Allowed

M/s Divyashakti Limited (formerly, M/s Divyashakti Granites Limited) v. The Assistant Commissioner of Income Tax

Telangana HC24 Sept 2024WP/26243/2024

Case brief

AI extract

What is this about?

The High Court allowed the writ petition praying for quashing of a Section 148 notice and consequential orders. The court disposed of the matter based on an earlier common order in connected writ petitions, holding that the notice was illegal due to procedural non-compliance and set it aside.

What did the court decide?

Set aside the show cause notice issued under Section 148 and consequential orders. Writ petition allowed. No costs.

M/s Divyashakti Limited (formerly… — Constitutional and Fundamental Rights | Telangana HC (2024)

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134',t11

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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TUESDAY, THE TWENTY FOURTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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, THE HONOURABLE SRI JUSTICE SUJOYPAUL AND

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THE HONOURABLE SRIJUSTICE NAMAVARAPU RAJESHWAR RAO

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WRIT PETITION NO: 26243 OF 2024

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Between:

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M/s Divyashakti Limited (formerly, M/s Divyashakti Granites Limited), 7-1-58, Divyashakti Complex, Ameerpet, Hyderabad - 500 016, Telangana. Represented by its Managing Director, Mr. Nallapati Hari Hara Prasad, S/o Mr. N.V.Rattaiah.

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...PETITlONER

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AND

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1 The Assistant Commissioner of lncome Tax, Circle 8(1), Hyderabad, Signature Towers, Opposite Botanical Gardens, Sy. No.. 6(P) of Kondapur, Sy No. 37(P) of Kothaguda, Serilingampally Mandal, Hyderabad^- 500 084, Ranga Reddy District, Telangana.

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2 The Chief Commissioner of lncome Tax, Hyderabad, l.T. Towers, 10-2-3, AC Guards, Hyderabad - 500 004, Telangana.

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...RESPONDENTS

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Petition under Article 226 of lhe Constitution of lndia^praying that in the circumstances stated in the affidavit filed ttrcrewith, the High Court^{may be} pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring that. a. the order passed by the lst Respondent, u/s 148A(d) of the lncome Tax Act, 1961, dated 2910812024, bearing DIN and Letter No.. ITBA/COM/F/1712024-2511068137399(1), for the Assessment Year 2O14 - 15. and b. the notice issued by the lst Respondent, u/s 148 of the lncome^{Tax Act,1961,} dated 2910812024, bearing DlN. ITBA/ASTlMl148-112024-25/1068139637(1),^for the Assessment Year 2014 - 15. as arbitrary, illegal, bad in law,^{void-ab-initio,} violative of the principles of natural^justice, apart from being violative of Articles 14 19(1Xg) and265 of the Constitution of lndia and Sec 1484 of the lncome^Tax Act, 1961 , and to consequently set aside the same in the interests of^justice.

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,ii;-d8rn ,

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lA NO: 1 OF 2024

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Petition under Section 1sl cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings, including any recovery, pursuant to the notice issued by the 1 st Respondent u/s .r 48 of the lncome Tax Act, 1 961 , dated 2gtogt2o24, bearing DlN. lrBA/ASr,Mt148_1t2024-2s11068139637(1), for the Assessmenr Year 2014 - 15, pending disposal of the above Writ petition.

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Counsel for the Petitioner : SRI A.V.A.SIVA KARTIKEYA

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counsel for the Respondents: Ms.J.sUNrrHA (Jr. sc FoR rNcoME TAx) The Court made the following: ORDER

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THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE ITAM.C.VARAPU RAJESHWAR RAO

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WRIT PETITION No.26243 OF 2o.24

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ORDER: (per Hon'ble Justice Sujog paul)

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Heard Sri A.V.A.Siva Kartikeya, learned counsel for the petitioner(s) and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax Department, for the respondent(s).

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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 modilied but the respondents have not taken care of it and therefore, notice issued under Section 148 of the Income Tax Act, 196 1 calnot 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, Iearned counsel for the parties agreed that curtains on this issue are frnally drawn by this Court in a batch of writ petitions, W.P.No.25903 of 2022 and other connected matters, decided by common order dated 14.O9.2023. The parties agreed that this matter may be disposed of in terms of the Common Order dated, 14.09.2023.

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This Court in the said order dated^14.09.2023in

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W.P.No.25903 of 2022, held^as under

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'35,^{In wiewof the aforesaid discussioEs'itis by aowvery} ctear that the^procedure to be^{follosed by the respondent-} Department upon treating the^{notlce6issuedforleassessment} being under Sectioa 148A, the^{sub8equent proceedingswas} maudatorily required to be undertaken under^{the substituted} provisions as l,aid down uBder the Firance Act, 2021.^{ln tltre} absetrce of which, we are coqstrained to^{hold thatthe} procedure adopted by the respoBdent-DePartEelt^isin contravention to the statute i.e, the^{FinanceAct,2O21' at the} fr-rst instiDce. Secoadly, it is also itr^{direct contravention to} the diiectives issued by the Hon'ble^{SupretneCourt in the} case of Ashish Agarrral, supra.

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For att the aforesaid reasous, the^{impugned noticesissued} and the^proceedings drawo by the^{reapoEdent-DepartEentis} aeithcr tenable, tror sustainable. The^{Eotlce6so issuedaDd} the procedure adopted beiag^{per se lllegal,deserves to be and} are eccordingly set aside/quashed.^{As a consequence'all the} iEpugned orders^{gettingquashed,} the^{coDsequential orders} passed by the respondent DepartEent^purauant to the^lotices issued under Sectiou 147 aad^{148sould also get quashedatrd} it iE ordered accordingly. The^{reasoBwe are quashing the} consequential order is on the^{priaciplesthat whenthe} ilitiation of the^proceediEgs itself^{was ptocedurallywrong,} the aubsequent orders also^gets aullilied^{autoEatically.}

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The preliminary objection raised^{6y the petitioneris} sustained and all these writ^{petitlons statrds allowed olr this} very jurisdictional issue. Since the iEPugned^noticesaEd orders are^{gettiEgquashedoE} the^{poltrt ofiurisdiction,weare} uot inclined to^proceed further and^{decldethe other issues} raised by the petitioner lrhich stands^{teeerved to be raised} aad contended in a[ appropriate Proceedings.

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Since the Hon'ble Supretle Court^{had, ia the case of} Ashish Agartf,al, supra, as a o[e-tiEe^{Ereaaureexercisilgthe} poEers under Article 142 of the CoEstitutioE of^India' permitted the Revenue to proceed under the substituted provisions, and thG Court allosing the Petitioas only on^the procedural flaw, the right conferred on the Revetrue^would remain reserved to proceed further if they so sant froE^the

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stage of the ordcr of the SupreEte Court in the case of Ashish Agarwal, supra-

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No order as to costs.-

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In view of the consensus arrived, the impugned Show Cause notice arrd consequential orders passed in this writ petition are set aside. Liberty is reserved to both the parties to take respective stand and to proceed in accordance with Iaw as per paragraph No.38 of the order dated 14.09.2023 in W.P.No.259O3 of 2022.

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The Writ Petition is allowed. No costs. Interlocutory applications, if any pending, shall also stald closed.

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SD/- N.CHANDRA SEKHAR RAo ASSISTANT R STRAR //TRUE COPYII To, SECTI FFICER 1 The Assistant Commissionet of lncome Tax, Crrcle g(1). Hyderabad. S["fi':]i(Ey:#k8l!Sii:,'.T;tf:,ffim.V;-jij.:St""J?ssSr,T, 5,an^j1 $90_dy^{District, T6langana.} 2 J 4 gtriiil$-ft+h6^f ,ti{fl e's:lff :iii,:J;-"^1023Ac ! vr'rrv'/r,rr- rA^ 5 Two one cD cc copies to Ms.J SUNtrHa pi sc roH i'ilcoil'E'ia,il. [opuc] BSK (o, LS

HIGH COURT

DATED:2 4t09tZOZ4

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ORDER

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