High Court · 2025

Counsel for the petitioner: Counsel for the Respondent Nos.1&2: Ms. B. SApNA REDDY SC FOR lT S:il;:,jilTe Respondent No.3: GADI PRAVEEN KUMAR Depury Soticitor The Court made the following: ORDER THE HONOURABLE SRI JUSTICE P'SAM KOSHY NAR'TNG RAo rHE HoNouRABLE '*iH"t'"' NANDIKONDA WRIT PETITION No.19395 of2025 ORDER, (per Hon'ble Sri Justice Narsing Rao NandikonQa) Heard Mr'T Chaitanya Kumar' learned counsel for the petitioner and Ms'B'Sapna Reddy' 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 either challenged to the notices which were issued under Section 148.4 andl48oftheIncomeTaxAct,lg6l(forshort.theAct,)orthe assessmentordersthosehavebeenpassedunderSectionl4Tof 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 148A of the Act and the subsequent initiation of proceedings under Section 148 of tlry Act by the jurisdictional Assessing Officer' whereas in terms \ oftheamendmentthatwasbroughttothelncomeTaxActbyway of Finance Lct,, 2021 w e'f , 01'04'2021 onwards' proceedings ., , l under Section 14gA of the Act as also under Section l4g of the Act ought to have also been issued and proceeded in a faceless man ner

4. The contention of the petitioner is that the issue of proceedings being in violation of the Financ e Act, 2021i.e.. the rmpugned notices under Section l48A and Section I4g ofthe Act not being issued in a faceless rnanner, have already been dealt with and decided by this Courr in the case of KANKANALA RAVINDRA REDDY vs. INCOME_TAX OFFICERT decided on 14.09.2023 whereby a balch of writ petitions were allowed and the proceedings initiated under Section l4gA as also under Section i48 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section l51A of the Act read with Notification lg/2022 dated,29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large nurnber of writ petitions which were a owed on simirar tems. ' [(2023) I 56 raxrnann.corn I7g (Telangana)] J 5 Down the line, we hnd that the same issue has also been decided against the Revenue bY various High Courts t'e ' the case of HEXAWARE by the BornbaY High Coutt tn TECHNOLOGIES LTD" vs' ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS2' Gauhati High Court in the case of llAM NARAYAN SAH vs' UNION OF INDIA3' Punjab and I{aryana High Court in the case of JATINDER SINGH BANGU vs. UNION oF INDIA4, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF TNCOME 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 international taxation ancl central circle' tligh Court of Himachal Pradesh in the case of GOVIND SINGH vs' INCOME TAX OFFICERT' Gujarat l{igh Court in the case of MANSUKIIBHAI 'yzoz+1464 ITR 430 (Bom) 'iQOZq 156 taxmann.com 478 (Gauhati)l ^ [(.2024) 165 taxmann.corn I l5 (Punjab & I{aryana)] ' [2024){67 taxmann.com 411 (Tetangana)] " 12024) l$6 taxmann.com 679 (Bombay)l ' izOZ+) 165 taxmann.com I 1 3 (Himachal Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME TAx OFFICER, WARD 3(3Xt8, Jharkand High Court in the case of SHyAM SUNDAR SAW vs. UNION OF INDIAe, Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitionsrO which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Courl in the case of GIRDHAR GOPAL DALMIA vs. UNION OF. INDIA & ORS (M.A.T 1690 of 2023),decided on25.09.2024. 6. Even though the same issue having been decided by a large number of High Courts, we are still confronted with large filing of identical rnatters on daily basis ranging between 5 to I0 writ petitions. That upon the instructions being sought frorn the Department, they have been taking a solitary ground that the decision of the Bombay High court in the case of Hexaware Technologies Lttl., (2 supra) as also the one whiclt has been decided by this Couft in the case of Konskula Ravindra Reddy '2024 SCC Online Gui 4012 '2025 SCC Onl ine Jhar 2R7 I o y2023 : RJ-JD : 4 9 84-DBl f : 5 (1 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'ble Supreme Court is seized of the matter' ln addition, there are about 1200 SLPs also filed arising out of the same issue being decided by various Lligh Courts' To a query being put to the learned counsel for the Revenue' 7 . they have categorically accepted the lact that there is no interim Coufi in anY of these order granted by the Hon'ble Supreme matters pending before it Meanwhile' 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' fresh writ Petitions of

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 'rax Department to take appropriate steps to either hold back issuance of notice under Section 148,{ and under Section 148 of the Act by the jurisdictional Assessing Offrcer' rather the authorities concemed in the teeth of series of decisions 6 by all the major High Courts in India are continuously srill initiating proceedings under Section l48A of the Act ancl also initiating proceedings under Section l4g of the Act in contravention to the arnendments brought into. the Inconte i.ax Act pursuant to the Finance Act,2C20 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 Courl in tlre case of Konakala Ravinclra Rettdy (l supra), iearned Standing Counscl flor the Incorne Tax Depaftrrent contends that those wor-rlcl unnecessarily burden the Income .lax Department where they would be required to file equal number. of SI_ps belore 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 IIon,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 our with a mcchanism to issue appropr.iate instructions or to take l i 1 I 7 appropriate steps in ensuring that proceedings under Section 148A of the Act as also the assessment orders under Section 148 ofthe Act are kept in a hold in the light ofthe decisions dedcided by the various High Courts, it was submitted by the teamed 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 Coutts' 10. As a result of which' what we are lacing is steep increase of lirigation day in and day out even thotrgh various orders have been passed by this High Court allowing writ petitions on the very same issue. The Income 'I'ax authorities concerted are still svsn nsw in 2025 also initiating proceedings in contravention to the provisions of Section 1 5 1A of the Act and as a result by now' more than 600 toT00petitionshavebeenalreadygotpiledupbeforethisHigh Court on an issue which otherwise stands squarely covered by the ju<lgment of this Court in the case of Kanukala Ravindra Reddy (l supra). What is also surprising is the fact that though whiie allowing the writ petitions in the case of Kunakalu Ravindta Retlcty (l supra), the Division Bench while reserving the dght of the Revenue, has also protected the interest of the petitioners \ 8 t insofar as the libety which was granted to the Ilevenue lor initiating fresh proceedings strictly in accordance with the amended provisions of the Act, as amended by the Finance Act, 2020 ancl the Finance Act, 2021 . The petitioner assessee q,ould be entitled to challenge or raise the other legal objections if the Revenue initiates fresh proceedings. The Deparlment has rnade no endeavour. ir.r ai.ailing the said liberty that was reserved for the Revenue. On the contrary, they have been still sticking on to the stand, r,r,hich this Fligh Coult as well as many other High Courls already hcld to be bad. It appears that because of the aforesaid liberry that this High Court had granted permitting the Revenue fbr tnrtrating fi.esh 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 rneet thc limitation that would otherwise come in the way. Likewise, ilthe writ petition is kept pending for a considerable long period of time and finally at a later stage if the Hon,ble Supreme Clourt confirms the decision taken by this High Couft as also by the other High Courts in which the SLps are still pending, the Income Tax I i / 9 Depaftment would get the advantage of the libedy that is otherwlse 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 beneficial to the Revenue and would be equally disadvantageous and detrimental so lar as interest of the assesses are concemed' As a consequence' the lncome Tax Depadment gets an extended period of time for initiation of fresh proceedings.

12. The atarming trend of docket explosion in this Courl' despite the clear precedent sel in Kanakala Ravindra Recltty (l supra)' is a matter of grave concem' The Income Tax Department's persistent initiation of fresh proceedings' disregarcling tl.re established judicial pronouncements, has led to an unprecedented surge in litigation with over 600-700 petitions piling up on the same issueThis 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 'I 10 administrative efficiency and the posltion. Such conduct raises serious questions about the respect for judicial pronouncements, parlicularly when this court has already provided a balanced approach by preserving both the Re'enue,s rights and i i l i assesses interests

13. Another aspect which needs to be considered is that in fact it should have becn realized by the Income Tax Department itself and should have found out via lnedia in ensuring tliat proceedings under Sections l4g_A and l4g should not have been issued in a faceless manner, at least till the Hon,ble Supreme Court clecide the :::]l:j:io::3 !i3gr]^:13jl-ps which it is arreadl,seized of or, ar least the Income Tr:r ;."-"'"^' :partment should have found out sorne remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 14g_A and l4g, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further 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 ar all { ..4 : : 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 Though the learned level of Central Board of Direct Taxes' Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition ol 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 Iligh Cor-rrt resulting in fiting of hundreds of new writ petitions which in the long run not only afl-ects the disposal 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 beforc 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 Courls 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 \-\ I I I I ! I i I 1 I t I I I I I I I I i I I I i i I I i I l I l l 72 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner. 14. In the case of BANK OF INDIA ys. ASSISTANT COMMISSIONER, INCOME TAXil, on anissue wherher.it was justifiable on the part of the Income Tax Department in not follor.ving 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 herd at paragraph No.25 as under, viz., : t^il:r:il:::J:i::1, "25. Mr. paridwalla decison orthis court , Jil:Il:":::i;:#il1"::ff Godavaridevi Sarafl2 as also the recent decision of the co_ ordinate Bench of this C( or wh ch one or us ,.,rr;': : ;rJ,:; the Court categorically observed that the Revenue having not "accepted,, the judgment of the High Court would not mean that till lhe same is set aside in a manne. trn^,.,^ +^ ,_. " bindins rorce Rererrins ,J;:T:i:::'":,li-;lri,l :ffi l Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, 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. ' . t,t, |,1}3t.r .l 7 0. t a x r n a m. c or n 4 2 2 ( B o r n bay 1l '' le78l j l] It R 589 fllombay) '' [2024] 165 raxmann.corn 5g l/300 Taxman 452 (Bombay) '" |992) laxrnann.com l6155 ELT433 (SC) L3 "6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides tn passing the impugned orders They perhaps g"nui*ty 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 ln regard to the same issue which were placed before tnem, one of the Collector (Appeals) and the other of The High Court has' in our view' rightly the Tribunal conduct of the Assistant Collectors and nt to the assessee caused by the failure criticized this It the harassme of these officers to give effect to the orders authorities higher to them in the appellate hierarchy cannot be too vehemently emphasized that it is 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 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 \. I I I i I I I I I I 14 ']i 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 t because it has been .,1"_ -":,*' "i some rength, Additionar sori"ito. ce,.ulalT::',3 i::"r";::: made by the High Court, have been harsh on the officers. lt is clear that thr oot"'ut'ons of the High court, seemingry ,un.' and apparen y unparatabre ,o ,n" R"runr"tunt' a tendency jn revenue rrr:::"#'o,,lt:ffffi'il become widespread, could result in conslderable harassment to the assesses to the Revenue *" *"ro,Jo["-',:"::;"1::i;: department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in futu shourd be paid by the r.,,;,"ff;iff;:[i::"jn: appeltate authorities to the disciprine and the need ... n,ii"1''1ili,": ;: :::i1 of the higher appellate authorities which are binding on them."

15. What is worrying this Bench more is the tact 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 whorn have taken a consistent stand that the action of the Income Tax Department being violative of the 15 Finance Act' 2020 and Finance Act' 2021' 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 Ravinclrl Reddy (l supra) shall however be subject to the outcome of the Sl'Ps which were hted by the Income Tax Depaftment and which is pending consideration before the I{on'ble Supleme Coutt.

16. In the given tacts 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 Cout and which stands forlified by the decisions of the various other l{igh Courls on the very same issue' the pendency of this Fligh Courl would lurther 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 ancl3g ofthe order which, for ready refercnce rs reproduced hereunder:

36. For all the aforesaid re issued and tne p,o"""oing-"":::;i?TJi::il:ff: Department is neither nor sustainabre. The notices so issued ,'un'o'"' he Procedure adopted being "no per se illegal, deserves ,o and are accordingly set aside/quashed. oa , aon".o ou"n"u' all the impugned orders getting quashed, ,nu. ""rr;r::l ,Tr::::: ,li:::il:: by the responde", issued under Section 147 :,:f"d :ld ll i ollered,#:;;T:,l::" l.j are quashing the consequential order is "" ,n" O;r",0,". that when the initiation of the proceedings rtself was procedurally wrong, the sub sequent orders also gets nulrified automaticary.

37. The preliminary objection raised by the petitioner is sustatned and ali these writ this ve ry ju risdictiona r issue. fi:J;: ::::; #:,::: and orders are getting quashed on the point of jurisdiction, we are not rnclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. QO of Ashish Agarwal, supra, as a one{ime the powers under Article 142 Since the Hon,ble Supreme Court had, ln the case measure exercising of the Constitution of tndia, permitted t he Revenue to proceed under the substituted provisions, and this Court 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 Cotlfl- int-the"case rcf*Asfiish-' ' 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 fact that the earlier order of this High Couft in the case ol KanukalaRavindraRetkty(lsupra)issubjectedtochallenge before the Hon'bte Supreme Court in SLP No'3574 of 2024' preferred by the Incorne Tax 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 ofthis High Court in the case of Kanukala Rwindra Reddy (l supra)' This, in other words, rvould 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 Courl in the pending SLP on the very same issue' lg. Accordingly, the instant writ 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' I I 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 ol Kankanala Ravindra Reddy (l supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. \ To, //TRUE COPYII "-itg,"?i-1'f .'8f.f HiH SECTION OFFICER - rr,

1. Assessment Unit, Natio k##,:?[ffi dS#]trfl "-';A'.,T:f.e,i,,?:H:"iE:H:#- ' il':""i?Tl"? l,ii.?Xi"r"Ja.EtrBfj,?; llli?,,ii,d 3. The Secretary Ministry of Finance North Block, New Delhi_i.10 001 4. One CC to SRt. THANNERU CHA|TANYA KUIvIAR Advocate tOpUCl 5. One CC to Ms. B. SAPNA REDDY SC FOR tT tOpUCl ' t$r"r?? 7. Two CDC optes to sRI' GADI PRAVEEN KurvAR o"or,, i,"ar Generar of rndia /, r row E R, AC G u a rd s, A T HIGH COURT DATED:08 tTtt2\2s I ORDER WP.No.19395 of 2O2S ({ o $ t/ \ 10 sEP 206 ': ,, ' ,,-, ir'l --:: j-?' 'i\ a j (,, _l ALLOWING THE WRIT PETITION WITHOUT COSTS i j I I I I \ 1