Allowed

Arene Life Sciences Unit 3 Pvt. Ltd. v. Assessment Unit

Telangana HC23 Sept 2024WP/26092/2024

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging a reassessment notice under Section 148 of the Income Tax Act, 1961. The Court allowed the petition, setting aside the impugned notices and consequent orders, relying on a common order in a batch of related writ petitions that quashed such proceedings due to non-compliance with the Finance Act, 2021.

What did the court decide?

The impugned show cause notice dated 13-03-2024 and all consequential orders passed thereunder are set aside. Liberty is reserved for parties to proceed in accordance with the common order dated 14.09

Arene Life Sciences Unit 3 Pvt. Ltd. Vs Assessment Unit — Income Tax | Telangana HC (2024)

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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 THE HONOURABLE SRI JUSTICE^{NAMAVARAPURAJESHWARRAO}

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WRIT PE TITION NO: 26092^{OF 2024}

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Between:

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Arene Life Sciences Unit 3^{Pvt. Ltd, havingits officeat 3- 58' Mai} nRoad s. R. Chambers, Ramachandrapuram^{Hyderabad,Telangana - 50203} 2Rep. by its Director

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..PETITIONER

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AND

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1 Assessment Unit, lncome^{Tax Department, Natio-nalFaceless Assessment} C;;ir-e-G6;ilrlntbi^{lndia, JawAharlalNehru Marg, Block B, Press Enclave,} Savitri Nagar New Delhi^{- 110002}

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2 Assistant Commissioner^{of lncome Tax Circle- 8(1), Hyderabad.Signature} T;;;;;, bt N;. oiplot^{Kondapur opp BotanicalGardens, Serilingampally} (lVI) R R Dist.Hyderabad-500084

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Union of lndia, Rep^{by its Secretary, Department of Revenue,Ministryof} Finance, North Block New^{Delhi- '1 '10001}

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...RESPONDENTS

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Petition under Article²²⁶ oI^{the constitutionof Indiaprayingthat in the} circumstances stated in^{the affidavit filedtherewith, the High court maybe} pleased to issue Writ order or Direction^{more particularlyin the natureof writ of} Mandamus declaring the^{impugnedorder dated 13- 03- 2024 bearing DINand} Notice No ITBA/ASTiF/148N2023-^{24t1062538283('1)passed by 2nd respondent} u/s' 14BA (d) of the lncome^{Tax Act, 1961andimpugned noticedated ,13- 03.} 2024 bearing DIN and^{Notice No. ITBA/AST/Si14}112023- 2411062539090(1)} issued by 2nd respondent^{u/s. 148 of the lncome Tax Act, 1961as being without} jurisdiction, arbitrary, illegal, unjust and^{violative of Articles 14, 19 (1) g and 265 of}

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Constitution of lndia and consequently set aside the same and all consequent proceedings.

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lA NO: 1 OF 2024

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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 operation of the notice dated^'13- 03- 2024 with DIN and Notice No. ITBA/AST/S/148 112023- 2411062539090(1) issued by the 2'd Respondent u/s. 148 of the Act for the A.Y.2020-21 and all consequential proceedings thereto.

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Counsel for the Petitioner: SRI MOHD MUKHAIRUDDIN

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Counsel for the Respondent Nos.'l and 2: MS J. SUNITHA, SC

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Counsel for the Respondent No.3: SRI B. MUKHERJEE, LEARNED COUNSEL REPRESENTING FOR SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR GNERAL OF INDIA

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The Court made the following: ORDER

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THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO

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WRIT PE?ITION No.26O92 OF 2024

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ORDER: (per Hon'ble Justice Sujog Paut)

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Heard Sri Mohd. Mukhairuddin, learned counsel for the petitioner(s), Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for respondents Nos.1 & 2 ald Sri B. Mukherjee, iearned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.3.

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The ground taken by the learned counsel for the petitioner(s) is that in furtherance of Finance Act, 2021, reassessment process stood modified but the respondents have not taken care of it and therefore, notice issued under Section 148 of the Income Tax Act, 1961 cannot 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.25903 of 2022 and other connected matters, decided by common^order

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dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated 14 .O9 .2023.

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This Court in the said order dated 14.09.2023 rn

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W.P.No.25903 ol 2022, held as under:

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"35.^{In wiew} of the afo.esaid discussioas, it is by now very clear that the p.ocedure to be followed by the respondentDepartment upon treatirg the notices issued for reassessment being under Section 148A, the subsequetrt proceediugs was Eaudatorily required to be undertakeD under the substituted provisions as laid dolrn undet the Finance Act, 2021. In the absence of which, we are constrained to hold that the procedure adopted by the respoldeat-DepartEent is in contravention to the statute i.e. the Finance Act,2O21, at the Iirst ilstance. Secondty, it is also in direct contravention to the directives issued by the Hon,ble Supreme C.ourt iu the case ofAshish Agarwal, supra.

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For aU the aforesaid teasolts, the impugEed notices issued and the proceedings draEn by the respoldeat-Depa.tmeDt is neither tenable, nor sustainable. The notices so issued and the ptocedure adopted being per se iltegal, deserves to be and are accordingly set aside/quashed. As a co[sequeuce, all the impugned orders getting quashed, the consequeutial orders passed by the lespondent Department pursuatrt to the notices issued under SectioE 147 and 148 would also get quashed and it is ordered accorditgly. The reasoa we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullilied automatically.

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37- Th€ preliminary objection raised by the petitioner is sustained and all these writ petitions staDds allowed on this very jurisdictioaal issue. Since the impugned notices and orders are getting quashed on the point ofjurisdiction, we are Eot incliaed to proceed further alld decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.

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38- Since the Hon'ble Supreme Court had, in the case of Ashtst Atarwal, supra, as a one-tilne tlleasure exercasing the powers under Article 142 of the Constitution of India,

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permitted the Reveuue to proceed under the substituted prowisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so watrt from the stage of the order of the Supreme Court ir the case of Ashish Agarwal, supra. 39, No o.dei as to costs.'

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In view of the consensus arrived, the impugned Show Cause notice and consequential orders passed in this u,rit petition are set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with lann, as per paragraph No.38 of the order dated 14.09.2023 in W.P.No.25903 of 2022.

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The Writ Petition is allowed. No costs. Interlocutory

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applications, if any pending, shall also stand closed.

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SD/- T. TIRUMALA DEVI ASSISTAN REGI TRAR ,TRUE COPY//

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SEC ON OFFICER

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'l . Assessment Unit, lncome Tax Department, National Faceless Assessment Centre Government of lndia, Jawaharlal Nehru Marg,^{Block B, PressEnclave,} Savatri Nagar New Delhi - 110002

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To,

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Assistant eommissioner of lncome Tax Circle- B(1),^{Hyderabad Signature} Towers, Sy No. 6(P) of Kondapur Opp. Botanical Gardens,^{Serilingampally} (tU) R R. Dist. , Hyderabad - 500084

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