NITIN ENTERPRISES, Vip in Ramesh v. ntrary to the Principles of Natural

the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings pursuant to the Notice u/s. 148 of the lncome Tax Act dated 28.032025 for A.Y. 2022-23 vide DtN No. |TBA/AST/S/14812024_ 2511075205445(1) issued by the )Ao (1st Respondent) instead of FAo, and may pass such other order(s) as the Hon'ble court deems fir and proper in the interests of substantial justice, as otherwise the petitioner would be put to irreparable lass and severe injury. Counsel for the Petitioner: SRI DUNDU SASHANK MANMOHAN Counsel for the Respondents: SRI K. SUDHAKAR REDDY, SENIOR S.C. FOR INCOME TAX The Court made the following: ORDER THE HONOURABLE SRI JUS CE P.SAM KOSHY ANt) THE HONOURABLE SRI JUS ICE NARSING RAO NANDIKON A WRIT PETITION No.l 628 of2025 QBDEB, @er llon'bla Sri Justica \:u'sing uo Nandikonda) Heard Ms.Rutuja Pawar, along rvith Mr.Dundu Sashank Manmohan, leamed counsel for the pet tioner and Mr.K.Sudhakar Reddy, learned Senior Standing Cou sel for the lncome Tax Departrnent appearing fbr the responde ts. I'erused the record

2. This is a writ petition where t e proceedings are either challenged to the notices which were i sued under Section l48A and 148 of the lncomc Tax Act, 1961 fbr short 'the Act') or the assessment orders those have bcen pa sed under Section 147 ol the Act which have been assailed

3. This writ petition is being taken p today only on one of the grounds, that the notices issued unde Section 148A of the Act and the subsequent initiation of proce ings under Section 148 of the Act by the jurisdictional Assessi Oflficer, whereas in terms of the amendtner[t$t was brought to e Income Tax Act bY waY of Finance Act, 2021 w.e.f., 01.04.2 21 onwards, proceedings i 2 under Section l48A olthc Act as also under Secrion l4g of the Act ought to havc also been issued and proceedetl in a faceless lllanner

4. l'he contcntion ol the petitioner is that the issue of proceedings being in violation of the Finance Act, 2021 i.e.. the impugned notices under Section 148A and Section I4g of thc Act not being issuc'd in a f'aceless tnanner, have already been dealt rvith and clecidcd by this Courr in rhe case of KANKANALA RAVINDIiA ItltDDY vs. INCOME-TAX OFFICERI decidcd <tn 14.09.2023 wircreby a batch of writ petitions wcre a[tou,ect and the procecdings initiated uncler Section i+sa u. also u,der Section 148 of thc Act wcre held to be bad with consequential rcliets on the ground ol- it bcine in violation of the provisions of Scction l5lA of tlre Act read rvith Notification lBl2022 dated 29.03.1012. -I-he judgrnent passcd bv this court has also been subseqLre,tll fo[o*ed in a large nuurbcr of rvrit petitions wrrich were a o*,ed on sirnilar '[(20231 156 taxmann.com 178 ('felangana)] 3

5. Down the line, we find that e salne issue has also been decided against the Revenue by vanous High Courts i.e., by the Bombay High Court in e case of HEXAWARE TECHNOLOGIES LTD., vs. ASSI TANT COMMISSIONER oF INCOME TAX & OTHERS2, G uhati High Courl in the case of RAM NARAYAN SAH vs. IINr N OF INDIA3, Punjab and Haryana High Court in the case of J TINDER SINGH BANGU vs. UNION OF INDIA4, and Telan a High Courl in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTy COMMISSIONER OF INCOME T X' where the issue was in respect of international taxation. Bom ay High Courl in the case of ABHIN ANTLKUMAR SHAH vs. I COME TAX OFFICER TNTERNATIONAL TAXATIoN6 w ich is again on intemational taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. IN OME TAX OFFICER' , Gujarat High Courl in the ca of MANSUKHBHAI ' lzoz+1464 ITR 430 (Bom) 'l(20241 156 raxmann.corn 47g lGauhati)l " l(2024) 165 taxmann.com I 1 5 (punjab & a l 2 2 0 4 2 24\1t6 taxmann com 6 0 2 0 (r e an ( B o 111ba ( H 6 taxmann com 5 taxm arul com v ) 9 3 4) 67 ) 1 i t 4 7 2 I 1 1 I 5 I Haryana)l l radesh)l 4 DAHYABHAI RADADIYA vs' INCOME TAX OFFICER' WARD 3(3XO8, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDtAe, Rajasthan High Cour-t in the case of SHARDA DEVI CHHAJER vs' INCOME TAX OFFICER&ANOTHERandbatchofwritpetitionslowl-ricl-r stood decided on 19.03.2024' Similar views have also been taker.t by the Dii'ision 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 lalge number of I{igh Courts, we are still confronted with large fiting of identical matters on daity basis ranging betrvectt 5 to 10 ll,'rit petitions. 'Ihat upon the instructions being sought fron'r the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case of Hexaware Technologies Lrd., (2 supra) as also the one ulrich has been decided by this Courl in the case of Kanakala Ravindra Reddy- t2024 SCC Online Guj 4012 '2025 SCC Online Jhar 287 to pzo23 . RJ-JD:4984-DBl 5 (l supra) has been subjected to c allenge in a Special Leave Petition i.e., SLP No.3574 of 2024 elore the Hon'ble Supreme Cor-rr1 and the Hon'ble Supren-re C urt is seized of the matter In addition, there are about 1200 SL s also filed arising out of the same issue being decided by various igh Courts l. 1'o a query being put to the lea ned counsel lor the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon'ble Sup rne Couft in any ol these rnatters pending before it. Mean ile, fresh writ petitions of identical nature are being piled up be ore this Bench on daily basis and the pendency is getting increas on matter which otherwise has already been dealt and decided by this vcry High Courr iselL

8. On the one hand, even thou the order of this Court that was passed as early as on | 4.09.202 and more 16 months have lapsed, tilt date, we do not find an remedial steps having been taken by the Income Tax Departmen to take appropriate steps to either hold back issuance of notice der Section l48A and under Section 148 of the Act by the juri ictional Assessing Officer, rather the authorities concemed in teeth of series of decisions 6 by all the major High (lourls in India are conrinuously still initiating proceedings under Section 1484. of the Act and also initiating proccedir.rgs under Section 148 o1' the Act in contravention to the anrendrnents brought into the Incorne Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021 .

9. Upon a qLrery being put as to rvhy can't this writ petition be disposed o1- in thc teeth of tl.re decision rendered br this Court in the case of Konakokr Rovindra Reddy (l supra), learned Standing Counsel lor the Incorne Tax Department contencls that those rvor"rld unnecessaril1, burden the Income Tax Departn-rent where tliey would be rcquired to filc equal number of SLPs belore the IJon'ble Suprerne Courl and it would be further. burdeninq the exchequer of l-he (Jnion ol India. lt was also the contention ol the leamed Standing Counsel that no prejudice would be caused to the interest of the petitioners in case if this writ petition is kept pcnding till the finalization of thc SLPs pending before the Hon'ble Supreme Court and the fact that the petitioner is already enloying the benefit of intelim protection. Nonetl.reless, on the earlier query of this Court as to why the Income Tax Depaftment have not colne out with a mechanisln to issue appropriate instructions or to take 7 appropriate steps in ensuring that pro eedings under Section 148A of the Act as also the assessment or ers under Section 148 of the Act are kept in a hold in the light of he decisions dedcided by the various High Courts, it was submi by the learned 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 Iirnited to any ol these julisdictional igh Coults

10. As a result of which, what we facing is steep increase of litigation day in and day out even tho gh various orders have been passcd by this High Court allou,ing it petitions on the very same issue. The lncome Tax authorities co cerned are still even now in 2025 also initiating proceedings in c ntravention to thc provisions ol- Section i 51A of the Act and as a sult by now, more than 600 to 700 petitions have been already ot piled up before this High Court on an issue which otherwise s ds squarely covered by the judgment of this Court in the case Kanukula Ravindra Reddv ( 1 supra). What is also surprising s the fact that though while allowing the writ petitions in the ase of Kanakala Rwindra Redd.y (1 supra), the Division Benc while reserving the right of the Revenue, has also protected t interest of the petitioners r 8 insofar as the libefty which was granted to the Ilevenue for initiating f.esh proceedings strictly in accordance rvith the amended provisions ol the Act, as arnended by the Finance Act, 2020 and the Financc A,ct, 2021. The petitioner assessee woulcl bc entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Depar-trncnt has made no endeavour. in availing the said liberty that rvas rescrved for thc Rcvenue. On the contrary, thcy have been still sticking on to the stand, which rliis High Court as well as many other.High Courls ah.eady l.reld to be bad. I l. [t appears that because ol the aloresaid libertl, rhar this High Court had granted permitting the Revenue for initiating fresh proceedings as a one-time lleasurc in a faceless rnanner. the Incorne Tax Deparhent wants to take advantage ol- thc same by protracting these proceedings which would enable thern to rneet the limitation that would otherwise corne in the way. Likewise, if the writ petition is kept pending lbr. a considerable long pcriod of tirne and finally at a later stage if the Hon,ble Supreme Court confirms the decision taken by this High Courr as also by thc other High Courts in which the SLPs are still pending,, the Income Tax 9 Deparlment would get the advantage o the liberty that is otherwise protected in lavour of the Reven e lor initiation of fresh proceedings from the disposal of these atters at a much later stage which would be advantageous and be eficial to the Revenue and would be equalty disadvantageous and etrimental so far as interest of the assesses are concerned. As a c nsequence, the Income Tax Department gets an extended period o time for initiation of fresh proceedings.

12. 'l'he alarming tlend of docket ex losion in this Court, desPite the clear precedent set in Kanaknlo R vindra Reddy (1 suPra), is a matter of grave concern' The Income Tax Department's Persistent initiation of fresh proceedings, disreg ing the established judicial pronouncements, has led to an unp cedented surge in litigation with over 600-700 petitions piling p on the same issue. Thts deliberate approach not onlY unde nes the principle of judicial precedent but also strains the judicial resources unnecessarilY. The Department's strategy ol awaiting the Supreme Coutt's decision on pending SLPs while continuing initiate fresh proceedings appears to be a calculated move t buy time and circumvent limitation periods, rather than adh ing to the established legal *rr :! 10 position. su.rr "onau.;^;#;-il;;;il;; about the administlative efficiency and the respect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserwing both the Revenuc,s rights and assesses itlterests.

13. Another aspect which needs to be consideted is that in fact it should havc been realized by the Income Tax Departmer-rt itself and should have found out via media in ensuring that proceedings under Sections 148-,{ ancl 14g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court decide the twelve hundred (1200) odd SLps whicfi it is already seized ofor, ar least the Income Tax Department should have lbund out some remedial steps to ensure that wherever the authorities intend to initiate proceedings ur.rder Sections r4g-A and 14g, other than in a faceless manner, the proceedings should have been defer.red without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after l.he SLp,s are decided by the Hon'ble Supreme Court on the ve1.y same issue. This again, the Income Tax Deparlment, 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 fol th whole of India, and which otherwise has to be bY waY of a Polic decision and that too at the level ol Central Board of Direct T es. Though the leamed Standing Counsel for the lncome Tax Department contended that the Dethi l{igh Court dismissed a writ etition of similar nature, on the one hand when the Fligh Court is struggling to reduce its pendency, such notices which aro u der challenge ln this writ petition are lorcing the assessee to k ock the doors of this High Courl resulting in tiling of hundreds o new writ petitions which in the long run not only affects the dis sal of the writ petitions but also consumes substantial time of e .Bench in hearing these matters again and again on daily basi Admittedly, in spite of the rnatter before the Hon'ble Suprctnc ourt having been taken on many occasions, the Hon'ble SuPrem Court which is seized of the rnatter has been reluctant in granting y interim protection to the Incomc Tax Dcpartment. Yet, tlle uthorities concerned at the State level are not ready to accept th verdict passed by a majoritY of High Courls of different States on the same issue; and to make things turther worse, the Income ax Depaftment IS showing audacity by issuing notices continuou ly under Sections 148-A and 72 148 through the jurisdictional Assessing Olficer rvhereas it ought to have becn only in the faceless manner.

14. In lhe case ol. BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAXlr, on an issue rvhether it was justifiable on the part o1' the Incorne Tax I)epartrnent in not following an order passed by the adjudicating authority only on the ground thal tl.re appeals arc pending, the Division Bcnch ol the Fligh Court of Bombay held ar paragr.aph No.25 as under, viz., : '25. lVlr. 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. lTOr3 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 woutd not mean that till the same is set aside in a rnanner known to law, it would loose its binding force. Referrrng 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 officrals of Revenue of treating decisions betng,,not acceptable', was crrticized by the Supreme Court. ln such decision, following are the relevant observations made by the Supreme Court. ',t I{ZOZS) 170 taxmann.corn 422 (Bombay)l " 119181 I t 3 ITR 589 (Bombav) '3 TZOZ+1165 raxmann.com 5gl/300 Taxman 452 (Bornbai.) 'o 1t9921raxmann.com t6/55 EL-l' 433 (SC) 13 "6. Sri Reddy is perhaPs righ officers were not actuated b 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 concluston malafides but with the fact that t in saying that the any mala fides in . They perhaps e assessee was not pted, the Revenue overlooks is that we the correctness or or of any factual e officers, in reaching in their conclusion, by-passed appellate orders in regard to the same issue whi were placed before them, one of the Collector (APP als) and the other of the Tribunal. The High Court h criticized this conduct of the A s, in our view, rightly istant Collectors and the harassment to the assesse of these officers to give eff authorities higher to them tn the cannot be too vehemently em utmost importance that, r quasijudlcial issues before the bound by the decisions of th caused by the failure ct to the orders of ppellate hierarchy. lt has.ized that it is of disposing of the , revenue officers are appellate authorities. The order of the Appellte Coll ctor is binding on the Assistant Collectors working wi the order of the Tribunal is bin Collectors and the Appellate under the lurisdiction of the Tri judicial discipline require that t in his .lurisdiction and ng upon the Assistant ollectors who function nal The princrples of e orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. order of the appellate authorit the department - in itself an and is the subject matter of a ground for not following it u The mere fact that the is not "acceptable'' to bjectionable phrase - appeal can furnish no less its operation has been suspended by a comPe t court. lf this healthy g -1.4 ( 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 apparenfly 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 judlcial discipline and the need for giving effect to the orders of the higher appellate authorities which are brnding on them." I 5. What is worrying this Bench more is thc fact that an endeavour is being made whole heartedly to ensure not to generatc further litigation on issues which have been laid to rest by a laree number of High courts all of whorn have taken a consistent stand that the action of the Income Tax Department being violative of the t5 f inance Act, 2020 and Finance Act, 021 . Now, in order to protect the interest of the Revenue as also th of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the dispos of the inst_ant writ petition in terms of the judgment rendered by t is High Court in the case of Kankanala Ravindra Reddy (l sr.rp ) shall however be subject to the outcome of the SLPs which w re filed by thc Income Tax Department and which is pending co sideration before the Hon'ble Supreme Court

16. In the given facts and circ stances, this Bench is of the considered opinion that unless and ntil we do not timely dispose of matters which are squarcly cover by thc decision of this Court and which stands fortified by the ecisions of the various other High Courts on the very same iss , the pendency of this High Court would further be burdened rv ich otherwise can be decided and disposed of as a covercd matter. ll . So far as the interest of the R venue is concemed, we ale of the considered opinion that the inte st olthe Revenue has already been considered and protected, as h been observed in paragraphs f 1_6 ( 36,37 and 3 8 of the order wl.rich, for ready reference, is reproduced hereunder: 36 For all the aforesaid reasons, the rmpugned notices issued and the proceedings drawn by the respondent, Department is neither tenable, nor sustarnable 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 14g would also get quashed and it is ordered accordingly. The Teason 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 nulllfied automatically. J/. rhe prettmtnary 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 pornt of jurisdrction, we are not inclined to proceed further and decide the other issues rarsed by the petitioner which stands reserved to be ratsed and contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agaruval, supra, as a one{ime measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right 17 conferred on the Revenue wo proceed further if they so wan order of the Supreme Court ld remain reserved to from the stage of the in the case of Ashish Agarwal, supra.

18. We would only further like to ake observations that since we are inclined to dispose of the ins t writ petition, conscious of the fact that the earlier order of thi High Court in the case of I(anakala Ravindrs Reddy (l sup is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Depart ent, we make it clear that allowing of the instant writ petition s sub.ject to outcome oi the aforesaid SLP preferred by the Reven e against the decision of thrs High Court in the case of Kanaksla Ravindra Reddy (1 stpra). This, in other words, would mean tha either of the parties, if they so want, may move an appropriate pe ition seeking revival of this writ petition in the light of the decis on of the Hon'ble Supreme Courl in the pending SLP on the very ame lssue.

19. Accordingly, the instant writ petition stands allowed in fbvour of the assessee so far as E ISSUE of jurisdiction IS concemed. As .a consequence, e impugned notice under challenge under Sections 148-A and 48 stands set aside/quashed. ', 18 The consequential orders, if any, also stand set aside/quashecl in similar terms as have been passed by this High Court in the case of Kankanala Ravindro Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed i/TRUE COPY// Sd/. S. MALLIKARJUNA RAO SISTANT REGISTRAR , SECTION OFFICER ./ lncome-tax Officer Ward, - 5(1), Hyderabad lT T,ower, AC Guards' Masab Tank, Hyderabad-500004 The Pr Commissioner of lncome Tax 4 Hyderabad, 8th floor, D-Block' lncome Tax Towers, 10-2-3, AC Guards, HyderaMd. The Centrai Board of Direct Tax, Through the Ministry of Finance' Department of Revenue, North Block, New Delhi -1 10001. ONE CC tO SRI DUNDU SASHANK I\iIANMOHAN AdVOCAtE [OPUC] One CC to SRI K. SUDHAKAR REDDY, Senior S.C for lncome Tax [OPUC] To, I 2 J 4 KKS MP 5 6. Two CD CoPies \l' , 5a7ir"-ro,,1i:i.n]. : : Jilh f- HIGH COURT I DATED:2410612025 _.--_ -__:+-. - ( C I l il": S r ,\ 1 * 2 nlj8 zffi )) o .\ 1 .s, ).i T cr.r ORDER WP.No.17628 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS { n