Allowed

Dsn Films Private Limited v. Income Tax Officer

Telangana HC23 Sept 2024WP/25668/2024

Case brief

AI extract

What is this about?

Writ petition challenging an Income Tax Officer's notice and consequential orders issued without following the reassessment procedure substituted by the Finance Act, 2021. Parties agreed to dispose of the matter in terms of a common order dated 14.09.2023; the impugned notice and orders were set aside.

What did the court decide?

Impugned show cause notice and consequential orders set aside; writ petition allowed without costs; pending interlocutory applications closed.

Dsn Films Private Limited Vs Income Tax Officer — Income Tax | Telangana HC (2024)

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[³⁴¹¹¹

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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MONDAY, THE TWENTY THIRD DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE SUJOY PAUL AND

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THE HONOURABLE SRIJUSTICE NAMAVARAPU RAJESHWAR^RAO

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WRIT PETITION NO: 25668 OF 2024

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Between:

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DSN Films Private Limited, Represented by its Director Mr. Dulam Satyanarayana, Row H.No.5, Urna Heights, Plot NoTB. M L A Colony, Banjara Hills, Hyderabad- 500034

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...PETITIONER

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AND

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1 lncome Tax Officer, Ward-17(1), Hyderabad,^{lncome Tax Office, Signature} Towers, Sy No 6(P) of Kondafur, Sy.No.37(P)^{of Kothtg,u-d-1Opp. Botanical} Garden, Sbrlingampally(M), R. R. District,^{Hyderabad -500084.}

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2 Principal Commissioner Of lncome Tax-2, Signature^{Towers, Opp. Botanical} Gard6n, Serlingampally(M), R. R.^{District, Hyderabad -500084}

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...RESPONDENTS

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Petition under Article 226 of lhe Constitution^{of lndiaprayingthat in the} circumstances stated in the affidavit^{filed therewith,the High Court may be} pleased to issue a Writ of Mandamus or any other appropriate^{writ, order or} direction, declaring the order^{passed by the lncome Tax Officer, Ward-17(1),} Hyderabad, Under Order 148-A of the^{lncome Tax Act,1961 Date of Order22-03-} 2024 DIN No. ITBA/AST/F/14i1N2023^{2411063204425(1)For the Year} Assessment Year 2020-21 , as arbitrary^{illegal bad in law withoutjurisdictionvoid} abinitio violative of^principles of^{Natural Justice part frombeingviolative of Artble} 4, 19 and 265 of Constitution of India and^{consequentlyset aside the samein the} interests of^justice.

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lA NO:^'l oF 2024

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Petition under section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay all further proceedings incruding any recovery, pursuant to the order passed by the 1st respondent Under orde-r4g-A of the rncome Tax Act, 1961 Date of order of 22-03-2024 DrN No. ,'BA/AST/F/148A1202324t106320442 5(1) For the year Assessrnent Year 2O2O-21 pending disposal of writ petition.

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Counsel for the^petitioner: SRI UpADHyAy RAGHAVENDER

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counsel for the Respondents: Ms. J. suNlrHA (JUNloR sc FoR lNcoME TAx) The Court made the foflowing: ORDER

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"*7

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THE HONOURABLE SRI JUSTTCE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE IYAMAVARAPU RA"'ESIIWAR RAO

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trIRIT PETITION No.25668 OF 2024

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ORDER: (per Hon'ble Sri Justice Sujog paul)

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. Heard Sri U. Raghavender, learned counsel for the petitioner(s) and Ms. J. Sunitha, learned Junior Stalding Counsel for Income Tax Department, for the respondents.

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The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Financ e Act, 2021, re_ assessment process stood modified but the respondents have not taken care of it arld therefore, notice issued under Section 148 of the Income Tax Act, 196 1 carnot sustain judicial scrutiny. Since notice is bad in law, the consequential orders are also bad in law.

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During the course of hearing, learned counsel for the parties agreed that curtains on this issue are finally drawn by this Court in a batch of writ petitions, W.p.No.259O3 of 2022 and other connected matteJs, decided by common order dated 14.09.2023. TI;.e parties agreed that this matter may be dispo_sed of in terms of the Common Order d,ated 14.O9.2023.

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This Court in the said order dated 74.09.2023 in

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W.t'.No.25903 of 2022, held as under:

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'35.^{In vies of the aforesaid dlscussions,itis by now very} clear that the procedure to be followed by the respoEdentDepartmert upon treating the notices issued for reassessment being under Section 148A, the subsequett proceedings was mardatorily required to be utrdertakeE under the substituted provlsions as laid doya uDder the FiraBce Act, 2021. ln the absence of whlch, we are constrained to hold that the procedure adopted by the respordeDt-DepartEetrt is in contraveution to the statute i.e. the Fi[allce Act, 2021, at the first instance. Secondly, it is also ilr dilect contraveation to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarsal, supra.

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For all the aforesaid reasons, the impugred notices issued atrd the proceedings drawo by the respondent-Department is leither tenable, nor sustqinable. The notices so issued and the ptocedure adopted belEg per se illegal, deserves to be and are accordingly set aside/quashed. As a co!6equeace, all the iEpugned orders gettiag quashed, the cons€queutial orders passed by the respondent Departmetrt pursuant to the notices issued under Sectio! 147 aad 148 would also get quashed aad it is ordered accordiEgly. The reasoD we are quashing the consequeEtial order is on the principles that when the itritiation of the proceedings itself was procedurally wrong, the subsequent orders also gets lullified autotaatically.

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The preliminary objectior raised by the petitiorer is austained and all these writ petitiotrs strnds sllowed on this very jurisdictional issue. Siacc the impugrcd Eotices and ordera are getti[g quashed oE the poilt ofjuriadiction, we are not incliled to proceed further atrd decide the other issues raised by the petitioaer shich stands rescrved to be raised and coaterded in aE appropriate proceediugs.

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Since the ltron'ble Supretae Court had, ia the case of Ashish Agarwal, supra, as a otte-tiBe measure exercising the powera ulrder Artlcle 142 of the Corstitutloa of llldia, pcrEitted the ReveEue to proceed under the substituted provisioas, aod this Court allowiDg the petitio8s otrly on the procedurat flaw, the right confered on the Revenue would reEain reserved to proceed further if they so want from the

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stage of the order of the Supreme^{Court iB} the^{caseof Ashish} AgarPal, 6upra.

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No order as to^costs."

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In view of the consensus arrived, the^{impugned Show} Cause notice and consequential orders^{passed in this writ} petition are set aside. Liberty is^{reservedto both the parties} to take respective stand and^{to proceed in accordancewith} law as per paragraph^{No.38 of the order dated14.09.2023in} W.P.No.25903 of 2022.

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The Writ Petition is allowed.^{No costs. Interlocutory} applications, if any pending,^{shall also standclosed.}

To,

TJ LS

SD/- T. TIRUMALA^DEVI ASSISTANT^REGISTRAR SEC OFFICER

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//TRUE COPY//

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lncome Tax^{Officer,Ward-17(1), Hyderab-qd,lnc-omeTax Office' Signature.} ' t;;;;;, sv ruo otpi or xJndairui, $v.t'ro szte) of Kothas^ujj^9. pPP' Botanical G;;;;;: slaingi;nbattv(M),^{R. R. District, Hvderabad -500084}

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z^{p'i"lipir-c.rntii..ion.i,"of 'rniomJrii-2,signature Torygr-s,opp Botanical} - d;#", S.;insampally(M), R R. District, Hyderabad -500084 3. dilct to^{SiiUpionfdviiagnavender,A<ivocatet9f!91.^.} ;. on; cc io^{rrll". Jlsunitni (Ju-niorSC for lncomeTax) [oPUc]} 5. Two CD CoPies

\s'

HIGH COURT

DATED:2310912024

ORDER

WP.No.25668 of 2024