Premnivas Attal v. Assessment Unit, Income Tax Depa

Heard Mr. TejPrakash Toshni , leamed counsel for the petitioner and Ms. Bokaro SaPna y, leamed Junior Standing Counsel for the Income Tax DeP ent, for resPondent Nos. I and 2. Perused the record.

2. This is a writ Petition where the proceedings are either challenged to the notices which wer issued under Section 148A and 148 of the Income Tax Act, 196 (for short 'the Act') or the assessment orders those have been assed under Section 147 of the Act which have been assailed'

3. This writ Petition is being take up today onlY on one of the er Section l48A of the Act grounds, that the notices issued and the subsequent initiation of proc edings under Section 148 of the Act by the jurisdictional Assessi g Officer, whereas in terms of the amendment that was brought the Income T@Ulct bY waY of Finance Act, 2O2l w.e.f., 01'0 .2021 onwards, Proceedings 2 under Section 148,4. 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, 2021 i.e., the impugned notices under Section l48A and Section 148 of the Act not being issued in a faceless manner, have already 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 were allowed and the proceedings initiated under Section 148,4. as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation ofthe provisions of Section 15lA of 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 allowed on similar telms. 'l(2023) 156 taxmann.com I78 (Telangana)l 3

5. Down the line, we find that th same issue has also been decided against the Revenue bY arlous High Courts i.e., by the BombaY High Court in case of HEXAWARE e TECHNOLOGIES LTD.' vs' ASS TANT COMMISSIONER OF INCOME TAX & OTHERS2, High Court in the case of RAM NARAYAN SAH vs' IINI N OF INDIAT, Punjab and Haryana High Court in the case of J TINDER STNGH BANGU vs. UNION OF INDIA4, and Te High Court in the case of SRI VENKATARAMANA REDD PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME AXs where the issue was tn respect of international taxation, Bom y High Court in the case of ABHIN ANILKUMAR SIIAH vs' COME TAX OFFICER, TNTERNATIONAL TAXATIO]t' hich is again on intemational taxation and central circle, High Co of Himachal Pradesh in the case of GOVIND SINGH vs' Gujarat High Court in the COME TAX OFFICERT, ase of MANSUKIIBHAI ' Tzoz+1464 ITR 430 (Bom) ' [(2024) 15S lalmann'som 478 " l(2024) 165 taxmann'com 1 I 5 '[2024) 167 taxmann.com 411 " 12024) 166 taxmann.com 679 ' 12024) I65 taxmann.com I I 3 )l (Gu @unjab & Haryana)l )l m )l b (B o (H ma al Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME TAX OFFICER, WARD 3(3X5)8, Jharkand High Courr in the case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SIIARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsro 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 INDIA & ORS (M.A.T 1690 of 2023), 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 filing of identical matters on daily basis ranging between 5 to 10 writ petitions. That upon the instructions being sought from the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hernware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakala Ravindra Retldy '202+ SCC Ont.ine Guj 4012 '2025 SCC Online Jhar287 p2oz3, RI-JD :4984-DBl 'o I , 5 (1 supra) has been subjected to ch lenge in a SPecial Leave Petition i.e., SLP No.3574 of 2024 fore the Hon'ble SuPreme Court and the Hon'ble SuPreme Co is seized of the matter' In addition, there are about 1200 SLP also filed arising out of the same issue being decided by various gh Courts.

7. To a query being Put to the I ed counsel for the Revenue, they have categorically accepted the fact that there is no intenm order granted bY the Hon'ble Su matters pending before it' Meanw me Court in anY of these ile, fresh writ Petitions of identical nature are being piled up be ore this Bench on dailY basis and the pendencY is getting in on matter which otherwise has already been dealt and decided by this very High Court itself

8. On the one hand, even thou the order of this Court that was passed as earlY as on 14'09'20 3 and more 16 months have lapsed, till date, we do not hnd remedial stePs having been taken by the [ncome Tax DePartme t to take aPProPriate steps to either hold back issuance of notice Section 148 of the Act bY the j Section 148,{ and under sdictional Assessing Offrcer, rather the authorities concemed in e teeth of series of decisions . ffi1;". -=iL ... -. 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, 2020 as also the Finance Act 2021.

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 Court in the case of Kanakalo Ravindra Reddy (l supra), learned Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the lncome 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 of India. It was also the contention of the learned 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 Courl and the fact that the petitioner is already enjoying the beneht of interim protection. Nonetheless, on the 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 edings under Section 148,{ of the Act as also the assessment o rs under Section 148 ofthe Act are kept in a hold in the light of t e decisions dedcided bY the various High Courts, it was submi d by the leamed Standing Counsel that the said steps can only taken at the level of CBDT as any such stePs would have to be en Pan India and cannot be timited to any of these jurisdictional gh Courts. t 0. As a result of which, what we facing is steep increase of litigation day in and day out even th ugh various orders have been passed bY this High Couft allowing it petitions on the very same issue. The Income Tax authorities c ncemed are still even now ln 2025 also initiating proceedings in c ntravention to the Provisions of Section 15 1A of the Act and as a result by now, more than 600 to 700 petitions have been alreadY ot piled uP before this High Court on an issue which otherwise tands squarelY covered bY the judgment of this Court in the case f 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 Ben h while reserving the right of the Revenue, has also Protected e interest of the Petitioners 8 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Financ e Act, 2020 and the Finance Act,202l. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Rcvenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the Revcnue. On the contrary, they have been still sticking on to the stand, which this High Court as well as rnany other High Courts already held to be bad. I 1. It appears that because of the aforesaid libertl, that this High Court had granted pennitting the Revenue for initiating fresh proceedings as a one-time measure in a faceless manner, the Income Tax Department wants to take advantage ol'the same by protracting these proceedings which would enable them to meet the limitation that rvould otherwise come in the way. Likewise, 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 C]ourt confirms the decision taken by this High Court as also by the other High Courts in which the SLps are still pending, the lncome Tax I Department would get the advantage o the liberty that is otherwise protected in favour of the Reve e for initiation of fresh proceedings from the disposal of these matters at a much later stage which would be advantageous and eficial to the Revenue and would be equally disadvantageous an detrimental so far as interest of the assesses are concerned' As a nsequence, the lncome Tax Department gets an extended period f time for initiation of fresh proceedings.

12. The alarming trend of docket e plosion in this Court, desPite the clear precedent set in Kanukala avindra RedtlY (l suPra), is a matter of grave concem. The lncom Tax Departmenf s Persistent initiation of fresh proceedings, disre ing the established judicial pronouncements, has led to an unP cedented surge in litigation with over 600-700 petitions piling up on the same issue. This deliberate aPProach not onlY unde es the princiPle of judicial precedent but also strains the judici resources unnecessarilY. The Department's strategy of awaiting th Supreme Court's decision on pending SLPs while continuing initiate fresh Proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than ad ring to the established legal 10 ( position. Such conduct raises serious questions about the administrative efficiency and the respect lor 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 Depar.tment itself and should have found out via media in ensuring that proceedings under Sections 148-,,{ and 148 should not have bccn issued in a faceless maru1er, at least till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized olor, at least the Income Tax Department 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 manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only alter 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 decision if at all t .,tfl lL has to be taken, has to be taken for e whole of India, and which otherwise has to be bY waY of a Polic decision and that too at the level of Central Board of Direct axes. Though the leamed Standing Counsel for the Income T Depadment contended that the Delhi High Court dismissed a wri petition of similar nature, on the one hand when the High Co is struggling to reduce ils pendency, such notices which are der challenge in this writ petition are forcing the assessee to nock the doors of this High Court resulting in filing of hundreds f new writ petitions which in the long run not only affects the dis sal of the writ Petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily bas S Admittedly, in spite of the matter before the Hon'ble SuPreme Court having been taken on many occasions, the Hon'ble SuPre e Court which is seized of the matter has been reluctant in grantin any interim Protection to the Income Tax DePartment. Yet, th authorities concemed at the State level are not readY to accePt e verdict passed bY a majoritY of High Courts of different States things further worse, the Income the same issue; and to make Tax DePartment is showing audacity by issuing notices continu usly under Sections 148-A and 7 12 f 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 COMMISSIONER, INCOME TAXIr, on an issue u,hether it was justifiable on the part 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 Bornbay 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 Ioose 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 Revenue of treating decisions being "not acceptable" was criticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. 11zozs1 170 taxmann.com 422 (Bombay)l It '' 1tszs1 u3 ITR 589 (Bombay) 3 ' TZOZ+7 1 6 5 taxmann.com 5 8 I /3 00 T axman 4 52 (Bombal) 1l9921taxmann.com- 16/55 ELT 433 (SC) ' 13 "6. Sri ReddY is PerhaPs right officers were not actuated bY passing the imPugned orde genuinely felt that the claim of tenable and that, if it was a would suffer. But what Sri Redd are not concerned here with otherwise of their conclusion malafides but with the fact that in their conclusion, bY-Passed regard to the same issue whic them, one of the Collector ( the Tribunal. The High Court criticized this conduct of the A the harassment to the assess of these officers to give authorities higher to them in the cannot be too vehemently e utmost imPortance that' I quasijudicial issues before the bound bY the decisions of th The order of the APPellte Coll Assistant Collectors working the order of the Tribunal is bin Collectors and the APPellate under the .lurisdiction of the Tri judicial disciPline require that appellate authorities should by the subordinate authorities order of the aPPellate author the department - in itself an and is the subject matter of a ground for not following it u been susPlended bY a compe in saying that the any mala fides in They PerhaPs assessee was not pted, the Revenue overlooks is that we the correctness or or of anY factual officers, in reaching appellate orders in were placed before ls) and the other of s, in our view, rightly sistant Collectors and caused bY the failure to the orders of appellate hierarchY It phasized that it is of disposing of the , revenue officers are appellate authorities. or is binding on the hin his jurisdiction and ing upon the Assistant llectors who function unal. The PrinciPles of e orders of the higher followed unreservedlY The mere fact that the is not "acceptable" to objectionable Phrase - appeal can furnish no less its oPeration has nt court. lf this healthy i i : 7 -t4 ( 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 learned 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 matters 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 judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them." 1 5. What is worying 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 large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the 15 Finance Act,202O andFinance Act' 2 21 . Now, in order to Protect the interest of the Revenue as also of the assessee, it would be trite at this juncture, if we dispose f the writ Petition with an obserwation/direction that the disposal terms of the judgment rendered bY Kankanala Ravindra ReddY (1 *Pr of the instant writ Petition in is High Court in the case of shall however be subject to the outcome of the SLPs which w e frled bY the Income Tax Department and which is Pending co ideration before the Hon'ble Supreme Court.

16. In the given facts and circ stances, this Bench is of the considered opinion that unless and til we do not timelY disPose of matters which are squarelY cove by the decision of this Coutt and which stands fortified bY the ecisions of the various other High Courts on the very same iss e, the pendencY of this High Court would further be burdened ch otherwise can be decided and disposed of as a covered matter'

17. So far as the interest ofthe enue is concemed,, we are of the consideted opinion that the inte st of the Revenue has alreadY been considered and Protected, as s been observed in ParagraPhs i I 7 16 ( 36,37 and 38 ofthe order which, for ready reference, is reproduced hereun der:

36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent- Department rs neither tenable, nor 'sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly 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 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 pro€ed 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 Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permifted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right .l ,. 77 conferred on the Revenue proceed further if theY so wa order of the SuPreme Cou uld remain reserved to t from the stage of the in the case of Ashish Agarwal, supra.

18. We would only further like make observations that since we are inclined to dispose of the ins t writ petition, conscious of the fact that the earlier order of Kanakala Ravindra ReddY (l srtP before the Hon'ble SuPreme Co s High Court in the case of ) is subjected to challenge in SLP No.3574 of 2024, preferred by the lncome Tax De ent, we make it clear that allowing of the instant writ petitio is subject to outcome of the aforesaid SLP preferred by the Reve ue against the decision of this High Court in the case of Kanaka Ravindru Reddy (l srtPra). This, in other words, would mean t either of the parties, if theY so want, may move an aPProPriate tition seeking revival of this writ petition in the light of the d ision of the Hon'ble SuPreme Court in the pending SLP on the v same rssue.

19. AccordinglY, the instant t petition stands allowed in favour of the assessee so far the issue of jurisdiction IS concemed. As a consequence, the impugned notice under challenge under Sections 148-,4' an 148 stands set aside/quashed. ( ( ( I 'l i , I ! I I l \ To, 1 2 3 4 6 7 B TJ GJv 18 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 Kankanals Ravindra Reddy (l supra). There shall be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand closed. i/TRUE COPY// SD/- A. JAYASREE ANT REGISTRAR \ sEcTtoN oFFtcER APst t, I Assessment Unit, lncome Tax. D€partmejt, Nationali assessment centre, New D^elhi, Room No.40.t , 2nd Fldor, e-nimp, Jlwahrrfri f.f"f,r, Strai*i, New. Delhi. -1 '10003 lncome Tax Officer, Ward 5(.t ), lT Towers 10-2-3, A.C Guards, l\4asab Tank, Hyderabad. 500004 Principal Chief Commissioner of lncorne Tax, Andhr.a praCesh and Telangana, Hyderabad Room No.922, bt-Fio.jils,b'toct<, l. i. iowers, 10_2- 3. A.0 Guards, Masab Tank, Hyderabad. SOOOO+. IP.9":l"ISry,-.[9 union or rndia, rr,linistry oiFinance, Department of Kevenue, Litrect taxes. Government of lndia, North Block, Ground Floor, Sansad Marg. New Delhi-1 10001. 9f 99 to .Sri Tejprakqsh Toshniwat Advocate IOPUCI une CC to [Vls. Bokaro Saona,Reddy (Jr. SC foilncome Tax; tOpUC] one cc to Sri Gadi prave6n t<r.iiid"prtis"ori.it"oi'i"n"rar of rndia[opUC] Two CD Copies - -' , 6 HIGH COURT DATED:0210512025 ORDER WP.No.14325 ot 2025 o$ s r,q 16: 13 rlJB zffi C .) t+ :j ,/ ALLOWNG THE WRIT PETITION WITHOUT COSTS oI