The Primary Agricultural v. '1 . Assessment Unit

THE HONOURABLE SRIJUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDTKONDA WRIT PETI TION No.20490 OF 2025 QBDEB, (per Hon'hle Sri Justice Nursing Rao Nundikonda) Heard Mr. T.Chaitanya Kumar, leamed counsel for the petitioner and Ms. B.Sapna Reddy, learned Senior Standing Counsel for the Income 1'ax Department appearing lbr respondent No.2. Perused the record.

2. This is a writ petition where the proccedings are either challenged to the notices which were issued under Section 148A and 148 of the Income Tax Act, l96l (for short'the Act') or the assessment orders those have been passed under Sec(ion 147 of 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 olproceedings under Section 148 of the Act by the jurisdictional Assessing Officer, rvhereas in terms of the amendment that was brought to the Income Tax Act by way of Finance Act. 2O2l w.e.l-., 0l .04.2021 or'' 'ls, proceedings 2 under Section l48A of the Act as also under Section 148 of the \ Act ouglrt to have also been issued and proceede,J in a faceless manner.

4. The contention of the petitioner is thar the issue of proceedings being in violation of the Finance Acr. 2021 i.e., thc impugne,l notices under Section 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and dec dcd by this Courl in the case of I(ANKANALA RAVINIIR.A REDDY vs. INCOME-TAX OFFICERT decided on 14.09 2023 whereby a batch of writ petitions wrrre allowed and the proceedings initiated under Section 148A as.also under Section 148 of th,: Act were held to be bad with consequential reliefs on the ground o'it being in violatlon of the provisions ol S,eltion l5lA of the Act rt:ad with Notification 1812022 dated,29.03.2022. The said judgment passed by this Courl has also been subseqrently lollowed in a large number of writ petitions which u,ere allt:u,.ed on similar terms. ' [(2023) I5(' ta1nlonn."om ,l78 (Telangana)] .,

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 TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS!, Gauhati High Court in the case of RAM NARAYAN SAII 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 SRI VENKATARAMANA REDDY PATLOOLA VS. DEPUTY COMMISSIONER OF INCOME TAXS where the issue was in respect of intemational taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH VS. TNCOME TAX OFFICER' INTERNATIONAL TAXATION6 which is again on intemational taxation and central circle, High Court of l{imachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICERT, Gujarat High Court in the case of MANSUKHBHAI t lzoz+1464 ITR 430 (Bom) '[(2024) 156 taxmann.com 478 (Gauhati)] 'l(2b2+) 165 taxmann.com ll5 (Punjuh & Ilaryana)l ' 1202\1 167 laxmann.com 4l l (l elanBana)l " 12024) 166 taxmann.com 679 (Bombay)l '[2024) 165 taxmann.com 113 (Himachal Pradesh)] - -- ',1 \ 4 DAHYABHAI RADADIYA vs. INCOME TA.X OFFICER, WARD l(3X5)8, Jharkand High Court in the case of SHYAM SUNDAIf SAW vs. UNION OF INDIAe, Rajasthan High Court in the casc ol SHARDA DBVI CHHAJER vs. tl\COME TAX OFFICER & ANO'IHER and batch of writ pctitionsr(' which stood derided on 19.03.2024. Similar views have irlso been taken by the [tivision Bcnch of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (M.A.T 1690 of 2023), decided on25.09.2024.

6. Iivr:n 16ou*1l the sarne issue having been decided by a large number of tligh Courts, we are still confronted with largc filing of identical matters on daily basis ranging betweer 5 to 10 writ petitions. That upon the instructions being soughl ftom the Department, thcy have been taking a solitary ground that the decision of the Bonrbay High Court in the casc of Hexawtre Technologies Ltd., (2 supra) as also the one r.vhich has been decided ty this Corrrt in the case of Kanakoln Rnvindro Reddy '202,1 SC('onl-ine Guj 4012 'g 2025 SC(l Ont.ine Jhar 287 'n12oE, R r-.rD:1984-I)tJ I i 5 ( I supra) has been subjected to challenge tn 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. In addition, there are about 1200 SLPs also filed arising out of the same issue being decided by various High Courts l. 1'tt 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 Hon'ble Supreme Court in any of these mattcrs pending before it. Meanwhile, fresh writ petitions of identical nature are being pited up before this Bench on daily basis and rhe pendency is gefting increased on matter' which otherwise has already been dealt and decided by this very FIigh Court itsetf.

8. ()n 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, till date, we do not flnd any remedial steps having been taken by thc [ncome '['ax Department to take appropriate steps to either hotd back issuance of notice under Section l48A and under Section 148 ol the Act by the jurisdictional Assessing Officer, rather the authorities concemed in the teeth of series of decisions \"/ 6 by all tt,e rra.lol Iligh Courts in India are continuously still initiating procecdings under Section 1484 of the, A.ct and also initiating proceedinqs under Section 148 of the Act in contravention 10 thc arncndrnents brought into the Income Tax Act pursuant lo thc I;inance Act, 2010 as also the Finance Act 202 I

9. Up,rn a qrrery being put as to why can't this .,i,r-it petition be disposcd rf in the tccth ol the decision rendered by this Court in the case cf Kanakalo Ravindru Reddy (l supra), Iearned Standing Counsel firr thc Incorne'l'ax Department contends that those would unnecessarilv hurdcn thc Incomc Tax Department where they would be rcquircd to file equal number of .SLps belore the Hon'ble liuprcrne ('ourt and it would be further burdening the exchequer of the tlnion ol'lndie. lt was also the contention of the leamed Standing ('ounsel thar no prejudicb would br: caused to the interest of the pctitione.rs in casc if this writ petition is kept pending titl the flnalization of the SI.Ps pending before the Hon,ble Supreme (lorrrt and the lact that the petitioner is aLeady enjoying the benefit ol'inte'rirn protection. Nonetheless. on the earlier query of this Corrrr as to why the Incorne 'fax Departmenr llave not come out with a mcchanisrn to issue appropriate instructions or to take 7 appropriate steps in ensuring that proceedings under Section [48A 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 dedcidcd 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 Coutls. i0. 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 Court allowing writ petitions on the very same issue. The lncome Tax authorities concemed are.still even now in 2025 also initiating proceedings in contravention to the provisions of Section I 5 tA of the Act and as a result by now, mdre 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 Redtly ( I supra). What is also surprising is the fact that though while allowing the writ petitions in the case of Kunakala Ravindra Redd-v (l supra), the Division Bench while reserving the right of the Rcvenue, has also protected the interest of the petitioners 8 ',*-.! insofar z:s the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance with the amended provisior:s of the Act, as amended by the Financc Act, 2020 and the Finarce Act, 2021 . The petitioner assessee would be entitled to challengi or raise the other legal objections ilthe Revenue initiates fresh prcceedings. T'he Department lras made nc endeavour in availing the said liberty that was reservcd for the Revenue. On the contrary, they have been still sticking on to the stand, which this High Corrrt as we[[ as many other High Courts alr;ady held to be bad.

11. It z.ppears that because of the aforesaid liberty that this High Court had granted permitting the Revenue for initiating fresh proceedir.gs as a one-time measure in a tbceless ryanner, the Income 1'ax Deparlment wants to take advantage of the same by protracting these proceedings which would enable them to meet the limitation that would otheru,isc come iu the way. l-ikewise, if the writ petit'on is kept pending lor a considerable long. period of time and finally at a later stage if the Hon'ble Suprerne (lourl confirms the decis:on taken by this High Court as also b1. the other High Courts irL which the SLPs are still pendinu. the Income Tax l.t. 9 Deparlrnent would get the advantage of the liberty that is otherwise protected in t-avour of the Revenue lor initiation of lresh proceedings fiom thc disposal olthese matters at a much later stage which would be advantagcous and beneflcial to the Revenue and would be equally disadvantageous and detrimental so far as interest of the assesses are concenred. As a consequence, the lncome Tax Depaftment gets an cxtended period ol time for initiation of lresh proceedings.

12. The alarming trend ol docket explosion in this Court, despite the clear preccdcnt set in Kanokala Ravindra Reddy (l supra), is a matter of gravc concern. -l tre lncome Tax Deparlment's persistent initiation ol ttesh proceedings, disregarding the established judiciat pronouncemcnts, has led to an unprecedented surge \n litigation with over 600-700 petitions piling up on the same issue. fhis deliberate approach not only undermines the principle of judicial precedent but also strains the judicial resources unnecessarily. The Department's strategy ol arvaiting the Supreme Court's decision on pending SLPs while continuing to initiate fresh proceedings appears to be a calculatcd move to buy time and circumvent limitation periods, rather than adhering to the established lcgal -/ I 10 position. Such conduct raiscs serious questions about the administlativc efficiency and the rcspect fbr judicial \ pronoun( ements, particularlv uhcn this C'ourt l-ras alrcady providcd a balanccd approach by preserving both the ltevoruc's rights and assesses ntcrests.

13. Ar otlrcr aspect which needs to bc considercd is that in fact it should hzrve been realizcd by the Income -l'ax [)epartrlent itself and should have lound out via rnedia in ensuring tlrar proceedings under Sections 148-l\ and I48 should not have becn issued in a faceless rnanner. at least till the Ilon'blc Supremc ( rrurt decide the twelve hrrndred (1200) odd SLPs rvhich it is alreadr seized of or. at least the Income Tax Department should have lirr-rnd out some remedial steps to ensure that wherever the authoriiies intend to initiate ploceedings under Sections I 4tl-A and l4lJ. other than in a faceless manner, the proceedings should harc been defened without precipitating the mattcr lirrther intirnating the assessee tlrat they shall initiate appropriatc procccdings onl1, alrer rhe St_p,s are decided try the Hon'blc Supremc Court on the ve,n salle tssue. This agai:r, the Incomc'T'ax I)cpartrnent, has not b.'cn able to give a convincing rcply, except lbl the lact tlrat such a dccision if at alt / 1L 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 fbr the lncorne Tax Deparlment contended that the Dethi High Court disrnissed a wlit petition of similar nature, on the one hand when the High Court is struggling to reduce lts pendency, such notlces 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 atlects 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 before the Hon'ble Supreme Couft having beqp taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interipr protection to the Income Tax Department. Yet, the authorities concemed at the State [eve[ are not ready to accept the verdict passed by a majority of High Coufts of dillerent States on the same issue; and to make things further worse, the Income fax Deparlment 1S showing audacity by issuing notices continuotisly under Sections 148-A and 72 148 thro ugh the jurisdictional Assessing Officer rvhereas it ought to have t,een only in the faceless manner.

14. [n the case of BANK OF INDIA vs, ASSISTANT COMMiISSIONER, INCOME TAXrr. on an isslr.: rvhether it rvas justifiabte on the part of the Income Tax Def,artrnent in not followinll an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Corrrt of Bombay held at paragraph No.25 as rurder. viz., : "25. Mr. Paridwalla has rightly drawn out attention to the decitiion of this Court in Commissioner of lncome Tax vs. Smt. Godavaridevi Sarafl2 as also the recent decision of the co- ordirate Bench of this Court in Samp Furniture (P) t_td. v. lTO13 of which one of us (Justice G.S. Kulkarni) was a memcer, wherein the t)ourt categorically observed that the Revenue having not "accr:pted" the judgment of the High Court would not ntebn that till the same is set aside in a manner known to law. it would lbose its bindilg force. Referring to the decision of the Supreme Courl in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Cour: observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was critrczed by the Suprr)me Court ln such decisron, following are the relevant obse vations made by the Supreme Court. '.IKZOZS) 170 taxrnann.corn 422 (Bornbay)l '2 Jts781 I l3 ITR 589 (tsombai,) " 72OZ+1165 taxnann.corn 581/300 Taxman 452 (llonrhar ) " lt992l rxmann.com 16i55 tiLT 4lj (SC') 1l "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 lhe 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 view, righfly 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 dtsposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appe ate authorities. The order of the Appellte Collector is binding on tfrJ , 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 -t4 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 learned Additional Solicitor General that the observatrons made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended t,: curb a tendency in revenue matters which, if allo\ ied to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations rn the proper spirit. The observations of the H_igh 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 judrcial discipline and the need for giving effect to the orders of the higher appellate authorities which are brnding on them." I 5. W} at is worrying this Bench more is th: I'act that an endeavour is being made whole heartedly to ensure uot to generate further Iitigation on issues which have been laid to lest by a large number of Fligh Courls all of whom have taken a c()r-tsistent stand that the aotion of the lncome Tax Department being r iolative olthe 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 w'rit petition with an observation/direction that the disposal o1' the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Redd.y (l supra) shall however be subject to the outcome of the SLPs which were fited by the Income Tax Department and which is pending consideration belore 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 oi this Court and which stands fortified by the decisions of the vdrious other High Courts on the very same issue, the pendency ol this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter. I7 . So far as the interest of the Revenue is concemed, we are of the considered opinion that the interest of the Revenue l'ras already been considered and protected, as has been observed in paragraphs 16 36,37 and 38 ofthe order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent Department is neither tenable, nor sustainable. The notices so issued and the procedure acopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all thr: impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceeding s itself 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 thrs very jurisdictional issue- Since the impug;ndd,notices and orders are getting quashed on the point of jurisdiction, we are not inclined'to proceed further and decide the other issues raised by the petilioner which stands reserved to be raised and conterded rn an appropriate proceedings.

38. Since the Hon'ble Supreme Court had in the case of Ashish Agarwal, supra, as a one{ime measure exercising the powers under Article 14.2 of the Constitution of lndia, permifted the Revenu€ to proceed under the substrtuted provisions, and this Court allowing the petitions only on the procedural flavr, the right 77 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 fact that the earlier order of this High Court in the case of Kanokala Rovindro Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the Income 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 of this High Court in the case of Kanakala Ravindrt Reddy (l supra\. This, in other words, would mean that either ol 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 Court in the pending SLP on the very same issue

19. Accordingly, the instant writ petition stands allowed ir.r 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- 18 The consequential orders, if any, also stand set a;ide/quashed in similar terms as have been passed by this High Court in the case of Kankanola Rovindra Reddy (l supra). There shall be no order as \ to costs Conscquently, miscellaneous petitions pendirLg. if any, shall stand clo ;ed ,TRUE COPY// SD/. L. LAKSHMI BABU PF UTY REGISTRAR ECTION OFFICER To,

1. The Ass,:ssment Unit, National Faceless Assessment Centre, lncome Tax Department, l\4inistry of Finance, Room No. 4O1,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi -1 10 003. L

2. The lnccme tax officer ward 1, Warangal/ lncome Tax Offite, D.No. '1-8-610, 3rd Floo', tVlayuri Complex, Opp Tsnpdcl Bhawan, Nakkalagutta Hanamkcnda, Warangal, Telangana, 506001

3. The Secretary lr/inistry of Finance, Union of lndia, North Block, New Delhi-110 001

4. One CC to SRI THANNERU CHAITANYA KUIMAR, Advocate. IOPUCI 5. One CC to SRI GADI PRAVEEN KUIVAR, (Deputy Sc,licitor General of lndia), High Co rrt for the Stdte of Telangana at Hyderabad. [OPUC]

6. One CC to IVs.B.SAPNA REDDY, SC for lncome Tax Department. [OPUC] 7. Two CD Copies. BSK GJP HIGH COIJRT DATED:1610712025 ORDER WP.No.20,190 of 2025 '\i{: () 19 51:? 2ffi (' l, i; ")) r 5,. ir'\ \:. I ALLOWIN(3 THE WRIT PETITION WITHOUT COSTS ( A [9 \ ct t.