Shaik Karimunnisa v. Union of lndia

Counsel for the Pelitioner: SRI SIRIPURAM KESHAVA Counsel for the Re:spondent No.1: SRI GADI PRAVEEN KUI\{AR, DEPUry SOLICITOR Gl:r',lERAL OF INDIA Counsel for the Re:;pondent No.2 to 4: Ms. B.SAPNA REDII :f, Sr. SC FOR lT The Court made thr: following: ORDER THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION No.17875 of 2025 ORDER, Qu llon'ble Srr .lustice Nur.sing Ruo Nundikondu) Heard Mr.Sirirpuram Keshava, lealned counsel for the petitioner and Ms.B.Sapna Reddy, learned Senior Standing Counsel lor the lnconre Tax Department appearing lor the respondents. Perused thc record

2. This is a writ pctition where thc proceedings are either challenged to the notices which rvere issued under Section l48A and 148 of thc Incomc Tax Act, ,l961 (for short'the Act') or the assessrnent orders those have been passed under Section 147 ol the Act rvhich have been assailcd.

3. -Ihis u,rit 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 thc Act by the jurisdictional Assessing Officer, whereas in terms of\he amendment that was brou ght to the Incorne Tax Act by way of lrinance Act, 2021 w.e.f., 0l .04.2021 onwards, proceedings ,i 2 under Section l4iiA of the Act as also under Sectio r 148 ol thc Act ought to havc also been issucd and proccedeci r a facclcss tnanner

4. The contention of thc petitioner is tliat he' issue of ploceedings being in violation of thc Finance Act. .102 I i.c., thc impugned ncticcs under Section l48A and Scction I t8 ol'the Act not being issrred in a t-aceless rnanncl, havc alrcady tr,'e n clealt rvith and dccided b1 this Court in rhc case of Kri.N KANALA RAVINDRA REDI)Y vs. INCOME-'IAX OF'Ft,l t.Rr decidcd on 14.09.2023 rvhereby a batch of writ petitions wer\ allou.ed and the proceedirrgs initiatcd undcr Sectiorr l48A as also ndcr Section 148 of thc Ar:t r.;cre hcld to be bad r.vith consequentir.l r-eliel.s on the ground ol it lreing in violation of the provisions ol- St:,.1ion I 5 tA ol the Act rcad with Notification 1812022 dated 29.01.1( 12. fhe said judgmer-rt passed bl,this Court has also been subseqrrcrttly Ibllorvcd in a large nu nbcr ol'writ petitions rvhich rvere allorr,:d on similar terms. ' l(2023) l 5(r t rxrrann. corn 1 7 8 ('f elangana )] * 'l 3

5. Down the line. we find that the same issue has also been decided against the Rcvenue by vanous High Courts i.e., by the Bomba5, 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 SAtl vs. UNION OF INDIAT, Punjab and Haryana lJigh Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIAI, aud Telangana Lligh Court in the case of SRI VENKATARAMAI\IA 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 TAXATION6 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 '7zoz+1464 I ll{ 430 (t}om) '[(2024) 156 taxmann.com 47ti (Gauhati)] ^ 1Q024) 165 taxmann.com I l5 (l'unjab & tlaryana)l '[2024) 167 taxrnann.com 4l I ( l'elangana)] \ I.zoz+ t I 66 taxrnann.ctrnr 679 1 llorrrhay ) | '12024) 165 taxrnann.com I l3lllimachal Pradesh)l H 4 DAHYABHAI RADADIYA vs. INCOME TA\. OFIIICER, WARD 3(3r(5)8, Jharkand lJigh Court in rhc ca:r of SIIYAM SUNDAR S 4,W vs. tINION OF INDIAe, Ra.jastlrirrr Iiph ( 'ourt in the case ol'SI{ARDA DEVI CHHAJER vs. l)i(.OMli TAX OFFICER ,& ANOTHER and batch of rvrit pct :ionsr" rvhjch stood decidcd on 19.03.2024. Similar viervs havc r l.,o been taker.r by thc Division Bench of Calcutta High Court r the case of GIRDHAR GOPAL DALMIA vs. UNION OF l\,1)lA & ORS (M.A.'l' 169{) o1'2023), clecidcd on 15.09.2024.

6. Irven ,hough the same issue having been decrrrcd by a large number of I tigh Couns, rve are still confionted rvirlr urge liling of identical mzttt-ers on daily basis rar-rging lrctween 5 to l0 writ petitions. That upon the instructions bcing sorr:.ht lior.n the Department, they have been taking a solitar-r, g ,,und that the decision of thc Bornbay I Iigh Court in thc casc .',f llc.uuwtre Technologit's Ltd., (.2 supra) as also the one u I ich hirs been adecided by this Court in thc case ol' Kanakalu Ru,,indra Reddy t2024 SCC On[.ine Gul 4012 '2025 SCC Crnl.ine Jhar 287 to p2023 : RI, j D : 1984-DI) l '-) ./' 5 (l supra) has been subjected to challenge in a Special Leave Petition i.e., SLP No.3574 ol 2024 before the Ilon'ble Supreme Court and the Hon'ble Supreme Courl is seized of the matter In addition, there are about 1200 SLPs also filed arising out of the sarne issue being decided by various Fligh Courts

7. To a query being put to the learned counsel lor the Revenue, they have categorically accepted the lact that there is no interim order granted by the Hon'blc Suprerne Court in any of these mattel's pending before it. ivleanwhilc, fiesh writ petitions ol identical nature are being pitcd up belbre this Bench on daily basis and the pendency is getting increased on matter which otherwise has already becn dealt and decided by this very High Court itself.

8. On thc one lrand, even though thc order of this Court that was passed as early as on 14.09.2023 and more l6 months have lapsed, till date, we do not find any remedial stcps having been taken by the Income Tax I)cpartment to take appropriate steps to either hold back issuance of notice under Section 148A and under Section 148 of the Act by the .lurisdictional Assessing Officer, rather the authorities concerned in the teeth of series of decisions a'l \ffi\{.*-i -'i \: \;, \ 6 by all the major t-ligh Courts in India are cor tirruoLrsly still - initiating proceedings under Section l48A ol- the \ct and also initiating proceedings under Scction 148 ot thc .{cr in contraventio r to the arnendments brought into thc Ilt,,orre -['ar Act pursuant to t 1e Finance Act, 2020 as also the Financ,: {ct 202 t

9. Upon a query being put as to why can't this ,r -it l)erition be disposed of in tl're teeth ol the decisior.r rendered h, ihis ('ourt in tlre case of Kanakda Rovindru Rcddy (l supra), Ir-r nccl Standing ('ounsel lbr -he lncorne Tax I)epartnrent contcrrds tl I r those u,oLrld uttnecessaril/ burden the Income I'ax Departn-rcr L where they would be required to file equal number ol SI I's belbre the flon'ble Suprerne Court and it would be lurther ',Lrrricning the exchequer o 'the [Jnion ol lndia. lt was also the cc r tr'ntion ol the learned StanCing Counsel that no prejudice would be eaused ro the interest of thc petitioners in case if this writ petition i: kcpt pending till the tinelization of the SLPs pcnding bcfbr,: Lhc IIon'ble Supreme Court and the fact that the petitioner is alr.,rrtly enjoying thc benellt of interim protection. Noncthcless, on tlr,, ear-lie:r qucr), of this Courr as to why the Income Tax Deparlment lravc not corne out u,ith a nlechanism to issue appropriate instr.ucti.'ns or to take 7 appropriate steps in ensuring that proceedings under Section l48A 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 vanous High Couns, it was subm itted by the learned Standing Counsel that the said steps can only be takcn 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 rve are facing is steep increase ol litigation day in and day out even though various orders havc been passed by this High Court allowing writ petitions on the very same issue. The Irtcome Tax authorities concerued are still even now in 2025 also initiating proceedings in contravention to the provisions of Section I 5 I A ol' the Act and as a result by now, more than 600 to 700 petitions have been already got piled up belore this High Couft on an issue which otherwisc stands squarely covered by the judgment of this Court in the case of Kanakola Ravindra Reddy ( 1 supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kanakala Ravindru Reddy (1 supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners ! I I 4! 8 ,I insofar as the liberty which was granted to thc l{el e uue lbr initiating fresh proceedings strictly in accordance u.i,.lr [hc arnended provisions o I the Act, as arnended by the F inrncc .\.ct. l[)20 and the Financc .\ct, 2021. The petitioncr assessee rvoull hc enritled to challenge or raise the other legal objections if the Rt,' cnrre initiatcs lr'csh proceedings. The Dcpartment has made n. i'ndca\.our in availing the ;aid liberty that was reserved for the Rcr:nuc. On the contrar]! they have been still sticking on to thc st:r,d, u,hich tlris Fligh Cotur ;rs u,ell as many other I ligh Courls ah'c: 1y held to bc I I . It app,:ars that because of the aforesaid libertr' , irar th is High (lour1 had i_lranted pennitting the Rcvenue lbr 'r iriating flesh proceedings as a one-time measure in a lacclcss rnilnner, thc I ncome 1-ax Department wants to take advantage o the same by protracting these proceedings which would enable tl'(.in to nteet thc' limitation thrt would otherwise come in the way. i. i..ewis!., if rhc u,rit petition is kept pending for a considerable lon!. rcriod ol tinrc and finally at a later stage if the Hon'ble Supreme I our.t c-.r6r.,1.t. the decision taken by this IJigh Court as also by :t.c orhr:r High Corrrts in vrhich the SLPs are still pending, th,: Income T ar 4 9 Department would get the advantage of the liberty that is otherwise protectcd ln favour ol the Revenuc lor initiation of fresh proceedings lrorn the disposal olthese matters at a much later stage which would be advanl.ageous and beneficial to thc Revenuc and would be equally disadvantageous and detrirnental so far as interest of the assesses are concenred. As a consequence, the Income Tax Depadment gcts an extended pcriod of tinte lor initiation ol liesh proceedings.

12. The alarming trend of dockct explosion in this Court, dospite the clear precedent set in Kanakala Ravindru Redd.1' (l supra), is a matter of grave concern. The Income Tax Departrnent's persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedertted surge in litigation with over 600-700 petitions piling up on the sanre issuc. l'his deliberate approach not only undertnines the principle of judicial precedent but also strains the judicial resources unnecessarily. The Department's strategy of awaiting the Supreme Cou('s decision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculated move to buy time aud circumvent limitation periods, rather than adhering to the established legal 10 ''., position. SrLch conduct raises serious questio:t'; about the administrative efficiency and the respect lor .iudicial pronouncemr)nts, parlicularly when this Courl has al r.:ad)' provided a balanced approach by preserwing both the Revertp,s'5 rights ar-rd assesses rnte "ests. I 3. Another aspect rvhich needs to be considered :, that in t'act it shoLrld have been realized by the Income Tax Departnent itself and should have lound out via media in ensuring thr proceedings under Secticns 148-A and 148 should not have bct'n isstred in a laceless marner, at least till the Hon'ble Supreme Cc,':rt dccide the trvelve hundred (1200) odd SLPs which it is alread,v s,:ized of or, at least the Incorne Tax Department should have ft trnd oLIt solre remedial steps to ensure that rvherever the author'lties intend to initiate procr:edings under Sections I48-A and I48. other than in a faccless manner, the proceedings should have heen deferred without precipitating the matter fur1her intimating tlLr: assessee that they shalI initiate appropriate proceedings only aftc' tlre Sl.P's are decided by the Hon'ble Supreme Court on the r.'erv sam,: issue This again, the Income'fax Department, has not beer able to give a convincing leply, cxcept fol the fact that such a dt:,.:ision if at all -*,rSffi 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 level of Central Board of Direct Taxes. l-housh the learned Standing Counsel for the Income 'lax Departlnent contendcd that the Delhi High Courl dismissed a writ petition of sirnilar rlature, on the one hand when the I{igh Court is struggling to reduce rts pendency, such notices which are under challenge in this rvrit petition are forcing the assessee to knock the doors of this lligh Courl resulting in filing of hundreds of new writ petitions w'hich in the long run not only affects the disposal of the writ petitions but also consumes substantial time ol the Bench in hearing these matters again and again on daily basis. Admittedly, in spite of the tnatter belore the Hon'ble Suprente Court having been taken on many occasions, the Hon'ble Supreme Court which is seizcd of the uatter has been reluctant in granting any interin-r 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 audacity by issuing notices continuously under Sections 148-A and t2 .tt 148 through the jurisdictional Assessing Officer \\'.ri:)reas it ought to have been only in the faceless manner.

11. In th,: case of BANK OF INDIA vs. ASSISTANT COMI\{ISSIONER. INCOME TAXIT. on an isSuc ",'hethcr it r,,'as justitiable on the parl of the Incon-re Tax DeptLlirnettt ln not fbttowing an order passed by the adjudicating autholitv onh, on thc ground that thc appeals are pending, the Division Bench of the Iligh Court of Bombay held at paragraph No.25 as urrler. r,iz., : "25. Mr. Paridwalla has rightly drawn out attentton to the decision of this Court in Commissioner of lncome Tit:x vs. Smt. Godava idevi Sarafl2 as also the recent decision of the co- ordinate Bench of this Court in Samp Furniture (P) LtrJ. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a memt€r'. wherein the Cou:t categorically observed that the Revenue having not "accepted" the judgment of the High Court would not nrean that till the samt-. is set aside in a manner known to law, it wotrld loose its binding 1orce. Referring to the decision of the Suprerrt-'Court in Union of lndia vs. Kamlakshi Finance Corporatior l-td.14, the Court ot,served that the approach of the officials of levenue of treating decisions being "not acceptable" was criticized by the Supremel Court. ln such decision, following are t r',r relevant observations made by the Supreme Court. " 11zozs'; 170 taxmann.corn 422 (Bornbay)l '' 1tezsl I i3 trR 589 (Ilombay) JZOZ+] 165 taxmann.com 581/300'l'axman 452 (Bomt,ay) '* 1tO9z1 taxrilann.com l6155 ELT 433 (SC) b 13 "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 overlooks 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 vrew, 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 hrerarchy. lt cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate aulhorities. 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 Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of ludicial 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 objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. lf this healthy t4 t:i rul,r is not followed, the result will only be ttndue ha assment to assesses and chaos in administration of rax laws 12 We have dealt with this aspect at some longth. be)ause it has been suggested by the lea ned Additional Solicitor General that the observ riions mede by the High Court, have been harsh on the off cers. lt is clear that the observations of the 'ligh Court. seemrngly vehement, and apperr:ntly un:alatable to the Revenue, are only intended to curb a endency in revenue matters which, if allowe',j to belome widesoread, could result in considr:rable ha assment to the assesses-public without any b€'nefit to the Revenue. We would like to say thurt the derartment should take these observations ir the proper spirit. The observations of the High (;ourt sh,;uld be kept in mind in future and the utmost regard sh,ruld be paid by the adjudicating authorities an(i the ap:ellate authorities to the requirements of jttrlicial drscipline and the need for giving effect to the orders of the higher appellate authorities which are b n,Jing on them."

15. What is worrying this Bench more is thr: fact that an endeavorlr is, bcing made whole heartedly to ensure rrot to generate further litigz.tion on issues which have been laid to lest by a large number of lligh Courls all of whom have taken a c (rnsistent stand that the action of the Income Tax Department being r iolative of the "r+v ,/ 15 Finance Act, 2020 and Finance Act, 2021. Now, in order to protect thc interest of the Revenue as also that of the assessee, it would be trite at this juncture, if wc dispose of the writ petition with an observation/direction that the disposal of the instant rvrit petition in tcrms of the j udgment rendered by this High Court in the case of Kanktntlo Ravindrs Reddy (l supra) shall however be subject to the outcome ol the SLPs which were filed by the lncome I'ax Depaftrnent and q,hich is pcnding consideration belore the Hon'ble Supreme Court

16. In the given facts and circumstances, this Bench is of the consideled opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other IJigh Courts on the very same issue, the pendency of this I'ligh Court would llrther be burdened which otherwise can be decided and disposed ol as 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 alrcady been considered and protected, as has been observed in paragraphs L6 36,37 and 38 of the order which, for ready reference, is reproduced hereunder 36 For all the aforesaid reasons. the impugne(l notices issued and the proceedings drawn by the resl):rnden! D€partment rs neither tenable, nor sus:irinab.e. The notices so issued and the procedure adoptr):l being per se illegal, deserves to be and are accord rrr;ly set asde/quashed. As a consequence, all the irrrugned orrlers gettrng quashed, the consequential order:; :rassed by the respondent-Department pursuant to the rrotices issued under Section 147 and 148 would a sD get quashed and it is ordered accordingly. The reirion we aro quashing the consequential order is on the pr,lciples that when the initiation of the proceedings itrn::lf was procedurally wrong, the subsequent orders a si,c gets nuilified automatically.

37. The preliminary oblection raised by the pet t cner is sustained and all these writ petitions stands all,),'r'ed on this very jurisdictional issue. Since the impugnecl rrotices anC orders are gettrng quashed on the )oint of jurlsdiction, we are not inclined to proceed furher and decide the other issues raised by the petitiono which stulnds reserved to be raised and contendel in an aporopriate proceedings.

38. Since the Hon'ble Supreme Court had, in :he case of Ashish Agarwal, supra, as a one-time reasure ex:rcising the powers under Article 142 lf the Ccnstrtution of lndia, permitted the Revenue to proceed unCer the substituted provisions, and this Court allowing tho petitions only on the procedural flaw, tnr: right 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 only further likc to rnake observations that since we arc inclined to dispose of the instant writ petition, conscious of the I'act that the earlier order ol this High Court in the case of Kanuk o Ravindra Reddv (l supra) is subjected to challenge befbre the Hon'ble Supreme Court in SLP No.3574 of 2024, \ prefelred by the Income'fax Department, we make it clear that allowing of the instant writ petition is subject to outcome ol the afolesaid SLP prefbrred by the Revenue against the decision of this High Couft in the case ol Ksnakalu Ravindra Reddy (l supra). This, in othcr r.vords, would mean that either of the parties, if they so want, may lnove an appropriate petition seeking revival of this rvrit petition in the light ol the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue.

19. Accordingly, the instant rvrit petition stands allowed in favour of the assessee so far as the issue of jurisdiction IS concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed 1ti The consequential orders, if any, also stand set as rr|c/q Lrashed in similar tenns as have bcen passcd by this High Cour. rn thc casc of Kankanulu llovindru Redd.t, (l su;rra). -fhere shall t',: no order as to cosls Consery,-'ntly, miscellaneous petitions pendinr.. il- an1 . shall stand c losed ,TRUE COPY// SD/. L. VIJAYA LAXMI lgsrsrerur REGISTRAR SECTION OFFICER To, '1 . The Secretary, Ministry of Finance, 166-8 North btoct New Delhi, Union of lndia-1 10 0(11

2. The Assistitnt Commissioner of lncome Tax, Cir: e 14(1), HYderabad, Telangana. The Princioal Chief Commissioner of lncome Tax, AF ,rnd TS, 1Oth Floor' C- Block lT Tb'ruers, 1023, AC Guards, Hyderabad, Telan3irna' The National Faceless Assessment centre, lncome Te;< Department, Ministry of Finance, Govt. of lndia, New Delhi One CC to 3RI SIRIPURAI\,4 KESHAVA, Advocate [Ot'] JC] One CC to Ms. B.SAPNA REDDY, Sr. SC FOR lT [OF'l lC] One CC to SRI GADI PRAVEEN KUMAR, DEPUTY IjOLICITOR GENERAL Oflftf Of n, f igi'.r Court for the State of Telangana at H'i lerabad [OPUC] 4 5 6 7 o BSR bJ Two CD Cr,pies o I I I I I I i i HIGH COUR.T DATED:2610612025 ORDER WP.No.17875 of 2025 !I' 1B iiI,-,'rtlffi t tS,iD i :l :']t .; .'l ,.;' 2.. ALLOWING THE WRIT PETITION, WITHOUT COSTS q &1