THE PRIMARY AGRICULTURE CO-OPERATIVE SOCIETY LIIVITED v. 1. Assessment Unit

ORDBR, (per llon'ble Sri Justice P.Sam Koshy) Heard Ms. Aishwarya Sunil, learned counsel representing Mr. Thaneeru Chaitanya Kumar, leamed counsel for the petitioner and Ms. J.Sunitha, leamed Junior Standing Counsel for the Income Tax Department for respondent No.2. Perused the record

2. This is a writ petition where the proceedings are either challenged to the notices which were issued under Section 148A 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 of the grounds, that the notices issued under Section l48A of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings 2 under Section 1484. of the Act as also under Section 148 of the Act ought to have also been issued and proceedcd in a faceless mannel.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance A<t, 202 I i.e., the impugned notices under Section l48A and Sectiorr 148 of the Act not being issued in a faceless manner, have alreadl been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions w jre allowed and the proceedrngs initiated under Section 148A as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground ol it being in violation of the provisions of S,ection 15lA ol the Act read with Notification 1812022 dated 29.03.2022. The said judgment passed by this Court has also been subseqrrently followed in a large number of writ petitions which were allowed on similar terms. 'l(2023) 156 taxmann.com 178 (Telangana)l (-/

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 SINGH BANGU vs. UNION OF INDIA", and Telangana High Court in the case ol SRI VENKATARAMANA REDDY PATLOOLA vS. DEPUTY COMMISSIONER 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 OFFICER, INTERNATIONAL TAXATION6 which is again on international taxation and central circle, High Court ol Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICER?, Gujarat High Court in the case of MANSUKHBHAI 'lzozcl464 ITR 430 (Bom) ' [(2024) 156 taxmann.com 478 (Gauhati)] 'l(2024) 165 taxmann.com I 15 (Punjab & Haryana)l 5 [2024) 167 taxmann.com 4ll (Telangana)] " 12024) 166 taxmann.com 679 (Bombay)l ' 12024) 165 taxmann.com 113 (Himachal Pradesh)l 4 DATTYABHAI RADADTYA vs. INCOME TI\X OFFICER, WARD 3(3X5)8, Jharkand High Court in the czLse of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Courr in the case ol SHARDA DE\,'I CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ p.:titionsro which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF TNDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the same issue having been decidcd by a large number of lJigh 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 sot ght from the Department, they have been taking a solitary glound that the decision of the Bombay High Court in the case ol' Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Rcrvindra Reddy 8z0zq SCC online Guj 4012 '2025 SCC Online lhar 287 'o 12023 : RJ-JD :49g4-DBl r ( 5 (l supra) has been subjected to challenge in a Spocial 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 and 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 of notice under Section 148,4. and under Section 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions 6 i, by all the major High Courts in India are c,rntimrously still initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 ol the Act in contravention to the amendments brought into the lnconte Tax Act pursuant to the Finance Ac|2020 as also the Finan:e Act202l

9. Upon a query being put as to why can't this writ petition be disposed of in the teeth of the decision rendered by this Courl in the case of Kanakala Ravindra Reddy (l supra), l,:arned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the lncome Tax Departm( nt 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 of India. It was also the contention of the leamed 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 beforr: the Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on tte earlier query of this Court as to why the Income Tax Department have not come out with a mechanism 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 Courls, it was submitted by the learned 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 olthese jurisdictional High Courts.

10. As a result of which, what we are facing is steep increase of titigation 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 lncome 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 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 Roindra 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 r b insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance ryith the amended provisions of the Act, as amended by the Finance Act, 2020 and the Finance Act, 2021 . The petitioner assessee would be entitled to challenge or raise the other legal objections if the l(evenue initiates fresh proceedings. The Department has made rro endeavour in availing the said liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the s and, which this High Court as well as many other High Courts aleady held to be bad.

11. It appears that because of the aforesaid liberly that this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time measure in a facele:;s manner, the Income Tax Department wants to take advantage tf the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. I-ikewise, if the writ petition is kept pending for a considerable long period of time and finally at a later stage if the Hon'ble Supreme ,lourt confirms the decision taken by this High Court as also by he other High Courts in which the SLPs are still pending, thc lncome Tax r f Deparlment would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings Iiom 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 setin Kanakala Ravindra Reddy (l 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 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 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has erh'eady 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 Departrnent itself and should have found out via media in ensuring ttrat proceedings under Sections 148-4. and 148 should not have b,:en issued in a faceless manner, at least till the Hon'ble Supreme ( ourt decide the tweive 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 autho;ities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only aftel the SLP's are decided by the Hon'ble Supreme Court on the ve y same issue. This again, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all t / 77 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 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 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 .? I I i i 72 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vr;. ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue rvhether it was justifiable on the part of the Incorne 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 rrnder, r,iz., : "25. Mr. Paridwalla has righfly drawn out a e rtion to the decision ol this Court in Commissioner of lncome Iax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co_ ordinate Bench of this Court in Samp Furniture (p) l.td. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a mem )er, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not rtean that till the same is set aside in a manner known to law, it wo rld loose its binding force. Referring to the decision of the Suprene Court in Union of lndia vs. Kamlakshi Finance Corporatiorr Ltd.14, the Court observed that the approach of the officials of ievenue of treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are flle relevant observations made by the Supreme Courl. 1t9781113 ITR 589 (Bombay) '.ll{zozs1 170 taxmann.com 422 (Bombay)l t2 " 120241165 raxmann.com 581/300 Taxman452 (Bombry) 'o ]t9921raxmann.com 16/55 ELT 433 (SC) t3 "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 correilness 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 qlaced before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightty 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 disposing 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 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 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 74 rule is not followed, the result will only be undue harassment to assesses and chaos in admin stration of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by lhe earned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of fl-e High Court, seemingly vehement, and apparenfly unpalatable to the Revenue, are only intended lo curb a tendency in revenue matters which, if allorved to become widespread, could result in consic erable harassment to the assesses-pubtic without any ,enefit to the Revenue. We would like to say that the department should take these observations rn the proper spirit. The observations of the High Court should be kept in mind in future and the utmost -egard should be paid by the adjudicating authorities a1d the appellate authorities to the requirements of j_rdicial discipline and the need for giving effect to the ,)rders of the higher appellate authorities which are brnding on them."

15. What is worrying this Bench more is th,: 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 large number of High Courts all of whom have taken a c)nsistent stand that the action of the Income Tax Department being .riolative 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 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 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.

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 76 36,37 and 38 ofthe order which, for ready reference. is reproduced hereunder:

36. For all the aforesaid reasons, the impugncd notices issued and the proceedings drawn by the rer;pondent- Department is neither tenable, hor su;ta,nable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accor(lingly set aside/quashed. As a consequence, all the inpugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to th,l notices issued under Section 147 and 148 would .Llso get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the [)rinciples that when the initiation of the proceedings ilsetf was procedurally wrong, the subsequent orders elso gets nullified automatically. 37 The preliminary objection raised by the pelitioner is sustained and all these writ petitions stands all,rwed on this very jurisdictional issue. Since the impugne<l notices and orders are getting quashed on the )oint of jurisdiction, we are not inclined to proceed fudher and decide the other issues raised by the petitionr:r 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 rteasure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to l)roceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, t e right 17 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. i

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 Kunakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, II 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 (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 concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed. 18 The consequential orders, if any, also stand set lside/quashed in similar tenns as have been passed by this High Co:rt in the case of Kunksnala Ravindra Reddy (l supra). There sharl be no order as to costs Consequently, miscellaneous petitions pendilg, if any, shall stand closed. To, SD/- B. REKHA RANI ASSISTANT REGISTRAR/,/ ( lti SECTION OFFICER 1. Assessment Unit, National Faceless Assessment Centre, lncome Tax "E_H";; Department, Nlinistry of Finance, Room No. +Oi inO'Efoo;, Jawaharlat Nehru St5dium, Dethi - i tO OOi. //TRUE COPY// 1 10 001

2. The Assistant commissioner of rncome tax, circre 1, r,iizamabad/ rncome Tax _ Office, 6-2-156/3, Subhash Nagar, NizambaO, felangana-SOSOO2 3. The^Secretary, Union of rndii, [/inistry of Fintn;ir.lorfr eroi[, New Derhi- 4. One CC to SRI, THANNERU CHAITANYA KUMAR. Advocate toPIIcI 5 One CC to t\,4s. J SU|THA, Jr SC FOR TNCOME iAX }FAiirr,,lEili' 6. One CC to SRl. GADI PRAVEEN KUIMAR, Deputy Sollcitor General of lndia [OPUC] 7. Two CD Copies loPUCl BIV gGJP ,f I HIGH COURT DATED:2410412025 ORDER WP.No.9621 of 2025 \' 't 0 siP ?025 ALLOWING THE WRIT PETITION WITHOUT COSTS 0 t