Case Law Details
Satya Prakash Chigurupati Vs ACIT (Telangana High Court)
Summary: The Telangana High Court disposed of a batch of writ petitions challenging notices issued under Section 148A of the Income-tax Act, 1961, as well as assessment orders passed under Section 147 of the Act. Since the issues involved in all the petitions were similar, the matters were heard together.
During the hearing, counsel appearing for both the petitioners and the Income Tax Department submitted that the controversy raised in the present cases had already been considered by a Division Bench of the High Court in W.P. No. 26304 of 2024, decided on 28 April 2025. It was agreed that the earlier decision squarely covered the issues involved in the present writ petitions.
The Court referred extensively to the observations made in the earlier judgment. The Division Bench had noted that several High Courts had consistently held that certain actions undertaken by the Income Tax Department were violative of the provisions introduced through the Finance Act, 2020 and the Finance Act, 2021. The Court observed that timely disposal of matters already covered by existing precedents would prevent unnecessary accumulation of litigation.
The earlier judgment had held that the impugned notices and proceedings initiated by the Department were neither tenable nor sustainable in law and that the procedure adopted was illegal. Consequently, the notices issued and the proceedings conducted pursuant thereto were liable to be quashed. It was further held that when the initiation of proceedings itself suffers from procedural defects and lacks jurisdiction, the consequential orders passed under Sections 147 and 148 would also automatically stand nullified.
The Court had sustained the preliminary objection relating to jurisdiction and clarified that, since the petitions were being allowed on that ground, other issues raised by the petitioners were left open to be raised in appropriate proceedings.
At the same time, the Court noted that the Supreme Court, in the case of Ashish Agarwal, had permitted the Revenue, as a one-time measure under Article 142 of the Constitution, to proceed under the substituted statutory provisions. Accordingly, the Revenue’s right to take further action, if permissible in law, was kept reserved from the stage indicated in the Supreme Court’s decision.
The High Court also recorded that the earlier decision in Kankanala Ravindra Reddy was under challenge before the Supreme Court through a Special Leave Petition filed by the Revenue. Therefore, the relief granted in the present cases was made subject to the final outcome of the pending SLP. The Court observed that either party would be at liberty to seek revival of the proceedings depending upon the decision rendered by the Supreme Court.
Following the consensus of the parties and applying the earlier precedent, the Telangana High Court disposed of the writ petitions by setting aside the impugned notices and consequential orders. No order as to costs was passed, and all pending miscellaneous applications were directed to stand closed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Mr. Prudhviraj Mattapally, learned counsel representing Mr. Dundu Manmohan, learned counsel for the petitioners in W.P.Nos.20979, 20998, 21053, 21084, 21099 and 21105 of 2025.
Mr. Siripuram Keshava, learned counsel for the petitioner in W.P.No.20982 of 2025.
Mr. Thanneru Chaitanya Kumar, learned counsel for the petitioners in W.P.Nos.20983, 21046, 21064, 21070, 21076, 21078, 21127 and 21208 of 2025.
Mr. A.V.A.Siva Kartikeya, learned counsel for the petitioners in W.P.Nos.21063 and 21095 of 2025.
Mr. M.Naga Deepak, learned counsel for the petitioner in W.P.No.21066 of 2025.
Ms. K.Prabhabati, learned counsel for the petitioner in W.P.No.21185 of 2025.
Ms. Bokaro Sapna Reddy, learned Senior Standing Counsel for the Income Tax Department for the respondents in W.P.Nos.20983, 21063, 21064, 21070, 21076, 21095, 21127 and 21208 of 2025.
Mr. K.Suhakar Reddy, learned Senior Standing Counsel for the Income Tax Department for the respondents in W.P.Nos.20979, 20982, 20998, 21046, 21053, 21084 and 21099 of 2025.
Ms. J.Sunitha, learned Senior Standing Counsel for the Income Tax Department for the respondents in W.P.Nos.21066, 21078, 21105 and 21185 of 2025.
2. Regard being had to the similitude of the questions involved in these writ petitions, the matters were analogously heard.
3. In these writ petitions, the challenge is either to notices which were issued under Section 148A of the Income Tax Act, 1961 (hereinafter referred to as, “the Act”), or to the assessment orders which have been passed under Section 147 of the Act.
4. Learned counsel for the parties, during the course of hearing, fairly submit that the issue involved in these writ petitions was considered by a Division Bench of this Court in W.P.No.26304 of 2024, vide order dated 28.04.2025, and the said order squarely covers the present writ petitions as well.
5. The relevant extract of the order dated 28.04.2025 passed in W.P.No.26304 of 2024 reads as under:
“15. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the Finance Act, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy vs. Income-Tax Officer [(2023) 156 taxmann.com 178 (Telangana)] shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon’ble Supreme Court.
16. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter.
17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 36, 37 and 38 of the order which, for ready reference, is reproduced hereunder:
36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason 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 nullified automatically.
37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.
38. Since the Hon’ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, 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 want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.
18. We would only further like to makeobservations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kankanala Ravindra Reddy (supra) is subjected to challenge before the Hon’ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kankanala Ravindra Reddy (supra). This, in other words, would mean that either of the parties, if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon’ble Supreme Court in the pending SLP on the very same issue.
19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed. The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy [(2023) 156 taxmann.com 178 (Telangana)]. There shall be no order as to costs.
Consequently, miscellaneous petitions pending, if any, shall stand closed.”
6. In view of the consensus arrived at, these writ petitions are also disposed of in terms of the order dated 28.04.2025 passed in W.P.No.26304 of 2024. However, there shall be no order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
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