Mrs.Nidhi Reddy Marri vs. The Income Tax Officer

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WP/9214/2023HC TelanganaHBHC01017090202319 October 2023Bench: P.SAM KOSHY,LAXMI NARAYANA ALISHETTY6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition on the objection raised by the petitioner that the proceedings were not conducted in accordance with the amended provisions of the Income Tax Act, 1961, but under the unamended provisions. The Court noted that the present petition was filed on similar terms as a batch of writ petitions previously decided by the same bench. The bench, in its previous decision, had taken note of paragraphs 37 & 38, which stated that if the impugned notices and orders were quashed on the point of jurisdiction, the Court would not proceed further to decide other issues raised by the petitioner, as those issues would stand reserved for consideration in appropriate proceedings. The Court also referenced a Supreme Court order in the case of Ashish Agrawal, which permitted the Revenue to proceed under the substituted provisions as a one-time measure. Consequently, the present writ petition was allowed on the ground that the proceedings were not conducted in consonance with the amended provisions. The right of the respondents to proceed further was reserved as envisaged in the previous order. No order as to costs was made.

What were the facts?

The petitioner, wlrs. Nidhi Reddy Marri, filed a writ petition before the High Court for the State of Telangana at Hyderabad challenging a notice under Section 148 and an order under Section 148A(d) of the Income Tax Act, 1961, issued by the Income Tax Officer, Ward 17(1), Hyderabad, for Assessment Year 2016-17. The petitioner contended that the amended provisions of the Act, effective from April 1, 2021, require a notice under Section 148A and an opportunity of hearing before initiating reassessment proceedings, and that such proceedings should be faceless. The petitioner argued that the reassessment was initiated by the jurisdictional Assessing Officer, not in a faceless manner, and relied on a previous judgment of the same bench. The respondents, represented by the Senior Standing Counsel for the Income Tax Department, did not dispute the petitioner's contention regarding the jurisdictional issue but raised other objections.

What were the issues?

1. Whether the notice under Section 148 and the order under Section 148A(d) of the Income Tax Act, 1961, are void, illegal, arbitrary, and violative of Article 14 of the Constitution of India, for being issued without authority of law, specifically concerning the procedural requirements under the amended provisions of the Act effective from April 1, 2021. Assessee's Contentions: - The respondents were required to issue a notice under Section 148A and provide an opportunity of hearing to the assessee as per the amended provisions of the Act, which came into effect from April 1, 2021. - The proceedings were required to be conducted in a faceless manner. - The reassessment was initiated by the Jurisdictional Assessing Officer, which is contrary to the amended provisions. The petitioner relied on the judgment in WP-No 25903 of 2022. Revenue's Contentions: - The learned Senior Standing Counsel for the respondent-Department did not dispute the jurisdictional issue raised by the petitioner. - However, the revenue contended that apart from the aforementioned objection, there have been other various objections raised by the petitioner in the writ petition.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

Between: wlrs.Nidhi Reddy Marri, W/o. M. Aditya Reddy, Aged about 48 years, R/o 6-3-1089/A/317, Gulmohar Avenue, Somajiguda, Hyderabad - 500082 [ 3386 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE NINETEENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 9214 OF 2023 ...PETITIONER The lncome Tax Officer, Ward 17(1), Hyderabad. The National Faceless Assessment Center, lncome{ax Department, New Delhi, lndia. AND 1 2 ...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 pass a writ, order, or direction, more particulady in the nature of a writ of mandamus declaring the lmpugned notice under Section 148 of the Act in DIN and Notice No. ITBA/ASTlMll4B-] 12022-2311051744718(1) dated 31-O3'2o23 and the Order passed under section 148A(d) of the Act bearing DIN and Notice No. ITBtuCOM 1F1148A/2O22-2311O51744OO0(1 ), dated 31-03-2023 passed by the Respondent No. 1 for Assessment Year 2016-17 in PAN ABMPM6525D as being void, illegal, arbitrary, violative of Article 14 of the Constitution of lndia, without any authority of law. IA NO: oF 2023 :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 stay the operation of the notice under Section 148 of the Act in DIN and Notice

No: ITBA/ASTll\,4t148-112022- 2311051744718(1) dated 31-03-2023 and the Order passed under section 148A(c1) of the Act bearing DIN and Notice No. ITBAiCO M I F I 1 48Al 2022- 231 1 05 1 1 44OO0( 1 ), dated 31 -03-2023. Counsel for the Petitioner: M/s. R.S. ASSOCIATES Counsel for the Respondents: M/s. SUNDARI R PISUPATI, ST. SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY W.P.No.9214 of 2023 ORDDR Th(' instant l rit petiturn hzrs been filcd by the pctitioner under Artic.lc 226 of thc Constitr"rrion o[ India challenging the order dated 3i 0:1.2023 in t)lN &, Notice No.l'lBA/COM lF/148A12(d22 23i 1051744OOO(11 issLrecl unclcr Cltruse (d) ol Sect.ion 148A of thc lncome 'l'ax Acr. (ii.:r shon, 'thc Act") and zrlso the notice dated ?,1.()3.2023 irr [)lN & Notice No.ITBA/ASTlMll4S-1 l'2022- 23llOS1744/ i 8(1) under Scction l'18 o[ the Act by the l't respondent for tl-rc Assessment Ycar 2016 17. 2. One of the conlcntions lhat the petitioner has raised in the present n,rit pe tition is that un<ler the atlcnded provisions ol the Act whicl'r came inLo eflect lrom O I .O4.2021 , the respondents, while procceding under Section I4tt of thc Act, wer'c required to issue noticc unclcr Scction 148A .ind provide an opportunity of hearing t.o the assessee. As per thc amendcd provision of law, the proceedings to be drawn are also in a laceless manner. 3. Whereas, Icanlcd counscl lor the petitioner contended that, in thc instant- case, reopening has been initiatcd by the .Iurisdicl-ional Asst:ssing Olfic<:r. In support oI itis contention, he relied r:pon the rccenr judgment rcndi.-rcd b,t'this vcn'IJench in WP-No 25903 ot2L22 ll er t tot r' bl, s-r .,rrst( r, P.SAM KOSIIr,/ I

.E & i-r;11q 1-1 drrtr:rl I1.\)q 2l)23 \\'lrirrcin Lhrs Co,- i ilislrost.ri (.,I th(] i,).tt.i it of urit pctilions to the linritt:cl crtr:nt 4. ()n i)(' othcr- h:rnrl. lar:lrnral St:rrrcillrl Cor,,tscl for lhc ro-s lro lr alc ri l j)cpartlnelt I dccidccl in ihc alorcsarcl rlocs noi disl:,1:rc Lhtrt lirl si-uci ol r.je<'tion'.r'a" bat.ch oi u,rit lletitlori.i [{ott,cr,cr, hc lirriiter contet'lded thar apa.t lrom thc :rforcsiiid ob-jecr i,n, therrc hav. brei'r c,thtr- variorrs objccriors lrlso u hich rirr-' Pctirir,r-^ i lras nrist:cI in ,.irc $'rit irel itjon. 5. lio far as this contcntion oi Lhc lcar.r..ed colrnsel for thc, .rr:sp,rnrlenl-I)r-'l)ilrtn].lrl 1s c.)i.r'crilr:(1. tlri.; Bcr,.ir. r.hilr rlisposirr_: Oi said l,.atch o[ r'rit pr_'tittons, harl t;tkt.n ]lole ol iitt. :s:rntc al pzrra.gr.I)h Nos i7 & ll8 u iricl-r are reprodur.ed hr:ri in urrclct: ':i. The preltntita41 .b.FCtion totsecl it.r1 tlv, petitinn€:r is .stuslcrrrcri ancl oll the,se urnt ])ehliotls sictrtcls l..llotr.<l otL 1.s uery lurisdtcuortal issue Sitlce tha uttpuqnerl ttottce)s .nt(7 orcle:rs are getlinq quashed on tlle potnt of juri-sdrction, u,e tlre not tnclrnecl to proceed fufther and decide tht, olller rs.srre.s r<zrser/ blj thc pc ioner t.uhich stends reserued to be retsed end co \,ndec1 fi an .1p p ro p nrf I e p ro ce edi t Lg s. " "36. Slnce tlp llon'l>le SupreiLe Couft had, tn the cuse of Ashtsh Aqarual, supra, es .r orte tlme ote(lsLlr(: exerclsulg the potaers unr)er Arlrcle 142 oI th? Constitutton of lniita. pemiltecl the Reuanue to pt'ocee(l under tlp st1[rs|itutt,d prouisLotis. (lncl {ht.; (.:ourt aLloutinq the petitio|.S ot.Llll oI ih€j roce(1urol llart.,. L!rc nqht conf<:rred on the Ret)cnue tuoul.l rernatr, raseruetj :o [)rocee(l fiulher if th<:g so Lttctttt fntnt the stage of tlte order of the .\uprernc Corul in lhe case o/ Ashlslr AcJctrwal, sultra ,' -J '.'I

l 6- [ u vicrv of thc sapc. 1 c pci;tion aiso on similar tcr.rrs. Acc:orclingl_1 , rhe present Writ petrtion stands allou'ed on thc objr,crion o1. tl.ic pctitroner that the proceedings i);*,c not ltcen clrarr ri i. accor.cl:t,tc. r'iLh the amendecl provrsion but undr:r tltc un.arne.dcd pr(,\isr(,1 r,rlrrtir is otherwisc not sustarn;rb.lc. :rrr, irrr:linecl to allorv the presc.nt writ b.y' this Bencl.r in thc erfbresaid batch matters, 7, As lras bcen hcld petrttons. No ordcr irs to cosls thc right ol' the respo,der,rs *.ould sr:r,cl reserved as ts envisagecl at paragraph Nos.37 & 3g ol Lhe said orrier passed in rhc batch ol.writ a. Conseq u enLly,, rnisceilatrcous slz,nd closed. p.trtrons pcntiing, if an1,, shalt SO/-8. SARASWATHI ASSISTANT REGI$TRAR ^t trl SECTION dFTICCR The lncome Tax Officer, Ward 17(1), Hyderabad. The National Faceless Assessment Center, lncome{ax Department, New Delhi, lndia. One CC to M/s. R.S.ASSOCIATES, Advocate tOpUCI 9lq CC to M/s. SUNDART R ptSUpATt, Sr. SC FOR TNCOME TAX DEPARTMENT [OPUC] Two CD Copies s //TRUE COPYII To, 1 2 J 4 5. BSR GJP I

HIGH COURT DATED: 1911012023 ORDER WP.No.9214 of 2023 ALLOWING THE WRIT PETITION, WITHOUT COSTS Yr i: S TA i-6- e q ii;'l 03 ., ,3 t i,/ - i-1i:ir:'- (r*o tr6 ..-:\ P a .!

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