Sri Rajkumar [\/uduru v. The lncome Tax Officer

2. This is a writ petition where thc lrrrri:ccdings are either Section 148A challenged to the notices rvhich were isst'tt.i t't and 148 of the Income lax Act' 1961 (t-oistrort'the Act') orthe assessment orders those have been passeti i:lrcier Section 147 of 'der the Act which have been assailed'

3. This writ petition is being taken up toda-v only on one of the grounds, that the notices issued under Secti''rn 1 'l8A ol the Act '148 of and the subsequent initiation of proceedings uniler Section the Act by the jurisdictional Assessing O[liccL' whereas in terms of the amendment that was brought to the hlcorne Tax Act by way iinuards, Proceedings of Finance Act, 2021 w'e'f" 01'04'2021 / = 2 under Seclior-r I 48.4 of' thc Act as also under Ser:tion I 48 of the Act ought to harir: also l:reen issued and proceed3d in a faceless manner.

4. The contc,rtri'ri of the petitioner is tl-r,rt the issue of proceedings beinq irr violation of the Finance Act, 202 I i.e., the impugncd rroticcs irrr<lel Section l48A and Section 148 of the Act not being issrred ii: .r lacelcss manner, have already' been dealt with and deciricil hi rlr!s Courl in the case of KANKANALA RAVINDIt,,\ R[.[]il]' vs. INCOME-TAX OFI.'ICERT decided on I4.C9.201I v,li.'r'.:lr,r' u lratclr of writ petitions \!,ere allowed and the proceedings i;riti.;ied under Sectiorr 148A as also under Section 148 of the z\ct w'elc i,clci to be bad with consequential reliefs on the ground ot'iL hein6r ir: r'iolation of the provisions of Scction l51A of the Act read rvith l';ciiiir:ation 1812022 dated 29.0-r.2022. The said judgment pl-;sed b, .nis Courl has also been subse,qucntly followed in a large n urnbcr ,-,,' '"r,rit pctitions which were allowed on similar ' [(2023) I 5 (r taxmitr rt -c' r: n I 7 8 ('f clangana)] .,

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 c3s,,: of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati lligh Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA3. Punjab and Haryana High Court in the case of JATTNDER SINGH BANGU vs. UNION OF INDIA4, and Telangana I{igh Court in the case of SRMNKATARAMANA REDDY PAI'LOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX5 rri:r're the issue was in respect of intemational taxation, Bornbay IJigh Court in the case of ABHIN ANILKUMAR SHAH vs. INCOi',IE TAX OFFICER, INTERNATIONAL TAXATION6 which i:; again on intemational taxation and central circle, Fligh Courl of'Jlinrachal Pladesh in the case ol GOVIND SINGH vs. INCOillE 'I'AX OFFICERT, Gujarat High Court in the case ol- iIIANSUKHBHAI 'lzoz+1464 ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati)l '[(2024) 165 taxmann.com 115 (Punjab & Ilarrana)] ' [2024) 167 taxmann.com 4 I I (1'elangana)] " 12024) 166 t.axmann.com 679 (Bombay)l '[2024) 165 taxmann.corn 113 (Himachal Pradc:;h,t] -t 4 DAHYABI{AI P.AD.\I}(YA vs. INCOME TAX OFFICER, WARD 3(3)(5)8, .lharkancl Iligh Court in the c:rse ol'SIIYAM SUNDAR SAW vs. tjNION OF INDIAe, Rajasth:rn High Court in the case ol'SHi\lil),{ DEVI CI{HAJER vs. TNCOME TAX OFFICEII & AN(,TtnI;f{ and batch of rvrir Jretitionsro which stood decided on i9.()3.2014. Similar r.iews have also been taken by the Di.,,ision B,:rich o1- Calcutta Fligh Courf irr the case of GIRDHAR (;OPAL IIALMIA vs. IINION OF INDTA & ORS (M.A.1' 1690 of 2(rl-i ), r{ccided on 25.09.2024. 6 Even thoueir :hi ::irn'rc issue having been de:ided Lry a large number of High ('orirt.s, u,e are still confronted rvith Jarge filing of identical ntatters ,.;j ,,iaily basis ranging betwee r 5 to l0 writ petitions. 'Hrat Lrlr-.r tlie instructions being scught from the Depaftmcnt. thei, t, rr e bcen taking a solitary llround that the decision o1' 1he [Jr:r,rb:rv lligh Court in the casr: <tf Heraware Technologies Ltd., (:'. supra) as also the one v,,hich has been decided by this C.''url in the case of Ktnakala llovinttra Reddy 82024 SCC ()n[.ine (,Lrj 4{)12 '2025 SCC Onl.iric liir:r 287 12023 : RJ-J l) :4984-i,r ti I I I I l ! I I I 5 (l supra) has been subjected to challenqe in a Special Leave Petition i.e., SLP No.3574 of 2024 before thc llon'ble Supreme Court and the Hon'ble Supreme Court i: sr:ized of the matter' In addition, there are about 1200 SLPs also liicd arising out of the same issue being decided by various l{igh ('ourts

7. To a query being put to the learned cottttscl for the l{evenue' they have categorically accepted the l-ac t that there is no interim order granted by the I ton'bte Supreme ( ''rttt in any of these matters pending before it. Meanwhile. fi esh writ petitions of identical nature are being piled up before this Rench on daily basis and the pendency is getting increasecl oh rratter which otherwise has already been dealt and decided by tlt*s very Irligh Court itself'

8. On the one hand, even though the oirler of this Court that was passed as early as on 14.09'2023 and rrtore I6 rnonths have lapsed, till date, we do not find any remetlial steps having been taken by the Income Tax Department to takc appropriate steps to either hold back issuance of notice under Section 148A and under Section 148 of the Act.by the jurisdictiorial Assessing Officer' rather the authorities concemed in the teettr ol series of decisions ( I 6 by all thc n.rajor llrgh Courts in India are continuously still initiating proceecling::r under Section l48A o1' t rc Act and also initiating procecdirrg,s under Section 148 of the Act in contravention to thLr arr-lendments brought into the Incor.ne Tax Act pursuant to the Iiinancc AcL. 2020 as also the Finarce Act 2021.

9. Upon a quci'. br:ing put as to why can't thi; writ petition be disposed of in thc 1r:.:1li o1'the decision rendercd b1' this Court in the case ol' Kunaku!,t Rovindra Reddy (l supra), lcamed Standing Counsel for the Incorn,-: l'ax Depaftment contends lhat those u,ould unnecessalily bur<lcii the Income Tax Deparln ent where thev would be requireti to lile equal number of S,l.l's before the Hon'ble Supremc ('orirt and it would be lurthe r buldening the exchequer of the t. iiiou ol lndia. It was also the r:ontention of the leamed Standing (.'trr.:ttsel that no prejudice u,ould be caused to the interest of the petitio,rer':; in case if this writ petitiorr is kept pending till thc finalizaticir ,rl' thc SLPs pending bcfr,rc thc' Hon'ble Supreme Court and the f'act that the petitioner is rlready enjoying the benefit of inlelirn prolection. Nonetheless, on thc earlier query of this Court as.to '.r,ir), the Income Tax Departmerrt lravc not come out with a nrechanisrrt to issue appropriate instru,:tions or to take U * I I f I I I I i! I i I ! ; 7 appropriate steps in ensuring that proceedings under Section l48A of the Act as also the assessment orders undet' Section 148 of the Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts, it was submitted b;- 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 Pen India and cannot be limited to any of these jurisdictional High Courts.

10. As a result of which, what we are l'acitrr.t is steep increase of litigation day in and day out even though varil)us orders have been passed by this High Court allowing writ ptrtititxs on the very same issue. The Income 'l ax authorities concerncd are still even now in 2025 also initiating proceedings in contraveltion to the provisions of Section 151A of the Act and as a result by now, more than 600 to 700 petitions have been already got piled up betbre this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of Ksnokulo Ravindru Reddy (1 supra). What is also surprising is the [acL ihat though while allowing the writ petitions in the case ctl Kanakalo Ruvindra Reddy (1 supra), the Division Bench rvhile leserving the right of the Revenue, has also protected the intclest of the petitioners -1 I 8 insofar as lhe libertli 'which was granted to t he Revenue for initiating liesh procerc)ings strictly in accordance rvith the amended plovisions of the lct. as amended by the Financ e Act, 2020 and the Finance Act, 201 I. -flie petitioner assessee rvould be entitled to challenge or raise ttr': other legal objections if the Revenue initiates fresh proceedings. 'l'he f)epartment has made no endeavour in availirrg the said lii''crt-r, that was reserved for the l{evenue. On the contrary, they havt: l,i:en still sticking on to the stand, which this High Court as u,eli :r-s rnany other l{igh Courts already held to be bad.

11. It appears thar because ofthe aforesaid liberty that this High Courl had grant.rri p,elrnil-ting the Revenue fbr initiating fresh proceedings as a o;re-time measure in a facel:ss manner, the Income 'l'ax Depailrnt:lti wants to take advantag€ of the same by protracting these p'roceedings which would enable them to meet the limitation that woriirl othenvise come in the u,ay. Likervise, if the writ petition is kept pending for a considerable long period of time and finally at a late.t" stage iI'the Hon'ble Supremt: Court confirms the decision taken b.v this High Court as also b1 the other High Courls in rvhich the SLPs are still pending, the Income Tax i I . i t I 9 Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue lor initiation of fresh proceedings from the disposal of these mattcr s at a much later stage which would be advantageous and beneficial to the Revenue and would be equally disadvantageous and detrimenlal so far as interest of the assesses are concemed. As a consequence, the Income Tax Department gets an extended period of tit.tr.: il't' initiation of fresh proceedings.

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakals Ravindra Reddy (l supra), is a matter of grave concem. The Income Tax Department's persistent initiation of fresh proceedings, disregarding ttrt: established judicial pronouncements, has led to an unprecedetrteil surge in litigation with over 600-700 petitions piling up on lh.e same issue' This deliberate approach not only undermines thc principle of judicial precedent but also strains the judicial resouries umece ssarily' The Department's strategy of awaiting the Suprenle Coud's decision on pending SLPs while continuing to initilte iresh proceedings appears to be a ' calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal ) 'l I 10 position. Such conduct raises serious questions about the administrative elliciency and the respecl for judicial pronouncernents, palticuiarly when this Court has already provided a balanced approacir by preserving both the Revr:nue's rights and assesses interests.

13. Another asp$li \yhich needs to be considere I is that in fact it should havc been n:rli,:cd t-ry the Income Tax DepzLrlment itself and should har,e founr: ,.rLrl v ia media in ensuring '.hat proceedings under Sectioirs I l ll- ,\ ancl 148 should not have reen issued in a faceless ln.rnner, a1 i,:rrs1 till the Hon'ble Supreme Court decide the twelve hundred ( I 2t)ii j odd SLPs whicir it is already seized of or, at least the I)rcr)me 'i'it:- i)epatlment should have lound out some remeciial steps to irirslilc that u,herever the authrrities intend to initiate ploceedinl.l, ,.111,1.. Scctions 148-A and l4ti, other than in a facelcss nranner, lrr llroceedings should have been deferred witliout precipitatinri iiir-- rnatter further intimating the assessee that they shall ir.ritiate applopriate proceedings only after the SLP's are decided by the Hol'bic Supreme Couft on the rery same ISSUe This again, the Income Tax Department, has not been able to give a convincing repl.v. cxcept for the fact that such a rlecision if at all /.' /' IL has to be taken, has to be taken for the whole of India' and which otherwise has to be by way of a policy dccision and that too at the level of Central Board of Direct Taxes. l hough the leamed Standing Counsel for the Income Tax Deparrrnent contended that the Delhi High Court dismissed a writ petition oI similar nature' on the one hand when the High Courl is stlugl:ling to reduce its pendency, such notices which are under cl:allenge in this writ petition are forcing the assessee to knock the doors o1'this High Court resulting in filing of hundreds of new ii "t petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the.Rench in hearing these matters again and again on daily basis' Adtllttedly' in spite of the matterbeloretheHon,bleSupremeCotrl.tlrlr',.Lngbeentakenon many occasions, the Hon'ble Suprerne Court ''r'irich is seized of tl-re matter has been reluctant in granting any intl:rim protection to the lncome Tax Department' Yet, the authorilies concemed at the State level are not ready to accept the vertlict 1'rssed by a majority of High Courts of different States on the santc issue; and to make things further worse, the Income Tax L)cl-'artment is showing audacity by issuing notices continuously ttirc're t Sections 1 48-A and 1 148 through the.julr:;dictional Assessing Officer r.vhereas it ought to have been only' in lhc i'aceless manner.

14. In thc' casc ,;t' BANK OF INDIA vrr. ASSISTANT COMMISSIONEI(" INCOME TAXrr. on an issrre whether it was justifiable on the ;::ri o1' the lncome Tax Deltartment ln not follorving en ordr-'r-n:::rscd hy the adjudicating authority only on the ground that thr ;l.rr,:i ls ale pcnding, the Division Bench of the High Court of Bortri.ii,. hcld at paragraph No.25 as under, viz., : "25. [4r F]a. air1,atla has rightly drawn out attontton to the decision of thrs uor:,-i in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarat" as also the recent decistol of the co- ordinate Bencir of this Court in Samp Purniture (P) Ltd. v. lTOl3 of which one of ,.rs (Juslice G S Kulkarni) was a mertber, wherein the Couri caterr.r;::,: ally observed that the Revenu: havrng not "accepted' the Jii, j, tr ent of the High Court would not mean that till the sarne is sei aslds in a manner known to law, it wculd loose its binding force R.,ftr:r-rng to the decision of the Suprame Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.l{, the Court observeii tirar lhe approach of the officials o Revenue of treating; decisrons L;eir.ie "not acceptable" was critioized by the Supreme Cour-t ii-r such decision, following are the relevant observations maCc by the Supreme Court. '] t{zOZSl 170 raxrrranrr.conr 422 (Bombay)l '' 1t9zs1 l l.l t l'R 5fi9 (tlouriray) " 1202+116-5 taxma;rn.corn -5til/300 J-axman 452 (Bonrbay) TlgSZl taxmann.clrnr i(ii-<5 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. l'hey 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 cQrlectness 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 vrere placed befoi-e them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in oi;r view, rightly criticized this conduct of the Assistant Coiiectors and the harassment to the assessee causeci try the failure of these officers to give effect to the orders of authorities higher to them in the appellate hicrarchy lt cannot be too vehemently emphasized that it is of utmost importance that' in d'isposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellaie 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 'qssistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The plrnciples of judicial discipline require lhat the orders cf 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 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 ;l I L4 rule is not iollovved, the result will only be undue harassmeiit tc assesses and chaos in admin stration of tax lau,/s. 12 We have dealt with this aspect at some length, because it nas been suggested by .the learned Additionai Siclir;itor General that the obse vations made by the lJigh Court, have been harsh on the officers. ii !s clear that the observations of the High Court, ss.rningly vehement, and apl)arently unpalatabi,- io ttre Revenue, are only intended lo curb a tendency i,i levenue matters which, if allc wed to tlecorne !,.1r,.i.]spread, could result in consrderable harassrnent to the assesses-public without any benefit to the Revc-nrre We would lrke to say tlat the department should take these observations in the proper splri: The observations. of the Higlr Court should be ke.t in mind in future and the utmos': regard should be paid b\/ the adjuCicating authorities and the appellate aLiti',or-iiies to the requirements of judicial disGpline a,-rd ihe need for giving effect to th€ orders c,1'the highrrr appellate authorities which are binding on {henr ""

15. What is rl,'(--,r1 '" ;ng this Bench more is the fact that an endeavour is being uia<le whole heartedly to ensur3 not to generate fuither litigation on issues r.vhich have been laid to rest by a large number of High Co,,irLs all of whom have taken a consistent stand that the action of tire Income Tax Department bein13 violative of the 15 Finance Act,2O20 and Finance Act,2021' Nr"u', in order to protect the interest of the Revenue as also that of the llssessee' it would be trite at this juncture, if we dispose of thc r'r rit petition with an observation/direction that the disposal ofthe instant writ petition in terms of the judgment rendered by this Fligh Court in the case of Kankanala Ravindra Retltly (l supra) shall horvever be subject to the outcome of the SLPs rvhich were filed Lr1' the lncome Tax Depaftment and which is pending considelatiorr before the Hon'ble Supreme Court.

16. In the given facts and circumstanccs, Lhis Rench 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 Coutt and which stands fortified by the decisions ol'the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which othcrrvise can be decided and disposed of as a covered matter'

17. So far as the interest of the Revenue is concemcd' we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been obselved in paragraphs 7 16 ;r.!r 36, 37 and 38 of the c:dg;- 1vfiish, for ready referen:e, is reproduced hereunder: 36 For ::il liro aforesaid reasons, the imougned notices issued and the proceedrngs drawn by the r€sponden! Departmenl is neither tenable. nor sustainable. The notices so issued and the procedure adol)ted being per se illeglr deserves to be and are accordtngly set aside/qua-si,:r,i As a consequence, all the impugned orciers geit,n:t quashed, the consequential ordr rs oassed by the res pordent-Department pursuant to tlte notices issued L..rrrcJ:." Seclron 147 and 148 would also get quashed ar,d ri is ordered accordingly. The reason we are quashinir ihe consequential order is on the principles that v/hen the rnitiation of the proceedings itself was procedurall_v ,riong the subsequent orders also gets nullified autornatically 37 The oreirninary objectron raised by the p,-,trtioner is sustained arr.J all these writ petrtions stands ellowed on this very Ju!'isdrcticnal issue Since the impugn()d notrces and order-., ire getting quashed on the point of jurisdiction, ,,r,e are not inclned to proceed frtrther and decide the oth?r rssues raised by the petitio rer which stands reservercl to be raised and contended in an appropriate proceedtngs. 38 Since the Hon'ble Supreme Court had, irr the case of Ashish Aga.rwal, supra, as a one{ime measure exercisine r. powers under Article 142 of the Conslituti,,.n cf lndia, permitted the Revenue to proceed under ihe sribstituted provisions, and this Courl allowing the petitrons only on the procedural flaw, the right t7 conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Couft in the case of Ashish Agarwal, supra.

18. We would only further like to make ob:;.rvations that since we are inclined to dispose of the instant writ pctition, conscious of the fact that the earlier order of this Fligh ('ourt in tjre case of Kanaksla Ravindro Reddy (l supra) is sub.iected to challenge before the Hon'ble Supreme Courl in SLt' No.3574 of 2024, preferred by the Income 1'ax Depaftmetlt, tvi: lnake it clear that allowing of the instant writ petition is subiecr to outcome of the aforesaid SLP preferred by the Revenue against rhe decision of this High Court in the case of Kanakala Rtviniltc Retkly (l supra). This, in other words, would mean that either oi the parties, if they so want, may move an appropriate petition sceliing revival of this writ petition in the light of the decision of iirc Hon'ble Supreme Court in the pending SLP on the very satnc is:',,te.

19. Accordingly, the instant writ petition stands allowed rn favour of the assessee so far as the issue of jurisdiction IS concemed. As a consequence, the impugned notice under challenge under Sections 148-4 and I48 stands set aside/quashed. I I I I i l I 18 The consequentill ordels, if any, also stand set e side/quashed in similar tenns as havr: bc-r:n passed by this lJigh CorLrt in the case of Kankanah Ravindrol Redil1, (l supra). There shall be no order as to costs ConsequenLll,. nijscellaneous petitions pending, if any, shall stand closed //TRUE COPY// SD/. T. JAYASREE DEPUTY REGISTRAR To, 1. The lncome Tax officer, ward- -.1, lncome Tax office. 1_g-610, 3rd Floor rst,Fcr a;,*,,, ruIi#il! ur ra Ha na mko nda, ffi3,,.5ffiiffj;6.?pp SE OFFICER

2. The Assessment Unit National Faceless Assessmenl Centre, lncome Tax Department, ft,4inistrv or Financ.e, Roorn N;. ;6'i:'zio rtoor, E_Ramp. Jawaharlat Nehru Sfadium, Oefni r io Ooa. '" ' -,' 3. One CC to SRt A.V.RAGHU RAM, Advocate. [OPUC] - to tMs.BoKARo SAPNA REDDY, (sr SC FOR tNCoME rAX). fl&"r""? 5 Two CD Copies GJP "r HIGH COURT DATED:0910612025 c' k 1lt sit 20ffi (- ,:' \-, : i .( ? -)I \ r1/, ORDER WP.No.14731 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS \\