NAl.. R, VINDRA REDDY v. INCOME-TAX OI,IlCEIlr deciclcd on

4. The contention of the petitioncr thr t thr- issuc o1- proccedings being in violation of tlie Financc \t r. l0l I i.c.. rtrc inrpugned notices under Scction l48A and Sectic,r l.lli ol'the,\ct ttot bcing isrsug4 1. a faceless lranner, have alleacj. irccn dealt r,r ith arrrl clccidcrl bv this Cloult in thc casc ot' KANK.{NAl..\ R,\VINDRA REDDY vs. INCOME-TAX OI,IlCEIlr deciclcd on 14.09t.2('t23 whereby a batch of writ petitions \\ere allowed and thc proccedir.rgs initiated undcr Section l48A as a : o unclcr Scction 14E o1'the,\ct were held to be bad ivith couserluerlial rclrc[i on rlrc ground of it being in violation of the provisions of iectiorr I 5 I A o1 thc Act leatl with Notillcation 1812022 dated 29.0 1 2022 I'he said juclgrnent prrssed by this Court has also bcen subser Lrcntl\' lbllo\\cd in a large number of writ petitions which wsrc xlt,rrved on similar' tcrms. '[(2023) 156 taxmann.com 178 (Telangana); J

5. Down the line, we find that the same issue has also been decided against the Itevenue by VAI'IOUS High Courts i.e., by the Bombay l{igh Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANI' COMMISSIONER OF INCOME TAX & OTHERS2, Gauhati I{igh Court in the case of RAM NARAYAN SAH vs. UNION OF lNDIAr, Punjab and Haryana High Court in the case oIJATINDOR SINGH BANGLJ vs. UNION OF INDIAT, and'felangana lligh Coult in tl.re casc of SIII \/ENKATARAMANA REDDY PI\]'LOOLA vs. DEPU'I'Y COMMISSIONER OF INCOME TAX5 rvl.rele the issue was in respect ol international taxation, Bombay I ligh Court in the case of ABIIIN ANILKUMAR SHAH vs. INCOME TAX OFFICEII, INTEItNATIONAL TAXATION(' rvhich is again on international laxation and central circle, l-Iigh Courl ol Himachal Pradesh in the case of GOVIND SINGH vs. INCOMII TAX OFFICIIRT, Gujarat High Court in the case ol' MANSUKHBHAI ' 7zoz11464 ITR 430 (Bom) '[(2024) [ 56 taxmann.com 478 (Gauhati)] " [(2024) 165 taxmann.com I I 5 (Punjab & Haryana)] 'L2024) 167 taxmann.com 4t I (Telangana)l " [2024) 166 taxmann.com 679 (Bombay)] ' [2024) 165 ta]tnmn.com I l3 (t-Iimachal Pradcsh)l 4 DAHY,TBHAI RADADIYA vs. TNCOME t'\X OITFICUR. \\'.ARD 3(3X5)3, Jharkand Higl.r Court in rhe ,: rse ol' SHyAIVI StINDAR SAW vs. UNION OF INDtAe, Ra.iasrlr rn t.ligh Courl in thc casr: of SHARDA DBVI CHHAJEII vs. INCOMI] .t.AX OFFICFIR & ANOTI{ER and batch of rvrir I cririons u.hich (, st<rod decirled on 19.03.2024. Similar viervs have also bcen rakcn by thc Division Bench o1'Calcutta IIigh ()ourl in thc casc ol' CIRDI{AR GOPAL DALMIA vs. UNION OI. INDI,\ & OttS (VI n. f i6(t() of 2023), decidcd on 25.09.2024.

6. [},en though the same issue having been dc,.idecl b1,a largc nurlbcr of ){igh Courts. we arc still confr.onted rvitLr larec filing of iderrtical utetters on daily basis ranging betwec.rr 5 ro I0 rrrir petitions. 'l hat upon the instructions being so.rght 1r.onr the Dcpaflme nt. they have been taking a solitary o rounrl that thc dccision crl' tl-re Bontbay High Courl in the casr o1- Ilc-rrtt,ara Technologics Ltd., (2 supr.a) as also the one ,rhich has bccn decided lry this Court in the case of l{anaksla Rat,indra Reldt, \ 'lpl-l SCr'( )rrl.ine Crri 40 l2 '2025 SCC Online Jhar 287 '012023, R.t- j D:4984-DBl 5 (1 supra) has been subjected to challenge Special Leave Petitiorr i.c., SLP No.3574 of 2024 belore tl.re Hon'blc Supreme Court and the Hon'ble Supreme Court is seized ol the matter. ln addition, there are about 1200 SLPs also filed arising out of the same issue being decided by various l{igh Courts.

1. 1'o a query being put to the learned counsel for the Rcvenue, they have categorically accepted the fact that lhele is no inrcliur older glanted by the Hon'ble Suprerne Cor-rrt in an1, ol' these matters pending before it. Meanwliile, ll'esh wlit petitions of identical nature are being piled up bclorc this Bench on daily basis and the pendency is getting increased on matter which otherrvise has already bcen dealt and decided by this very High Courr itselt-.

8. On the one hand, even though the order of this Court that s as passed as early as on 14.09.2023 and more l6 rnonths have lapsed, till date, we do not find any rernedial steps lraving been taken by the Income Tax Department to take appropriate stcps to either hold back issuance of notice under Section 148A and under Section 148 of the Act by the jurisdictional Assessing Oflicer, rather the authorities concemed in the teeth of series of decisions 6 b1, all th,: rnajor IJigh Courts in India are continr.rouslv still initiating proceedings under. Section l4gA ol t re Act ar.rd also lr rtlat tg ploceedines under Section 148 < f the Act in cortravention to the arlcndmcnts brought into thr: Incot,e.l.ax Act plrrslrant to tlt" p1ru,',.. Act, 2020 as also the Filar ce Act 201 I

9. L pon a query being put as to rvhy can't th : u,rit ltctition bc disposerl ol in the teeth of the decision rcndcred by this Oourr in tlre- case ol lianukala Ravindrt Rerkl.y (l supra). eamecl Sta.cli.e c.unscl lbr the Incorre 'l'ax Department contencls hat thosc *,oLrlcl unnccessar ly burden the Income Tax Departnt:nt wherc thc1,, u,ould be lequired to tile equal nurnber of ll,_ps belorc thc lJon'blc SrLplerne Court and it would bc fuftlrt: bur.dening thc cxchcquer ol thc Union of India. It was also the :ontention ol'thc lcarLrcd Standing Counscl that no prejudice would rc caused to the inte rcst .l-t rc petitioners in case if this writ petitior is kept penclirru till the finalization of thc SLps pending bcfc,r c tl.re l{on.ble Supleme Court and the fact that the petitioner is rlreadv enjoying the benellt .l'interim protection. Nonetheless. o, t re earlicr. quer' of this Court as to why the Income Tax DepartmerLl have not come out rvith a rnechanisnt to issue appropriate instruc;r ions or to takc 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 of the Act ale kcpt in a hold in the light ofthe decisions dedcided by the various I ligh Courls, it was submitted by the ieamed Standing Counsel that the said steps can only be taken at the level of CBD'I' as any such steps would have to be taken Pan India and cannot be limited to any of these jurisdictional Iligh Coults.

10. As a result of which, what rve are facing is steep increase of litigation clay in and day out even though various olders have bc'err passed by this I-Iigh Court allowing wlit petitions on the verl,sarne ISSUE The Income Tax authorities concerned are still even now in 2025 also initiating proceedings in contravention to the provisions o1- Section 1 51A of the Act and as a result by now, more than 600 to 700 petitions have beerr already got piled up before this High Court on an issue which otherwise stands squarely covered by the judgment o[ this Court in the case of Kunakalo Rttvindra Reddy (t supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Ksnakalo Ravindra Reddy (l supra), the Division Bench while reserving the right of the Revenue, has also protected the interest of the petitioners 8 insofar as the liberty wl-rich rvas granted to the Ilcvenue for initiating fiesh proceedings strictly in accordance ., vith the arnended provisions o1- the Act, as amended by the Finance Act, 2020 and the Finance Act, 2021. The pctitioner assessee rvo.tld be entitlecl to challcnee ol laise the other legal objections if the {evenuc initiatcs fresh prococdings. The Departrnent has made to endeavour ir.t availing the said liberty that was reserved for the I,.cvenue . On thc corltrar), thcv have been still sticking on to the srand, rvhich this Hieh Courr as u,ell as llatlv other High (lourts al.cad1, held to be I 1. It appcars that because ofrhe aforesaid libeLrl. thar rhis IIigh Court had granted pennitting the Revenue for. initiating lresh proceeding; as a one-time lreasure in a facele ss rnanner, the Income Tar Depar{.ment wants to take advantagc of the same by protracting tl-rese proccedings rvhich would enable them to meet the limitation trat would otheru,ise come in the way. Likewise, ilthe rvrit petition is kept pending 1'or a considerable lon I period of time and finally at a later stage if the Hon'ble Suprem,: Court confirms the decision taken by this High Couft as also b;. the other High Cor.rrts in r,,'hich the SLPs are still pending, 1l e Income Tax 9 Dcpartment would get the advantage of the libcrty that is otherwise protected in favour of the Revenue for initiation of fresh proceedings fi on-r thc disposal of these matters at a much latel stage u,hich r.vould [e advantagcous and bene{lcial to the Rcvenue and u,ould be equally disadvantageous and detrimental so lar as intercst ol- the assesses are concemed. As a consequence, the Income'lax Departrnent gets an cxtendcd period of tirne lbr initiation of fi esh ploceedings. I l. Thc alarrning trcnd of docket explosion in this Court, despitc- the cleal plecedent seL in Konakoh Ravindra Reddy (l supra), is a rnatter of grave concern. The Income Tax Department's persistent initiation of lresh ploceedings, disregarding the establisl.red judicial pronouucements, has led to an unprecedented surge in litigation rvith ovcr 600-700 petitions piling up on the samc issue. This dcliberate approach not only undermines the principle of judicial precedcnt 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 lirnitation periods, rather than adhering to the established legal 10 position. Such conduct raises serious ques"rons about the administrative elliciency and the respect for .iudicial prouou n cenrcn ts, particularlr,r,herr this Courl has rllcaclr,provided a balanc:ed approach by plcscn'ir-rg both tl-re Rer, r rruc's rights and assesses irrtcrc'sts.

13. Anolhcr aspect urhich needs to be considerc< is tltat in fact it shoLrld har,,: hcen rcalized b1, thc Inconte l-ax Dep,r'lnrcrrt itself and should hai c fbr-rnd out via ntedia in ensuring t rlt proccedings under Scctions 148-A and 148 should not have Iccn issLred in a faceless rr.,nner, at least till the llon'ble Suprerre r 'ou11 dccide the ts,elve hundrcd ( 1200) odd Sl-Ps rvhich it is alreacl' seized of or, at least thc Incorne Tax Depaltnrent should have tirr-rnd out solre rernedial slcps to ensurc that whcrevel the autl.r,ritics intend to initiate prot:cedings under Sections 148-A and 14,1 other than in a faceless mannerl the proceedings should liavt: becn deferred rvithout prccipitating thc ntattcl lirtthcr intirnating rhc assossee that they shall i'ritiate appropriate proccedings only a[t,'r thc SLP's are decided by thc Hon'ble Suplerne Courl on the 'i:r'y sanre issue. This again, the Income Tax Departrnent, has not bt:,'n ablc to give a coltvincing rcply, except fol the fact that such a c ccision if at all I 1,1, has to be taker.r, 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 lcr.cl o1- Ccntral Board of Direct Taxes. Though the leamed Standing Counscl lbr the Income Tax Deparlment contended that thc I)elhi I ligh Court disrnisscd a writ petition of similal nature, on tlie one hand r.vhen the lJigh Court is struggling to reduce its pe'ndcncy, such noticcs which are under challenge in this writ pctition are lbrcing thc asscssce to knock the doors of this High (.oLrlt lcsutting in Irling ol hLrndrcds of new rvrit petitions which in tlre long run not only affects the disposal of the writ petitions bLrt also consurnes substantial time of the Bench in hearing these nratters again and again on daily basis. Admittedly, in spite of the mattcr- bclbrc the Iton'ble Suprcme Courl having been taken otl rnany occasions, the l-lon'ble Supreme Court which is seized of the lnatter has been |eluctant in granting any interim protection to the lncornc 'l'ax Departt-ucnt. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of IIigh Coufts of dilferent States on the same issue; and to make things lurthcr worse, the lncoine Tax Department IS showing ar-rdacity by issuing notices continuously under Sections 148-4 and 't? 148 th.ough the jurisdictio,al Assessing Office. *,hereas it ought to havc bccn only in the faceless lnanner.

14. [n thc casc ol BANK OF INDIA rs. ;\SSISTAN.I (lol\{i\IISSIONIiII, INCON{E TAXrr, on an is:; re *lrcrher it r,,,as .lLrstilrable on thc pa.r .1' the Income Tar De ,art,ert iu not follorving an order.passed by the adjudicating aull ority only on the glound thrrt the altpcals are pcnding, ths pivi5i,,n llcnch of the High Cour.t o1- []ontbav hclcl at par.agr.aph No.2-5 a; Lrndcr.. viz., : "25 l\rlr. Paridwalla has righfly drawn out atttntion to the decisic n of this Courl in Commissioner of Incomc f ax vs. Smt. Godavaridevi Sarafl2 as also the recent decisi,).r of the co_ ordrnate Bench of this Court in Samp Furniture (p) Ltd. v. lTOr3 of which one of us (Justice G S. Kulkarni) was a men,ber, wherein the Cc,urt categorically observed that the Revenu,, having not "accep:ed" the ludgment of the High Court would not r.ean that till the sarrre ts set aside in a manner known to law, it vr tuld loose its binding force. Referrrng to the decision of the Sup.:me Court in Union of lndia vs. Kamlakshi Finance Corporaticn Ltd.,!. the Court observed that the approach of the officials cf Revenue of treating decisions being "not acceptable,' was criti(. zed by the Supreme Court. ln such decision, following are :he relevant observations made by the Supreme Court I ITZOZS; I ?0 taxmann.conr 2122 (Bornbay)l '' 1lol81 I 1-i I Ilt 589 (llombay) " 12OZ+1 l6ii raxmann.oorn 58l/300 Taxman " 119921laxn]ann.corr I6l.5-5 I jl.'f 433 (SC) 452 (Bour ray) 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 faclual malafides but with the fact that the officers, in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. lt cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the 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 {ollowed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an obiectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. lf this healthy "14 rule is not followed, the result wili only b€ undue harassment to assesses and chaos in admil stration of tax laws. '2. We have dealt with this aspect at som: length, hecause it has been suggested by the earned lidditional Solrcitor General that the obs,: vations rnade by the High Court, have been harsh on the officers. lt is clear that the observations of re High Oourt, seemingly vehement, and a1>1rarenfly lnpalatable to the Revenue, are only intende,l to curb a tendency in revenue matters which, if alcwed to become widespread, could result in conSiJerable harassment to the assesses-public without any benefit to the Revenue. We would like to say t rat the department should take these observations rn the proper spirit. The observations of the Hi! I Court should be kept in mind in future and the utmoljt regard should be paid by the adludlcating authorities rnd the appellate authorities to the requtrements ol ludicial discipline and the need for giving effect to th3 orders oF the higher appellate authorities which are rindtng on them." 1 5. Wl.rat is worrying this Bench rnore is I re fact rhat an endeavo ur Ls being lxade whole heartedly to ensut ( not to gcneratc further litigation on issues which have been laid .() rest by a large number of High Courts all of whom have taken a lonsistcnt stand that the action of the Income Tax Deparltrent being violative of the ! 15 F.inance Act, 2020 and Finance Act,202l. Now, in order to protect the interest ol the Rcr,enue as also that of the assessee, it would be tlitc at this juncture, if we dispose of the writ petition with an o bservation/dilection that the disposal of the instant writ petition in tcrms of thc judgment rendered by this l{igh Court in the case of Kttrkonola Rsvindro Reddy (I supra) shall however be subject to [hc outcome of the SLPs rvhich were filed bv the Income Tax Dcpartment and which is pending consideration belore the Ilon'ble Supren're Court.

16. In the given lacts 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 for-titied by the decisions of the various other High Courls on the very same issuc, the pendcncy of this High Courl would turthel be burdened which otherwise can be decided and disposed of as a covered mattel' ll . So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 76 36, 37 and 38 olthe order which, for ready relerer.t e. is reproduced hereundcr 36 For all the aforesaid reasons, the impugn:d notices issued and the proceedings drawn by the re;pondent- frepartment is neither tenable, nor sr stainable The notices so issued and the procedure adc,tr ted being per se illegal, deserves to be and are acccrJrngly set aside/quashed. As a consequence, all the mpugned orders getting quashed, the consequential orde s passed by the respondenlDepadment pursuant to I e notices is,sued under Section 147 and 148 would e so get quashed and it is ordered accordingly. The rlason we are quashing the consequential order is on thr-. Drinciples that when the initiation of the proceedings tself was procedurally wrong, the subsequent orders a so gets nulli{ied automatically. 3,7. The preliminary objection raised by the l) rt tioner is sustained and all these writ petitions stands e lowed on this very jurisdictional issue. Since the impugn,:d notices and orders are getting quashed on th€ point of Jurisdiction, we are not inclined to proceed i rther and decide the other issues raised by the petitil rer which stands reserved to be raised and contenc3d in an appropriate proceedrngs.

38. Since the Hon'ble Supreme Court had, irrthe case of Ashish Agarwal, supra, as a one{imer measure exercising the powers under Article 14',1 of the C;onstitution of lndia, permitted the Revenue t ) proceed under the substituted provisions, and this Cou t allowing the petitions only on the procedural flaw the 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. 1 8. Wc rvould only further like to n'rake observations that since we arc inclined to dispose of the instant writ petition, conscious of l.he lact that the earlier older ol this High Court in the case of Kunakala Rtvindru Reddy (I supra) is subjected to challenge belbre the Flon'ble Suprerle Courr in SLP No.3574 of 2024, pre f-crred by the Incorne Tax Deparlmcnt. we rnake it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by thc Revenue against the decision of this Higlr Court in the case of Kanukala Ravindra Reddy (l supra). This. in other words, would mean thar either ol the parties, if they so want, may move an appfopriate petition seeking revival of this wlit petition in the light of the decision of the Hon,ble Supreme Court in the pending SLP on thc very same issue.

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction IS conccmed. As a consequence, the in-rpugned notice under challenge under Sections 148-A and 148 stands set aside/quashed. t , 18 The conseqr-rential orders, if any, also stand set eside/quashed in similal tenrs as have been passed by this High Cc Lrr.t in the casc of Konkanalu Ravindra Redly (l supra). 1'here sh r I I be no or.clcr as to costs Conscquently, miscellaneous petitions penrl ng, i1- ani,, s|1n11 stand closed. ,TRUE COPY// SD/. A. JAYASREE s\rarur REGTsTRAR .o. \brcrtou oFFtcER ( L \ To,

1. The lncome Tax Officer, Ward 15(1), Hyderabad lT Te rvers, Ac Guards, Ivlasab Tank, Hyderabad-500004

2. The Principal Commissioner of lncome Tax - lV, Hydr: abad lT Towers, Ac Gr.rards, Masab Tank, Hyderabad-500004

3. The National Faceless Assessment Centre, lncome 1'trx Department tr/inistry of Finance (lovt. of lndia, New Delhi.

4. The Secret.rry, Union of lndia, N/inistry of Finance,16l.B North Block, New Delhi - 110'101. 5 6 7 One CC to llRl P.SRIKANTH RAO, Advocate. [OPUC One CC to tVs.B.SAPNA REDDY, SC for lncome Ta>: )epartment- [OPUC] Two CD Copies. BSK GJP Ny , ,:, }r: r\ , u-r. l. ' /\\ .'l'' ! .t t[T zu5 -). -:, ,/ -,.,/ t/

1. i-\ -l ,,4 HIGH COURT DATED:0710712025 ORDER WP.No.19161 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS *\