Case Law Details
Largesized Cooperative Society Vs Assessment Unit (Telangana High Court)
Telangana High Court Allows Withdrawal of Income Tax Reassessment Challenge with Liberty to File Fresh Writ Petition
The Telangana High Court permitted the petitioner to withdraw its writ petition challenging an income tax reassessment order passed under Sections 147, 144, and 144B of the Income-tax Act, 1961, while granting liberty to institute a fresh writ petition. The Court accordingly dismissed the matter as withdrawn without expressing any opinion on the merits of the dispute.
Introduction
In Largesized Cooperative Society v. Assessment Unit, National Faceless Assessment Centre & Others, the petitioner challenged a reassessment order issued by the Income Tax Department for Assessment Year 2018-19. However, during the hearing, the petitioner sought permission to withdraw the writ petition with liberty to pursue a fresh challenge. The High Court accepted the request and disposed of the matter accordingly.
Facts of the Case
The petitioner filed a writ petition challenging an assessment order dated 16.03.2024 passed under:
- Section 147 (reassessment),
- Section 144 (best judgment assessment), and
- Section 144B (faceless assessment procedure),
of the Income-tax Act, 1961 for Assessment Year 2018-19.
The petitioner alleged that the reassessment order was:
- Arbitrary and illegal,
- Contrary to the principles of natural justice,
- Violative of Articles 14, 19(1)(g), and 265 of the Constitution of India,
- Contrary to Sections 148A, 149, and 151A of the Income-tax Act,
- Inconsistent with applicable CBDT circulars.
The petitioner sought quashing of the reassessment order and all consequential proceedings.
Petitioner’s Stand
The petitioner challenged the validity of the reassessment proceedings and the consequential assessment order, alleging procedural and legal infirmities in the reassessment process. However, during the course of hearing, the petitioner chose not to press the writ petition and instead requested liberty to withdraw it with permission to file a fresh writ petition.
Court’s Observations
The High Court noted the request made by the petitioner seeking withdrawal of the writ petition with liberty to institute fresh proceedings. Since the petitioner itself sought withdrawal, the Court did not enter into the merits of the challenge raised against the reassessment order.
Final Decision
The Telangana High Court:
- Permitted the petitioner to withdraw the writ petition.
- Granted liberty to file a fresh writ petition.
- Dismissed the writ petition as withdrawn.
- Passed no order as to costs.
- Closed all pending miscellaneous applications.
Key Takeaways
1. Withdrawal with Liberty Preserves Future Remedies
When permitted by the Court, withdrawal of a writ petition with liberty enables the petitioner to file a fresh petition on the same cause of action, subject to law.
2. No Adjudication on Merits
Since the writ petition was withdrawn, the Court did not examine the validity of the reassessment proceedings or the legal issues raised by the petitioner.
3. Procedural Flexibility in Writ Jurisdiction
High Courts may allow withdrawal and refiling where the petitioner seeks to cure procedural defects, add grounds, or pursue a more appropriate legal strategy.
4. Fresh Challenge Remains Open
The liberty granted by the Court ensures that the petitioner is not prejudiced by withdrawal and may pursue an appropriate challenge against the reassessment order in future proceedings.
Conclusion
In Largesized Cooperative Society v. Assessment Unit, National Faceless Assessment Centre & Others, the Telangana High Court allowed the petitioner to withdraw its challenge to an income tax reassessment order for AY 2018-19 and granted liberty to file a fresh writ petition. The decision underscores the Court’s willingness to permit withdrawal where a litigant seeks to pursue a more effective or properly framed challenge without any adjudication on the merits of the underlying tax dispute.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Learned counsel B.Muralidhar, representing learned counsel Sri T.Chaitanya Kumar, appears for the petitioner.
Sri K.Sudhakar Reddy, learned Senior Standing Counsel for Income Tax Department, appears for respondents No.1 and 2.
2. The writ petition is preferred seeking the following relief:
“For the reasons stated in the accompanying affidavit, the petitioner herein prays that this Hon’ble Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of mandamus holding that the order passed by 1st Respondent u/s.147 r.w.s 144 read with section 144B of the Income tax Act Date of 16.03.2024 with DIN No.ITBA/AST/S/147/2023- 24/1062760777(1) for the Ay. 2018-19 as arbitrary, illegal, bad in law, void ab initio, violation of principles of natural justice apart from violation of Articles 14, 19(1)(g) and 265 of Constitution of India apart from being violative of provisions of section 148A & section 149 of the Act and also contrary to the circular issued by CBDT and provisions of section 151A of the Act and consequently set aside the order passed by 1st Respondent u/s 147 r.w.s 144 read with section 144B of the Income Tax Act Date of 16.03.2024 with DIN No.ITBA/AST/S/147/2023- 24/1062760777(1) for the Ay. 2018-19 and all consequential proceedings pursuant there to, and pass such other order(s) as the Hon’ble Court deems fit and proper in the interest of justice.”
3. Learned counsel for the petitioner seeks permission to withdraw the writ petition with liberty to the petitioner to file a fresh writ petition.
4. Accordingly, the writ petition is dismissed as withdrawn with the aforesaid liberty. However, there shall be no order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
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