The High Court · 2025

Petition under Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay all further proceedings incruding stay of coflection of taxes and consequent penarty notices issued pursuant to the reassessment order dated 09-01-2025 bearing DIN No. |rBA/ASTlsl147r2o24-2sl1o72o4o6gg(1) passed by the .lst Respondent undersection 147 t.w.s 144 r.w.s.'144B of the Act for the Asst. year 2o1r-1g. Counsel for the Petitioner: SRI AV.RAGHU RAM Counsel for the Respondents: M/s. BOKARO SAPNA REDDY, SENIOR SC INCOME TAX The Court made the following: ORDER ; I t I I THE HONOURABLE SRI JUSTICE P'SAM KOSHY THE HoNouRABLE sni Jusrrcn NARSING RAo NANDIKONDA AND WRIT PETITION No.18 186 0 2025 F ORDER, (per Hon'ble Sri Justice Narsing Rao Nandikonda) Heard Mr. A'V'Raghu Ram' leamed counsel for the and Ms. B.Sapna Reddy' learned Senior Standing petlttoner CounselforthelncomeTaxDepartmentforrespondents. Perused the record'

2.Thisisawritpetitionwheretheproceedingsareeither chaltenged to the notices which were issued under Section l48A and 148 of the Income Tax Act' 1961 (for short'the Act') or the assessment orders those have been passed under Section t47 ol the Act which have been assailed' This writ petition is being taken up today onty on one of the l. grounds, that the notices issued under Section 148A of the Act and the subsequent initiation of proceedings under Section 148 of the Act by the jurisdictional Assessing Officer' whereas in terms oftheamendmentthatwasbroughttothelncomeTaxActbyway .\ of Finance atiZOZf w.e.f., 01.04.2021 onwards, proceedings 2 under Section 14gA of the Act as also under Section 14g of the Act ought to have also been issued and proceeded in a faceless manner ,that

4. The contention of the petitioner is the issue of proceedings being in violation of the Financ e Act, 2021 i.e., the impugned notices under Section i+ta una Section i4g of the Act not being issued in a faceless manner, have already been dealt with and dec ,ds-d_ _-by. this Courl in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions were alrowed and the proceedings initiated under Section r4gA 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 151A of the Act read with Norificarion lg/2022 aut"a Zg.Ol.ZO22. 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 (Telangana)] 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 TECHNOLOGTES LTD., VS. ASSISTANT COMMISSTONER OF INCOME TAX & OTHERS2' Gauhati High Court in the case oi 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 SRT 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 ANTLKUMAR SHAH VS. INCOME TAX OFFTCBR' INTERNATIONAL TAXATION6 which is again on international 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) ']QOZ+) 156 taxmann.com 478 (Gauhati)l " [(2024) 165 taxmann.com I l5 (Punjab & Flaryana)] ' 12024) 167 taxmang,com 4 I 1 (Telangana)l " [2024) 166 taxmann.com 679 (Bombay)] 'iZOZ+j I65 taxmann.com 1I3 (Himachat Pradesh)l 4 \ DAHYABHAI RADADIYA vs. INCOME TAx OFFICER, WARD 3(3X5)8, Jharkand High Courr in rhe case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan l{igh Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ peririonsr0 which 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 ol 2023t decided on 25.09.2024.

6. Even though the same issue having been decided by a large number of High Courls, we are still confronted with large filing of identical matters on daily basis ranging between 5 to I 0 writ petttrons. 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 Konakaltt Ravindra Reddy 82024 SCc Online Guj 4012 " 2025 SCC OnLine lb.ar 287 72023 : RI-JD : 49 8 4-DB l I o .l I 5 (1 supra) has been subiected 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' In addition, there are about 1200 SLPs also hled arising out ofthe same issue being decided by various High Courts' To a query being put to the leamed counsel for the Revenue' 't . they have categorically accepted the fact that there is no interim orcler granted by the Hon'ble Supreme Court in any of these matters pending Uefore it' Meanwhile' fresh writ petitions of identicar nature are being pired 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 tapsed, titl 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 1484, and under Section 148 of the Act by the jurisdictional Assessing Officer' rather the authorities concemed in the teeth of series of decisions 6 India are continuously still by all the major High Courrs in initiating proceedings under Section l48A of the Act and also initiating proceedings under Section I4g of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021. 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 Ravindta 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. [t was also the contention of tl.re 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 mechanisrn to issue appropriate instructions or to take 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 of the Act are kept in a hold in the light ofthe decisions dedcided by the various I{igh 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 C<iurt allowing writ petitions on the very same issue. The Income Tax authorities concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section 15lA 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 (l supra). What is also surprising is the fact that though while altowing 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 8 a\ 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 wourd 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 Court as well as many other High Courrs alreadl, held to be I l. It appears that because of the aforesaid liberty that this High Court had grantecl 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 corne 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 Couft confirms the decision taken by this High Court as also by the other High Courts in which the SLps are still pending, the Income Tax 9 Depafiment would get the advantage of the liberty that is otherwise protected in lavour of the Revenue for initiation of ftesh proceedings from the disposal of these matters at a much later stage which would be advantageous and benehcial to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concerned' As a consequence' the Income Tax Depafiment gets an extended period of time for initiation of fresh proceedings.

12. The atarming trend o[docket explosion in this Court' despite ' r Kanakula Ravindra Reddy (l supra)' is a the clear Precedent set Lr 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 to buy time and circumvent limitation periods, rather than adhering to the established legal l/l 10 position. Such conduct raises serious questions about the administrative efficiency and the respect f.or judicial pronouncements, particularly when this Court has already 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 Departrnent itself and should have found out via. media in ensuring that ltroceedings under Sections 148-.{ and l4g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Courr decide the twelve hundred (1200) odd SLps which it is already seized of or, ar least the Income Tax Department should have lound out some remedial steps to ensure that wherever the authorities intend ro initiate proceedings under Sections 148-A and l4g, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter furlher 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 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 tevel of Central Board of Direct Taxes' Though the leamed 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 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 filing of hundreds of new writ petitions which in the long run not only aff'ects the disposat 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 lncome 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 dift'erent States on the same issue; and to make things further worse, the lncome Tax Department is showing audacity by issuing notices continuously under Sections 148-A and

1.2 throueh the jurisdictional Assessing Officer whereas it ought -l-a8. l ,{SSTSTANT to have been only in the faceless manner. 14. [n the case of BANK OF INDIA vs. COMMISSIONER, INCOME TAXrr, on an issue n.herher ir was justifiable on the part of the Income Tax Departmenl in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division llench of the High Court of Bombay held.at paragraph No.25 as under, viz.. : "25 Mr. pa,dwarra has righ,y drawn out attention to the decision of this Court in Co G odava ridevi s a rar1 2 as'l:T: T::i,' :::::1"; ;"" :: ordinate Bench of this Cour orwhich one or us (r,.,,." :: I^J,3, the Court categorically observed that the Revenue having nol "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 ihe Supreme Court in Union of tndia 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 lhe relevant observations made by the Supreme Court. t^1;Hil:tJl"J:l,i11, i] llr^o_1i,. Llo gmann.com 422 lBombay)l '- ll978l II3 ITR 589 (Bombay) " 72OZ+1 165 taxrnann.com 5g l/300 Taxman 452 (Bombay) " 1l9O21raxmann.com l6155 ELT 433 (SC) 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 otheMise 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, rn disposing of the quasijudicial 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 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 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 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 74 --|..k-.+ 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 Iearned Additional Solicitor General that the observations made by the High Court, have been harsh on the *i,ljt ":j::,ff; officers. It is clear that the court, seeminsry ;"r",9J;i, 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 Revenud. We would like to say that the department should take these observations ln 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 Courls all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the -' 15 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 Kankanala Ravindra Retldy (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'ble Supreme Court

16. In the given facts and circumstances, this Bench is of the considered 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 fortihed by the decisions of the various other High Courts on the very same issue, the'pendency of this High Courl would further be burdened which otherwise can be decided and disposed of 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 already been considered and protected, as has been observed in paragraphs 16 36,37 and 38 of the order which, for ready reference, is reproduced hereunder

36. For all the aforesaid reasons, the impugned notices issued and the proceedin n:^:t'*t by the respondent- Department is neither rhe notces so issued r".,l'""rljl.J:,."o]I::.:t; per se illegal, deserves t( be and are accordingly set aside/quashed. o" , all the impugned "on' orders getting quashed, ,nutuo'"n""' by the respond"",-r"ornrlli ff."ff :'T::::::: issued under Section 14 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles Itiit'vi6iin=tTrri ,';r-tAii6; of the proceedings itsetf 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 this very jurisdictional issue_ Since the jmpugned notices and orders are gefting quashed . on the point of 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 of Ashish Srnce the Hon,ble Supreme Court had, in the case Agarwal, supra, as a one_time measure the powers under Article 142 exercising 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 -/ 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 only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious ol the fact that the earlier order of this High Court in the case of Kanakala Ravindra RecLly (l supra) is subjected to challenge belore the Hon'ble Supreme Court in SLP No.3574 of 2024, prelerred by the Income Tax Department, we make it clear that atlowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision ofthis High Courl in the case of Kanakala Ravindra Reddy (l sqra)' This. in other words, would mean that either of the parties, if they so want, may move an appropriate petition seeking revival of this rvrit 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 in f'avour 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. 18 l i The consequential orders, if any, also stand set aside/quashed in similar tems as have been passed by this High Court in the case of Kankanala Ravintlra Redtty (l supra). There shall be no order as to costs. Consequently, rniscellaneous petitions pending, if any, shall .*&-fr---stand'closed. \ .//rRUE CoPYtt SD/- A.H.S. GOWRI SHANKAR ASSISTANT BEGISTRAR l-- SECTION OFFICER To 1 2 3 4 5 PSK. BM Assessment Unit, National Faceless Assessment Centre, lncome Tax Department. Ministrv of Finance, Rod -t 6 ;bl;'z'ni' Erior, r_Ramp, Jawaharlat Nehru Sfadium, Defhi i iO ooi- l,[j[T."rl1r3[Ltl' ward 1' tncome tii bnicer, Near Rait, Under Bridse, 9n" 99 to SRI A.V.RAGHU RAM. Advocate ropr rcl 9^lg 9_g to M/s BOKARO sApNA nEoov,-s'rr.rr6Hsc tNCoME rAX loPUCl Two CD Copies lfi- HIGH COURT DATED:27lO6tZO2S ) ORDER WP.No.18186 of 2025 .)l i'. 0 \*'rl' \\ 2 sfP 206 ALLOWING THE WRIT PETITION WITHOUT COSTS V+ J1 >\