tr,1r Minhaiuddin v. lncomeTaxOfficer

petitioner and Mr.Vijay K Punna, learned Senior Standing Counsel lor the Income Tax Department appearing for the respondents. Perused the record.

2. This is a writ petition where the proceedings are eithcr chatlenged to the notices which were issued under Section i48A and I48 of the Income Tax Act, 1961 (for shoft'the Act') or the assesslnent orders those have been passed under Section 147 ol' 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 l48A of the Act and the subsequent initiation of proceedings under Section 148 of the '[ct by the jurisdictional Assessing Officer, whereas in terms ) ol the amendment that was brought to the Income Tax Act by way of Finance Act, 2021 w.e.f., 01.04'2021 oowards, proceedings ..,. 2 under Section l4gA of the Act as also under Ser:tion I 4g of the Act ought tc have also been issued and proceedr:d in a faceless manner.

4. The contention of the petitioner is thrrt the issue of proceedings being in violation of the Financ e Ar.:t, 2021 i.e., the impugned notices under Section 14gA and Sectirtr: l4g of the Act not being issued in a faceless manner, have alreadl.been dealt with and decided by this Courl iir the case of KANI(ANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a batch of writ petitions \v(:.re allowed and the proceedings initiated under Section l4gA as also unf,e1 Section 148 of the Ac1 vvere held to bc bad rvith consequenti,rl reliefs on the grourd o|it being in vioration of the provisions of Sr:ction 151A of the Act read with Norificarion 18/2022 dated,29.03.2,.022. The said, judgment passed by this Court has also been subseq uently followed in a large number of writ petitions which were auor'ed on similar tenns. '[(2023) 156 raxmann.co-]nr{ 78 (Telangana)l 3

5. Down the [ine, 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 TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERSz, Gauhati High Court in the case ol RAM NARAYAN SAH vs. UNION OF INDIAT, Punjab and Haryana High Courl in the case of JATINDER SINGH BANGU vs. UNION OF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA vS. DEPU.I.Y 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 intematior.ral taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICER?, Gujarat High Courl in the case of MANSUKIIBHAI ' lzoz+1464 ITR 430 (Bom) ' l(2024) 156 taxmann.com 478 (Gauhati)l ^ 1Q024) 165 taxmann.corn 1 15 (Punjab & Haryana)l ' [2024) 167 taxrnarm.com 4l l.{Telangana)] " [2024) 166 taxr.nann.com 679 (Bombay)] ' 12024) 165 taxmann.com I l3 (Himachal Pradesh)l I 4 DAHYABHAI RADADIYA vs. INCOME I'1!X OFFICER,, WARD 3(3Xr8, Jharkand High Courr in the r;ar;e of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan IJigh Courr in the case of SI{ARDA DEVI CHHAJER vs. L\COME TAX OFFICER & ANOTHER and batch of writ pr:tirionsro which stood decided on 19.03.2024. Simitar views have i:lso been taken by the Division Bench ol- Calcutta l{igh Court ;n the case of GIRDHAR GOPAL DALMIA vs. UNION OF TNDIA & ORS (M.A.T | 690 ot 2023),decided on 25.09.2024.

6. Even though the same issue having been dcc ded by a large number of Fligh Courts, we are still confi.onted wirh large filing of identical matters on daily basis rangirrg between 5 to 10 writ petitions. 'lhat upon the instructions being sought from the Department, they have been taking a solitary grround that the decision of the Bombay High Court in the case of Hexaware Technologies Ltd., (2 supra) as also the one vifrich has been ( decided by this court in the case or Kattakara Ravinfiy11 pnr1r1, 82024 SCC Online Guj 4012 " 2025 SCC Onl,inc llrar 2g7 12023 : I{J-JD :4984- DI} | I o 5 . .(l -suprd=.ha$.",heqo*suhi,ep-ted-ts.sh4llilgE'-rs^a*Ssesiel.Lp-qxe.=.,.,-.-'--.. Petition i.e., SLP No.3574 of 2024 before the Hon'ble Supreme Couft and the Hon'ble Supreme Court is seized of the matter In addition, there are about 1200 SLPs also filed arising out ofthe same issue being decided by various High Courts.

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 llon'ble Supreme Court in any of these nlatters pending befbrc it. Meanwhile, fresh writ petitions of identical nature are bcing piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dcalt 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 1'ax Department to take appropriate steps to eithcr hold back issuance of notice under Section l48A and under Section 148 ol the Act by the jurisdictional Assessing Officer, rather the authorities concerned in the teeth of series of decisions -) 6 by all the rnaj or High Courts in India are continuously still initiating proceedings under Section l48A of r l.r,-: Act and also initiating proceedings under Section 148 o l thc Act in contravention to the amendments brought into thc lncome Tax Act pursuant to the Finance Act,2020 as also the Finan. c Act 2021 .

9. Upon a query beiug put as to why can't th s rvrit petition be disposed of in the teeth of the dccision rendcred 11 this Coufi in the case of Kanokalo Ravindra Reddy (1 srrpra), l,'arned Stanciing Counsel for the Incorne Tax Deparlment contends rlrat those would unnecessarily burden the Income I'ax Departnr,'nt l,trere they would be required to file equal numbel of S I,s before the Hon'ble Supreme Court and it rvould be furlhi:r burdcning the exchequer of the Union ol India. It was also thc contention of the leamed Standing Counsel that no prejudice woulct rc caused to the interest of the petitioners in case if this writ petition is kcpt pending till the finalization of the SLPs pending belo e the Hon'ble Supreme Court and the fact that the petitioner is a rcady enjoying the benefit of interim protection. Nonetheless, on I re earlier query of this Court as to why the lncome Tax DepartmenL havc not come out with a Inechanism to issue appropriate instrucrions or to take L:\ 7 appropnate steps in ensuring that proceedings under Section l4gA of the Act as also the assessment orders under Section 14g 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 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 w,e 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 concemed are still even now in 2025 also initiating proceedings in contravention to the provisions of Section l5 I A 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 l{anaksla Ravindra Reddy ( I supra). whar is arso surprising is the ract that though while allowing the writ petitions in the case of Kanakula Ravindru Reddy (l supra), the Division Bench while reseling the right of the Revenue, has also protected the interest of the petitioners 8 insofar as the libetty which was granted to thr: Revenue for initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance' '\ct. 2020 and the Finance Act,2O2l. The petitioner assessee wou k' he entitled to challenge or raise the other legal objections if the R.ei'enue initiates fresh proceedings. The Department has made ro endcavour in availing the said liberty that was reserrred for the R-c,'enue On the contrary, they have been stiii sticking on to the stz n'J, which this High Court as well as many other High Courts alrcady held to be bad. I 1. [t appears that because ol the aforesaid tibert' that this F{igh Court had granted permitting the Reveuue for irritiating fresh proceedings as a one-time measure in a facel':trs mannet, the Income Tax Department wants to take advantage' :rf the same by protracting these proceedings which would enable tl'em to meet the timitation that would otherwise come in the way. -,ikewise, if the writ petition is kept pending for a considerable lonp period of time and finally at a later stage if the Hon'ble Supremt: Coufi confir'ms the decision taken by this High Couft as also bi' Lhe other High -r:-^ rire Income Tax Courts in which the SLPs are sti- \ .-\ \ 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 benehcial to the Revenue and would be equally disadvantageous and detrimental so f_ar 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 Konakala Ravindra Reddy (l supra), is a matter of grave concern. The Income Tax Depadment,s persistent initiation of fresh proceedings, disregarding the established judicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 peritions piling up on rhe same issue. This deliberate approacl.r 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 gl-ps while continuing initiate lresh proceedings appears to be a calculated move to Iimitation periods, buy time and circumvent rather than adhering to the established legal ) 10 position. Such conduct raises serious questior r about the aclministrative efficiency and the respect lor judicial pronouncements, parlicularly when this Court has a1r:ady provided a balance<l approach by preserving both the Revenr te's rights and assesses interests.

13. Another aspect which needs to be considerecl s that in laci it sl.rould have been realized by the Incorne Tax Deparl nent itsell and strould have found out via media in cnsuring !lr.rt p'r'oct-'edings under Sections 148-A and 148 should not have bt:cn issued ir.r a laceless manner, at least till the Hon'ble Supreme r- ouft decide the trvelve hundred (1200) odd SLPs which it is alread-v seized of or' at least the Income Tax Dep'artment should have fi 'und oLtt sorne remedial steps to ensure that wherever the atrthc:ities intend to initiate proceedings under Sections 148-A and 14[i otl.rer than in a f'aceless manner, the proceedings should havc been deferred without precipitating the matter further intimating' l lre assessee that they shalt initiate appropriate proceedings only aft''r the SLP's are decided by the Hon'ble Supreme Courl on the r -'ry samc issue' This again, the Income Tax Departmerrt, has not t'er-'ir ablc to give a' convincing reply, except for the fact that such a 'lecision if at all '\.r\ I \ 7't_ 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. Though the leamed Standing Counsel for the Incorne 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 ro reduce its pendency, such notices which are under challenge in this writ petrtron are forcing the assessec to knock [he doors of this High Court resulting in filing of hundreds of ncu, writ pctitions which in the 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 again on daily basis. Adrnittcdly, in spite of the matter before the Hon'ble Supreme Court having been taken on tnany occasions, the Hon'ble Supreme court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Department. yet, the authorities ccncemed 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 .fax Department is showing audacity by issuing notices r -.:.,,ously under Sections l4g_A and 12 148 through the julisdictional Assessing Officer wltereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs' ASSISTAn-T COMMISSIONER, INCOME TAXrr, on an issutr rvhcther it rvas .justifiable on the part of the Income Tax Del)rrrtrllcttt it.t I.tot fbllorving au order passed by the adjudicating autholitv on[1' on thc ground that the appeals are pending, the Divisit'r llench ol the High Cour-t oi- tsombay held at paragraph No'2-< as tr r'iz ' : '<!cr-' "25 Mr Pariclwalla has rightly drawn out atter tion to the dectsion of this Court in Commissioner of lncome Tax vs' Smt' Godavaridevi Saraf'2 as also the recent decisicn of the co- ordinate Bench of this Court in Samp Furniture (P) t td' v lTO13 of which one of us (Justice G.S. Kulkarni) was a metnl:'er' wheretn the Court categorically observed that the Revenur: having not "accepted" the judgment of the High Court would nol rrrean lhat trll the same is set aside in a manner known to law, it urcrrld loose tts bindrng force. Referrtng to the decision of the Supre -ne Court in Union of lndia vs. Kamlakshi Finance Corporatio:r Ltd'o' the Courl observed that the approach of the officials of Revenue of treating decisions being 'not acceptable" was crit (: zed by the Supreme Court. ln such decision, following are ll-re relevant observations made by the Supreme Court. ' 11zozs1 170 taxnlann.com 422 (Bombay)l ' 1 te zal t i ..t I'rR 5 89 (Bornbay) ' IZOZ+1 165 taxrnann.corn 581/3O0 Taxman 452 (Ilorl trtLy) 1telZl ta\mann.com 16/55 ELT 433 (SC) o 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 reachlng 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, righ y 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 vehemenfly 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 jurisdiclion 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,, 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 comoetent court. lf this healthy t4 rule is nol followed, the result will only be utrdue harassment to assesses anci chaos in administl ation of tax laws.

12. We have dealt with this aspect at some l€'ngth' because it has been suggested by the le:irned Additional Solicitor General that the observi)tions made by the High Court, have been harsh ln the officers. lt is clear that the observations of the High Cou(, seemingly vehement, and appe-ently unpalatable to the Revenue, are only intended k: curb a tendency in i'evenue rnatte!'s which, if allotted to become widespread, could result in considr:'rable harassment to the assesses-public without any t'enefit to the Revenue We wouid iike to say thi,t the department should take these observations irr the proper spirit. The observations of the Higl' Court should be kept in mind in future and the utmost r'3gard should be paid by the adiudicating authorities ald lhe appellate authorities to the requirements of j.rdicial discipline and the need for giving effect to the :)rders of the higher appellate authorities which are t ncjing on tircn-r."

15. What is worrying this Bench more is th: fact that an endeavour is being lnade vhole heartedly to ensul'e not to generate lurther litigatiorl on issues which have been laid tc' rest by a large number of High Courts all of ';vhom have taken a .ronsistent stand that the action ol the [ncorne Tax Department being violative ol Lhe 15 Finance Ac[ 2020 and Finance Act, 2OZl. 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 Ktnkanala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Deparlrnent and which is pending consideration before the I-Ion,ble S Lrprerne Court. t6. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose ol- uraltels which are squarely covered by the decision of this Court and u,hich stands fortified by the decisions of the various other Iligh Courts on the very same issue, the pendency of this High Court 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 concerned, we are of thc considered opinion that the interest of the Revenue has already bcen considered and protected, as has been observed in paragraphs ) 16 36,37 and 38 ofthe order which, for ready referenc::, is reproduced heleunder:

36. For all the aforesaid reasons, the impugnerj notiees issued and the proceedings drawn by the res condent- Department is neither tenable, nor sur;tainable. The notices so issued and the procedure adcp:ed being per se illegal, deserves to be and are accor(lingly set aside/quashed. As a consequence, all the i'npugned orders gettlng quashed, the consequential order:r passed by the respondent-Department pursuant to th:) notices issued under Section 147 and 148 would :rlso get quashed and it is ordered accordingly. The r(|ason we are quashing the consequential order is on the rrinciples rt^-...,L^- --^ r,rrd( wrrcrr lrrE rlllr.rdu\Jrr ur (lrc pl(,uceulligo i.^^r....^^ i,5cii vrr<is procedurally wrong, the subsequent orders i:lso gets nullified automatically.

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very lurisdictional issue. Since the impugrrerJ notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed l'u ther and decide the olher rssues raised by the petitior =r which stands reserved to be raised and contendod in an appropriate proceedrngs.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra. as a onetime measure exercrsing the powers under Article 142 of the Constitution of lndia, permitted the Revenue tc proceed under the substituted provisions, and this Courl allowing the petitions only on the-procedural flaw, the right \ L7 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 oF the lact that the earlier order of this I{igh Court in the case of Kanokala Rtvintlra Reddy (l supra) is subjected to challenge belorc 1he Hon'ble Suprcme Court in SLP No.3574 of 2024, prc {'erred b1, ttre lrrcome I'ax Department, we make it clear Lhat allor'ving o[ thc instant writ petition is subject to outcome of the alorcsaid SL.P prelcrred by the Revenue against the decision of this l{igtr Court in the case of Konakala Ravindra Reddy (l supra) [-his, in other words, rvould mean that either of the parties, il the1, so want, rnay move alr appropriate petition seeking revival ol this writ petition in tl're light of the decision of the Hon'ble Supreme Courl in thc pcnding SLP on the very same issue.

19. Accordingly, the instant writ petition stands allowed in lavour of thc assessee so far as the issue of jurisdiction ts concemed. As a consequence, the impugned notice under challengc uuder Sections 148-A and 148 stands set aside/quashed --'i .?/ 18 The consequential orders, i[ any, also stand sei aside/quashed in similar terms as have been passed by this High (_ <:,ur1 in the case of Kankanala Ravindra Reddy (l supra). There shrr.ll be no order as to costs. Consequently, misce[laneous petitions pending, it any, sha[ stand closed. /ITRUE COPY// n SD/. r)+u l\ T. VIJAY KUMAR TY REGTSTRAR \ J SECTION OFFICER To,

1. The lncome Tax Officer, lntematronat Taxation - t \Hyderabad 6th floor, C- Block, lT Towers, 10- ?-3, AC Guards. Hyderabad." 2. One CC to SRI fi/.NAGA DEEPAK. Advocate. [OPUC 3. One CC to SRI VUHAY K PUNNA (SENIOR SC FOII rrD). [OPUC] 4. Two CD Copies- v BSK GJP HIGH COURT DATED:07107t2025 \ ( '1 :it 2 $25

4..' I \ ORDER WP.No.I9229 ot ZO2S ALLOWING THE WRIT PETTTION WITHOUT COSTS \p