Ms. K. PRABHABATI REp SRl. A v. RAGHU RAM

Ms. J.Sunitha, leamed Junior Standing Counsel for the Income Tax Department for respondent No.l. Perused the record'

2. This is a writ petition where the proceedings are either challenged to the notices which wefe issued under Section 148A and 148 of the lncome Tax Act, 196l (for short 'the Act') or the assessment orders those have been passed under Section 147 of the Act which have been assailed.

3. This writ petition is being tatfn up today only on one of the grounds, that the notices issued under Section l48A of the Act and the subsequent initiation of propeedings under Section 148 of the Act by the jurisdictional Assessing Offtcer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w'e.f., 01.04.2021 onwards, proceedings 2 under Section l48A of the Act as also under Section 148 of the Act ought :o have also been issued and proceeded in a faceless manner,

4. The contention of the petitioner is that the issue of proceedingri being in violation of the Finance Act,202l i.e., the impugned rrotices under Section 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decide,d by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICERT decided ot 14.09.2A23 whereby a batch of writ petitions were allowed and the proceedings initiated under Section l48A as also under Section 148 of the lrct were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section l51A of the Act reacl with Notification 1812022 dated 29.03 2022. The said judgment pzLssed by this Court has also been subsequently followed in a large nrmber of writ petitions which were a[lowed on similar terms. 'l(2023) 156 taxrnann.corn 178 (Telangana)l ) t 3

5. Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i.e., by the Bombay High Court in the case of IIEXAWARE TECHNOLOGTES LTD., VS. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, pauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARATVIANA REDDE PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of intemational taxation, Bopbay High Court in the case of ABHIN ANILKUIVIAR SHAH vsi INCOME TAX OFFICE& INTERNATIONAL TAXATION6 which is again on intemational taxation and central circle, High Court of Himachal Pradesh in the case oI GOVIND SINGH vs. INCOME TAX OFFICERT, Cujarat High Court in the case of MANSTIKIIBHAI '1zoz+14& trR 430 (Born) ' [(2024) [ 56 taxmann.com 478 (Gauhati)] ' l(2024) 1 65 taxmann.com I I 5 (Punjab & Haryana)l ' [2024) 167 taxmann.com 4l I (Telangana)] " l2)24l 166 taxmann.com 679 (Bombqy)l ' izoz+l tos taxmann.com I l3 (Hirnachal Pradesh)] 4 DAIfYABIHAI RADADIYA vs. TNCOME T.AX OFFICE& WARD 3(3Xt8, Jharkand High Court in the case of SIfYAM SUNDAR SAW vs. UMON OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsro 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 GIRDHAFI GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A,T 169t0 of 2023\, decided on 25.09 .2024.

6. Even though the same issue having been decided by a large number of l{igh Courts, we are still confronted with large filing of identical matters on daily basis ranging betwcen 5 to l0 writ petitions. 1'hat upon the instructions being sought fiom the Deparhnent, they have been taking a solitary ground that the decisioa of the Bombay High Court in the cast ot Hexaware Technologirzs Ltd, (2 suprai as also the one u'hich has been decided by this Court in the case of Kanakala Ravindra Reddy '2024 SCC Crnline Guj 4012 '2025 SCC ()nline Jhar287 'o 12023 : RJ-J D :49 84-DB l t 5 (1 supra) has been subjected to Qhallenge in a Special Leave Petition i.e., SLP No.3574 of 202! before the Hon'ble Supreme Court and the Hon'ble Supreme Court is seized of the matter. In addition, there are about 1200 SIIPs also filed arising out ofthe same issue being decided by various High Courts.

7. To a query being put to the lepmed counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon'ble Supreme Court in any of these matters pending before it. Meanwhile, fresh writ petitions of identicat nahrre are being pited up lefore this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dealt and decided [y this very High Court itself.

8. On the one hand, even though the order of this Court that was passed as earty as on 14.09.2Q23 and more 16 months have lapsed, till date, we do not find any remedial steps having been taken by the lncome Tax Departmqnt to take appropriate steps to either hold back issuance of notice under Section 148,4' and under Section 148 ol the Act by the junsdictional Assessing OfEcer, rather the authorities concemed ln t he teeth o[ series of decisions 5 by all thr: major High Courts in India are continuously still initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuantto the Finance Act,2020 as also the Finance Act202l .

9. Upolr a query being put as to why can't this writ petition be disposed o;'in the teeth 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 rhat those would unnecessarily burden the Income Tax Departmcnt where they would be required to file equal number of S l-l)s before the Hon'ble Su preme Court and it would be further burdening the exchequer c'f the Union of India. It was also the crrntention ol the leamed Standing Counsel that no prejudice would be caused to rhe interest of the petitioners in case if this writ perition is kept pending tilt the finirlization of the SLPs pending befiore the Hon'ble Supreme Cc,urt and the fact that the petitioner is already enjoying the benefit c,f interim protection. Nonetheless, on tlre earlier query o[this Courr. as to why the Income Tax Department have not come out with a rrechanism to issue appropriate instruct ions or to take appropriate steps in ensuring that proceedings under Section l48A of the Act as also the assessment ofders under Section 148 of the Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts, it was submftted by the leamed 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 ttiough various orders have been passed by this High Court allowing writ petitions on th€ very same issue. The Income Tax authorities are still even now in loncerned 2025 also initiating proceedings in contravention to the provisions of Section l51A of the Act and as 4 result by now, more than 600 to 700 petitions have been already got pited up before this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case ol Kanakala Ravindra Reddy (1 supra). What is also surPrisinq is the lact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Division Benph while reserving the right of the Revenue, has also protected the interest of the petitioners E insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act, 2020 and the Finance \ct,2021. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Rcvenue initiates fresh proceedings. The Department has made nc, endeavour in availing the r;aid liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the stand, which this High Court as well as many other High Courts already hetd to be bad.

11. [t appt:ars that because ofthe aforesaid libertl' 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 t,f the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the waY. I ikewise, if the writ petition is kept pending for a considerable long period of time and finally ar: a later stage if the Hon'ble Supreme ( louft confirms the decision taken by this High Court as also by the other High Courts in which the SLPs are still pending, tht' lncome I'ax 9 Department would get the advantagq of the liberty that is otherwise protected in favour of the Revenue for initiation of fiesh proceedings from the disposal of thepe matters at a much later stage which would be advantageous and beneficial to the Revenue and would be equally disadvantageous ahd 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 in Kanakala Ravindra Reddy (l supra), is a mafter of gftIve concem. The lncorpe Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piting up on the same issue' This deliberate approach not only undelmines the principle of judicial precedent but also strains the judicial resources unnecessarily' The Department's strategy of awaiting the Supreme Court's decision on pending SLPs while continuing to initiate fresh proceedings appeffs to be a calculated move to buy time and circumvent limitation periods, rather than adfering to the established legal 10 position. Such conduct raises serious questions about the administrative effrciency and the respect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue's rights and assesses lnterests.

13. Anolher aspect which needs to be considered is that in fact it should have been realized by the Income Tax Department itself and should have found out via media in ensuriog that proceedings under Sections 148-A and 148 should not have been issued in a faceless mirnner, at least till the Hon'ble Suprerne Court decide the twelve hunlred (1200) odd SLPs which it is already seized olor, at least the Income Tax Department should have tbund out some remedial sleps to ensure that wherever the authorities intend to initiate pror:eedings under Sections 148-A and 148, other than in a fhceless manner, the proceedings should have been deferred 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 reply, except for the fact that such a decision il at atl 11 I 1 I I I I I i :, I I I I I i i I l i I has to be taken, has to be taken for the whole of India; and which otherwise has to beby way ofa policy decision and that too at the level of Central Board of Direct Taxes. Though the leamed Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar narure, 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 o[ 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 matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Deparhnent. Yet, the authorities concemed at the State level are not ready to accept thE verdict passed by a majority ol High Courts of different States or1 the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections I48-A and 72 148 through the jurisdictional Assessing Officer whereas it ougtrt to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISiSIONER, INCOME TAX1t, on an issue whether it was justifiable on the part of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground thirt the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decisic,n of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Saraf'2 as also the recent decision of the co- ordinale Bench of this Court in Samp Furniture (P) Ltd. v. lTOt3 of which one of us (Justice G.S. Kulkami) was a member, wherein the Cc,ur1 categorically observed that the Revenue having not 'accepted" the judgment of the High Court would not mean that till the sarne is set 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 Gorporation Ltd.14, the Court observed that the approach of the officials of Revenue of treatinq decisions being "not acceptable" was criticized by the Suprenre Court ln such decision, following are the relevant observirtions made by the Supreme Court. 'l ttZOzsl l-/0 taxmann.com 422 (Bombay)l '' 1t9281 I t I ITR 589 (Bombay) " 12OZ+1 [65 taxrnann.com 581/300 Taxman 452 (Bombay) '* 1t9921 taxrnann.com l6155 ELT 433 (SC) .B "6. Sri ReddY is PerhaPS rdfrt in saYlng that the by any mala fides in officers were not actuated passing the impugned orflers. TheY PerhaPs I the assessee was not genuinely felt that the claim ( hccepted, the Revenue tenable and that, if it was overlooks is that we would suffer. But what Sri R€ lith tne conectness or are not concemed here ul l* o, ot any factual otherwise of their mnclusl the officers, in reaching malafides but with the fact t\itlo appellate orders in in their conclusion, bY4asse ich were Placed before regard to the same issue eals) and the other of them, one of the Collector ( the Tribunal. The High Cou has, in our view, rightlY Assistant Collectors and criticized this conduct of the caused bY the failure the harassment to the asses to the orders of of these officers to give e appellate hierarchy. lt authorities higher to them in hasized that it is of cannot be too vehemently disposing of the utmost imPortance that' emr revenue officers are quasijudicial issues bebre t appellate authorities bound by the decisions of is binding on the The order of the APpellte Assistant Collectors workirE within his jurisdiction and inding upon the Assistant the order of the Tribunal is Collectors who function Collectors aM the ribunal. The Principles of under the jurisdiction of the judicial disciPline require th t the orders of the higher appellate authorities should be folbwed unreservedly . The mere fact that the by the subordinate a 'rs not "acceptable" to order of the aPPellate a the department - in itself n obiectionable Phrase - an appeal can furnish no and is the subiect matter unless its operation has ground for not following t court. lf this healthy been susPended bY a com 74 rJle is not followed, the result will only be undue harassment to assesses and chaos in administration cf tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the leamed tr,dditional Solicitor General that the observations nrade by the High Court, have been harsh on the offlcers. lt is clear that the obseNations of the High C:ourt, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit k) the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court slould be kept in mind in future and the utmost regard s'rould be paid by the adiudicating authorities and the appellate authorities to the requirements of judicial dlscipline and the need for giving effect to the orders ol the higher appellate authorities which are binding on them."

15. Wha: is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litip ation on issues which have been laid to rest by a large number of High Courts all of whom have taken a coosistent stand that the action of the lncome Tax Department being violative of the 15 Finance Act,2020 and Finance Act, 2011:Irbw,rinbtdbr 6 protect the interest of the Revenue as also that of the assess€, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the dispos4l ofthe instant writ petition in terms of the judgment rendered by fhis High Court in the case of Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending copsideration before the Hon'bte Supreme Court.

16. In the given facts and circunfstances, this Bench is of the considered opinion that unless and {ntil we do not timely dispose of matters which are squarely.ou"..h by the decision of this Court and which stands fortified by the decisions of the various other l{igh 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 Rev enue is concemed, we are of the considered opinion that the intereFt of the Revenue has already been considered and protected, as has been observed in paragraphs 36,37 attl:l8 cr'tile o.ioi r.i:rl.lh^ fc; ready referer,c.e, is reproduce<i hereunder: 3ri. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor sustainable. T1e notices so issued and the procedure adopted being p(rr se illegal, deserves to be and are accordingly set ar;ide/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed bv the respondent-Depa(ment pursuant to the notices issued under Section 147 and 'lz18 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. 3 2. The preliminary objection raised by the petitioner is sL stained and all these writ petitions stands allowed on th s very jurisdictional issue. Since the impugned notices arrd orders are getting quashed on the point of ju|isdiction, we are not inclined to proceed further and de,cide the other issues raised by the pelitioner which stilnds reserved to be raised and contended in an aF,propriate proceedings. 3{}. 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 lndia, permitted the Revenue to proceed under the subslituted provisions, and this Court allowing tht. petitions only on the procedural flaw, the right !EEa@E:*-* t7 ld remain , reserved to conferred on the Revenue proceed further if they so from the stage of the order of the Supreme Coqft in the case ofAshish Agarwal, supra. vriant

18. We would only further like tp make observations that since we are inclined to dispose of the in$tant writ petition, conscious of the fact that the earlier order of tJris High Court in the case of Kanakala Ravindra Reddy (l ruqra) is subjected to challenge before the Hon'ble Supreme in SLP No.3574 of 2024, preferred by the Income Tax Dep ent, we make it clear that I t allowing of the instant writ petitio{ is subject to outcome of the aforesaid SLP preferred by the Rev ue against the decision of this High Court in the case of Kanakala Ravindra Reddy (l *pra). This, in other words, would mean ttfat either of the parties, if they so want, may move an appropnate etition seeking revival of this P writ petition in thc light of the dec sion of the Hon'ble Supreme Court in the pending SLP on the verS same issue.

19. Accordingly, the instant wrjt petition stands allowed in favour of the assessee so far as the issue of jurisdiction 1S concerned. As a consequence, the impugned notice under challenge under Sections 148-A an 148 stands set aside/quashed. 18 The consequential orders, if any, also stand set aside/quashed in similar tenns as have been passed by this High Court in the case of Kankanalu Ravindra Reddy (l supra). There shatl be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. /ffRUE COPY// D/- L. VIJAYA LAXMI TANT REGIST A To, SECTION OFFICER 1. Assessment Unit, National Faceless Asressme,it Centre. lncome Tax Departmerrl. Ministry .of Finance. Room No. 4O1, 2"d Fbor, E-Ra;p; Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The lncorne Tax Officer Wa! a(]), Signature Towers, Opp. Botanical 3. Punjab National Bank, lN:B HO, Ground Floor, Wing Sector 10. Amberhai, - -' South Wer;t Delhi-1 10075. Rep. by its Chairman a_nC ruianaging Oirect6n 4. lndustrial l)evelopment Bank of lndia (lDBt) 22.a t:toot, ii*"ation Cefi, f Ogf lower. Colaba S.O., Mumbai - 400005, Rep. by its Chairman and Managing Director. Gardens, l(ondapur. 1-lderabad - 50b084. "

5. One CC to SRl. A. V. RAGHU RA[/, Advocate [OpL]Cl 6. One CC to Ms. J. SUN|THA, (JUNtOR sc FoRlNCoruE TAX) [OPUC] 7. Two CD Ccpies s BM GJP \ \ I HIGH COI.'RT -': DATEDt24.I04t2025 ORDER WP.No.483i8 ot 2025 4^. +,) ..) za R 1 r-..: 3 ^.-...' C,J 25NBM ' ^ lrrr c' '1 l-----:. - -i- -'' ';,- ALLOWING THE WRIT PETITION WITHOUT COSTS