B. Ramadevi vs. The state of Telangana

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WP/8437/2026HC TelanganaHBHC01017467202623 March 2026Bench: SUREPALLI NANDA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the substantive issues on merits. Instead, it acknowledged the challenge made to the vires of Section 147-A of the Income Tax Act, 1961. Consequently, the Court ordered that the matter be listed for hearing before an appropriate Bench. The interim order that was previously granted was extended until the next date of hearing. The Court's decision was procedural, focusing on the listing of the case and the continuation of interim relief pending a substantive hearing on the constitutional challenge and other grounds raised by the Petitioner. No findings were made on the legality of the Section 148 notice or the applicability of Section 149, as these were deferred pending further adjudication.

What were the facts?

The Petitioner, Manoj Kumar Kothari, filed a writ petition before the High Court of Telangana at Hyderabad challenging a notice issued by the Income Tax Officer (Respondent No. 1) under Section 148 of the Income Tax Act, 1961, dated March 28, 2025. This notice called for the return of income for Assessment Year 2019-20 and initiated reassessment proceedings. The Petitioner also challenged the constitutional validity of Section 147-A of the Income Tax Act, 1961, as inserted by the Finance Act, 2026. The petition sought to declare Section 147-A unconstitutional, the notice under Section 148 illegal and arbitrary, and to set aside the notice and consequent proceedings. An interim stay on the operation of the notice and consequential proceedings was also sought. The Court, on August 31, 2026, extended the interim order and listed the matter for hearing before an appropriate bench due to the challenge to the vires of Section 147-A.

What were the issues?

1. Whether Section 147-A of the Income Tax Act, 1961, as inserted by the Finance Act, 2026, is unconstitutional, ultra vires the Constitution of India, and void? (Question of constitutional law) 2. Whether the notice issued by Respondent No. 1 under Section 148 dated March 28, 2025, calling for the return of income for A.Y. 2019-20 and subsequent proceedings are illegal, arbitrary, bad in law, and violative of Articles 14, 19, and 21 of the Constitution of India? (Question of mixed law and fact, concerning procedural fairness and constitutional rights) 3. Whether the notice issued under Section 148 dated March 28, 2025, initiating reassessment proceedings is contrary to the faceless assessment scheme and lacks jurisdiction? (Question of mixed law and fact, concerning procedural adherence) 4. Whether the notice issued under Section 148 dated March 28, 2025, initiating reassessment proceedings based on material seized in the case of M/s Rajapushpa group is valid, given that the transactions do not pertain to the Petitioner? (Question of mixed law and fact, concerning the basis of reassessment) 5. Whether the notice issued under Section 148 dated March 28, 2025, calling for the return of income for A.Y. 2019-20 is barred under Section 149 of the Act? (Question of law, concerning limitation periods) Assessee's Contentions: The Petitioner argued that Section 147-A is unconstitutional. The notice under Section 148 and subsequent proceedings are illegal, arbitrary, and violative of constitutional rights. The proceedings are contrary to the faceless assessment scheme and lack jurisdiction. The reassessment is based on material unrelated to the Petitioner. The notice is barred by limitation under Section 149. Revenue's Contentions: No specific contentions for the revenue are recorded in the provided text.

Which sections of the Income-tax Act were involved?

Section 147A,Section 148,Section 149

AI-generated summary — verify with the full judgment below

13447 1 HIGH COURT FCIR THE STATE OF TELANGANA AT HYDERABAD TMONDAY, THE I HIRTY FIRST DAY OF AUGUST TWO THOUSAND AND TWENTY SIX : PRESENT: THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WP NO: 8473 Of 2026 Between Ii/anoj Kumar Kothari, S/o Shiv Kumar Kothari, Aged about 46 years, Occ- Business, Residing at Flat No 103. Legend Kandhari, itoad No 3, Domalguda, Hyderabad 500029, felangana. lndia AFAPK3SiISC .....PETITIONER AND 1. lncome Tax Officer, Ward B(1), Hyderabad Signature Towers, Sy.No.6(P) of Kondapur, Sy.37(P) of Kothaguda, Opp. Botanical Gardens, Serilingampally (tvl), R R. District, Hyderabad, Telangana, 500084 2. Chief Commissioner of lncome Tax, Hyderabad, lncome Tax Tower, AC Guards, fi/asab Tank, Hyderabad 3. Principal Commissioner lnconre Tax ll, Hyderabad, lncome Tax Tower, AC Guards, l/asab tank, Hyderabad 4. The National Faceless Assessment Centre, lncome Tax Department, tt/inistry " of Finance, Govt. of lndia, New t)elhi 5. Union Of lndia [.4inistry Of Firrance Rep By lts Secretary, 166-8 North Block, New Delhi 6. Chief Commissioner cf lncome Tax, Hyderabad Income Tax Tower, Ac Guards, [/asab Tank, Hyderabad, Telangana, 500004 7. Principal Commissioner of lncome Tax-ll, Hyderabad lncome Tax Tower, Ac ., Guards, Masab Tank, Hyderabad, Telangana, 500004 B. The National Faceless Assessment Centre lncome Tax Department, I\Iinistry. of Finance, Govt. of lndia, New Delhi 9. Union of lndia, tt/inistry of Finance Rep. by its Secretary, 166-8 North Block, . New Delhi - 1 10 001 .....RESPONDENTS

Hon'ble Court may be pleased to issue a writ, order or direction, more For the reasons stated hereinabove, the Petitioner prays that this particularly one in the nature of Writ of Mandamus, declaring 1 .Section 147 A of the lncome Tax Act, 1961 as inserted by the Finance Act, 2026 as unconstitutional, ultra vires the Constitution of lndia, and void; ii. the action of the Respondent No.1 in issuing Notice u/s.148dated 28.03.2025 calling for return of income for A.Y andsubsequent proceedings as illegal, arbitrary, bad in law and violative of Articles14. 19 and 2,35 of the Constitution of lndia; and iii. Set aside the Notice issued u/s 148 dated 28 03 2025 calling for return of - income for A.Y. 2019-20 and any consequent proceedings as lacking in jurisdiction andcontrary to the faceless assessment scheme: and iv. Set aside the Notice issued u/s. 148 dated )28.03.2025 lnitiating reassessmentproceedings in case of Petitioner relying on the material seized in the case of tt//s Rajapushpa group as the transaction with them do not pertain to the Petitioner; and v. Set aside the Notice issued u/s. 148 dated 28.03.2025 calling for return of income for A.Y.2019-20 as being barred under section 149 of the Act; and vi. Pass such or. any other Order(s) as this Hon'ble Court deems fit in the interest of justice. Prayer is amended as per C.0. dt.31.08.2026 vide l.A.No.3 of 2026 in W.P.No.8473 ot 2026. l.A. NO: 1 OF 2026 Petition under Section 151 of C.P.C praying that in the r;ircumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant an interim stay on the operation of the Notice issued u/s. 148 of the lncome Tax Act, 1961, by Respondent No.1 dated 28.03.2025 calling forthe return of income of the Petitioner for A.Y. 2019-20, and further stay all consequential lrroceedings initiated or contemplated by the Respondents; and pass, Pending disposal of WP No 8473 of 2026, on the file of the High Court. The petition coming on for hearing, upon perusing lhe Petition and the affidavit filed in support thereof and the high court order dated 21.04.2026 made herein and upon hearing the arguments of P Soma Shekar Reddy Advocate for the Petitioner(s), J Sunitha (sr Sc For lncom Tax) Advocate for the Respondent(s), and the Court made the following. ORDER Let the matter be listed for hearing before an appropriate Bench in the light of amendment and challenge made to the vires of provrsions contained in Section 147-A of the lncome Tax Act, 1961.

lnterim order granted earlier shal! stand extended till the next date of hearing. Sd/- AIIMED AtiDx.rLL.t idgr.ill AsStsTANr RE(;r.sr.,..i ii ",' //TRUE COPYII OFFICER To, 1 One CC to Sri. P SOTUA SHEKAR REDDY Advocate IOPUCI 2. One spare copy "

HIGH COURT PSK, J & NNR, J DATED: 31-08-2026 ORDER WP.No.8473 of 2026 EXTENSION OF INTERIM ORDER \iv \

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