High Court · 2025

Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may be pleased to pass an order or direction' especially one in the nature of WRIT OF MANDAMUs rrotorng tnat;";r;, passed by 1't Respondent u/s' 147 r'w's 144 of the lT Act, dt'27 '03'2024 with DIN No ITBAJAST/S/14712023-2411063428546(1) for the Ay. 2018-'t9' 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 rndia apart from being viorative of provisions of section 148A and 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 1't Responden I uts' 1 47 r'w's 1 44 of the lT Acl' dl 27'O3'2024 with DIN ,n 4 No. ITBA/AST/S/1 4 I /2023_24t 1063428s46(1 consequential proceedings pursuant thereto. ) for the Ay. 2O18_1g and all IA NO;10 F 2025 petition under' section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay all fu(her proceedings, including any recovery, prr.rrnt to the order passed by the 'rst Respondent u/s 147 t'w.s 144 0f the rr Act, dt. 27.03.2024with DrN No. ITBA/AST/S/1 4 7 t 2023_ 24t 1 06}428546(1 ) for the assessment yea r Ay. 20 1 B_ 1 g. Counsel for the petitioner: SRI THANNERU CHAITANYA KUMAR Counsel forthe Respondent No.1: SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITOR CErVEriAr- OF INIDA Counsel forthe Respondent No.2: MS. J SUNITHA (JUNtoR Sc FoR lNcoME TAX) The Court made the following: ORDER THE IIONOURABLE SRI JUSTICE P'SAM KOSHY rrrE rroN ouRABLm$fXS:E NAR'TNG RAo WRIT PETITIONNo.l4s60F 2025 ORDER' (per Hon'ble Sri Justice Narsing Rao Nandikond! HeardMr.ThannenrChaitanyaKumar,learnedcounsel leamed Junior Standing for the Petltloner and Ms. J.Sunitha, Counsel for the Income Tax Department for the respondents' Perused the record '

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148A and 148 of the Income Tax Act' 1961 (ior short 'the Act') or the ed under Section i47 of assessment orders those have been pass the Act which have been assailed' This writ petition is being taken up today only on one of the 3 . grounds, that the notices issued under Section 148A of the Act and the subsequent initiation ofproceedings under Section 148 of the Act by the jurisdictional Assessing Ofhcer' whereas in terms of the amendpeq$ that was brought to the Income Tax Act by way of Finance Lct, 2021 w'e'f'' 0l'04'2021 onwards' proceedings 2 under Sectron l4gA ofthe Act as also under Section l4g ofthe Act ought to have also been issued and proceeded in a faceless manner

4. The contention of the petitioner is that the issue of proceedings being in violation of the Financ e Act, 2021 i.e., the tmpugned n,)tices under Section l4gA and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decidecl by this Court in the case of KANKANALA RAVINDRA REDDY vs. TNCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allowed and tire proceedings initiated under Section 14gA as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section 151A of tlre Act read with Notification lgl\02| dated29.03.2022. The said judgment passed by this court has also been subseque,try foilowed in a large number of writ petitions which were allorved on sirnilar terms. ' l(.2023) I 56 tax mann.com l7g (Telangana)l .] .1, 3

5. Down the line, we find that the same issue has also been decidedagainsttheRevenuebyvariousHighCourtsi.e.' by the Bombay High Court in the case of HEXAWARE TECIINOLOGIES LTD'' vs' ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2' Gauhati High Court in the case of RAM NARAYAN SAH vs' UNION OF INDIA3' Punjab and Haryana High Court in the case of JATINDER SING[I BANGU vs. uNIoN oF INDI#, and Telangana High court in the case of Sru VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of international taxation' Bombay High Court in the case of ABIIIN ANILKUMAR SHAII VS.INCOME TAX OFFTCER, TNTERNATIONAL TAXATION6 which is again on intemational taxation and central circle' High Court of Himachal Pradesh in the case of GOVIND SINGH vs' INCOME TAX OFFICERT' Gujarat High Court in the case of MANSUKHBHAI 'pozql464ITR 430 (Bom) ' iAozil 156 taxmann.com 478 (Gauhati)l ^tfZOZq 165 taxmar;n.com t l5 (Punjab & Haryana)l '12024) I 6? taxma4h.com 41 1 (Telangana)l u 12024\ I 66 taxmann.com 679 (Bombay)l ,iiOz+i 165 taxmann.com ll3 (Himachal Pradesh)l 'l 4 DAHYABHAI RADADIYA vs. INCOME TAx OFFTCER, WARD 3(3Xr8, Jharkand High Court in the case of SIIyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHIIAJER vs. INCOME TAX OFFICER & ANOTHER and barch of wrir petitionsr0 which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023),decided on25.09.2024.

6. Even though the same issue having been decided by a large number of High Courts, we are still conTronted with large filing of identical matlers on daily basis ranging between 5 to l0 writ petitions. That upon the instructions being sought flom the Department, they have been taking a soritary ground thar rhe decision of the Bombay High Court in the case of llexaware Technologies Ltd., (2 supra) as arso the one which has been decided by this Court in the case of Kanakala Ravindra Reddy szOZ+ ScCpnlrne Guj 4012 " 2025 SCC Onltne Jhar 2g7 1 o pzo23 : RJ-JD :4984-DB l a. 5 (1 supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No'3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme Court is seized of the matter' In addition, there are about 1200 SLPs also filed arising out ofthe same issue being decided by various High Courts'

7. To a query being put to the learned counsel for the Revenue' they have categorically accepted the fact that there is no interim order granted by the Hon'ble Supreme Couft in any of these matters pending before it' Meanwhile' fresh writ petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increased 6n matter which otherwise hasalreadybeendealtanddecidedbythisveryHighCourtitself.

8. On the one hand' even though the order of this Court that was passed as early as on 14'09'2023 and more 16 months have lapsed, till date' we do not find any remedial steps having been taken by the Income Tax Department to take appropriate steps to either hold back issuance ofnotice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Offrcer' rather the authorities concemed in the teeth of series of decisions ( i by all the major High Cou,.ts in India are continuously still initiating proceedings under Section 14gA of the Act and also initiating ltroceedings under Section l4g of the Act in contraventicrn to the amendments brought into the Income Tax Act pursuant to lhe Finance Act, 2020 as also the Finance Act 2021. 9. Upon a query being put as to why can,t this rvrit petition be disposed of in the teerh of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), leamed Standing counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equar nuniber of slps before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention of the leamed Standing counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pending till the finalization of the SLps pending before the Hon,ble Supreme Courl and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the Income Tax Department have not come out with a mechanism to issue appropriate instructions or to take 7 appropriate steps in ensuring that proceedings under Section 148A ofthe Act as also the assessment orders under Seclion 148 ofthe Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts, it was submitted by the learned Standing Counsel that the said steps can only be taken at the level of CBDT as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional High Courts' 10. As a result of which' what we are facing is steep increase of litigation day in and day out even though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income Tax authorities concdrned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 1 51A of the Act and as a result by now' more than 600 to 700 petitions have been already got piled up before this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of Kanakala Ravindru Reddy (1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakals Ravindra Reddy (l supra)''the Division Bench while reserving the right ol the Revenue, has also protected the interest of the petitioners I 8 insofar as the liberty which was granted to the Revenue for initiating fr,:sh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 and. the Finance Act, 2021 . The petitioner assessee would be entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Department has made no endeavour in availing the l;aid liberty that was reserved for the Revenue. On the contrary, the.y have been still sticking on to the stand, which this High Court as well as many other High Courts already held to be bad. I l. It appears that because ofthe aforbsaid liberty that this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless manner, the Income Tax Department wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending for a considerable long period of time and lrnally at a later stage if the Hon'ble Supreme Court confirms the decision taken by this High Court as also by the other High Courts in whir;h the SLps are still pending, the Income Tax 9 Department would get the advantage of the libefi that is otherwtse protected in favour of the Revenue for initiation of fresh proceedings from the disposal of these matters at a much later stage which would be advantageous and beneficial to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concerned' As a consequence' the Income Tax Department gets an extended period of time for initiation of fresh proceedings.

12. The alarming trend of docket explosion in this Court' despite the clear precedent set irt Kanakala Ravindta Reddy (l supra)' is a matter of grave concern' The Income T6x Department's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation withover600.T00petitionspilinguponthesameissue.This deliberate approach not only undermines the principle ofjudicial precedent but also strains the judicial resources unnecessarily' The Department's strategy of awaiting the Supreme Court's decision on pending SLPs while continuihg to initiate fresh proceedings appears to be a' calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal 1 I l 10 administrative efficiency and the position. Such conduct raises serious questions about the respect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue,s rights and assesses interests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Depaftment itself and should have found out via media in ensuring that proceedings under Sections l4g_A and 14g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps which i1 is already seized of or, at least the Income Tax Department should have fbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g_A and l4g, other than in a faceless lranner, the proceedings should have been defened without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLp,s are decided by the Hon'ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing repl1,, except for the fact that such a decision if at all 11 has to be taken, has to be taken for the whole of India' and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes' Though the learned Standing Counsel for the lncome Tax Depafiment contended that the Delhi High Court dismissed a writ petition of similar nature' on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis' Admittedly' in spite of the before the Hon'ble Supreme Court having been taken on occasions, the Hon,ble supreme court which is seized of the matter to the matter has been reluctant in granting any interim Protection Income Tax Department' Yet' the authorities concemed at the State level are not ready to accept the verdict passed by a majority of High Courts of dift-erent States on the same issue; and to make things further worse' the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and I t i I 1 -I I 't-2 148 through thejurisdictional Assessing officer lvhereas it ought to have been only in the faceless manner. 14. In ttre case of BANK OF INDIA vs ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue whether it was justifiable c,n the part of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25' tr/r. paridwara has righry drawn out attention to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafr2 as also the recent decision of the co- ordinate Bench of this Court in Samp Ffirniture (p) Lta. v. tTOr: of which ore of us (Justice G-s. Kurkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that till the same is; sel aside in a manner known to law, it would loose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.,4, the Court observed that the approach of the officials of Revenue of treating decisions being ,,not acceptable,, was criticized by the Supreme Court. In such decision, following are the relevant observations made by the Supreme Court. nO rarmann.com 422 (Bombay)) ',1, .tt.z^03;-l ',' ll978l I l3 ITlt 589 (Bombay) " [2024] 165 taxmann.com 5gl/300 Taxman 452 (Bombay) 'o lt9921taxmann.com 16/ 55 ELT433 (SC) I I t I 13 "6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted' the Revenue would suffer. But what Sri Reddy overlooks is that we the correctness or here with are not concerned or of any factual otherwise of their conclusion malafides but with the fact that the officers' in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them. one of the Collector (Appeals) and the other of the Tribunal. The High Court has' in our view' rightly criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these offlcers to give effect to the orders of authorities higher to them in the appellate hierarchy lt cannot be too vehemently emphasized that it is of utmost importance that' in disposing of the quasiiudicial issues before them' revenue officers are bound by the decisions of the appellate authorities' The order of the Appellte Collector is binding on the Assistant Collectors working within his 'iurisdiction the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court lf this healthy t ">*l-" I I t4 rule is not followed, the result will only be undue h;rrassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Co.rrt, seemingly veher u npalata bte,o,n" *"r"nr",1rl';" fi:"r.::i:'::r; a bndency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses_public without any benefit to the Revenue. We would like to say that the department should take these observations in lhe proper spirit. The observations of the High Cou( should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on tbem." i 5' what is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate fur1her 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 15 Finance Act,2020and 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 observatiorVdirection that the disposal ofthe instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Rayindra Red.dy (l supra) 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 tacts 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' l7 . So far as the interest of the Revenue is concemed' we are of the considered opinion that the interest of the Revenue has already been considered and protected' as has been observed in paragraphs I I I I l i I I I i I I 76 36, 37 and j8 of the order which, for ready reference, is reproduced hereunder

30. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent_ Dr:partment is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set as de/quashed. As a conr all the impugned orders getting quashed, ,n"t"o'"n""' by the responde".r"r"-.::?t":r:::l: :";: :I::: issred under Section 147 and 14g would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles thai 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. of Ashish Since the Hon,ble Supreme Court had, in the case Agarwal, supra, as a one{ime measure the powers under Article 142 exerc sing 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. ,he right 17 1_r ( 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 make observations that srnce ' ' n' conscious of we are inclined to dispose of the instant writ petttto the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred by the lncome Tax Department' we make it clear that allowing of the instant writ petition is subj ect to outcome of the aforesaid SLP prefened by the Revenueagainst the decision of this High Court in the case of Kanakals Ravindra Reddy (1 sttpra)' 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 concemed. As a consequence' the impugned notice under challenge under Sections 148-4 and 148 stands set aside/quashed' a I ! : t ; 'I .t I l I 18 The consequential orders, if any, also stand set aside/quashed in similar terms as have been passsd by this High Court in the case of Kankanala Ravindra Reddy (r supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// Sd/. B. REKHA RANI ASSISTANT REG STRAR SECTI FICER To, 1 Assessment Jnit, National Faceless Assessment Department, Ministry of Finance, Room No. 401, Jawaharlal Nehru Stadium, Delhi 1 10 003. The lncome Tax Officer Ward-.l , Ivlanchirivat lnco Floor, Ravindra Hospital, Bellampally Road, MAf.t 504209 Qne CC to Sri Thanneru Chaitanya Kumar, Advocate [OpUC] Sunitha (Junior SC for tncome fr*l lOpU-Cj' 9n" 99 Io yl: one cc to sri Gadi Praveen Kumar, Deputy soricitoi Generaiof rndia[opUC] Two CD Copies me Tax Office, Ward-1, 2nd CHERIAL, Telangana, Centre, lncome Tax 2nd Floor, E-Ramp, ^J 3 4 5 TJ PVL / d HIGH COURT DATED:2810412025 ORDER WP.No.1456 of 2025 ,/ q- \. 2OSEPM \iS.(,,. sl),. .--:: 1:, I rrf:O ALLOWING THE WRIT PETITION WITHOUT COSTS / /t 5,/ 7 ,/?;