SRI EDUPAYALA VANA DURGA DEVASTHANAM' BHAVANI' v. Assessment Unit

Petition Under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of WRIT OF MANDAIV1US holding that the notice issued (JAO) by 2nd Respondent under section 148 Dated.3111312023 vide DIN No. ITBA/ASTlsl148- 1t2022-2311051736257(1) for the Assessment Year 2019- 20and the consequential order passed by the 1st respondent. uls. 147 r.w.s '144 read with section 1448 of the lncome{ax Act Date of Order 1310212024, DlN. ITBA/AST/S/1 4 7 / 20 23 _24 I 1 06084020 1 ( 1 )for the As isessment Year 2019-20, as arbitrary, ilegar, bad in raw, void ab initio, vioration aparr rrom vioration or Artictes 1a, re (iXs) ,". ,.;:i:;ffiil:::,ffi]j:il; from being viorative of provisions of section 14BA and section .l49 of the Act and also contrary to the circulz Act, and consequenr y .".,:::t :J ::T;:#:;T I;r:"" ::A"',,:; r'w s 144 read wrth section 1448 of the rncome-tax Act Date of order 13.02.2024, DlN lrBA/ASTlsll47/2o23-24t1o6o'4o2o1(.r)for the Assessment year 2o1g_ 20and a' consequentiar proceedings pursuant thereto. I.A.NQ:l O F 202s petition Under Section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay all further proceedings, including.any recovery, prrrrrnt to the order passed by the 1st Respondent u/s 147 r-w.s 144 readwith section 1448 ofthe rncome{ax Act Date of Order 1302.2024, DtN. ITBA/AST/S/14 the Assessment year 20 1 e-2,andstay or o"r"nJ',',llri:.r^ll!i:::;:1,,]::j Dated' 13'o22024 vide DrN No rrBA/Asr'r156t2023-24/1o6o,40282(1) Assessment year 201g_20. for the Counsel for the petitioner : SRI THANNERU CHAITANYA KUMAR Counset for the Resoonr".llto-...] A 2 : Ms. J.SUN|THA, LEARNED SENTOR couNSEL FoR rHE tNcoME rAx oepnriiia-eii,', Counsel for the Respondent No.3 : Ms. B.KAVITA YADAV The Court made the following ORDER THE HONOURABLE SRIJUSTICE P'SAM KOSHY AND THE HONOURABLE SRT JUSTICE NARSING RAO NAIIDIKONDA WRIT PETITION No.1 6417 of2O25 9 , (per Hon'ble sri Justice Narsing Rao Nandikanda) Heard Mr. T'Chaitnya Kumar' learned counsel for the petitioner,, Mr. J. Sunitha, leamed Senior Standing Counsel for the Income Tax Department appearing for the respondent No'2 and Ms.B.KavitaYadav,Ieamedcounselappearinglorrespondent No.3. Perused the record'

2. This is a writ petition where the proceedings are either chattenged to the notices which were issued under Section l48A andl48oftheIncomeTaxAct,lg6l(forshort.theAct,)orthe assessmentordersthosehavebeenpassedunderSectionl4Tof 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 of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms of theLmendment that was brought to the Income Tax Act by way ( \ 2 ' 'l of Finance Act, 2021 w.e.f., 01.04.2021 onwards, proceedings under Section l4gA of the Act as also under Section l4g of the Act ought to have arso been issued and proceeded in a faceress manner.

4. The contention of the petitioner is that the issue of proceedings being in violation of the Financ e Act, 2021 i.e., the impugned notices under Section l4gA and Section l4g 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 RAWNDRA R-EDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 14gA as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section 15lA of the Act read with Notification lg/2022 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 alrowed on simirar terms. '[(2023) 156 taxmann.com l7g (Telangana)] { a 3

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 INCOME TAX & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. T NION OF I|{DIA3, Punjab and HaryanaHigh Court in the case of JATIITIDER SINGII BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA 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 TAXATIO1t' which is again on intemational taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI ' Tzoz+1464 ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati)] ^ LQ024) I65..taxmann.com 115 (Punjab & Haryana)l '12024) 167 t\mann.com 411 (Telangana)l "12024) 166 taxmann.com 679 (Bombay)l '[2024) 165 taxmann.com 113 (Himachal Pradesh)] iffiil,: :1iF,.*'. i .i. , i'-1ffi", r.rt5ril.i. 4 DAHYABHAI RADADIYA vs. INCOME TAx OFFICER, WARD 3(3X5)8, Jharkand High Court in the case of SHyAM SUNDAR SAW vs. UMONOF 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 Calcuna High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF IIYDIA & 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 dally basis ranging between 5 to 10 wdt 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 Hexaware Technologies Ltd., (2 supra) as also the one which has been decided by this Court in the case of Kanakola Ravindra Reddy 82024 SCC Online Guj 4012 'q 2025 SCC Online Jhar 287 'o 72023, RJ- JD :4 9 84- DB l 5 (l supra) has been subjected to challenge in a Speclal Leave Petition i.e., SLP No'3574 of 2024 before the Hon'ble Supreme Court and the Hon'ble Supreme Court is seized of the matter' In addition, there are about 1200 SLPs also filed arising out ofthe same issue being decided by various High Courts' 7. To a query being put to the learned counsel for the Revenue' they have categorically accepted the fact that there is no interim order granted by the Hon'ble Supreme Court in any of these matters pending befbre it' Meanwhile' fresh writ petitions of identicar narure are being pited up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been deart and decided by this very High court itself' 8. On the one hand' even though the 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 remedial steps having been taken by the lncome 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 \ ri,i . - i -i*:::: a-lr I ii.'' '::{iali-:.:; 6 4 by all the major High courts in India are continuously stiil initiating proceedings under Section l4gA of the Act and also initiating proceedings under Section l4g 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,r this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Rovindra Reddy (l supra), learned Standing counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to fire 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 leamed 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 Court and the fact 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 7 appropriate sGps in ensuring that proceedings under Section 1484. 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 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 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 of litigation day in and day out even though various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income I'ax authorities concemed are still even now in 2025 alsoinitiating proceedings in contravention 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 before this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of 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 Bench while reserving the right of the Revenue, has also protected the interest of the petitioners if,:: . - -jjs I .'.i'.. ..: r#r.- '*&tu,.:. :1tr4 r .:i&'.a,. i:, , r: :Sl-,., \ 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, 202r . The petitioner assessee would be entitred to challenge or raise the other legar objections if the Revenue initiates fiesh 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.

11. It appears that because of the aforesaid liberry 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 Cotrrt 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 9 Departrnent would get the advantage of the liberty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings from the disposal of these 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 the Income Tax of the assesses are concemed' As a consequence' Department gets an extended period of time for initiation of fresh proceedings.

12. The alarming trend of docket explosion in this Court' despite the clear precedent set \n Kanakala Ravindra Reddy (l supra)' is a matter of grave concern' The lncome Tax Department's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piting up on the same issue' This deliberate approach not only undermines the principle of judicial 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 .u__-,. 10 posrtion. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has atready 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 Department itself and should have found out via media in ensuring that proceedings under Sections l4g_A and l4g 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 ofor, at Ieast the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections l4g_A and l4g, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter furth er intimating the assessee that they shall initiate appropriate proceedings only after 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 r ( 11 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 Ievel of Central Board of Direct Taxes' Though the leamed Standing Counsel for the Income Tax Department contended that the Dethi High Court dismissed a writ petition of similar nature' on the one hand when the High Court is struggting to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in hling of hundreds of new writ 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 matter before the Hon'ble Supreme Court having been taken on 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 different States on the same issue; and to make things further worse, the Income Tax Department is showing t Ardacity by issuing notices continuously under Sections 148-A and itEi: -. 3iffi*;,, !#tI.-.:: liELi'i #t{r*' 72 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner. ! .i INDIA vs. ASSISTANT , on an issue whether it was

14. In the case of BANK OF CoMMISSIONER, INCOME TAXrr justifiable on the part of the Income Tax Department ln 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 righfly 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. Kurkarni) 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.,4, 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. ',',!r\O?-t, t70 taxmann.com 422 (Bombay)l " Ie78] l t] ITR 589 (Bombay) t.3.1202+1165 taxmann.com 5gl/300 Taxman 452 (Bombay) t4 lOeZltaxmann.com l6155 ELT 433 (SC) { t3 "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 ovedooks 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 caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy lt cannot be too vehemently emphasized that it is of utmost importance that' in disposing of the quasiiudicial 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 lurisdiction and the order of the Tribunal is binding upon the Assistant Coliectors and the Appellate Collectors who functton 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 obiectionable 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 \ \ ..'i,i,-. ' jw;. ffii; .t*ri+- '.rl( r'rial -.' 14 ! 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 leamed Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparenfly 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 15 observation/direction Finance A&,2OzOand Finance 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 that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were frled by the lncome Tax Department and which is pending consideration before the Hon'ble SuPreme Court'

16. ln the given facts and circumstances' this Bench is of the considered opinion that unless and until we do not timety 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 Court would further be burdened which otherwise can be decided and disposed of as a covered matter' So far as the interest of the Revenue is concemed' we are of considered opinion that the interest of the Revenue has already n considered and protected' as has been observed in paragraphs t7. # dffi- ',ffi 16 36,37 and3g ofthe order which , for ready reference, is reproduced hereunder: "o i.rruu

36. For all the aforesair issued and tt" pro"u"6l,^'^"^"1ons' Department is neithe The notices ".1 per se iregar, deserves aside/quashed. o. " .o" orders getting quashed, ,nnt"o'"'*' by the responde""*;" issued under section 1:ment quashed and it is oro"ruo'1tn']48 are quashing tt" that when the initiation procedurally wrong, the nurlified automatically. the impugned notices 9 drawn by the respondent- tenabre, nor sustainabre. rd the procedure adopted being be and are accordingly set all the impugned consequential orders passed pursuant to the notices would arso get accordingly' The reason we -0",. is on the principles the Proceedings itself was "r':'."' ubsequent orders also gets "r "onruqr"l

32. The preliminary objecti on t''t", by the petitioner is sustained and a, these *r,, petitions stands allowed on this very jurisdictionar issue. :::.,::*" "'" n"n"n"offi]"J]1'J"ffi:':; junsdiction, we are not inclir to proceed further and decide the other issues .r,.]uo by the petitioner which stands reserved to ou ,ri",g -'d and contended in an appropriate proceedings. a,n"" the Hon,bte Supreme Court had, in the case -1U. . of Ashish Agarwal, supra, "t ' one-time measure exercising the powers ,, constitution of rndia, p".rin 'd"'A*i"," to2 of the the Revenue to proceed under the substituted provisio and this court allowing the petitions .rt rrocedural flaw, the right ", ". ,ts' i..--

4. 17 confened on the Revenue would remain reseryed 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 further like to make observations that since we are irclined to dispose of the instant writ petition, conscious of thefactthattheearlierorderofthisHighCourtinthecaseof Kanakala Ravindra Reddy (1 supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No'3574 of 2024' preferred by the Income Tax Department' 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 Kanakala Ravindra Reddy (l supta)' 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 Supreme Court in the pending SLP on the very same issue'

19. Accordingly, the instant writ petition stands allowed favouroftheassesseesofarastheissueofjurisdiction IS concemed. As a consequence, the impugned notice under challengeunderSectionsl48-Aandl48standssetaside/quashed. I ., .? 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 Kankanala Ravindra Reddy (r supra). There shail be no order as to costs Consequently, miscellaneous petitions pending. if any, shall stand closed. //rRUEcopy// ^1?ilh?,?rAi6/gf#F sscrrdl1rncen ,ffi fl.;::iff fl1y,t!la"#1*4.""ffi 3:;s?:?ff Jawaharlal Nehru Sia ,l::#,?#?,,,1:9T",.:#,T3;r:zlit!*,[":,tJilB5i?;*oo, ,,?"?l?H,:iI"," Telangana-502 0bl . lf;. S 4. One CC to SRI THANI Secretary, Union of lndia, Ministry of Finance North Btock, New Dethi-.1 10 :#:T[', *.}Iiifi iliH$#,ffi-p"}3d''*sE1?8{Y'L SA GJ u I t l -.1:-'' 3 1F'; S14i o 6 c' ( llB SEP 2O[ i'J \. -:_\ -.:' .-.t_: ( -i-./ ,,:/ :/' HIGH COURT DATED:1Tt06t2o2s ORDER WP.No.1641t of 2025 ALLOWING THE W.P WITHOUT COSTS.