THE HON’BLE SRI JUSTICE P.SAM KOSHY AND THE HON’BLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION NO.14910 OF 2025 ORDER:(per Hon’ble Sri Justice Narsing Rao Nandikonda)

This Writ Petition, under Article 226 of the Constitution of India, is filed seeking the following relief:

“to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring (a) the order passed by the 1^st respondent under Section 264 of the Income Tax Act, 1961, dated 22.01.2025, vide DIN No.ITBA/REV/F/REV-7/2024-25/1072430712 (1), for the Assessment Year 2005-2006; &(b) the order passed by the 2^ndrespondent, dated 28.10.2013 u/s 154 of the Income Tax Act, 1961, vide DIN No.AAACD7182K/ACIT-1(2)/2013-14, for the Assessment Year 2005-06, as arbitrary, illegal, bad in law, void-ab- initio, violative of the principles of natural justice, apart from being violative of Articles 14, 19(1) (g) and 265 of the Constitution of India and consequently to set aside the same in the interest of justice, after directing the respondents to issue refund in an amount of Rs.3,98,64,102, along with applicable interest…”

2. The petitioner is a private limited company, engaged in the business of providing transport and logistic services. It is stated that for the Assessment Year 2005-2006, the petitioner-company filed income tax returns under Section 139 (1) of the Income Tax Act, 1961 (for short, ‘the Act, 1961’) declaring the income of Rs.1,06,81,148/- and the same was processed under Section 143 (1) of the Act, 1961 vide intimation, dated 14.07.2006. It is further stated that the petitioner was selected for a ‘complete scrutiny’ and a notice under Section 143 (2) of the Act, 1961 was issued and thereafter, an Assessment Order, dated 27.12.2007 was passed by the jurisdictional Assessing Officer under Section 143 (3) of the Act, 1961, making additions on account of bad debts and miscellaneous expenses.

3. During the course of scrutiny, the Assessing Officer sought clarification vide notice in Ref.No.F.No.D- 92/ACIT-1(2)/2005-2006, dated 10.01.2007 from the petitioner-company on TDS and depreciation issues, for which the petitioner furnished explanation. Further, on 30.12.2008, a survey was conducted at business premises of the petitioner to verify as to the adherence of TDS provisions and issued proceedings under the relevant TDS provisions i.e., under Section 201 (1) / 201 (1A) of the Act, 1961 and subsequently, the petitioner was served with a notice, dated 22.02.2010 under Section 148 of the Act, 1961 for the Assessment Year 2005-2006 and TDS proceedings were concluded and an order, dated 12.04.2010 was passed under Section 201 (1)/201 (1A) of the Act, 1961.

4. It is further stated that the said order does not contain any shortcomings in deduction of tax at source and in terms of the said order, only interest on some delays was raised and no addition or demand was raised on account of non-deduction of tax at source. Further, on 29.12.2010, respondent No.2 completed the Assessment under Section 143 (3) read with 147 of the Act, 1961 and respondent No.2 made addition only on account of charity expenses. The contention of the petitioner is that lorry hire & vehicle hire charges were agreed by respondent No.2 and accordingly, proposal was dropped. While the matter stood thus, the petitioner received a letter, dated 24.05.2012 calling for clarification with regard to the same issue which was the subject matter of reassessment proceedings, wherein it was alleged that on the aggregate amount of the hire charges claimed, the petitioner did not deduct the tax at source, the respondents have claimed depreciation @20% to a tune of Rs.23,38,000/- which is not proper. In response to the said letter, the petitioner gave reply on 05.06.2012. Further, a notice, dated 07.03.2013 was issued by respondent No.2 for the impugned Assessment Year on the basis of (a) original assessment order specifically the TDS survey, reassessment proceedings and clarification proceedings. Vid