Sri Bramaramba Mallikhariuna Swamy Tem v. The lncome Tax fficer, Ward 1

Counsel for the Petitioner : SRI DUNDU MANMOHAN Counsel for the Respondents: Ms'J'SUNITHA(JUNIOR SC FOR INCOME TAX) The Court made the following: ORDER THE IIONOURABLE SRI JUS ICE P.SAMKOSHY AND THE HONOI]RABLE SRI JUS CE NARSINGRAO NAIIDIKO A WRITPETITION No.l 038 ()F 202s ORDER: (per Hon'ble Si Justice Narsing Rao Nandikonda) Heard Mr. Dundu Manmohan leamed counsel for the petitioner and Ms. J.Sunitha, learned nior Standing Counsel for the Income Tax DePartment for the respondents. Perused the record.

2. This is a writ Petition where e proceedings are either challenged to the notices which were sued under Section l48A and 148 of the Income Tax Act, 1961 for short 'the Act') or the assessment orders those have been p sed under Section 147 ol the Act which have been assailed. l. This writ petition is being taken p today only on one ofthe grounds, that the notic€s issued unde Section l48A of the Act and the subsequent initiation ofpro dings under Section 148 of the Act by the jurisdictional Assessin Ofhce r, whereas in terms of the amendniEnfthat was brought to e lncome Tax Act bY waY 2 ( of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Section l48A ofthe Act as also under Section 148 ofthe 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 ofthe 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 OFFICERI decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 148A as also under Section 148 olthc Act were held to be bad with consequential reliefs on the ground ol'it being in violation of the provisions of Section l51A of the Act rcad with Notification 18/2022 dated29.03.2022. 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. ' (2023) I 56 taxrnann.com 178 (Telangana)., 3 l

5. Down the line, we find that the same issue has also been decided against the Revenue by ous High Courts i.e., by the Bombay High Court in case of HEXAWARE TECHNOLOGIES LTD., vs. ASSIS ANT COMMISSIONER OF TNCOME TAX & OTHERS2, ti High Court in the case of RAM NARAYAN SAH vs. tiNIO OF INDIA3, Punjab and Haryana High Court in the case of JA ER SINGH BANGU vs. UNION OF INDIA4, and Telang High Court in the case of SRI VENKATARAMANA REDDY TLOOLA vs. DEPUTY COMMTSSIONER OF INCOME T where the issue was in respect ol intemational taxation, Bomb High Court in the case o[ ABHIN ANILKUMAR SHAII VS. COME TAX OFFICER, I NTE RNATIONAL TAXATION6 W ch is again on intemational taxation and central circle, High Court f Himachal Pradesh in the case of GOVIND SINGH vs. IN OME TAX OFFICERT, Gujarat High Court in the cas of MANSUKI{BHAI 'pzoz+1464 ITR 430 (Bom) '[(202!\ 156 taxmann.com 478 (Gauhati)] 't(2024) 165 taxmann.com 115 (Punjab & '[2024)'167 taxmann.com 4l I (Te "[2024) 166 taxmann.com 679 (Bombay)] '12024) 165 taxmann.com 113 (Himachal aryana)l l radesh)l 4 { DAHYABHAI RADADTYA vs. INCOME TAX OF,FICE& WARD 3(3)(5)8, Jharkand High Court in the case of SIfyAM ST NDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA 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 DALMTA vs. UNION OF,INDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Even though the sarne 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 l0 writ petitions. That upon the instructions being sought from the Department, they have been taking a solitary ground that the decision of the Ilombay High Court in the case of Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in rhe case of Kanakala Ravindra Reddy E2O2+ SCC Online (iuj 40 t 2 '2025 SCC Onlir:e Jhar 287 'o 12023 : RI-J D :4984- DB l 5 (l supra) has been subjected to chal enge in a Special Leave Petition i.e., SLP No.3574 of 2024 b ore the Hon'ble Supreme Court and the Hon'ble Supreme Co is seized of the matter In addition, there are about 1200 SLPs o filed arising out ofthe same issue being decided by various Hi Courts.

7. To a query being put to the leam counsel for the Revenue, they have categorically accepted the that there is no interim order granted by the Hon'ble SuP e Court in any of these matters pending before it. Meanw e, fresh writ petitions ol identical nature are being piled up befo this Bench on daily basis and the pendency is getting increased matter which otherwise has already been dealt and decided by s very High Court itself.

8. On the one hand, even though e 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 edial steps having been taken by the Income Tax DePartment take appropriate steps to either hotd back issuance of notice un Section l48A and under Section 148 ot the Act by the juri ctional Assessing Officer, rather the authorities concerned in the toeth of series of decisions 6 by all the major High Courts ln 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 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 Court in the case of Kanakala Ravindra Reddy (l supra), leamed Standing Counsel for the lncome 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'ble Supreme Court and it would be further burdening the exchequer of the Union ol tndia. [t was also the contention of the leamed Standing Counsel that no prejudice would be caused to the interest ofthe petitioners in case ilthis writ petition is kept pending till the finalization ol the SLl']s pending before the Hon'ble Supreme Court and the lact 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 Department have not come out with a mechanism to issue appropriate instructions or to take appropriate steps in ensuring that proc ngs under Section l48A of the Act as also the assessment o under Section 148 ofthe Act are kept in a hold in the light of decisions dedcided by the various High Courts, it was submi 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 en Pan India and cannot be limited to any of these jurisdictional Hi Courts

10. As a result of which, what we facing is steep increase of litigation day in and day out even thou various orders have been passed by this High Court allowing t petitions on the very same issue. The lncome Tax authorities con ed are still even now in 2025 also initiating proceedings in co travention to the Provisions of Section t5lA of the Act and as a sult by now, more than 600 to 700 petitions have been already g t piled up before this High Court on an issue rvhich otherwise sta ds squarely covered by the judgment of this Court in the case o Kanakala Ravindra ReddY (1 supra). What is also surprising t the fact that though while allowing the writ petitions in the of Kanakala Ravindra Reddy (l supra), the Division Bench ile reserving the right of the Revenue, has also protected th 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 Finance Lct,2020 atd, the Finance Act, 2021. The petitioner assessee woutd 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 l. It appears that because of the 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 Income Tax 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. 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 Court confirms the decision taken by this High Courr as also by the other High Courts in which the SLPs are still pending, the Income Tax I Department would get the advantage o th€ liberty that is otherwise protected in favour of the Reven for initiation of fresh proceedings from the disposal ofthese atters at a much later stage which would be advantageous and eficial to the Revenue and would be equally disadvantageous and etrimental so far as interest of the assesses are concemed. As a co sequence, the Income Tax Department gets an extended period o time for initiation of fresh proceedings.

12. The alarming trend of docket ex osion in this Court, despite the clear precedent set in Kanakala Ra dra Reddy (l supra), is a matter of grave concern. The [ncome ax Department's persistent initiation of fresh proceedings, disre ing the established judicial pronouncements, has led to an unpr nted surge in litigation with over 600-700 petitions piling u on the same issue. This deliberate approach not only undermi es the principle ofjudicial precedent but also strains the judicial sources unnecessari ly. The Department's strategy ol awaiting the upreme Court's decision on pending SLPs while continuing to initiate fiesh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adheri to the establi$ed legal position. Such con<iuct 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. l.3. 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-A 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 Income Tax Department should have lound out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and I48, other than in a faceless manner, the proceedings should have bcen defened without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings onty afier the SLP's are decided by the Hon'ble Supreme Court on the very same lssue. 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 11 has to be taken, has to be taken for 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 T Though the leamed Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ etition of similar nature, on the one hand when the High Court s struggling to redrrce its pendency, such notices which are u der challenge in this writ petition are forcing the assessee to kn ck the doors of this High Court resulting in filing of hundreds of new writ petitions which rn the long run not only affects the dispo I of the writ petitions but also consumes substantial time o[ e Bench in hearing these matters again and again on daily basis Admittedly, in spite of the matter before the Hon'ble Supreme urt having been taken on many occasions, the Hon'ble Supreme ourt which is seized of the matter has been reluctant in granting a y interim protection to the Income Tax Department. Yet, the a thorities concemed at the State level are not ready to accept the erdict passed by a majority of High Courts of different States on t e same issue; and to make things further worse, the Income T x Department is showing audacity by issuing notices continuousl under Sections 148-4 and t2 \ 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BAI\K OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXrr, on an issue whether 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 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. lTOl3 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.'0, 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 relevanl observations made by the Supreme Court. " 11zozs1 [70 taxmann.com 422 (Bombay)] '' 1t9281 113 ITR 589 (Bombay) " 1202+1 165 taxmann.com 581/300 Taxman 452 (Bombay) 'o |l99z1taxmann.com l6155 ELT 433 (SC) -A t 13 , in our view, nghtlY stant Collectors and appellate orders in were placed before ls) and the other of salftg that the ny mala fides in They PerhaPS assessee was not , the Revenue overlooks is that we e conectness or or of any factual officers, in reaching "6. Sri Reddy is PerhaPS right offroers were not actuated bY passing the imPugned orders genuinelY felt that the claim of th tenable and that, if it was a vrculd suffer. But what Sri ReddY are not concerned here with otheruise of their conclusion malafides but with the fact that th in their conclusion, bY-Passed regard to the same issue which them, one of the Collector (APPe the Tribunal. The High Court ha criticized this conduct of the Ass the harassment to the assessee of these officers to give effe authorities higher to tfrcm in the cannot be troo vehementlY em utmost imPortance that, in quasijudicial issues before them, bound bY the decisions of the The order of the APPellte Col Assistant Collectors working wi the order of the Tribunal is bindi Coltectors and the APPellate under the jurisdiclion of the Trib judicial discipline require that th appellate authorities should be by the subordinate authorities' order of the aPPellate authority the department - in itself an o and is the subject matter of an ss its operation has ground for not following it u been susPended bY a compete t court. lf this healthY used by the failure to the orders of llate hierarchY. lt asized that it is of disposing of revenue officers are mere fact that the is not .acceptable" to iectionable Phrase - ppeal can furnish no llectors who function nal. The princiPles of orders of the higher tor is binding on the in his jurisdiction and upon the Assistant ppellate authorities lowed unreservedlY L4 nile 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 obseryations 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 judicial 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 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 I 15 Finance Act, 2020 and Finance Act, 2

21.,. Ncil,'inBdd* tcipYotect t the interest ofthe Revenue as also ofthe assessee, it would be trite at this juncture, if we dispose f the writ petition with an observationidirection that the disposal f the instant writ petition in terms of the judgment rendered by th s High Court in the case of Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which w filed by the Income Tax Department and which is pending con deration before the Hon'ble Supreme Court.

16. In the given facts and circums nces, this Bench is of the considered opinion that unless and il we do not timely dispose of matters which are squarely covered y the decision of this Court and which stands fortified by the d isions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened w otherwisc can be decided and disposed of as a covered matter.

17. So far as the interest ofthe Rev ue is concemed, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has n observed in paragraphs 16 36,37 aod 38 of the order which, for ready reference, is reproducei 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 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 nullifi ed 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 iurisdiction, 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 Agarwal, supra, as a one{ime 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 . ._ ?\ 7 17 l t oonfened on the Re\irenue wo proceed further if they so want order of the Suprerne Court remain reserved to frorn the stage of the the case of Ashish Aganval, supra.

18. We would only further like to e observations that since we are inclined to dispose of the ins writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (l sup ta is subjected to challenge before the Hon'ble Supreme Court n SLP No.3574 of 2024, preferred by the Income Tax Dep t we make it clear that allowing of the instant writ petition subject to outcome of the aforesaid SLP preferred by the Revenu against the decision of this High Court in the case of Kanakala avindra Reddy (l sqra) This, in other words, would mean that ther ofthe parties, if they so want, may move an appropriate tion seeking revival of this wnt petition in the light of the decisi of the Hon'ble Supreme Court in the pending SLP on the very e tssue.

19. Accordingly, the instant writ tion stands allowed in favour of the assessee so far as e lssue of jurisdiction IS concemed. As a consequence, th impugned notice under challenge under Sections l4E-A and 1 8 stands set aside/quashed. 18 The consequential orders, if any, also stand set aside/quashed in similar terrns 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. //TRUE COPYII Sd/- K. AMMAJI DEPUTY REGISTRAR sEc OFFICER To,

1. The lncome Tax Officer, Ward 'l , Sangareddy, lncome Tax Office, Veerabhadra Nagar, New Bus Stand, Sangaieddy, Telangana-502001

2. lhq.PnLc_1pal_Commissioner of lrrcome Tax 2, Hyderabad, Signature Towers, Sy.No.6(P) oI Kondapur, Sy.37(P) of kothagudajOpp. Boiani6al Gardens, Serlingampally, Ranga Reddy, Hyderabad,-Telangana-500084.

3. The National Faceless Assessment Centre, Delhi, The Assessment Unit, llcome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 401, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-1 10003.

4. One CC to SRI DUNDU MANMOHAN, Advocate. TOPUCI 5. One CC to MS J.SUNITHA (JUNIOR SC FOR TNCOME TAX). [OPUC] 6. Two CD Copies pK BSK PVL HIGH COURT DATED:2810412025 (i rl-lE SI o 4r (' ; rl- i't) il:-, 12ilEm o 1 t)r .s t: t,l C ($ l' > z )) ORDER WP.No.13038 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS fln- r!