ION OF INDIAT' Punjab and Haryana High Court in the case of JATINDE'R SINGH v. UNION OF IND

5. Down the line, we find that the same issue has also been decided against the Revenue by variott-< t{igh Courts i'e'' by the Bombay High Court in the casc of HEXAWARE TECHNOLOGIES LTD', vs' ASSISTANT {-OMMISSIONER OF INCOME TAX & OTHERS2, Gauhati iiigh Court in the case of RAM NARAYAN SAH vs' UNION OF INDIAT' Punjab and Haryana High Court in the case of JATINDE'R SINGH BANGU vs. UNION OF IND[A4, and Telangana I Iigir {'lourt itr the case of SRMNKATARAMANA REDDY PA'll't)Ol'A vs' DEPUTY COMMISSIONER OF INCOME TAX' r'!r,.'r'': lhc isstre r'r'as in respect of international taxation, Bombay lligh Court in the case of ABHIN ANILKUMAR SHAH vs' INCGiI'IFl 'IAX OI-FICER' INTERNATIONAL TAXATION6 which i:; lgain on intenrational taxation and central circle, High Court ol L{iirraciral Pradesh in the OFFICERT' case of GOVIND SINGH vs' INCONIIi Gujarat High Court in the case ol IVIAN.,SUKHBHAI .i'AX ' yzoz+1464 ITR 430 (Born) ' lpozi1 1 56 taxmann.com 478 (Gauhati)l ^itZOZ+,|165 taxmann.com 115 (Punjab & l{aryana)l 'f2024) 167 taxmann.com 411 (Telangana)l " 12024) 166 taxmann.com 679 (Bombay) - 'izoz+i 165 taxmann.com 113 (Himachal Pradesh)l 4 DAHYABFIAI RA}!,ADIYA vs. INCOME Tr\l( OFFICER, WARD 3(3X5)3. .l;,irrland I{igh Courl in the cz's: of SHYAM SUNDAR SAW vs:. t jivION OF INDIAe, Rajasthirr: High Court in the case of SHA.RIIA. DEVI CHIIAJER vs. IIICOME TAX OFFICER & Ai\{OI'LIFIR and batch of writ petitionsr0 which stood decitled on i{)',(r3.2024. Similar views have also been taken by the Division i:jltnoh rrf Calcutta l-Iigh Courl 'n the case of GIRDHAR GOPT'. DAI-MIA vs. UNION OF I\DIA & ORS (M.A. f l69tr of 2{).1j). tlecideci on25.09.2024.

6. Even thougi.r ili-' setre issue having been di cided by a large nuurber o1'tIigh { o'"r:'L-'r. r.vc ale still confronted with large filing of identical rxattcrs ,:;', ,laiiy basis ranging betwer:r'l 5 to 10 writ pctitions. That i;i,'i:r ihc instructions being srrrght fronr the Departmei it. thc.'.,' :r l" c ireetl taking a solitary ground that the decision o!' the lJ1';rrba1' l{igh Court in the car;e of Hextware Technologics l,tl., (2 srqrra) as also the one u'hich has been decided b'y this Cotrrt in the case of Kanakalu R'avindra Reddy 82024 SCC Onlinc ,.ir'i i0l2 '2025 SCC ( )nLine .rirai 2"Q7 'o 12023, R..t -J D : 498,1, I )tt I 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 Court and the Hon'bte Supreme Court is scized of the matter' In addition, there are about 1200 SLPs also iiled arising out olthe same issue being decided by various High Courts

7. To a query being put to the learned coutlsel for the Revenue' they have categorically accepted the fact tirrt tirerc is no interim order granted bY the Hon'ble Suprerne (lourt in any of these matters pending before it. Meanw'hile" iiesh writ petitions of identical nature are being piled up before lhis ]lenclr on daily basis and the pendency is getting increased on matier which otherwise has already been dealt and decided by this vcrl'Fligh Court itsetf'

8. On the one hand, even though thc oidcr of this Court that was passed as early as on 14'09 2023 and urrre 16 months have tapsed, till date, we do not find anY rettrediiii stcps having been taken by the Income Tax Department to take appropriatc steps to either hold back issuance of notice under Scction 1484 and under Section 148 of the Act by the jurisdictional Assessing Officer' rather the authorities concemed in the teeth ol series of decisions 6 by all thc rnajor i ligh Courls in India are ct,ntinuously still initiating proceedings untler Section 148,4. of the Act and also initiating proceedir-,gs under Section 148 o I the Act in contravention to th.t-' rnrendments brought into the lrLcome Tax Act pursuant to tlre Finance Act. 2020 as also the Finan:r: Act 2021

9. Upon a quer'1' t,i.ring put as to why can't this rvrit petition be disposed o i' ir.r the r.,crir of the decision rendered :'r this Court in the case of Kanakuiu Ro.t,indra Reddy (l supra), learned Standing Counsel fo]'ihc Irrr,a),r,-' -l alr Department contends .hat those vrould unnecessarili, bu rrlcr the Income I'ax Departm :nt where they would be requileti ro fi le equal number of S L Ps before the Hon'ble Supreme I irrilt and it would be furthe ' burdening the exchequer of the [.rr,lir,rr of India. It was also the contention of the leamed Stancling (-'rri.riri€l tliat no prejudice woukl b,: caused to the interest of tht'pe1i1..c,iri:r':i in case if this writ petitior is kept pending till the finalizatiolr r,r' the SLPs pending belore, the Hon'ble Supreme Coufi anr.i ihr fircl- that the petitioner is iLlr-eady enjoying the benefit ol interir;r pioter:tion. Nonetheless, on -he earlier query of this Court as to i\lrt'l.h.e Income Tax Department have not come out with a mechanisn tr-, issue appropriate instrur:tions or to take # 1 I 7 appropriate steps in ensuring that proceedings under Section t48A of the Act as also the assessment ordcrs undcr Section 148 of the Act are kept in a hold in the light of rhe 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 ofCBDT as any such steps would have to be taken [)an lndia and cannot be timited to any of these jurisdictional High ('ourts

10. As a result of which, what r.ve are f nt'ing is steep incrcase of litigation day in and day out even though valiotrs orders have been passed by this High Court allowing utit petitions on the very same issue. The Incorne Tax authorities concenrecl are still even now in 2025 also initiating proceedings in contra.,,ention to the provisions of Section l51A of the Act and as a result [r'v now, rnore than 600 to 700 petitions have been ah'eady got pilcd up befole this High Court on an issue which otherwise stands squarely coveled by the judgment of this Courl in the case of Ktntkalt Ravindra Reddy (l supra). What is also surprising is thc lact l-hat though while allowing the writ petitions in the case ol- Krnakoh Ravindra Reddy (1 supra), the Division Bench while rcserving the right of the Revenue, has also protected the inter,-'st of the petitioners 8 insofar as the liberrl rvhich was granted to the Reventte lor initiating frcsl.r procc:Llings strictly in accordance u'ith the amended provisions r,f the .\,-',. as amended by the Finance \ct. 2020 and the F'inancc Act, rl0 il. l. f he petitioner assessee wou [<l be entitled to challenge ol raise t[,,: othel legal objections if the F-ei'enue initiates fresh proce'edings. lhe Department has made ro endeavour in availing thc said libcr.', that was reserv'ed for the Rcvenue. On the contraly, the1, [i1'"'g [recn still stir:king on to thc s,and, whictr this High Couri irs wcll .s nr{rn'y othcr High Courls al 'eady held to be 1 l. [t appears ilriri I're,.:ause ol the aforesaid libeLtl that this High Court had grarrtcr,l ;.rnrrilting lhe Revenue for initiating fresh proceedings as A (rnt tirne rneasure in a facel,:ss manner, the Income T'ax Dep:rrtr,rort wants kr take advantagc of the sanre by protracting lhese pi,rc,:cclings which rvould enablc tlcrn to meet the limitation that u,ouiri olircr.*ise come in the way. t.ikervise, if the writ petition is kept pcnding for a considerable lorLg period o1'time and flnally at a lalel stage if the Hon'ble Suprenrr: Court confirms the decision taken ['y this t{igh Court as also b,' the other High Courts in uhich th,, SI-Ps are still pending, rhe Incorne Tax 9 Department would get the advantage of the liberty that is otherwise protected in favour of the Revenue ttrr. initiation of fiesh proceedings from the disposat of these mattcls at a much later stage which would be advantageous and benellcia] tc'r the Revenue and would be equally disadvantageous and detrimellial so f'ar as interest oftheassessesareconcemed.Asacollseqlisnce,thelncomeTax Depaftment gets an extended period of'titut' ii;r initiation of lrcsh proceedings.

12. The alarming trend of docket explosion in this Court' despite the clear precedent seL in Ktnakalo Rovindra Reddy (l supra)' is a matter of grave concern. The Income 'I'ax l)epartment's persistent initiation of fresh proceedings, disregarding the t:stablished judicial pronouncements, has led to an unprecedentecl surge in litigation with over 600-700 petitions piting up on ti''e same issue' This deliberate approach not only undetmines tlie rriinciple of judicial precedent but also strains the judicial resorir":' trnnccessarily' The Department's strategy of awaiting the Suprerne Court's decision on pending SLPs while continuing to initiatc liesh proceedings appears to be a calculated move to bu1'' Lirne and circumvent limitation periods, rather than adhering to tlt': established legal I 10 position. Such conditct raises serious questior-ts about the administrat ir t cl'l-lcie rrcy and the respcct for judicial pronouncerrents. par'iiculally when this Courl has rlreacly provided a balanced approach t,y preserving both the Ro,t rrue's rights and assesses lnterests

13. Anothcl asne,rt rvhich needs to be consider.',] is that in lact it should have been r',.raiizc<l [ry the lncornc 'l'ax DcPi rr rnent itse{f and should have lbunc! ,.'iit .,'ia rnedia in ensuring Irat procecdings undcl Sectior,s I -1[]-,\ and 148 should noL har"c x:en issuecl in a faceless manner, at Ir:rst till thc IIon'blc Suprenre ('ourt decide the twelve hundred ( 12001 odd SLPs which it is alreacll seized of or, at least the lncome i-ali [)cl)artment should have lirund out some remedial stcps to :trsrrrc lhat rvherever the autlrorities intend to initiate proccedings r;rdel Scctions 148-A and l-111. other than in a faceless manner. thc nroceedings should havi' been dclerred without precipitatrng tiie matter further intimatins. tlre assessee that they shall initiate appropriate proceedings only rLI:er the SI-P's are decided by the llon'hie Supreme Court on the ' i:ry same issue. This again, the Inconre Tax Department, has not l;r:cn able to give a convincing reply, c.roepr for the fact that such a tlecision il at all 7l has to be taken, has to be taken for the wholc of India, and which otherwise has to be by way of a policy dccisioir and that too at the level of Central Board of Direct l axcs' f irough the leamcd Standing Counsel fbr the lncome I'ax t)cparlrnctlt contended that theDelhiHighCourtdismissedawritpetition':fsimilarnature'on the one hand when the High Coufl is struggling to reduce its pendency, such notices which arc undct cii'-tllengc in this writ petition are forcing the assessee to knock lltr rioors of this l{igh Courtresultinginfitingofhundrcdsoftlcrvl.,l.i'.-petitiorrswhichin the long run not only affects the disposal cr ihl rvrit petitions but also consumes substantial time of the Ben';:h in hearing these matters again and again on daily basis' Admirtcdly, in spite of the matter before the Hon'ble Supreue Cottt t l"'r-' irrg becn taken on many occasions, the l{on'ble Supretnc Cotnt ii i'ich is seized ol the matterhasbeenreluctantingrantinganyirr!el'lir-rprotectiontothe Income Tax Department. Yet, the autirtlirtic-s concemed at the State level are not ready to accept the verdici p'rssed by a majority of High Courts of different States on the siiir:c isstte; and to make things further worse, the lncome Tax I)epr:rltntent is showing audacity by issuing notices continuously under -\.'cctions I 48-A and .ii:;iiiM I 12 148 through the jurisdiclional Assessing Officer r,lrereas it ought to have been onlr, in lirc faceless lnanner.

14. In thc case o[ BANK OF INDIA rs. ASSISTA.NT COMMISSIONUIT, INCOMI| TAXIr, on an issu-'whether i: was justifiable on tirc parl of the Income Tax Dcyrrrrtlnent in not Ibllowing att order- l-rrssed by the adjudicating authority only on the ground that the apncals are pcnding. the Divisitrn Bench of the High Court of Borlbrv lrcid at paragraph No.25 as .rnder, r,iz., : "25. l\ilr. Fraiirtwaiia has rightly drawn out att€ n ion to the decision of this Court in Commissioner of lncome-[ex vs. Smt. Godavaridev! Sarafr? as also the recent decision of the co- ordinate Bench of tl'ris Court in Samp Furniture (P) Lr:d. v. lTOl3 of which one of urs (Justice G.S. Kulkarni) was a menrber, wherein the Court categorica!ly observed that the Revenue having not "accepted" the jr.r(_lgrnent of the High court would not rf ean that till the same is set a:irde in a manner known to law, it w';r ld loose its binding force. i?e.ferrrng lo the decision of the Supr:rre Court in Union of lndia rrs. Kamlakshi Finance Corporatic,n Ltd.14, the Court observed that the approach of the officials 01 Ilevenue of treating decisirr.rs being "not acceptable" was cr tD:.ed by the Suprer,re Couil. In such decision, following are the relevant observations n-rade by the supreme court. " 11zOZs; 170 taxmanrr.cortr 422 (tlombay)l '' 1tezsl 1 13 ITR 589 (tlornbay) " 1202+1 165 raxmaun.com 58l/300 Taxman 452 (Borrrhay) 1l99Zl taxnrann.con, i6i55 flLT433 (SC) .;/ / II I I 'l I I I I I i I I I I 13 '6. Sri Reddy is perhaps right in saying that the officers were not actuated by any nrala ftdes in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, tire Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the coifecfness or otherwise of their conclusion or of ai-ry factual malafides but with the fact that the officers, in reaching in their conclusion, by-passed two appeilaie orders in regard to the same issue which were oi;.ed before them, one of the Collector (Appeals) and ihe other of the Tribunal. The High Court has, rn our vrew, rightly criticized this conduct of the Assistant Co;l,lctors and the harassment to the assessee caused by lhe failure of these officers to give effect to tha orders of authorities higher to them in the appellate hrerarchy lt cannot be too vehemently emphasized that it is of utmost importance that, in disposrng of the quasijudicial issues before them, revenue officers are bound by the decisions of the appeliate authorities. The order of the Appellte Collector is birrding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collecto!-s l",'ir: function under the jurisdiction of the Triburral. The pr;16jpls5 61 judicial discipline require that the orders of the higher appellate authorities should be iollowed ,.:nreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acc€ptable" the department - in itself an objectionabie phrase - and is the subject matter of an appeal carr furnish no ground for not following it unless rts coefation has been suspended by a competent court. ll this healthy 1 ..-.J I i I I I I i t i I 14 rule is not i'olk:rrred, the result will only be u'ldue harassmeni to assesses and chaos in adminit;tration of tax lavv--;.

12. \lJe have dealt with this aspect at some length, because r!. hirs been suggested by the l:arned Additional Soiicrtor General that the obserrations made by the l-ligh Court, have been harsh orr the officers. li is clear that the observations of the High Coufi, seerrringly vehement, and apparently unpalatable ic the Revenue, are only intended :o curb a tendenc,l in revenue matters which, if allo,verd to become v/iciespread, could result in consiclerable harassmelt to the assesses-public without any bonefit to the Rerrenue. We would like to say tf a the department should take these observations rr the prope!' sp!{t. -l'he observations of the High (lourt should be keoi in mind in future and the utmost r€)gard should be pard by the adjudicating authorities ernl the acpellate authcrities to the requirements of uCicial disclpline ;.rr-rd the need for giving effect to the oders oi the highei- appellate authorities which are rirrding on them "

15. \\'hal is u.r:rryino, this Bench more is tlre fact tha.t an endeavour is beiriq nrade rvhole heartedly to ensur(,trot to generate further litigation cn i-s:jues rvhich have been laid to i-est b1, a large number of Iiigh Couirs :rl1 of whom have taken a consistent stand that the action of tLc Incoile Tax Department bein€, r,iolative of the \ 15 Finance Act, 2020 and Finance Act, 20?1 . Norv" in order to protect the interest ofthe Revenue as also that ofthe essessee, it would be trite at this juncture, if we dispose o1- 1l.re rvrir petition with an observation/direction that the disposal of thc instant writ petition in terms of the judgment rendered by this High C\-.,urt in the case of Kankanala Ravindra Reddy (l supra) shalI it,'ru'cver be subject to the outcome of the SLPs which were tl led L,,.v the Income Tax Depaftment and which is pending consideratioir belore tlic Hon'ble Supreme Court.

16. In the given facts and circumstanccs, iiris Bench is of the considered opinion that unless and until we drl not tirnely dispose of matters which are squarely covered by the cltcision of this Courl and which stands fortifred by the dccisions '-r1- the various other High Courts on the very same issue, the penilency of this High Court would fuither be burdened which other'-".'ise can be decided and disposed of as a covered matter.

17. So far as the interest of the Revenue is concerned, rve are of the considered opinion that the interest of tl:e Revenuc has already been considered and protected, as has been ob:icrved in paragraphs .. -:aai'r'xta.ait,'r;xiintxlrt :.,..tts:1.'r: i I I ; l ; I I I I 1 ; i i 16 36,37 and 38 ofthc clder vrhich, fbr ready reference. is reproduced hereunder:

35. For aii ihe aforesaid reasons, the impugned notices rssued ancl the proceedings drawn by the reipondent- Department ;s neither tenable, nor sustatnable. The notices sc issued and the procedure adopted being per se illegal, deserves to be and are accor jlllgly set aside/qr.rasl''eC. As a consequence, all the n pugned orders getting quashed, the consequential orders passed by the i L:snordent-Departrnent pursuant to tl-e notices issued unie;'Secticn 147 and 148 would also get quashec iirirj;. is ordered accordingly. The r:aLson we are quasi,ing the consequential order is on the p 'inciples that when lii,-. rnitiation of the proceedings ts elf was proceduraill, wrcng, the subsequent orders also gets nullrfred a ut r, rn al ically.

37. The p;eiiminary objection raised by the p()titioner is sustained airLl a!l these writ petitions stands allc,wed on this very jurisdictional issue. Since the impugnr:c notices and orde.s 2ie getting quashed on the point of lui isdicti(,n. ,IJ? are not incllned to proceed fLtrther and Cecicje the other issues raised by the petitio-rerr which stands reserrved to be raised and con(ended in an apD.oprrale prcceedings.

38. Slirce the Hon ble Supreme Court had, in lhe case of Ashish A.gan/val, supra, as a one-time rneasure exercising the powers under Article 142 of the Constitutirrrr oi' lndia, permitted the Revenue tt proceed under the substituted provisions, and this Cou 1 allowing the petiiiorr:r only on the procedural flaw, t re right I t7 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 fufther like to nlakc obsclvations that since we are inclined to dispose of the instant s"ril pttition' conscious of the fact that the earlier order of this Fligh (lourt in the case of Kanakala Ravindra Retldy (l supra) is sul;iected to challenge before the Hon'ble Suprelne Court in St'l' 1lio'3574 of 2024' preferred by the Income Tax Department' rr'r' make it clear that allowing of the instant writ petition is sub]cci to outcome of the aforesaid SLP preferred by the Revenue agairrst tire decision of this High Courl in the case of Kanaksla Rut'inrlrt Redtly (l supta)' This, in other words, would mean that eitlrer tli.the parlics, if tlrey so want, may move an appropriate petition sceking revival of this writ petition in the light of the decision of t:e Llon'ble Supreme Court in the pending SLP on the very sarne issitc' lg. Accordingly, the instant writ petition stands allowed favour of the assessee so far as the issue of jurisdiction concemed. As a consequence, the impugned notice under IS challenge under Sections 148-4 and 148 stands set aside/quashed' I I .'-., I ! a i Il,H 18 'Ihe conseclui:ntii i I clder-s, if an1,', also stand set z.s de/quashed in similar t-errrrs as iiavc been;rassed by this Iligh Corrr- in the case of Kankanalu Raviiriitu llctldy (.1 supra). There shall be no order as [o cosls Consequentl,;,. rliscellaneous petitions pendirrg, if any, shall stand closetl. SD/. N. CI{I\NDRA SEKHAR RAO EEPUTY REGISTRAR //TRUE COPY/I ,.(7 To, SECTION OFFICER

1. The lncome Tax Officer, Ward B(1) Signature Towers Opp. Botanical Gardens, Kondapur, Hyderabad 500084.

2. One CC to SRI A.V.RAGHU RAM, Advocate [OPUC] 3. One CC to IMS J.SUNITHA, (JUNIOR SC FOR tNCOt\tE: TAX). tOpUCl 4. Two CD Copies. \ BSK GJP Yt t L :: .i:r i.r.'\. ti, 1'. ! :: .a; .L, lj' ll i u[I 6p \) I i t' -i; I -r0 HIGH COURT DATED:0910612025 ORDER WP.No.14697 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS 6,,l(q"L #6.'