SRI A v. A. SIVA KARTIKEYA

challenged to the notices which were issued under Section t48A and 148 of the Income Tax Act, 1961 (for short 'the Act') or the assessment orders those have been passed under Scction 147 of 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 l48A ol the Act and the subsequent initiation ofproceedings under Section t48 of the Act by the jurisdictional Assessing Officer, whereas in terms ol the amendment that was brought to the lncome Tax Act by way oF Finance Act, 2021 w.e.f., 01.04.202 I onwards, proceedings 2 under Section l48A of the Act as also under Sect.on 14g of the Act ought to have also been issued and proceederL in a faceless manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act. 2021 i.e., rhe impugned notices under Section l48A and Section l4g of the Act not being issued in a faceless manner, have already l;een dealt with and declded by this Court in the case of XANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFITCER' decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section l48A as also under Section 148 olthe Act were hetd to be bad with consequentiar reliefs on the ground ol it being in v.iolation o[the provisions of Se,ction l51A ol the Act read rvith Norification lStZOZz dated,29.O_7.2122. The said judgrnent passed by this Court has also been subsequr:ntly followed in a large number of writ petitions which were allov,ed on similar terms. '[(2023) [56 raxmann.corn 178 (Telangana)] 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 TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. IINION 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 VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 where the issue was in respect of intemational taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vS. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is again on international taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGII vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI ' lzoz+1464 I'tR 430 (Bom) ' f(2024) 156 taxnrann.com 478 (Gauhati)l " f(2024) 165 taxrnann.com ll5 @unjab &Haryata)l ' f2024) 167 taxmann.com 4l I (Telangana)l " f2024) 166 taxmann.com 679 (Bombay)l ' f2024) 165 taxmann.com 113 (Himachal Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME TAx OFFICER, WARD 3(3X5)8, Jharkand High Court in rhe case of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. I|ICOME TAX OFFICER & ANOTHER and batch of writ peritionsro which stood decided ot 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 II{DIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the same issue having been deciCed by alarge number of High Courts, we are still confronted with large filing of identical matters on daily basis ranging between 5 to 10 writ petitions. That upon the instructions being soujlht ffom the Department, thcy have been taking a solitary ground that the decision o[ the Bombay High Court in the case of Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanukala Ravindra Reddy 82024 SCC Online Guj 4012 '2025 SCC Online lhar 287 'o12023, RJ-JD :49 g4- DB l 5 (l 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 ol 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 atd more 16 months have lapsed, till date, we do not find any remedial steps having been taken by the lncome Tax Department to take appropriate steps to either hotd back issuance of notice 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 major High Courts in India are cc ntinuously still tnrtrating proceedings under Section l4gA of thr Act and also rruhatlng proceedings under Section 14g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act2OZl.

9. Upon a query being put as to why can't this urrit petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of SLps before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union ol India. It rvas arso the co,tention of the learned Standing counsel that no prejudice wor-rrd br,caused to the interest of the petitioners in case itthis writ petition i:r kept pending till the finalization of the SLps pending beflore the Hon,ble Supreme Court and the t'act that the petitioner is alr,:acly enjoying the benefit of interim protection. Nonetheless, on thir earlier query of this Court as to why the lncome Tax Department l:ave not come out with a mechanism to issue appropriate instructi(,ns or to take 7 appropriate steps in ensuring that proceedings under Section 148A ofthe Act as also the assessment orders under Section 148 ofthe Act are kept in a hold in the light of the 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 Iimited to any of these jurisdictional High Courts.

10. As a result o[ which, what we are facing is steep increase of litigation Cay in and day out even though various orders have been passed by this High Coun allowing writ petitions on the very same issue. The lncome Tax authorities concemed are still even now in 2025 also initiating ;oroceedings in contravention to the provisions of Section l5lA ol 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 (l 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 E insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance w.th the amended provisions of the Act, as amended by the Finance Act, 2020 and the Finance Act,202l . The petitioner assessee would lte entitled to challenge or raise the other legal objections ifthe Rr:venue initiates fresh proceedings. The Department has made nc, endeavour in availing the said liberty that was reserved for the Re vcnue. On the contrary, they have been still sticking on to the stand, which this High Court as well as many other High Courts alreacly held to be bad. I 1. It appears that because o[ the aforesaid libe*y that this High Court had 'granted permitting the Revenue lor i ritiating fresh proceedings as a one-time measure in a flaceles: manner, the Income Tax Department wants to take advantage ol'the same by protracting these proceedings which would enable thcrn to rneet the limitation that would otherwise come in the way. L kewise, if the writ petition is kept pending for a considerable long reriod of,time and finally at a later stage if the Hon'bte Supreme (our1 confirms the decision taken by this High Court as also by thc other High Courts in which the SLps are stilt pending, the lncorne 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 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 setin Kanakala Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Department's persistent initiation of fresh proceedings, di sregarding 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 white 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. Such conduct raises serious questicns about the administrative efficiency 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. Another aspect which needs to be considered rs 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 148-4 and 148 should not have been issued in a faceless matrner, at least till the Hon'ble Supreme Crturt decide the twelve hundred (1200) odd SLPs which it is already ;eized ofor, ar least the Income Tax Department should have fo -rnd out sotne remedial steps to ensure that wherever the author ties intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have ireen cief'ened without precipitating the matter further intimating thr: 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 de<:ision if at att -^lr / .\ L7 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 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'ble Supleme 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 tligh 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 I48 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT CON{MISSIONER, INCOME TAXrr, on an issue u,l.rerher it was justifiable on the part of the Income Tax Departmsnl in not following an order passed by the a_djudicating authoritv only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as urider, viz., : "25. Mr. Paridwalla has righfly drawn out attent on to the decision of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision r)f the co_ ordinate Bench of this Court in Samp Furniture (p) Lt,J. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a membr,r, wherein the Court categorically observed that the Revenue traving not ''accepted" the judgment of the High Court would not moan that lill the same is sel aside in a manner known to law, it woull loose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation _td.,4, the Court observed that the approach of lhe officials of R-.venue of treating decisions being .not acceptable" was criticizod by the Supreme Court. ln such decision, following are th() relevant observations made by the Supreme Court. (2025) 170 raxmann.com 422 (Bombay)l 19781 I l3 ITR 589 (Bombay) 20241 165 taxmann.com 581/300 Taxman 452 (Bomba r) 19921 taxmann.com t6155 ELT 433 (SC) .l 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 concemed 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 mnduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these olficers 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 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 .lurisdiction 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 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 t4 rule is not followed, the result will only be rrndue harassment to assesses and chaos in administ?tion of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the leilmed Additional Solicitor General that the observe tions made by the High Court, have been harsh orr the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparenfly unpalatable to the Revenue, are only intended to curb a tendency in revenue mafters which, if allowerd to become widespread, muld result in conside -able harassment to the assesses-public without any bernefit to the Revenue. We would like to say thal the department should take these observations in the proper spirit. The observations of the High Oourt should t,e kept in mind in future and the utmost regard should be paid by the adjudicating authorities anri the appellate authorities to the requirements of iu(licial discrpline and the need for giving effect to the orders of the higher appellate authorities which are binding on thern." 15 What is worrying this Bench more is the fact that an endeavour is bcing made whole heartedly to ensure not to generate further litigation on issues which have been laid to r3st by a large nurnber ol l{igh Courts all of whom have taken a consistent stand that the action of'the Income Tax Department being vrolative of the 15 Finance Act,2020 and Finance Act,2O2l. Now, in order to protect the interest ofthe Revenue as also that ofthe assessee, it would be 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 f,rled bv 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 decisiorl of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency ol 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 concerned, we are of the considered opinion that the interest ofthe Revenue has already been considered and protected, as has been observed in paragraphs 76 36,37 and 38 olthe order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor sustainable. The notices so issued and the procedure adopt€d being per se illegal, deserves to be and are acoordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would als;o get quashed and it is ordered accordingly. The reajon we are quashing the consequential order is on the pr nciples that when the initiation of the proceedings itsolf was procedurally wrong, the subsetuent orders also gets nullified automatically. 37 The preliminary objection raised by the petit oner is sustained and all these writ petitions stands allorved on this very jurisdictional issue. Since the impugned rotices 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.

38. Since the Hon'ble Supreme Court had, in th_. case cf Ashish Agarwal, supra, as a one{ime m{)asure exercising the powers under Article 142 cf the Constitution of lndia, permifted the Revenue to proceed under the substituted provisions, and this Courl alrowing the pelitrons onty on the procedural flaw, the right t7 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 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 (I supra) is subjected to challenge before thc t{on'ble Supreme Court in SLp No.3574 of 2024, preferred by the [ncome Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid S [-P prelerred by the Revenue against the decision of this High Court irr the case of Kanakala Rovindra Reddy (l supra). -l'his. in other rvords, would mean that either of the parties, if they so \\,ant, rnay movc an appropriate petition seeking revival of this n,rit petition in the light of the decision of the Hon,ble Supreme Court in the pcnding SLP on the very same issue.

19. Accordingly, the instant writ petition stands a[lowed in lavour ol the assessee so far as the issue of jurisdiction IS concemcd- As a consequence, the impugned notice under challcngc undcr Sections 148-A and 148 stands set aside/quashed. 18 The consequential orders, iI any, also stand set aside/quashed in similar terms as have becn passed by this High Cou( in the case of Kankanala Ravindru Reddy (l supra). There shall be no order as to costs Consequently, miscellaneous petitions pending if any, shatl stand closed. SD/- AHME:D ABDULLAH KHAN ASSISTANT REGISTRAR //TRUE COPY// secnAWorrrcen Assessment Unit, lncome Tax Department, National e-F ssessment Center, New Delhi, Room No.- 4O1 .znd Floor. E-Ramp. Jawah:rrlal Nehru Stadium, New Delhi - 110 003 The lncome Tax Officer, Ward - 11(1), Hyderabad. Signtture Towers, Sy. No Q(P) qf Kondapur, Opp. Botanical Gardens. Seriiingampatty, Kondapur --500 084, Telangana The Principal Commissioner oI lncome f ax - 2. Hyderatad, Signature Towers, Sy. No. 6(P) of Kondapur. Opp Botanicai Gard,rns, Serilingampally, Kondapur - 500 084, Telanqana One CC to Sri A. V. A. Siva Kartrkeya, Advocate [OPU(]I One CC to [Vls Bokaro Sapna Reddy (Jr SC for tncome Tax) TOPUC] Two CD Copies To, 1 2 J 4 E 6 TJ GJP tLv HIGH COURT DATED:2 410412025 ORDER WP.No.7901 of 2025 -.4'. ], 1 O SEP 2U25 \.- ALLOWING THE WRIT PETITION WITHOUT COSTS ,"(cN co% k^,,