Courts i.e., by the Bombay High Courl in the case of HEXAWARE TECHNOLOGIES LTD v. ASSISTANT COMMISSIONER OF INCOME TAX OTHERS

the affidavit filed in support of the writ petition, the High court may be pleased to stay all further proceedings pursuant to the Notice u/s 148 of the lncome Tax Act dated28.03.2025forA.Y.2021-22videDlNNo.ITBA/AST/S,14812024- 2511O75205448('1 ) issued bv the JAO ('1st Respondent) instead of FAO' Counsel for the Petitioner: MS' RUTUJA PAWAR' ALONG with SRI DUNDU SASHANK MANMOHAN Counsel for the Respondents: SRI K' SUDHAKAR EDDY' SC FOR THE INCOME TAX DEPARTMENT The Court made the following: ORDER t \ THE HONOURABLE SRTJUSTICE P.SAM KOSIIY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PB TITION No.17627 of 2025 ORDBR; iper Hon'ble Sri Ju.stice Narsing Rao Narulikonda) Heard Ms.Rutuja pawar, along with Mr.Dundu Sashank Manmohan, learned counsel for the petitioner and Mr.K.Sudhakar Reddy, learned Senior Standing counser for the Income Tax Department appearing for the respondents. perused the record.

2. This is a writ petition where the proceedings are either challenged ro the notices which were issued under Section I4gA and 148 of the Income Tax Act, 196l (for short ,the Act,) or the assessment orders those have been passed under Section 147 of 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 I4gA of the Act and the subsequent initiation of proceedings under Section I4g of the Act by the jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the Income Tax Act by way of Finance\.Ac r, ZO2l w.e-f., 01.04.2021 onwards, proceedings 2 :i'.1 under Section 1484. of the Act as also under Section 148 of the Act ought to have also been issued and proceeded in a faceless manner.

4. The contention ol the petitioner is that the issue of proceedings being in violation of the Finance Act' 2021 i'e'' the impugned uotices under Section l48A and Section 148 of the Act not being issued in a laceless manner' have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs' INCOME-TAX OFFICERT decided on 14.09.2023 rvhereby a batch of w'rit petitions wete allowed and the proceedings initiated under Section l48A as also under Section l48oftheActwerehetdtobebadwithconsequentialreliefsonthe ground of it being in violation of the provisions of Section 15 I A of the Act read with Notitication 1812022 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 allowed on similar terms. '[(2023) 156 taxmann.com 178 (T'elangana)] ( 6 .,

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 Courl in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati High Courr in the case of RAM NARAYAN SAH vs. UNION OF INDIA3, punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VBNKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOMB 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 TAXATION6 which is again on intemational taxation and central circre, High court of Himachal pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT. Gujarat High Court in the case of MANSUKIIBHAI 'z yzoz+1464 rtR 430 (Bom) 'l(2024) 156 raxmann.com 478 (Gauhari)l ^ 1Q024) 165 raxmann.com I l5 (punjab & Haryana)l 't2024\l 67 raxmann.com 4tI (Telangana)l " 12024) I66 taxrnam.com 679 (Bornbay)l ' [2024) 165 taxmann.com I l3 (Himachai pradesh)] 4 DAHYABHAI RADADTYA VS. INCOME TAX OFFICER, WARD 3(3)(5)8, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIAe' Rajasthan High Courl in the case of SIIARDA DEVI CHHAJER vs' INCOME TAX OFFICER&ANOTHERandbatchofwritpetitions|owhich stood decided on 19 '03 '2024' Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs' UNION OF INDIA & ORS (M.A.T 1690 of 2023). dccided on25'Oe'2024'

6.Eventhoughthesameissuehavingbeendecidedbyalarge number of High Courts, we are still confronted with targe filing of identical matters on daily basis ranging between 5 to 10 writ petitions. That upon the instructions being sought fiom the Depaltment, 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 Kanakala Ravindra Redtly 12024 sCC online Guj 4012 '2025 SCC Online Jhar28'7 12023 RJ- J D : 49 84-DB l o ' r (: 5 (l 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'bre supreme court is seized of the matter. n addition, there are about 1200 SLPs also fiieJ;Girsoui;"i1h-. '-^-:-^.- same issue being decided by various High Courts. I

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 before it. Meanwhile, fresh writ petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dealt and decided by this very High Court itself. 8. On the one hand, even though the order of this Courl 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 Income Tax Department to take appropriate steps to either hold back issuance of notice under Section l4gA and under Section 148 of the Acr by the jurisdictional Assessing Officer, rather the authorities concerned in the teeth of series of decisions \ 6 .: \..1\ by all the major High Courts in India are continuously still initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Acl202l

9. Upon a query being put as to why can't this writ petition be disposed of in the teeth of the decision rendered by this Court in the case of Kanakala Ravindra Reddy (l supra), leamed Standing Counsel for the Income Tax Department contends that those would unnecessarily burden the Income Tax Department where they would be required to file equal number of SLPs before the Hon'ble Supreme Court and it would be further burdening the exchequer of the Union 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 appropr)ate instructions or to take n 7 appropriate steps in ensuring that proceedings under Section I4gA of the Act as also the assessment orders under Section t4g 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 rever 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 Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l51A of the Act and as a result by now, more than 600 to 700 petitions have be:en already got piled up before this High Court on an issue which otherwise stands squarely covered by the judgment of this Couft in the case of Kanakala Ravindra Reddy (l supra). What is alsri surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindra Reddy (1 supra), the Division Bench while reserwing the right of the Revenue, has also protected the interest of the petitioners \ 8 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act, 2020 and the Finance Act,202l. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Department has made no endeavour in availing the said liberty that was reserved for the Revenue' On the contrary, they have been still sticking on to the stand, which this High Courl as well as many other High Courls already held to be bad. 1i. [t appears that because of the aforesaid liberty that this I{igh Court had glanted permitting the Revenue for initiating fresh proceedings as a one-time measure in a laceless manner, the Income Tax l)epartment wants to take advantage of the same by protracting these proceedings which would enable them to tneet the limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending for a considerable long period of time and finally at a later stage if the Hon'ble Supreme Court confirms the decision taken by this High Court as also by the other High Courls in which the SLPs are still pending, the Income Tax a' ( 9 Department 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 beneficiar to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concemed. As a consequence, the Income Tax 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 in Kanakala Ravindro Reddy (l supra), is a matter of grave concern. The Income 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 piling 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 [o buy time and circumvent limitation periods, rather than adhering to the established legal \ ! a t- 10 \.i \ position. Such conduct ralses serlous questions about the administrative efficiency and the respect for j udiciat pronouncements, parlicularly when this Courl has already provided a balanced approach by preserwing 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 148-4 and 148 should not have been issued in a faceless manner, at least till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized of or, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shatl 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 11 has to be taken, has to be taken for the whole of India, and which otherwise has to be by wayof a policy decision and that too at the Ievel of Central Board of Direct Taxes. Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling 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 filing of hundreds of new writ petitions which in thc 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 agam on daily basis. Admittedly, in spite of rhe matter before the Hon,ble Supreme Court having been taken on many occasions, the Hon,ble Supreme Co.ur1 which is seized of the matter has been reluctant in granting any inter.im protection to the Income Tax Departmer yet, the authorities concemed at the State level are not rea(y to accept the verdict passed by a majority of High Courts of differeni States on the same issue; and to make tliings further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections l4g_A and \ 7 L2 'i 148 through the jurisdictional Assessing Officer whereas it ought to have been onlf in the faceless manner

14. In the case of BANK OF INDIA vs' ASSISTANT COMMISSIONER, INCOMB TAXIr' on an issue whether it was justifiable on the parl of the Income Tax Departmsnl in not foltowing an order passed by the adjudicating authority only on the ground that the appeals are pending' the Division Bench of the High Court of Bombay held at paragraph No'25 as under' viz'' : '25. Mr Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of lncome Tax vs' Smt' Godavaridevi Sarafl2 as also the recent decision of the co- ordinateBenchofthiscourtinSampFurniture(P)Ltd.v.lTo13 ofwhichoneofuS(JUSticeG-S'Kulkarni)Wasamember'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't4' 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 " 11zozs1I70 taxmann.corn 422 (Bombay)l '' Iiszs1 113 ITR 589 (BombaY) " lzozql l(r5 taxmann.conr 581/300 Taxman 452 (Bombay) 'o [telzl taxmann.com 16/55 ELT 433 (SC) t/ - 13 "6. Sri Reddy is pert right in saying that the officers were no, ,"n'0" by any mara fides in passing the ,arrnrt"t"o o-"rs rhey perhaps genuinety fett that the ll . of the assessee was not tenabre and ,nrr, ,, n"'''' was accepted' the Revenue would suffer. But what *"00, overlooks is that we are not concerned n,t'' *"n the co'ectness or otherwise of their or of any factuar "ot'u marafides but with the ,""'"'on in rheir concrus,"" rr;:::::',T :ffnJffi.:l; regard to the same issc which were placed before them, one ot the corect,' the rrbunar *" r"";:ilT;; :::Jh:H;J criticized this conduct of the Assistant Coffu"tors"rnO the harassment to the asl or these orricers ro ;;""';:i"[":r:,]:J:,,:; authorities higher to them the apperate hierarchy. rt cannot be too ,un"runtt' ":on::l'd. that it is of utmost importance ,nr,' In disposing of the quasuud,ciar issues before bound by the oecisions or'Tl;:ff: ffi:: 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 Appeliate Coliectors who function under the jurisdiction of the Tribunal. fn" prin"ipf"" of judicial discipline require tha the orders of the higher appelate authorities shourd oy tne suooro na;il;;;;"j";:T::ffTl::I order of the appellate authority is not ,,acceptable,, the department _ in rtself an objectionable phrase _ and is the subject matter of a ground for nor foltowing ,, ;"Tfi:'::::ffi:: been suspended by a competent court. If this healthy I I t4 ! .l 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 Additionat 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 apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become wrdespread, 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 rn 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 Incotne Tax Department being violative of the 1 75 Finance Act,2020 and Finance Act,202l. 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 observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanola Ravindra Reddy (l supra) shall however be subject to the outcome of the SLps which were filed by the Income Tax Deparlment and which is pending consideration before the Hon,bre Supreme Courl

16. In the given facts and circumstances, this Elench is of the considered opinion that unless and until we do not timely dispose of matters which are squarery covered by the decision of this courl 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 ofas a covered matter.

17. So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs t .F t6 36,37 and38 ofthe order which' for ready reference' is reproduced hereunder:

36. For all the aforesaid reasons' the impugned notices issued and lhe proceedings drawn by the respondent- Department is neither tenable' nor sustainable' The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed As a consequence' all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automaticallY'

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on Since the imPugned notices this very .jurisdictional issue quashed on the Point of and orders are getting jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an approPriate Proceedings'

38. Since the Hon'ble Supreme Court had' in the case of Ashish Agarwal' supra, as a one-time 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 ftaw' thf r1'ght I I 17 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 onry further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanukola Ravindrt Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLp No.3574 of 2024, preferred by the Income 1'ax 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 Kanokala Ravindra Reddy (l supra). 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 verrr same issue. ) )

19. 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 challenge_under Sections 148-A and 14g stands set aside/quashed. 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 KankanalaRavindraReddy(|supra).Thereshallbenoorderas to costs. Consequently, miscellaneous petitions pending' if any' shall stand closed. SD SS +hY',eH# \ /ITRUE COPY// SECTION OFFICER To,

2. 4 5 TJ TK T*o CD CoP'"' .4. :, f, .>.... ..' t'f r.;i, HIGH COURT DATED:2410612025 ORDER WP.No.17627 ot 2025 R a f,4 t() t: -) t' 16 sEP fl6 i: f '+ * a_, -a ALLOWING THE WRIT PETITION WITHOUT COSTS