SRI A v. A. SIVA KARTIKEYA

Heard Mr. A.V.A.Siva Kartikeya, leamed counsel for the petitioner and Ms. B.Sapna Reddy, learned Junior Standing Counsel for the Income Tax Department for respondent Nos.l and 3. Perused the record.

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148,4. and 148 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those have been passed under Section 147 of the Act which have been assailed.

3. This virit petition is being taken up today only on one ofthe grounds, that the notices issued under Section 148,4' of the Act and the subsequent initiation ofproceedings under Section 148 of the Act by the jurisdictional Assessing Ofhcer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act,202l w.e.f., 01.04.2021 onwards, proceedings 2 under Seclicn l48A of the Act as also under Section 148 of the Act ought to ltiure also been issued and proceederl in a fli.ceiess manner.

4. The ,;ontt:ntion of the petitioner is thal the irsue of proceedinlls tr,: ng 'n violation of the Finance AcL 202 t i'e', the impugned n,tlices under Section l48A and Section l4tJ of the Act notbeingjssu<xlinafacelessmanner,havealreadybeendealtwith and decide,l lry this Court in the case of KANKII'NALA RAVINDR,\ ITEDDY VS. INCOME.TAX OFFICF]RI dCCidCd on 14.09.?102 i ,r'hereby a batch of writ petitions were allo'ved and the proceedinSl: initiated under Section l48A as also utrder Section 148 of the .A, ct '.r ere held to be bad with consequential reliels on the ground of it L,t:irLg in violation of the provisions of Section l51A of the Act reaci '.r,ith Notification 1812022 dated 29'03'2022' 'lhe said judgment ptLsse c, by this Court has also been subsequentlS' l cllowed in a large nlrrll3r of writ petitions which were allowed o| similar terms. '[(2023) 1i6 tarrnann.com 178 (Telangana)] J

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 TECHNOLOGIES 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 SINGII BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI YENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMI\ISSIONER OF INCOME TAX5 where the issue was in respect of international taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICE& INTERNATIONAL 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 2 lzoz+1464ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati)] '[(2024) 165 taxmann.com 115 (Punjab & Haryana)] ' [2024) 167 taxmann.com 4 I I (Telangana)] " [2024) 166 taxmarur.com 679 (Bombay)] '12024) 165 taxmann.com 113 (Himachal Pradesh)l 4 J DAIfYABH,\I RADADIYA vs. TNCOME TAX OITFICER, WARD l(3)(r;)8, Jharkand High Court in the case of (iHYAM SUNDAR S.\'W vs. UNION OF INDIAe, Rajasthan lligh Court in the case ol SIIARDA DEVI CHHAJER vs. INCOME TAX OFFICER ,3r ANOTHER and batch of writ petitions 0 stood decidec cn 19.03.2024. Similar views have also be,:n taken by the Diri:;ron Bench of Calcutta High Court in the case of GIRDHAR (;OPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 11190 rf 2023), decided on25.09.2024.

6. Eve'n ttrLrgh the same issue having been decided b...a large number ot'II1l r Courts, we are still confronted wirh large tiling of identical mllters on daily basis ranging between 5 to l0 writ petitions. t hat upon the instructions being sought fr,rm the Department. the.y have been taking a solitary ground .hat the decision c,f tlLt: Bombay High court in the case of. Hexaware Technologies i,td., (2 supra) as also the one whicr hiLs been decided b.z lli:s Court in the case of Kanakala Ravindra Reddy '2ozq SCc oni,ire Guj 4012 " 2025 SCC Onl,ine Ihar 287 '072023: RJ..[),1,)84-DB] 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 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 ar,d 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 Officer, rather the authorities concemed in the teeth of series of decisions 6 by all the rnajor High Courts in India are continuor rsly still initiating F,rr)ceedings under Section 148,4. of the Act ,tnd also initiating proceedings under Section 148 of the Act in contraventir::t -o the amendments brought into the Incrtme Tax Act pursuant to tlre .rinance Act,2020 as also the Finance l\ct1).021

9. Uptr .r query being put as to why can't this writ pe,tition be disposed cl n rhe teeth ofthe decision rendered by this Court in the case r'f A-onukala Ravindra Reddy (l supra), )eanred ttitanding Counsel f tr ttrr: Income Tax Department contends that thorre would unnecessaril1' burden the Income Tax Department whr.:re they would be rt'rl.rired to file equal number of SLPs belbre the Hon'ble liuprenre Court and it would be further br,rdening the exchequer c,f .ltr: Union of India. It was also the contenticn of the leamed StarLcir.lr Counsel that no prejudice would be caust:d to the interest of ttLe petitioners in case if this writ petition is k.ept ,rending till the fin;rlization of the SLPs pending before the llon'ble Supreme (lcur1 lnd the fact that the petitioner is already e,njoying the benefit c f rrterim protection. Nonetheless, on the earlir.:r query of this Cour rls to why the Income Tax Department ha\/e n,)t come out with a r,rr:chanism to issue appropriate instructions 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 ofthe decisions dedcided by the various High Courts, it was submitted 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 though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 1 5 1A 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 a ! insofar irs r ir r liberty which was granted to :he Re'r enue for initiating fiest oroceedings strictly in accordance with the amended provisions ol the Act, as amended by the Finance Act, 1,i020 and the Financr' tr':,1., 2021. The petitioner assessee would be entitled to challenge or I a ise the other legal objections if the Revenur, initiates fresh proce,ectings. The Department has made;ro enderrvour in availing t1e, :iit (l liberty that was reserved for the Revenue On the contrary, thel have been still sticking on to the stand, w rich this High Court el; rvell as many other High Courts already held to be

11. [t a1tp,e215 that because of the aforesaid liberty that ttris High Court ha<l granted permitting the Revenue for initiatir g fiesh proceedings I s a one-time measure in a faceless mantrer, the Income Tirx l-lr:partment wants to take advantage of the same by protractinp, t[1rs3 proceedings which would enable them to rrreet the limitation Lhat rvould otherwise come in the way. Like,wis,,:, if the writ petitic,n i; l<r:pt pending for a considerable long period of time and finally at rr later stage if the Hon,ble Supreme Court confirms the decision t,rle:n by this High Court as also by the othe,r High Courts in uhich the SLPs are still pending, the Ir,con:e Tax 9 Department would get the advantage of the liberty that is otherwise 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 benehcial 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 in Kanakala Ravindra Reddy (1 supra), is a matter of grave concern. 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 ofjudicial 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 ,@; 10 position. Suurlr conduct raises serious quesr:ionsr a)out the administlar i,.,e efficiency and the respect lor judicial pronounc ern€,r( s, particularly when this Court has already provided a balanct:d zqt:roach by preserving both the Revenut:'s rghts and assesses lnlerests.

13. Anothe r aspect which needs to be considered is that in fact it should havt: le e,n realized by the Income Tax Departm:nt jtself and should hin,e lound out via media in ensuring r.hat pror:eedings under Ser:tiors i48-A and 148 should not have been issued in a faceless nlanne r, at least till the Hon'ble Supreme Courl dr:,cide the twelve huncrLrec (1200) odd SLPs which it is already serzed of or, at least the Incc,rne Tax Department should have found out some remedial ;t()pri r.o ensure that wherever the authoritit:s it.Ltend to initiate pr'oceridiogs under Sections 148-A and 148. other than in a faceless rnzlr n,r-, the proceedings should have bet:n ,leferred without prec ilti'.zLting the matter further intimating the assessee that they shall initiatr: appropriate proceedings only after the SLp,s are decided blr itrr: Hon'ble Supreme Court on the very sam,.) issue. This again tlrr: lncome Tax Department, has not been able tr.r give a convincinp re:ly. except for the fact that such a decision f at all :l:u*ialr! ir:- i&'tat t ,; :r.i.:i!.tltttt: 1L has to be taken, has to be taken for the whol'e 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 lncome Tax Department contended that the Dethi 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 hling 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'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 Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority 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-,4' and 72 148 througr lh': jurisdictional Assessing Officer whereas it ought to have br:en ,rnlv in the faceless manner.

14. In tlir: r)ase of BANK OF INDIA vs. ASSIISTANT COMMISSIIITNER, INCOME TAXrr, on an issue whether it was justifiable ' cr: :he part of the lncome Tax Depart"nen:. in not following an,)r(ler passed by the adjudicating authorit./ on)y on the ground ttia the appeals are pending, the Division Bench of the High Court o1' B,ombay held at paragraph No.25 as under. r iz., : "25. \1r. Paridwalla has rightly drawn out attention to the decis orr rf this Court in Commissioner of lncome Tax vs. t;mt. Godavarirlevi Sarafl2 as also the recent decision of the co- lSench of this Court in Samp Furniture (P) Ltd. v. 11 O13 ordinat€' of whictr r;ne of us (Justice G.S. Kulkarni) was a member, whe'ein the C.orrrt :ategorically observed that the Revenue having not "accecteci' :lre judgment of the High Court would not mean thert till the sane s :;et aside in a manner known to law, it wculd loosr,) its binding forr e. Referring to the decision of the Supreme Cou't in Union of lndia vs. Kamlakshi Finance Gorporation Ltd.'4, the Court orlri,:1,ed that the approach of the officials of Rerrenur,r of treatirrg c|:,;isions being "not acceptable" was criticizec by the Supreme C;ourt. ln such decision, following are the relevant obser'r'ations made by the Supreme Court. . 7r.) taxmann.com 422 (Bombay)l " 11ZOZS1 '2 7t91811 l3 I-t R 589 (Bombay) " 720241 I r55 ta > rnann.com 581/300 Taxman 452 (Bombayl 'o ltggZl taxrnarr.com 16155ELT 433 (SC) 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 are not concerned here with the correctness or otherwise 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 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 conducl 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. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasijudicial 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 jurisdiction and 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 objeclionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operalion has been suspended by a competent court. lf this healthy t4 rui€) is not followed, the result will only be undue farassment to assesses and chaos in administration cf t:r laws. 12 lVe have dealt with this aspect at some lenEth, belause it has been suggested by the learred F,dc irir>nal Solicitor General that the observaticns made by the High Court, have been harsh on the lt is clear that the observations of lhe High offlcr€)rs. C.oL r:, seemingly vehement, and apparelfly u rpalatable to the Revenue, are only intendec to curb a te,r clency in revenue mafters which, if allowed to b,:c;r: re widespread, could result in considerable h;ar;rs s ment to the assesses-public without any benefit tc tt 3 Revenue. We would like to say that the depirt'nent should take these observations tn the proc € r spirit. The observations of the High Cc ud slrculJ be kept in mind in future and the utmost regitrd sloull be paid by the adjudicating authorities and rhe appel arte authorities to the requirements of judioial di,;t;iplire and the need for giving effect to the orders of tre higher appellate aulhorities which are binding or) I hem."

15. Wh,at is worrying this Bench more is the lacr that an endeavoul i:,i bt:ing made whole heartedly to ensurc not to .ilenerate further litigiLti,:n on issues which have been laid kr res,t b1 a large number o1 IIi11h courts all of whom have taken a consisterlt stand that the acri.r c,1'the Income Tax Department being violatir,.e of the 15 Finance Act,2020 and Finance Act,202l. Now, in order to protect the interest of the Revenue as also that of the assessee, it wouldbe trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this 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 consideration before the Hon'ble Supreme Court.

16. In the given facts 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. 11 . So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest ofthe Revenue has already been considered and protected, as has been observed in paragraphs c

35. -<-i :"rr,:: li li -trc ';ld*,. ,vhich, i..: i;ady reference, is ri.produced hereunde,r' :tC. =or all the aforesaid reasons, the impugned noticr>s i,;..;ur:d and the proceedings drawn by the respc nder rt- [)el)i]r1ment is neither tenable, nor sustainab:. l'ho notices so issued and the procedure adoptec beirrg Fer s,? illegal, deserves to be and are accordinqty s:t es deiquashed. As a consequence, all the impugnr;d c rd,-. -sr getting quashed, the consequenti?l orders p,a556;d by tlr6) respondent-Department pursuant to rhe rroticcs is,sre.c under Section 147 and 148 would ats() g::t qur:shed and it is ordered accordingly. The reas,)n \^,e are,cuashing the consequential order is on the prirciplers tlrat rlhen the initiation of the proceedings itself wz s p'c cxrrlurally wrong, the subsequent orders alsc ge s n rlrified automatically. 37 l he preliminary objection raised by the petiticner j; slrslained and all these writ petitions stands allow_.d o,l this very jurisdictional issue. Since the impugned n,lticerj anc crders are getting quashed on the poirt c,f ju.isJ ction, we are not inclined to.proceed further anrl dr,rcirl .. the other issues raised by the petitioneluhich stitnJ; reserved to be raised and contended in a aprpropriate proceedings. 3t). Since the Hon'ble Supreme Court had, in the cast; cf As;lrish Agarwal, supra, as a one-time meitsur(i 3xerois;ng the powers under Article 142 of ther lons,t tution of lndia, permitted the Revenue to proceec rnder tie substituted provisions, and this Court allcwing th(.) l ?:iiicns only on the procedural flaw, the right 17 confened . on the Rev-enue wo.uld remain reserved tQ 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 since we are inclined to dispose of the instant writ petition, conscious of 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 Income 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 ofthis High Court in the case of Kanakala Ravindra Reddy (l 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 concemed. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed. I 18 The conse,que rrtial orders, if any, also stand set asirleiq.rashed in similar t()nns r i have been passed by this High crurt in tl Le case of Kankanala' Fltvindra Reddy (l supra). There shall be no order as to costs. Cons,ec3rontly, miscellaneous petitions pending, il arLy, shall stand closer'l //TRUE COPY// SD,I.MOHD. ISMAIL EPLITY REGISTRAR SEI:]TION OFFICER P .l I lt/lasab Tank llvderabad - 500 004, Telangana "1 . The lncorne I'irx Officer, Ward - 15(1), Hyderabad, l\tTcwer:.;, AC Guards, 2. Assessmert tJnit, lncome Tax Department, National e-Assesi;ment Center, New Dell-ri, Fl()lm No. 401 ,znd Floor, E-Ramp, Jawaharlal N,::hru Stadium, New Deliri I 1C 003 3. The Principal Oommissioner of lncome Tax - 4, Hyderabad, I LTowers, 10-2- 4. One CC 1o [i'i r\ V. A. Siva Kartikeya, Advocate [OPUC] 5. One CC to Mr; 3okaro Sapna Reddy (Jr. SC for lncome lax) [OPUC] 6. Two CD ()c,p i,: s 3, AC Guard,s, l-lyderabad - 500 004, Telangana To, TJ BS rrr LAW L/' HIGH COURT DATED:24104,t2025 .'r'o,-' \ /,.1..\ 26 JUil ilM :ri ..' ,'/ ,-/, .t-, i.t '.',,.,.-1 ,; i,l-).:-, D ORDER WP.No.7051 of 2025 I ,-". ). t t ALLOWING TII-IE WRIT PETITION WITHOUT CO$TS -4 r'ttr