SRI. A v. A. SIVA KARTIKEYA Counsel forthe

Judgment

1. t 3 The lncome Tax Officer. W?rd-:! Njzalabad, lncome Tax Office, 6_2_156/3, Subhash Nagar, Nizamabad _ soi OOr:i;la;;;;""'" jiiilon"r e_Assessment Center. Assessmenr Unir. tncome T1x .Dgp;;;_;;j, New Dethi, Room No.. +or, 2no FLoi, t:*;t,'rrta'hartat Nehru Stadium, New Delhi - 1i0 003. The Chief Commissioner of. lngoTe Tax, Hyderabad, l.T.Towers, 10-2_3, AC Guards. Hyderabad - 500 oor, Gir"ii;.'r'vvrsvqv' r' ...RESPONDENTS Petition under Articre 226 0f the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to issue a Writ of lMandamus or any other appropriate Writ, Order or Direction, decraring that the order passed urs 147 r/w Sec. 144.rtw sec. 1448 of the lncome Tax Act. .l 961, dated 11tO3t2O2S, bearing DIN and Notrce No. ITBA/AST/S/'14,2o24-2st1O7 4326790(1), by the 1"t Respondenr, for rhe Assessment year 201t-18. as arbitrary, illegal, bad in law, void_ab_initio violative of the principles of natural justice apart from being violative of Articles 14. 1s(1)(g) and 265 of the constitution of rndia and Sec. 148A of the rncome Tax Act' .r 961 , and consequenay set aside the same in the interests of justice. IA NO:10F 2025 Petition under Section 151 cPC praying that in the circumstances stated in the affidavit filed iri support of the writ petition, the High court may be pleased to stay all further proceedings, including any recovery, pursuant to the notice issued uis 148 of the lncome Tax Act, 1961, dated 2210312024, bearing DIN and Notice No.. ITBAiASTIS/148-1t2023-24t1063135300(1), by the 1"1 Respondent, for the Assessment Year 2017 - 18. , pending disposal of the above writ Petition Counsel for the Petitioner: SRI. A. V. A. SIVA KARTIKEYA Counsel forthe Respondents 1 to 3 : Ms B. SAPNA REDDY (JUNTOR SC FOR INCOME TAX) Counsel for the ResPondent 2:- The Court made the following: ORDER TIIE TTONOIJRAIII,E, SRI JTISTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDTKONDA W.P.No.8291 OF 2025

ORDER: (per Hon'ble Sri Justice P.Sam Koshy) Heard Mr. A.V.A.Siva Kartikeya, learned counsel for the petitioner and Ms. B.Sapna Reddy, leamed 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 l48A 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 writ petition is being taken up today only on one ofthe grounds, that the notices issued under Section l48A of the Act and the subsequent initiation of proceedings under Section 14E of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the lncome Tax Act by way of Finance Act,202l w.e.L, 01.04.2021 onwards, proceedings ( 2 a under Section l48A of the Act as also under Section 148 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 Finance Act,202l i.e., the impugned notices under Section 148,4' and Section 148 ofthe Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case ot 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 l48A as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section l5 1A of the Act read with Notihcation 18/2022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms. ' l(2023) I 56 taxmann.com I 78 (Telangana) l -/t/

5. Down the line, we find tlrat lhe same issue has also becri 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 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 OTTICE& INTERNATIONAL TAXATION6 which is again on international taxation and central circle, High Court of Flimachal Pradesh in the case of GOVIND SINGII vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSIIKIIBHAI 'lzoz+1464 ITR 430 (Born) 'l{2024) 156 taxmann.com 478 (Gauhati)l 'l(2O24) 165 taxmann.com I l5 (Punjab & Haryana)l ' [2024) 167 taxmann.com 4 I I (-l'elangana)] " 12024) 166 taxmann.corn 679 (Bombay)l '12024) 165 taxmann.corn t l3 (llimachal Prade sh)l ,^l 4 r\ DAIfYABHAI ]RADADIYA vs. TNCOME TAX OFFICER, WARD 3(3X5)8, Jharkand High Court in the case of StIyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHIIAJER vs. INCOME TAX OFFICER & ANOTIDR and batch of writ peritionsr0 which stood decided on 79.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDIIAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 ot2023), 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 fiIinE of identical matters on daily basis ranging between 5 to t 0 writ petitions. That upon the instructions being sought lrom the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case ol Herairare Technologies Ltd, (2 supra) as also the one rvhich [ras been decided by this Court in the case of Kanakala Ravindra neddy 'z\zq SCC Online G:uj 40tz '2025 SCC Online that ZB7 12023 : RI-JD :4984-DB l o ' 5 (I supra) has bcer subjeeted to challenge in a Specicl Leave Petition i.e., SLp No.3574 of Z0Z4 before rhe I{on,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 leamed 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 14.0g.2023 and rnore 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 of notice under Section l4gA and under Section 148 of the Act by the jurisdicrional Assessing Officer, rather the authorities concemed in the teeth of series of decisions \ 6 by all the 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 pursuant to the Finance Act,2O20 as also the Finance A,Lct202l '

9. Upon a query being put as to why can't this writ petition be disposed of in the teeth ofthe decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of SLPs before the Hon'bte Supreme Court and it would be further burdening the exchequer of the Union of India. It was also the contention of the teamed 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 bene[rt of interim protection. Nonetheless, on the earlier query of this Court as to why the lncome Tax Department have not come out with a mechanism to issue appropriate instructions or to take 7 afllncpriate steps in ensudng that proceedings utrder section I4gA of the Act as also the assessnent orders under Section I4g 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 concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l51A of the Act and as a result by now, more than 600 to 700 petitions have been already got pitcd up befbre this High Court on an issue which otherwise stands squarely covered by the judgment of this court in the case of Kanakara Ravindra Reddy (l supra). What is also surprising is the lact 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 II.. 8 insofar as the liberty which was ganted 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 Act,202l . 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 bad. I 1. It appears that because ofthe aforesaid liberty that this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless manner' the lncome Tax Department wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitationthatwouldotherwisecomeintheway.Likewise,ifthe wnt petition is kept pending for a considerable long period of time and finally at a later stage if the Hon'ble Supreme Court conf-trms the decision taken by this High Court as also by the other High Courts in which the SLPs are still peoding, the Income Tax .-v i 9 Departrnont would get the advantage of the liherly that is otherwise protected in favour of the Revenuc for initiation of fiesh 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 tar as interest of the assesses are concemed. As a consequence, the Income Tax Department gets an extended period of time for initiation of fiesh 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 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 oljudicial 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 lirnitation periods, rather than adhering to the established tegat 10 position. Such conduct raises serious questions 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 interests.

13. 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 148-,{ and 148 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 of or, at least the lncome Tax Departmeflt should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless mannet, 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 lncome Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all I 11 has to be taken, has to be takcn for the rvhole of. ludia, ancl ryhich othcrwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes. Though the learned Standing Counsel for the 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 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 lurther worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections r4g-A and t2 148 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 COMMISSTONER, INCOME TAXIr, on an issue whether it was justifiable on the paft of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No'25 as under' viz'' : "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs' Smt' Godavaridevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) Ltd' v' lTO13 of which one of us (Justice G.S. Kulkarni) was a member' wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that till the same is 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't4' 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 observalions made by the Supreme Court' It (2025) [70 taxmann.com 422 (Bombay)] " 119281 I Ii ITR 589 (Bombay) 'o 1t99Z1tar,(mann.com t6155 ELT 4ll (SC) 7zOZl1 165 taxmann.com 58 l/300 Taxman 452 (Bombay) ''rj. -Sri xe.,Jv i+ Fo-hiipE .,ent in EEying ttrat the officors were not actuatad by any mela fides in passlng 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, bygassed tu,o appellate orders in regard to the same issue which wefe placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, righfly 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 vehemenfly enphaslzed that it is of utmost importance that, in disposing of the quasi.judicial 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 jurisciiction of the Tribunal. The principles of judicial discipline require that th€ orders of the higher appellate authorities should tre fiollowed unresen/edly 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 fumish no ground for not following it unless i(s operation has been suspencJed by a compebnt.@urt. Jf this healthy I , iJle is Ii(rn iciicorei, ',:.1 : e-i-.lri will only be L!ncue harassrnent to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some length' because it has been suggested by the leamed Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue mafters 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 future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of iudicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a latge number of High Courts all of whom have taken a consistent stand that the action of the lncome Tax Department being violative of the 15 liinance Aet. 2020 and Finanee Act, 2tt2 l . Now, in order to protect the interest of the Revenue as also that ofthe assesse€, it would be trite at this juncture, if we dispose of the writ petition with an observationy'direction that the disposar 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 ttre 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 olas 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 16 36,37 atd38 ofthe 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 adopted being per se illegal, deserves to be and are acmrdingly set aside/quashed. As a consequence, all the impugned orders gefting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 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.

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 olher 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 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 substituted provisions, and this Court allowing the petitions only on the procedural flaw' the right I ! i l I I i I l I I I I I L7 confened on the Revenue would rernain reserved to proaeed further if they so want from the stagre 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 of this High Court in the case of Kanakala Ravindra Reddy (1 stpra). This, in other words, would mean rhat either of the parties, if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue.

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concemed. As a consequence, the impugned notice under challenge under Sections 148-,4 and l4g stands set aside/quashed. ( ( 1E 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 Kankanala Ravindra Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. D/. L. VIJAYA LAXMI Aqsr TANT REGISTRAR //TRUE COPY' t\ To, SECTION OFFICER e Tax Office, 6-2-15613,

1. The lncome Tax Officer, Ward -1, Nizamabad, ln Subhash Nagar, Nizamabad - 503 002, Telangana

2. The Assessment Unit, lncome Tax Department, National e-Assessment Center, New Delhi, Room No.. 401 , 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. Guards, Hyderabad - 500 004, Telangana.

3. The Chief Commissioner of lncome Tax, Hyderabad, LT.Towers, 10-2-3' AC 4. One CC to SRl. A. V. A. SIVA KARTIKEYA, Advocate IOPUCI 5. One CC to Ms. B. SAPNA REDDY, (JUNIOR SC FOR INCOME TAX) loPUCl 6, Two CD Copies M JP HIGH COURT DATED:2410412025 ORDER WP.No.8291 ot 2025 .a .:) ) 1HE o$ ( 14: 26 tlJEu * * (.r a ALLOWING THE WRIT PETITION WITHOUT COSTS (^