XL Energy Limited vs. Income Tax Department

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WP/776/2025HC TelanganaHBHC01071096202409 January 2025Bench: SUJOY PAUL,G.RADHA RANI7 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed both writ petitions as withdrawn. The petitioners' counsel fairly submitted that appeals against the assessment orders had already been preferred and were pending, and no stay applications had been filed before the appellate authority. The counsel sought to withdraw the petitions with liberty to file appropriate stay applications before the appellate or competent authority. The Court granted this liberty and observed that if interim stay applications are filed in accordance with law, the appellate/competent authority shall endeavor to decide them expeditiously. The Court explicitly stated that it had not expressed any opinion on the merits of the cases. No other issues were decided.

What were the facts?

XL Energy Limited and three other petitioners filed two writ petitions before the High Court of Telangana at Hyderabad. The petitions challenged notices issued under Section 226(3) of the Income Tax Act, 1961, by the Income Tax Officer, Ward 17(1), Hyderabad, to Yes Bank Limited and Indian Bank, Mumbai, attaching the bank accounts of XL Energy Limited. These notices were dated December 9, 2024, and December 6, 2024, respectively. The petitioners sought to declare these notices illegal, arbitrary, and unconstitutional. In WP No. 921 of 2025, an additional prayer was made to direct the Commissioner of Income Tax (Appeals) to dispose of pending appeals expeditiously and to restrain the respondents from taking coercive steps. The assessment years are not specified. The amount in dispute is not stated.

What were the issues?

1. Whether the action of the Respondent No. 3 (Income Tax Officer) in issuing the impugned Notice under Section 226(3) of the Income Tax Act, 1961, to attach the Petitioner No. 1's bank accounts is illegal, arbitrary, unconstitutional, issued without jurisdiction, and without application of mind. Assessee's Contention: The petitioners argued that the notices were illegal, arbitrary, unconstitutional, issued without jurisdiction, and without application of mind, violating settled principles. They also sought a direction for expeditious disposal of pending appeals and a stay on coercive steps. Revenue's Contention: The revenue did not explicitly state their contentions in the provided text, but their presence as respondents indicates opposition to the petitioners' claims. The judgment notes that the other side had no objection to the petitioners' prayer for withdrawal.

Which sections of the Income-tax Act were involved?

Section 226(3)

AI-generated summary — verify with the full judgment below

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE NINTH DAY OF JANUARY TWO THOUSAND AND TWENW FIVE PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE OR. JUSTICE G.RADHA RANI WR]T PETITIO N NOS: 776 AND 921oF 2025 [ 3/t30 I .....PETITIONERS i I I iI II I I W.P.No.776 of 2025 Between: AND 2 X-L Energy Limited, Represented by its Director Mr. Naresh Jain Having its office at H.No. 19.66/11lD4, Laxmipuram Cotony, Opp. Dr. n.S. nao Naiai, -E-Cl!, Kapra, Rangareddi, Hyderabad, Tetangana _ SOOOOZ Ms. Karishma Jain, D/o Naresh Jain, Aged about 31 years, No 1201,12th Floor, Sumer Trinity, Tower 1, New prabhadevi Road, Near Samna preqs, Mumbai -400025. 3 M/s Jupiter city Deveroper (r) Limited, Represented by its Director Mr. Naresh Jain Having its office at premises No.2, 1st Froor, Rahimtoora House, 7, iomj; Street, Fort, Mumbai, Maharashtra - 4OOOOI 4 M/s Adwaita Navigations private Limited, Represented by its Authorised signatory Mr. Naresh Jain Having its office at t\ianjuraben Haridas Lar, Grain Market Tin Danivaja, Jamnagar, Gujarat _ 36.lOO1 . 1. Income Tax Department, Rep. by principar chief commissioner of rncome Tax. Andhra Pradesh and. Telangana, loth Floor, ,D'Block, 10_2-3, lT Towers, AC Guards, Masab Tank,Hyderabad - 5O0004. 2. ofrrce of the commissioner of rnmme Tax (Appears), 1o-2-3, rr rorarers, AC Guards, Masab Tank, Hyderabad - SO0OO4. 3' of{ice of the lncome Tax _ofFrcer, ward 17(1), Hyderabad, signature Torivers, !V lto. O(f), Kondapur, Sy. tr{o. 37(p) of Kothaguda, Opp. B-otanicat Ga.rdens, Serlingampally Mandal, Ranga Reddy Diskict, ityderabad, Telangana - 500084. a lnion of lndia, Rep. by its Secretary, Ministry of Finance, No(h Btoc*, New Delhi. 5. Yes Eank Limited, Yes Bank House off western Express Highway, santacruz (East), Mumbai - 400055. petition Under Articte 226 of the consritution of tndia ;*=r:t3LT^11: circumstances stated in the affidavit filed therewith, the High court may be pleased to grant an order, direction or writ, more so in nature of Mandamus, A) I i I I I I i I I I I i i

Declaring the action of the Respondent No. 3 in issuing the lmpugned Notice under Section 226 (3) of the lncome Tax Act, 1961 vide DIN and Notice No. ITBtuCOM/F/1712024- 2511071029447(1) dated 09.12.2024 to the Respondent No. 5 attaching the Petitioner No.1 s Bank Accounts bearing Account Nos. 440300142919, 440300140792, 440300142806, 440300142886, 42240300003046, 440300142896, 440300142826, 440300142866, 440 30 0 1 42 8 1 6, 44030 0'.1 4287 6, 4 40300't 42836, 440300 1 427 93, 4 40300 1 42929, 440300'142856, 440300140782, 440300142909, 440300142846 and 440300140772 maintained with Respondent No.5 as illegal, arbitrary, unconstitutiona l, issued without jurisdiction, issued without application of mind and in violation of the settled principles of by the Hon'ble Supreme Court and to set aside the same LA.NO:1 OF 2025 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 lmpugned Notice issued by the Respondent No. 3 under Section 226 (3) of the lncome Tax Acr, 1961 vide DIN and Notice No. ITBA/COMtFt\'7t2)24- 2511071029447(1) dated 09.12.2024 to the Respondent No. 5 attaching the Petitioner No.1's Bank Accounts bearing Account Nos. 44O3OO142g1g 440300140792, 440300142806, 440300142886, 42240300003046. 440300 1 42896, 4403001 42826, 440300 1 42866, 4403001 428 1 6, 440300 1 42876. 44 0 300 1 4 2 836, 4 4 0 30 0 1 427 I 3, 4 40300 1 42929, 440300 1 42856, 4 4o3o1 1 407 82 4403001 42909, 44O30O1 42846 and 4403001 40772 maintained with Respondenr No.5, in the interest of justrce, pending disposal of the writ petition. Counsel for the Petitioners : SRI KARAN TALWAR, ADVOCATE FOR SRI ROHIT POGULA Counsel for the Respondent Nos.l to 3 : SMT J.SUNITHA (JUNIOR SC FOR tNcoME TAX) Counsel for the Respondent No.4 : SRI B.MUKHERJEE, COUNSEL REPRESENTING SRI GADI PRAVEEN KUMAR, DEPUW SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.S : -

W.P.NO: 921 OF 2025 Between: 1. XL Energy Limited, Represented 5y its Di{ector Mr. Naresh Jain Having its office at H.No. 19-66/11/D4, Lamripuram 6lony, Opp. Dr. A.S. Rao l,lagar, ECIL, Kapra, Rangareddi, Hyderabad, Telangana - 500062. 2. Ms. Karishma Jain, D/o Naresh Jain, Aged about 31 years, Fl/o 1201, 12th Floor, Sumer Trinity, Tower 1, l'lew Prabhadevi Road, Near Samna Press, Mumbai - 400025. 3. M/s Jupiter City Developer (l) Limited, Represented by its Director Mr. Naresh Jain Having its office at Premises No.2, 1st Floor, Rahimtoola House, 7, Homji Street, Fort, Mumbai, Maharashtra - 400001 4. M/s Adwaita Navigations Private Limited, Represented by its Authorised Signatory Mr. Naresh Jain Having its office at Manjulaben Haridas Lal, Grain Market Tin Darwaja, Jamnagar, Gujarat - 361001. .....PETITIONERS AND 1 . lncome Tax Department, Rep. by Principal Chief Commissioner of lncome Tax, Andhra Pradesh and Telangana, 1Oth Floor, D Block, '10-2-3, lT Towers, AC Guards, Masab Tank, Hyderabad - 500004. 2. Olfie of the Commissioner of lncome Tax (Appeals), '10-2-3, lT Towers, AC Guards, Masab Tank, Hyderabad - 500004. 3. Office of the lncome Tax Officer, Ward 17(1), Hyderabad, Signature l0wers: Sy. No.6(P), Kondapur, Sy. No. 3(P) of Kothaguda, Opp. Botanical Gardens, Serlingampally Mandal, Ranga Reddy District, Hyderabad, Telangana - 500084. 4. Union of lndia, Rep. by its Secretary, Ministry of Finance, North 8lock. New Delhi 5- The Branch Manager, lndian Bank, Mumbai-Fort, #37, Mumbai Samachar Marg, Post Box No. 282, Allahabad Bank Euilding, Mumbai, Maharashtra - 400023. .....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 grant an order, direction or writ, more so in nature of Mandamus, A) Declaring the action of the Respondent No. 3 in issuing the lmpugned Notice under Section 226 (3) of the lncome Tax Act, 196'1 vide DIN and Notice No. ITBA/COM/F/1712024-2511070982360(1) daled 6.12.2024 to the Respondent No. 5 attaching the Petitioner No.1st Current Bank Account bearing Account No. 7812795947 and IFSC Code lDlB000F523 maintained with lndian Eank as illegal, arbitrary, u nconstitutional, issued without jwisdiction, issued without application of mind and in violation of the setfled princples of by the Honble Supreme Court and to set aside the same, B) Direct the Respondent No. 2 is dispose off the appeals dated 27 .09.2024 filed by the Petitioner No. 1 against the Orders of the

Respondent No.1 dated 19.O9.2024 and 23.09.2024 in an expeditious manner, C) Direct Respondent Nos. 'l and 3 not to take coercive steps pursuant to Orders dated 19.09.2024 and 23.09.2024 while appeats dated 27.09.2024 tited by Petitioner No.1 are pending adjudication by the Respondent No.2. !.A.NO:1 OF 2025 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 direct the Respondent Nos. 1 and 3 not to take coercive steps pursuant to Orders dated 19.09.2024 and 23.O9.2024, in the interest of justice, pending disposal of the writ petition. |.A.NO:2 OF 2025 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 lmpugned Notice issued by the Respondent No. 3 under Section 226 (3) of the lncome Tax Act, 1961 vide DIN and Notice No. ITBA/COMtFt17t2124- 2511070982360(1) dated 06J22024 to the Respondent No.S attaching the Petitioner No 1's Current Bank Account bearing Account No. 7812795d47 ahd IFSC Code lDlB000F523 maintained with lndian Bank, in the interest of justice, pending disposal of the writ petition. Counsel for the Petitioners : SRI KARAN TALWAR, ADVOCATE FOR SRl ROHIT POGULA Counsel for the Respondent Nos.l to 3 : SMT J.SUNITHA (JUNIOR SC FOR lNcoME TAX) Counsel for the Respondent No.4 : SRI B.MUKHERJEE, COUNSEL REPRESENTING SRI GADI PRAVEEN KUMAR, DEPUW SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.5 : - The Court made the following COMMON ORDER

THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HON'BLE Dr. JUSTICE G. RADHA RANI WRIT PETITION Nos.776 &,92L of 2025 COMMON ORDER (per Hon'ble SP,J) Sri Karan Talwar, learned counsel representing Sri Rohit Pogula, learned counsel for the petitioners; Ms. J'Sunitha, learned Junior Standing Counsel for Income Tax Department and Sri B. Mukherjee, learned counsel representing Sri 'Gadi Praveen Kumar, learned Deputy Solicitor General of India' 2. Regard being had to the similitude of the q"ttiot" involved, on the joint request of learned counsel for the parties, the matters u'ere analogously heard. 3. Learned counsel for the petitioners fairly submits that against the Assessment Order(s), the petitioners have already preferred appeal(s). The said appeal(s) is/are pending and the petitioners have not filed any stay application(s) before the appellate authority. He, after arguing for some time, seeks to withdraw these petitions with liberty to file appropriate stay apptication (s) before the appellate / competent authority' \ t 4. The other side has no objection to this innocuous praver

2 5 The Writ petitions are dismissed as withdrawn with the liberty prayed for. However, in observed that if any such interim the interest of justice, it is stay application(s) is/are filed by the petitioners in accordance tvith law, the appellate/competent authority shall make endeavour to decide the same expeditiously. It is made clear that this Court has not expressed any opinion on the merits of the cases. As a sequel, miscellaneous petitions pending, if any, shall stand closed. To \ SD/- S.MALLIKARJU RAO ASSISTANT REG TRAR /,TRUE COPY// SECTION OFFICER 1. One CC to SRI ROHIT POGULA, Advocate [OPUC] 2. One CC to SMT J.SUNITHA, Advocate [OPUCI 3. One CC to SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL oF INDrA (OPUC) 4. Two CD Copies SA PSK v

HIGH COURT DATED:0910112025 COMMON ORDER WP.Nos.776 AND 921 ot 2025 DISMISSING BOTH THE WRIT PETITIONS AS WITHDRAWN WITHOUT COSTS. '5 oo 1 Ht. s'( .. , 0 6 I - ,;'. t trt 4',

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