Y{: I! v. Tqqlgunu

4. The contention of the petitioner is thai the issue of proceedirrgs being in violation of the Finance Act, 2021 i.e., the impugne,J notices under Section l48A and Sectior: 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 KANKAN,\LA RAVINDRA REDDY vs. INCOME-TAX OFFICERI decided on 14.09.2023 whereby a batch of writ petitions wrre allowed and the proceedings initiated under Section 148A as alsro under Section 148 of th,: Act were held to be bad with consequent al reliefs on the ground o- it being in violation of the provisions of ilection 151A ol the Act read with Notification 1812022 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 allrwed on similar terms. '[(2023) 156 taxmann.com 178 (Telangana)] \ I

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 INDIA4, and 1'elangana 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 OFFTCER, INTERNATIONAL TAXATION6 which is again on international 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 ' lzoz+1464 ITR 430 (Bom) ' [(2024) 156 taxmann.com 478 (Gauhati)] ^[(2024) 165 taxmann.com I l5 (Punjab & Haryana)] '12024) 167 taxmann.com 411 (Telangana)l "12024) 166 taxmann.com 679 (Bombay)l ' [2024) 165 taxmann.com I l3 (Himachal Pradesh)] t, 4 DAHYABHAI RADADIYA vs. INCOME T,,\X OFFICER, WARD 3(3X5)8, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasth:,Ln l{igh Courl in the case of SHARDA DEVI CHHAJER vs. INCOME 'IAX OFFICER & ANOTHER and batch of writ p:titionsr0 which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench ol Calcutta'rHigh Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF ITNDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the same issue having been de,.:ided by a large number of High Courts, we are still confronted with targe hling of identical matters on daily basis ranging betweerr 5 to 10 writ petitions. That upon the instructions being so:rght from the Department, they have been taking a solitary 6rround that the decision of the Bombay High Court in the casr, of Hexaware Technologies Ltd., (2 supra) as also the one v. hich has been decided try this Court in the case of Kanakala A'avindra Reddy szozqSCC Online Guj 4012 '2025 SCC Online Jhar287 72023 : RJ-JD :4984-DBl \ ( 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 and more 16 months have lapsed, till date, we do not find any remedial steps having been taken by the Income Tax Departmeflt to take appropriate steps to either hold back issuance of notice under Section l48A and under Section 148 of the Act by the jurisdictional Assessing Ofhcer, rather the authorities concerned in the teeth of series of decisions r 5 .i,,.. by all the major High Courts in India are cr',ntinuously still initiating proceedings under Section 1484. of the Acr and also initiating proceedings under Section 148 o I- the Act in contravention to the amendrnents brought into the I ncome Tax Act pursuant to the Finance Act,2020 as also the Finan,.;e ,\ct 2021.

9. Upon a query being put as to rvhy can't this writ ltetition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (1 supra), I,.:arned Standing Counsel Jbr the Incorne Tax Deparlment contends that those would unnecessarily burden the Income Tax Departrnt.nt rvhere they would be required to file equal number of Sl,Ps before the Hon'ble Supreme Court and it would be further burdoning the exchequer of the Union of India. It was also the c,.rntention of the learned Standing Counsel that no prejudice would tre caused to the interest ofthe petitioners in case if this writ petition is kepr pending till the linalization of the SLPs pending beforo rhe Hon'ble Supreme Court and the fact that the petitioner is already enjoying the benefit of interim protection. Nonetheless, on the earlier query of this Court as to why the Income Tax Departmenl have not come out with il mechanism to issue appropriate instrucrions or to take \ \ 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light of the decisions dedcided by the various High Courts, it was submitted by the 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 IJigh Court allowing writ petitions on the very same issue. The lncome Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l5lA 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 whiie resewing the right of the Revenue, has also protected the interest of the petitioners 8 insofar irs the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance u ith the amended provisions of the Act, as amended by the Financr.: Act, 202[) and the Finance Act,202l. The petitioner assessee wou ld be entitled to challengc or raise the other legal objections if the Fl.evenue initiates fresh proceedings. The Department has made r o endeavour in availing t.he said liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the sr and, which this High Court as well as many other High Courls aheady held to be

11. It appears that because of the aforesaid liberv that this High Court had granted permitting the Revenue for initiating lresh proceedings as a one-time measure in a facele:;s manner, the Income 1'ax Department wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitation that would otherwise come in the way. L,ikeu,tse, if the writ petition is kept pending for a considerable lon1,; period of time and hnally at a later stage if the Hon'ble Supreme Court confirms the decision taken by this High Court as also by the other l{igh Courts in which the SLPs are still pending, tlLe Income Tax \ t '-&i.: 9 Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings lrom the disposal ofthese matters at a much later stage which would be advantageous and beneficial to the Revenue and would be equatty 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 alarrning trend of docket explosion in this Court, despite the clear precedent set in 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 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 I 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronoun,lements, pa(icularly when this Court has rrlreadl, provided a balanced approach by preserving both the Reve.nue's rights and assesses rnterests.

13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Depar-tment itself and should have found out via media in ensuring that pr,tceedings under Sections 148-4 and 148 should not have t,cen issued in a faceless rnanner, at least till the Hon'ble Supreme ( 'ourt decide the twelve hundred (1200) odd SLPs which it is alreadt,, seizcd of or, at least the Income Tax Department should have l ound ,)ut some remedial steps to ensure that wherever the authrrrities intend to initiate proceedings under Sections 148-A and 148. other than in a faceless manller, the proceedings should have bcen deferred without precipitating the matter further intimating tfre assessee that they shalL initiate appropriate proceedings only aftt:r the SLP's are decided by the Hon'ble Supreme Court on the v,.)ry sarne issue This again, the Income Tax Department, has not ber:n ablc to give a convincing reply, except for the fact that such a dlcision if at all { I 11 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 alfects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis. Admittedty, 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 through the jurisdictional Assessing Officer r','hereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs, ASSISTANT COMMISSIONER, INCOME TAXrr, on an issu.: whether it was justifiable on the part of the Income Tax Depaflment ln not following an order passed by the adjudicating autht,rity only on the ground that the appeals are pending, the Divisiorr llench of the High Court of Bombay held at paragraph No.25 as rrnder, viz., : "25. Mr. Paridwalla has rightly drawn out atte,rtion to the decision of this Court in Commissioner of lncome I ax vs. Smt. Godavaridevi Sarafr2 as also the recent decisior 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 member, wherein the tlourt categorically observed that the Revenue having not "accepted" the judgment of the High Court would not rnean that till the same is set aside in a manner known to law, it wcrrld loose its binding force. Referring to the decision of the Supre me Colrrt in Union of lndia vs. Kamlakshi Finance Corporation Ltd.r4, the Court observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was critic zed by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. ll trzOzsl 170 taxmann.com 422 (Bombay)l " lt979l I tJ ITR 589 (Bombay) " 12OZ+1165 taxmann.com 581/300 Taxman 452 (Bomlray) 'o 1t99z1taxmann.com t6155 ELT 433 (SC) -"BY 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 lheir 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 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 Appellale Collectors who functron 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 mafter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. lf this healthy 14 rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some length, because it has been suggested by the l,::arned Additional Solicitor General that the obseniations made by the High Court, have been harsh on the officers. lt is clear that the observations of thr,: High Court, seemingly vehement, and appirrenfly unpalatable to the Revenue, are only intended trr curb a tendency in revenue matters which, if allov.,ed to become widespread, could result in considr:rable harassment to the assesses-public without any tr.enefit to the Revenue. We would like to say that the department should take these observations ir the proper spirit. The observations of the High Court should be kept in mind in future and the utmost r3gard should be paid by the adjudicating authorities ard the appellate authorities to the requirements of jr dicial discipline and the need for giving effect to the (:rders of the higher appellate authorities which are bilding on them."

15. Whrlt is worrying this Bench more is tht: fact that an endeavour is being made whole heartedly to ensure rlot to generate further litigation on issues which have been laid to rest b1, a large number of High Courts all of whom have taken a c,)nsistent stand that the action of the Income Tax Department being ,..iolative 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 Kankanalq 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 Courl 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 ofas a covered matter.

17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs I Ib I 36,31 and 38 ofthe order which, for ready referen<:e, is reproduced hereunderr:

36. For all the aforesaid reasons, lhe impugnr]d notices issued and the proceedings drawn by the respondent- Department is neither tenable, nor . su stainable. The notices so issued and the procedure adot,ted being per se illegal, deserves to be and are accor,Jingly set aside/quashed. As a consequence, all the mpugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to th3 noticgs 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 trinciples that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders rlso gets nullified automatically-

37. The preliminary objection raised by the p€rtitioner sustained and all these writ petitions stands a lowed on this very jurisdictional issue. Since the impugnerd notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contendr,rd in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case arwal , supra, as a one-time measure of Ashish exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue tc proceed under the subslituted provisions, and this Cour: allowing the petitions only on the procedural flaw, ihe right conferred on the Revenue would remain res;erved to proceed further if they so want from the stage oF the order of the Supreme Court in the case ofAshish Aqarwal, 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 stpra). 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,bte 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 148-4 and 148 stands set aside/quashed. j 18 The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Cou rt 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 //TRUE COPY// . SD/. B. REKHA RANI STRAR To, Center, Room No.401, 2nd Floor, E-Ramp, Jawaharl Delhi-1 10 003. \ 1. The Assessment Unit, lncome Tax Departmeh{ ' sEcfloN oFFrcER l\ationial e-Assessment al Nehru Stadium, New 2. The lncc,me Tax Officer, Ward - 1, Aayakar Bhavi.rn, 6-2-15613' Subhash 3. Th; Principal Chief Commissioner of lncome Tax Andhra Pradesh and Telangarra, Hyderabad 10-2-3, Room No.922, 9th Floor, B Block, lT Towers, AC Guards, Hyderabad-SOO 004 l"dA, N/inistry of Finance, (]overnment of lndia, 3'd Floor, JeevanDeep Building, Sansad Marg, New Dell'i-1 '10 001 . +. fne sei.etury, Union Naoar. Nizamabad 503002. "i

5. One CC to SRl. S. VIJAY ADITHYA, Advocate [OPUC] 6. One CC to SRI J SUNITHA (JUNIOR SC FOR INCOI'4E TAX) IOPUC] 7. Two CD Copies BM GJP I I " /'- ,/; i c' '' ,rr. .:r:a]$r. !'r" /Q. -) :) l tii sEP 206 ,! ?r '. ., , .1",/ ,n ).rl/ HIGH COURT DATED:2410412025 ORDER WP.No.9829 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS : I i { i I I I I I I , I t t I E t ! I i I I