High Court · 2025

Petition under Section 151 CpC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Order bearrng no. |TBA/AST/F/148At2O23_ 2411063234389(1) dated 23.03.2024 pass ed under Section 14SA (d) of the lncome Tax Act, .l 961 to the petitioner with rega rd to assessment/rea ssessment pertaining to Assessment year 2O2O-21 pending disposal of the writ petition IA NO :2 OF 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 suspend the operation of the Notice be"ring'nrmber rrBA/AST/si 148 112023- 24110632411 '10('1 ) dated 23.o3.2024 issued under su.tion r+e ;f ,* .";r""; ,_ Act, 196'1 to the petitioner with regard to assessmer pertarnins to Assessment year 2o2o-21, pendins disposar of th" ;t:i'tu;;;ot;'"nt Counsel for the petitioner: SRl. ROHIT pOGULA Counsel for the Respondent No.1:Ms. y. JHANSI Counsel for the Respondent No.2: AGp FOR FINANCE Counsel for the Respondent Nos.3to6: Ms. J. SUNITHA, Jr. SC FOR INCOME TAX DEPARTMENT Counsel for the Respondent No.7:SRl p. MURALI KR|SHNA, FoR lNcoME TAx The court made the fo.flowing: oRDERsc TTIE HONOURABLE SRT JUSTICE P'SAM KOSHY TIIE IIONOURABLE SRI TUSTTCT NARSING RAO NANDIKONDA W.P.N o.61810F 2025 AND ORDER, (per Hon'ble Sri Justice P'Sam Koshy) Heard Mr' Vanam Sai Lokesh' leamed counsel representing Mr. Rohita Pogula, leamed counsel for the petitioner and Ms. J.Sunitha, leamed Junior Standing Counsel for the lncome Tax Department for respondent Nos'3 to 6 Perused the record'

2. This is a writ petition where the proceedings are either challenged to the notrces and 148 of the Income'l'ax Act' 1961 (for short 'the Act') or the ed under Section 147 of assessment orders those have been pass the Act which have been assailed' 3. This writ petition is being taken up today only on one of the grounds, that the notices issued under Section 148,'{ of the Act and the subsequent initiation ofproceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms oftheamendmentthatwasbroughttothelncomeTaxActbyway of Finance Act, 2021 w'e'f'' 01'04'2021 onwards' proceedings 2 under Section 14gA of the Act as also under Section 14g of the 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 impugned notices under Section l4gA and Section l4g ofthe Act not being issued in a faceless manner, have already been dealt with and decided by rhis Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section t4gA as arso 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 r5iA of the Act read wirh Norification lg/2022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently fo[owed in a large number of writ petitions which were allowed on similar terms. 'l(2023) 156 taxmann.com 17g (Telangaqa)l 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 HEXAWARE TECTINOLOGIES LTD., VS. ASSISTANT COMMISSIONER oFINCOMETAx&OTHERS2,GauhatiHighCourtinthecase of RAI\{ NARAYAN SAH vs' UNION OF INDIAT' Punjab and Haryana High Court in the case of JATINDER SINGII BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER Ol'' INCOME TAX5 where the issue was in respect of intemational taxation' Bombay High Court in the case of ABHIN ANILKUMAR SIIAH VS. INCOME TAX OFFICE& INTERNATIONAL TAXATION6 which is again on intemational taxation and central circle, High Coufi of Himachal Pradesh in the case of GOVIND SINGII vs' INCOME TAX OFFICERT' Gujarat High Court in the case of MANSUKHBHAI 2 t20241464 ITR 430 (Bom) ' t(ZOZ+t 156 taxmann.com 478 (Cauhati)l " l(2024) 165 taxmann.com I 1 5 (Punjab & Haryana)l '12024) 167 taxmann.com 41 I (Telangana)l " 12024) 166 taxmann.com 679 (Bombay)l . - 'iZOZqi 165 taxmann.com I13 (Himachal Pradesh)l 4 ,. DAHYABHAI RADADIYA vs. INCoME TAx OFFICER, WARD 3(3X5)8, Jharkand High Courr in the case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasrhan High Court in the case of SIIARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of *rit petitions,0 which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case ol GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (1,{.A.T 1690 of 2)23),decided on25.09.2024. 6. Even though the same issue having been decided by a large number of High Courts, we are still confronted with large filing of identical matters on daily basis ranging between 5 to I 0 writ petitions. That upon the instructions being sought 1iorn the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hevaware Technologies Ltd., (Z supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Reddy 82024 SCC online Guj 4012 '2025 SCC Online Jhar 287 12023 : RJ-JD:4984-DBl o ' I ,), .,: 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 Coufi 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 Court 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 on matter which otherwise has already been dealt and decided by.this very High court itself' 8. On the one hand' even though the order of this Court that was passed as early as on 14'09'2023 and 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 of notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Offrcer' rather the authorities concerned in the teeth of series of decisions 16 months have xl. ,t -rr -,, I 6 1n by all the major High Courts India are continuously still initiating proceedings under Section 14gA of the Act and also initiating proceedings under Section l4g of. the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act, 2020 as also the Finance Act 2021 . 9. Upon a query being pur as to why can,t this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), Ieamed Standing counser for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equar number of SLps before the Ilon'ble Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention of the Ieamed 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 Court 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 insl.ructions or to take 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light of the 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 ievel ofCBDT 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 concerned are still even now in 2025 alsoinitiating proceedings in contravention to the provisions of Section 151A 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 Ravindra Reddy (1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners 8 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 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 said 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 held to be

11. It appears that because ofthe aforesaid liberty that this High Court had granted permitting the Revenue for initiating fiesh 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 Iimitation that would otherwise come in the way. Likewise, if the writ petition is kept pending for a considerable long period of time and finally 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 which the SLps are still pending, the Income Tax 9 Department would get the advantage of the liberty that is otherwtse protected in favour of the Revenue for initiation of fresh proceedings from the disposal ofthese 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 concemed' 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 matter of grave concem' The Income 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 piling up on the same issue' This deliberate approach not only undermines 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 appears to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal 1 1 I 1 : a l l I I i a 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 I3. Another 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 ensuring that proceedings under Sections l4g_A and l4g 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 it is already seized ofor, at least the Income Tax Department should have found 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 manner, the proceedings should have been deferred without precipitating the matter further rntimating the assessee that they shall initiate appropriate proceedings onry after the SLp,s are decided by the Hon,ble Supreme Court on the very same issue. This again, the [ncome Tax Department, has not been able to give a convincing reply, except f9r t!9_ farr that such a decision if at a1 I I I I I I 1 i i i I l IL has to be taken, has to be takon 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 leamed Standing Counsel for the Income Tax Department 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 matter before the Hon'b1e 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 lncome Tax Department' Yet' the authorities concerned at the State level are not ready to accept the verdict passed by a maj ority of High Courts of different 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

1.2 r.r i 148 through the jurisdictional Assessing Officer rvhereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT coMMrssIONER, INcoMB TAXr r , on an issue whether it was justifiable on the part of the Income lax 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' Mr. paridwara has righry drawn out attention to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co_ ordinate Bench of this Court in Samp Ftsrniture (p) Ltd. v. lTOr3 of which one of us (Justice G.S. Kulkarni) was a member, wherein the court categoricary observed that the Revenue having not "accepted,'the judgment of the High Court would not mean that till the same 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 Corporation Ltd.14, the Court observed that the approach of the officials of Revenue of treating decisions being,,not acceptable,, was criticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. ',)1t,ZrO31.l.t.t^oyyrann.com422(Bombay)l '' [978] I t3 ITR 589 (Bombay) '.'.7ZOZ+1165 taxmann.com 5g1/300 Taxman 452 (Bombay) t4 ll99zltaxmann.com l6155 ELT 433 (SC) i I I I I i i I i I I ; I t , I I I I i I i f TJ "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 are not concerned here with the conectness or otheruise of their conclusion or of any factual malafides but with the fact that the officers' in reaching in their conclusion' by-passed two appellate orders in regard to the same issue whlch were placed before tnem, 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 officers 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 6isposing 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 and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the iurisdiction 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 subiect 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 /r' 74 rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with fl because it has been ,l't "to"rt at some rength, Add irionar sori"ito,. cun",.'altT:t:,3 i:: JT::: made by the High Court, have been harsh on the officers. lt is clear that th€ oot"tut'ons of the High court, seemingry ,un"' unparatabre to tn" nur"nr",lrlt;J;'"r.::i:'::r; a tendency 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 the proper spirit. The observations of the High Court should be kept in mind in futu shourd be paid by the ,.,r, "::,il'rff;,ffI"Jil: 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 them."

15. What is worrlring this Bench more is the fact that an endeavour is being made whole heartedly to ensure nol 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 i I I I ', . ) -l 15 Finance Act, 2L20and Finance Act,202l. 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 of the instant writ petition in terms of the judgment rendered by this High Court in the case of KunkanalaRavindraRed'dy(|supra)shallhoweverbesubjectto the outcome of the SLPs which were frled by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Court'

16. In the given facts and circumstances' this Rench 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 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 L6 36,37 and 38 ofthe order which, for ready reference, is reproduced , hereunder:

36. For all the aforesaid n issued and *re proceeoinssa:TiTrTlJi.:il:ff: Department is neither tenable, nor sustainable. The notices so issued and I ihe Procedure adopted being per se illegal, deserves ,o and are accordingry set aside/quashed, As a consr all the impugned orders getting quashed, ,n" io'"nt"' b y th e re s p o nd e -lT : :il ::: ",-o" *.,, issued under Section 147 quashed and * is o,oo"o."1ld,ol^T;H,j"::" lJ are quashing the consequential order is on the principles that when the initiation of the proceedings ilself was procedurally wrong, the sub 'sequent orders also gets nuflified automaticapy. totorill'"? """i

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 lvhich stands reserved to be raised and contended in an appropriate proceedings. 38 of Ashish Since the Hon,ble Supreme Court had, in the case Agarwal, Supra, aS a one{ime measure the powers under Article 142 exercising of the Constitution of lndia, permitted the Revenue to proceed under tlie substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right ; I I I I I I I ', j , I ; t , : i i I I I iI a I I I l I i , i ( \7 { ( conferred on the Revenu" ::::Jiil J,"""r"s;: proceed further if they so w*" "-the order of the SuPreme Cot Agarwal, suPra' case of Ashish

18. We would only further like to make observations that stnce we are inclined to dispose ofthe instant writ petition' conscious of the fact that the earlier order of this High Court in the case of Kanakalu Ravinilra Redtly (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred by the tncome 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 Kanakala Ravindra Reddy (1 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-aconsequence,theimpugnednoticeunder challenge under Sections 148-A and 148 stands set aside/quashed' { 18 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 Reddy (1 supra). There shalj be no order as Kankanala Ravindra to costs Consequently, miscellaneous petitions pending, if any, shali stand closed I To, //TRUE COPY// SD/-A.H.S. GOWRI SHANKAR ASSISTA'TREGISTRAR sEAffi oFFrcER

1. The Prinicipal Secretary, Union of rndia, Ministry of Finance, Department of Kevenue, Unrce ot lVlinistry of Finance. Room. No. 46. North []lock, New Delhi-1 10001.

2. The Principa! Chief Secretary, Finance Secretariat Building, HyCerabad. 3. The lncome Tax Officer, Ward 2(1), Signature Towers, Koidapur, Hyderabad. 4. The Additional Commissioner of lncome Tax - Range 2, Signature Towers, Kondapur, Hyderabad. Hyderabad. AC Guards l\,4asab Tank, Hvderabad, Telangana.

5. The Principal Commissioner of lncome Tax - ll, Signature Towers, Kondapur' 6. ifre Chief Commissioner of lncome Tax, Hyderabad at 9th Floor, lT Towers, 7. The lncome Tax Officer, Assessment UniU- Verification UniV Technical UniU 8. One CC to SRt ROHIT POGULA, Advocate [OPUC] 9. Two CCs to GP FOR FINANCE, High Court for the State of Telangana, at Review Unit New Delhi. Hvderabad tOUTI

10. Oire CC to Ms. Y: JHANSI , Advocate [OPUCI '1 1.One CC to SRl. P. I\,4UARLI KRISHNA, SC FOR INCOI\'4E TAX IZ.OiC CC tO IT./S. J. SOITHA, JT. SC FOR INCOIV1E TAX DEPARTI\4ENT DEPARTIMENT [OPUC] loPUCl

13.Two CD CoPies o. BM TKS I HIGH COURT DATED:24104t202s 0 2 sEP 206 .) ll' 'i ORDER WP.No.6181 of ZOZ1 ,ALLOWING THE WRIT PETITION WITHOUT COSTS