by the authorities or nor. The respondent authorities even at that stage i.e., during the period zoo3 i.e., about 23 years back itself were not in a position to produce the relevant records to decide this issue on the basis of the materials

8 available on record. Neither the Department was in a position to produce these materials during the proceedings before the leamed ITAT. l0.WhenthismattercameupbeforethisBench,eventhis court wanted the respondents to make available the records to decide this issue both on the aspect of whether the reasonable opportunity of hearing has been given to the petitioners or not and also whether an order as is required under Section 127 was passed andifatallitwaspassedwhetheritwasserveduponthe petitioners.Inspiteofsufficientopportunitybeinggrantedtothe learnedSeniorStandingCounselfortheDepartmenttomake available this record, such record could not be made available before the court. Learned Senior standing counsel contended that having made all effortso since the order under Section 127(1) was onewhichwasduringthat,periodbeingpassedmanually,thesaid orderunderSection]^2TortheproceedingsdrawnunderSection 127 coutd not be traced and as such expressed their inability to make the same available before the Bench'

9 a I l. Nonetheless, learned Senior Standing Counsel tried to impress the (lourt stating that unless there is an order passed under Section 127(l), the jurisdiction could not have been fallen upon the authority who had passed the assessing order and therefbre it has to be presumed that there was infact due compliance of the provisions under Section 127(l). Such a contention of the learned Senior Standing Counsel would not be sustainable for the reason that perusal of the records would go to show that right from the stage when the appeal was filed before the CIT (Appeals) i.e., in the year 2002-03 it has been the contention of the appellant / assessee that the authority r;r,ho has passed the assessing order lacks jurisdiction and competence primarily on the ground on non-cornpliance of provisions of Section 127(l) of the lncome Tax Act. Though the Departnrent had well over a period of 23-24 years with them to trace these documents or file as the case may be, but the Departrnent has, for reasons best known, failed to either trace or make available these records before this Court as well.

10 12. In the absence of any such materials available on record, this Bench more particularly taking note of the fact that even as early as in the year 2003 the CIT (Appeals) has rcquested the Department to make available these records before the Appellate Authority, we are left with no other option to draw an inference that such a proceeding either having not been initiated and if at all if it has been initiated, final orders under Section 127(l) officially transferring the file frotn the jurisdictional officer to auother assessing officer not having been passed, without there being anything as such available, the entire assesslnent proceedings and the .consequential appellate proceedings would stand vitiated on this very ground itself. 13. Accordingly, we are inclined to allow the present wrtt petitions. As a consequence, the assessment order as also the subsequent order passed by the CIT (Appeals) as also by ITAT stands set aside. 14. The writ petitions stand allowed accordingly.

11 Consequently, miscellaneous petitions pending, if any, shalt stand closed. l-here shall be no order as to costs. That Rule Nisi has been made absolute as above Witness The HON'BLE THE CHIEF JUSTICE APARESH KUMAR SINGH, Wednesday, The Eighteenth Day Of February Two Thousand And Twenty Six SD/.P.C. SULEKHA DEVI TANT REGISTRAR To, //TRUE COPYII ECTION OFFICER 1. Assistant Commissioner of lncome Tax Circle 3(2) Hyderabad 2. lncome Tax Officer, Ward-|, Nizamabad District 3. Commissioner of lncome Tax, Andhra Pradesh-ll, Hyderabad 4. Deputy Commissioner of lncome Tax, Circle 3(2),4th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad 5. One CC to Sri CH. Pushyam Kiran, Advocate [OPUC] 6 One CC to Ms J. Sunitha (SR SC for INCOM fAX) [OPUC] 7. Two CD Copies TJ BS \<

HIGH COURT DATED:18 10212026 ORDER ,,t i,if, s,.",i),p.. \ WP.Noo.7605 and 7740 ot 201 10 llrrr ZC2li L; * ,in ALLOWING THE WRIT PETTTIONS WITHOUT COSTS """fu