[t4r. Ganapathi Baddam v. THE HONOURABLE SRI JUSTICE NARSING RAO

challenged to the notices which were issued under Section 148,4. and 148 of the Income Tax Act, 1961 (for shorl 'the Act') ol 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 ofproceedings under Section 148 of the Act by the jurisdictional Assessing Officer, whereas in tetms 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 148,{ of the Act as also under Section 148 of the Act ought to have also been issued and proceedeci in a faceless lranner.

4. The contention of t[-re petitioner is that tl're issue of proceedings being in violation ol the Finance Act. 202 I i.e ., the impugned notices under Section 148,4 and Section I48 of the Act not being issued in a faceless manner, have alreadv bc,:n dealt with and dccided by this Courl in the case of IiANKANALA RAVINDRA ITEDDY vs. INCOME-TAX OFFICllllr decided on 14.09.2023 whereby a batch of writ petitions $€,r'e allorved and the proceedings initiated under Section f48A as also undel Section 148 olthe Act rvere held to be bad with consequentirl reliels on the ground of it being in violation of the plovisions of SecLion 151A of the Act read with Notification 1812022 dated 29.03.]0-12. T'he said judgment passed by this Court has also been subseqr.Lerrtly lollowed in a large number of writ petitions which were allorve,d on similar '1Q023) 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 INCOI\IE TAX & OTHERSz, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIAs, Punjab and Halyana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangar.ra High Courl in the case of SRI VF],NKATARAMANA 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 r,vhich is again on intcmational taxation and central circte, High Coult of Hin.rachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUI(HBHAI 'Tzoz+1464 ITR 430 (Bom) 'l(2024) 156 taxmann.corn 478 (Gauhati)l '[(2024) 165 taxmann.com I l5 (Punjab & Haryana)] '12024) 167 taxmann.corn 41 1 (Telangana)l " [2024) 166 taxmann.com 679 (Bombay)l ' 12024) 165 taxmann.com I 13 (Himaclial Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME TITX OFFICER, WARD 3(3xrrr, Jharkand High Court in the case 01'SHYAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan Iligh Court in the case of SHARDA DEVI CHHAJBR vs. I\COME TAX OFFICER & ANOTHER and batch of writ p,:titionsro which stood dccided on 19.03.2024. Similar views have also been taken by lhe Division Bench of Calcutta High Court in the casc of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T l6q0 ul'1023). decided on25.09.2024.

6. Evert though the same issue l.raving been dec id,:d by a large number of High Courts, we are still conhonted wit i lrarge filing of identical matters on daily basis ranging betweel j; to l0 r,vrit petitions. That upon the instructions being so:rght from t[re Depadment, they have been taking a solitary grouncl that the decision of the Bombay High Court in the case, af Hexuware Technologies Ltd., (2 supra) as also the one u.hich has been dccided by this Court in the case of Kanakula Ruvindra Reddy t2024 SCC OnLino Guj 4012 ' 2025 S('C OnL inc Jhar 287 n yzo23, RJ-JD : 49 84-DB l ' .;. 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 Cou( and the Hon'ble Supreme Court is seized of the matter In addition, there are about 1200 SLPs also filed arising out of the same issue being decided by various High Courts.

1. To a query being put to the learned counsel for the Revenue, they l.rave categorically accepted the fact that there is no interim ordel granted by the Hon'ble Supleme Court in any of these matters pending before it" Meanwhile, fresh rvrit petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise l.ras already been dealt and decided by this very lligh Court itself.

8. On the one hand, even though the order of this Courl that was passed as early as on 14.09.2023 and more i6 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 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 majol High Courls in India are cc ntinuously still initiating proceedings under Section 148A of the .A,ct and also initiating proceedings under Section 148 o,' the Act in contravention to the arnendments brought into the ncome Tax Act pursuant to the Finance Act,2020 as also the Finant:e .\ct 2021

9. Upon a query being put as to why can't this wit petition be disposed of in the teeth of the decision rendered by this Court in the case of Kantkolo Rovindra Reddy (1 supra), l,:arned Standing Counsel for the Income Tax Departrnent contends thar those would unnecessarily bulden the Incorne Tax Deparln-re:nt. w lrele they would be required to file equal nuliber of SLPs before the Hon'ble Supreme Coult and it would be furlher burdening the exchequel of the Union of India. It was also the c()ntention ol thc learned Standing Counsel that no prejudice would [>e r:sused to the interest of the petitioners in case if this writ petition is kept pending titl the fir.ralization of the SLPs pending beior.e the Hon'ble Supreme Court and the fact that the petitioner is aLready enjoying the benefit of interim protection. Nonetheless, on t.-re ear.lier query of this Court as to why the Income Tax Deparlmenl have not come out with a mechanism to issue appropriate instrucr.igrs or to take wt.'rr.,ii:6y -r' 7 appropriate steps in ensuring that proceedings under Section l48A 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 decided by the various High Courts, 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 of these jurisdictional High Courts

10. As a result of which, what we are facing is steep increase ol litigation day in and day out even though various orders have been passed by this High Court allowing rvrit petitions on the very same ISSUC The Income Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Scction 15lA 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 judgrnent of this Court in the case of Kanakola 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 (1 supra),.the Division Bench while reserwing the right of the Revenue, has also protected the interest of the petitioners 8 \& x&t.( insofar as the liberty which was granted to the Revenue for initiating fi'esh proceedings strictly in accordance with the amendcd provisions of the Act, as amended by the Finance Act. 2020 and the Finance Act,202l. lhe petitioner assessee would be entitled to challenge or raise the other legal objections if the Rev:nue initiatcs fresh proceedings. The Department has made nr endeavour in availing the said libety that was leserved fbr the R::venue. On the contrary, tl.rey havc been still sticking on to the stanrl, which this High Court as u,e[[ as rnany othel High Courts already held to be bad. I l. It appears that becausc of the aforesaid liberty that this I-{igh Court had granted permitting the Revenue for initiating tiesh proceedings as a one-time measure in a facelerts manner, the Income Tax Department wants to take advantage of the sarne by protracting these proceedings which would enable thel'n to rneet thc lirnitation that would otherwise come in the way. t-il.ewise. if the writ petition is kept pending for a considerable lon1t period of time and finally at a later stage if the Hon'ble Supreme Courl confimrs the decision taken by this High Couft as also by the other High Courts in which the SLPs are stili pending, the Income Tax .... ,,/ -./ 9 Department would get the advantage of the liberly that is otherwise protected in favour of the Revenue for initiation of fresh proceedings from 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 alarrning trend of docket explosion in this Court, despite the clear precedent ser in Kantkulu Ruvindra Reddy (l supra), is a matter of grave concern. The Income Tax Deparlment's persistent initiation of h'esh 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 j udicial 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 questicns about the administrative efficiency and the respect for judicial pronouncements, particularly when this Courl has alreadv providcd a balanced approach by preserving both the ReverLue's lights and assesses tnterests

13. Another aspect which needs to be considered is :hat in fact it should have becn realized by the Ltcornc Tax Depar.mi:nt itself and shouid have found out via rnedia in ensuling that proceedings under Sections 148-,4. and 148 should not have b<:en issued in a faceless manner, at least tilt the l]on'ble Supreme Court decide the twelve hundred (1200) odd SLPs u,hich it is already seized olor, at least the Lrcome Tax Deparlment should have fcrund out sotne remedial steps to ensure that wherever the autholiti:s 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 furlher intimating tLre assessee that they shall initiate appropriate proceedings only afte:- the SLP's are decided by the Hon'ble Supreme Court on the very same 1SSUe. This again, the Incorne Tax Depaftment, has not bee t able to give a convincing reply, except for the fact that such a de:ci:;ion if at alt .,1./ -.' :, l 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 fol the Income Tax Deparlrnent 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 ale under challenge in this writ petition are fbrcing thc assessee to knock the doors of this High Court resulting in filing of hrrndreds of new wtit 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 mattcr befbre the Ilon'ble Suprerne Court having been taken or.r 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 concemed at the State level are not ready to accept the verdict passed by a majority of High Courts of diflerent 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 \ L2 I 148 through the jurisdictional Assessing Olllcer u,heleas it ought to have been only in the faceless manner

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXIT, on an issue.*herhel it was justifiable on the part of the Incorne Tax Depafiment ln not following an order passed by the adjudicating authoriti,only on rhe ground that the appeals are pending, the Division f]ench of the High Court of Bornbay held at palagraph No.25 as r ndcr', viz., : "25. tvlr. Paridwalla has rightly drawn out attention to the decisron of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the tecent decision of the co- ordinate Bench of this Court in Samp Furniture (P) L.td. v. lTOl3 of which one of us (Justice G.S. Kulkarni) was a meml)er wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not r.rean that till the same is set aside in a manner known to law, rt wo.lld loose its binding force. Referring to the decision of the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Court observed that the approach of the officials of Re,renue of treating decisions being "not acceptable" was criticzed by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. 71ZOZS1 170 taxrnann.com 422 (Bornbay)l '' 1tozsl 113 ITR 589 (Bornbay) t3 1ZO2+1165 taxmann.com 581/300 I'axman 452 (Bomtral') 'o 1l9921raxmann.com l6/55 ELT 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 conduct of the Assistant Collectors and the harassment to the assessee catrsed by the failure of these officers to grve effect to the orders of authorities higher to them in the appellate hierarchy. lt cannot be too vehemently emphasized that it is of utmost rmportance 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 Trrbunal 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 operation has been suspended by a competent court. lf this healthy 74 I rule is not followed, the result will only be .lnclue harassment to assesses and chaos in administration of tax laws.

12. We have dealt with this aspect at some l,lngth, because rt has been suggested by the Iearrred Additional Solicitor General that the observations made by the High Court, have been harsh cn he officers. lt is clear that the observations of the H gh Court, seemingly vehement, and app.rrently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allo\ ed to become widespread, could result in consideracle harassment to the assesses-public wilhout any ben,:fit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations 6f the High Court should be kept in mrnd in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judic,jal discipline and the need for giving effect to the orders of the higher appellate authorities which are bind ng on them." I 5. What is wolTying this Bench more is thr: lact that an endeavour is being made whole heartedly to ensur.e not to generate further litigation on issues which have been laid to res;t by a large number of High Courts all of whom have taken a con:;istent stand that the action of the Income Tax Deparlment being ',,iolative of the 15 Finance Act, 2020 and Finanoe Act, 2021. 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 observationidirection that the disposal ofthe instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindru Reddy (l supra) shall however be subject to the outcome of the SLPs which werc filed by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Courl.

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 Courl would further be burdened which otherwise can be decided and disposed ofas a covered matter. Il . 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 76 f j 36,37 arrd 38 ofthe order which, for ready referenc,:, is reproduced hereunder:

36. For all the aforesaid reasons, the impugneC 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 accorcingly set aside/quashed. As a consequence, all the irnpugned orders getting quashed, the consequential orders passed by the respondent-Department pursuanl to tho notices issued under Section 147 and 148 would elsc 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 alsc gets nullified automatically.

37. The preliminary objection raised by the pe:iticner is sustained and all these writ petitions stands al owed on this very jurisdictional issue. Since the impugne I notices and orders are getting qua_shed on the po nt of junsdiction, 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 the case of Ashish Aganival, supra, as a onetime measure exercising the powers under Article 142 01' the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, t he right -,1 ,l 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.

18. We would only furlher like to make observaLions that since we are inclined to dispose of the instant writ petition, conscious of the lact that the earlier order ol this High Court in the case of Kanakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Suprcrne Courl in SLP No.3574 of 2024, pret-erred by the Income '['ax Deparlment, 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 Kanakals Ravindrs Reddy (1 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 Supr.eme 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. Xi.rc,l \ . r" Liiirzl .. ,: :. arttt . !}1 \ I :; 18 - The consequcntial orders, if any, also stand set as;id,:/quashed in similar terms as have been passed by this High Coul in the case of Kankanalt Rovindrt Reddy (l supra). There shall bc no order as to costs Consequently, rniscellaneous petitions pending, if any, shall stand closed. To, //TRUE COPY// SD/- P. F,ADMANABHA REDDY DEPUTY REGISTRAR K4- ON OFFICER SECTI 1 The lncome Tax Officer - Wgrg 1, Nizamabad, lncome Tax Officer, 6-2_156/3, Subhash Nagar, Nizamabad, Telangana - 503 002. The Principal Chief Commissioner of lncome Tax, Andrra pradesh and f9{,Srn, Hyderabad Room No, 922, gthFloor, B-Block, t f.foweri tO_Z-e AC Guards, Hyderabad - 500 004, Telangana. One CC to SRl. A V A SIVA KART|KEYA Advocate tCpLlCI One CC to l'/s SUNDARI R PtSUpATt (SR.SC FOR il.JC()N4E TAX DEPARTTVENT) [OPUC] 2 3 4 5 KKS GJP Two CD Copies a HIGH COURT DATED:2910412025 :\ r ..! 03 sEI, 26 ,i ?; o t'(: j.:2- ORDER WP.No.11780 of 2023 ALLOWING THE WRIT PETITION WITHOUT COSTS