SRl. A v. RAGKU RAM

challenged to the notices which were issued under Section l48A and 148 olthe Income Tax Act, 1961 (for short'the Act') or the assessrnenl orders those have been passed under Section 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 148.4. of the Act and the subsequent initiation of proceedings under Section 148 ol- the Act by the .jurisdictional Assessing Officer, whereas in terms of the amendment that was brought to the lncome Tax Act by way of Finance Act, 2021 w.e.f., 01.04.2O21 onwards, proceedings 2 under Section 148,4 of the Act as also under Section 148 of the Act ought to have also been issued and proceede(l in a faceless manne[

4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act, 2O2l i.e., the impugned notices under Section l48A and Section 148 of the Act not being issued in a faceless manner, have alreadl, L,een dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFI(--ERI decided on 14.09.2023 whereby a batch of writ petitions werc allowed and the proceedings initiated under Section l48A as also rrnder 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 l5 I A of the Act read u'ith Notification l8l2o22 dated 29.03.2022. 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. 'l(2023) 156 taxrnann.corn 178 (Telangana)l ..,

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 & OTHERS2, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIAs, Punjab and Ilaryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA{, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONBR OF INCOME TAX5 where the issue was in respect of intemational taxation, Bornbay High Court in the case of ABHIN ANILKUMAR SHAH vS. INCOME TAX OFFICER, INTERNATIONAL TAXATION6 which is again on intemational taxation and central circlc, High Court of Himachal Pradesh in the case ol GOVIND SINGH vs. INCOME TAX OFFICERi, Gujarat High Court in thq case of MANSUKHBHAI 2 pozq464 ITR 430 (uom) '[(2024) 156 taxrnann.com 478 (Gauhati)] 't(2O24) 165 taxmann.com I I 5 (Punj ab & Haryana)l '[2024) 167 taxmann.com 4l I (1'elangana)] " 12024) 166 taxmann.com 679 (llombay)l '12024) 165 taxmann.com I l3 (l'{imachal Pradesh)l 4 DAHYABHAI RADADIYA vs. INCOME TAX OFFICER, WARD 3(3)(18, 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. TNCOMB TAX OFFICER & ANOTHER and batch of writ p:titionsr(' which stood decided on 19.03.2024. Similar views have ;rlso been taken by the Division Bench of Calcutta High Court in the case of GIRDH.{R GOPAL DALMiA vs. UNION OF l\DIA & ORS (M.A.T 169(tof 2023), decided on25.09.2024.

5. Even though the same issub having been decided by a large number of High Courts, we are still confronted rvirh large fiting ol identical matters on daily basis ranging betw'een 5 to l0 writ petitions. 'l'hat upon the instructions being soLreht fiom the Department, they have been taking a solitary ground that the decision of the Bombay High Court in the case ol lle-tcov'are Technologies Ltd, (2 supra) as also the one whic h has been decided by this Court in the case of Kanakala Rovindra Reddy 82oz+ sCC Online Guj 40lZ '2025 SCC Online Jhar 287 12023 : RI-JD :4984-DB.l I o r--l It \ \, 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. In addition, there are about 1200 SLPs also filed arising out ofthe same issue being decided by various [{igh Courts.

7. To a query being put to the learned counsel for the Revenue, they have categorically accepted the lact that there is no interim order granted by the Hon'ble Supreme Court in any of these matters pending before it. Meanwhile, lresh writ petitions of identical nature are being piled up belore this Bench on daily basis and the pendency is gefting increased on matter which otherwise has already been dealt 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 lapsed, till 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 l48A and under Section 148 ol the Act by the jurisdictional Assessing Officer, rather the authorities concerrred in the teeth of series of decisions 6 by all the major High Courts ln India are cr,ntinuously still initiating proceedings under Section l48A of the Act and also initiating proceedings under Section 148 ol' the Act in contravention to the amendments brought into the [ncome Tax Act pursuant to the Finance Act,2020 as also the Finance Act 2021.

9. Upon a query being put as to why carr't this .,rrrit petition be disposcd of in the teeth of the decision rendered bv this Courr in the case ol Kanakala Ravindra Reddy (l supra), leamed Standing Counsel lbr the lncome Tax Department contends th:rt those u,ould 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. lt was also the con;-ention of the learned Standing Counsel that no prejudice would be :aused to the interest o[the petitioners in case if this writ petition is kept pending tilt the finalization of the SLPs pending before ,he Hon'ble Supreme Court and the fact that the petitioner is already enjoying thc benellt ol' interim protection. Nonetheless, on the r,arlier query ol-this Court as to why the Income Tax Department ha.ze not conle out with a rnechanism to issue appropriate instruction:; 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 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 Courrs.

10. As a result of which, what we are f,acing is steep increase of titigation 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 151A of the Act and as a result by now, more than 600 to 700 petitions have been already got pited up before this High Court on an issue which otherwise stands squarely covered by the judgment of this Court in the case of Kanaksla Ravindra Reddy (1 supra). What is also surprising is the fact that though while allowing 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 insofar as the liberty which was granted to the Revenue for initiating fresh proceedings strictly in accordance w'ith the amended provisions of the Act, as amended by the Finance Act, 2020 and the Finance Acr,2021. The petitioner assessee would be entitled to challenge or raise the other legal objections if the Relenue initiates liesh proceedings. The Department has made no endeavour irr avaiiing the said liberty that was reserved for the Revenue. On the contral.,,, they have been still sticking on to the stand, which this tJigh Couit as well as many other High Courts already held to be bad. I l. lt appeirrs that because ofthe aforesaid liberty that this l{igh Clourt had granted permitting the Revenue for inrtiating fresh proceedings zrs a one-time measure in a faceless manner, the lnccme 1'zr:< [)e partment wants to take advantage oi' the same by protracting these proceedings which woutd enable -thern to meet the limitation that would otherwise come in the way. Likewise, if the writ petition is kept pending for a considerable long period of tirne and finally at ir later stage if the Hon'ble Supreme Clc'urt confitms the decision tiLken by this High Court as also by thc other High Courts in rvh ich the SLPs are still pending, the [ncome Tar 9 Department would get the advantage of the tiberty that is otherwise protected m 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 far as interest of the assesses are concemed. As a consequence, the Income Tax Department gets an extended period of time for initiation of fiesh proceedings.

12. The alarming trend of docket explosion in this Court, despite the clear precedent set in Kanakala Ravindra Reddy (l supra), is a 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 titigation 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 fiesh proceedings appears to be a calculated move to buy time and circumvent limitation periods, rather than adhering to the established legal 10 position. Such conduct raises serious questions about the administrative efficiency and the respect for judicial pronouncements, particularly when this Court has already provided a balanced approach by preserving both the Revenue's rights and assesses interests.

13. Anoth:r'aspect which needs to be considered is that in fact it sirould have been realized by the Income Tax Depqrtrnent itsell'arrd should have found out via media in ensuring thirt proceedings under Seclions I48-A and 148 should not have been issued in a laceless manner, at least till the Hon'ble Supreme Court decide the twelve hundred ( 1200) odd SLPs which it is already scized of or, at least the lrtcomc Tax Department should have found out some remedial steps to ensure that wherever the authorities intend tcl initiate proceedings under Sections 148-A and 148, other than in a taceless manner. the proceedings should- have been deferred without precipitating the matter further intimating the assessee that they' shatl initiate appropriate proceedings only after the SLP's are decided by the Hon'ble Supreme Court on the very same issue. 1'his again, the [ncome 1-ax Department, has not been able to give a convincing reply', except for the fact that such a decision if at all t 11 has to bc hken, 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 ol 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 affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these rnatters again and again on daily basis. Admittedly, in spite ol the rnatter bclore the Hon'ble Supreme Couft having been taken on many occasions, the Hon'ble Supreme Court which is seized of the rnatter 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 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 1? 148 through the jurisdictional Assessing Officer '*'hereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. {SSISTANT COMMISSIONER, INCOME TAXIr, on an issue vrhether it was justifiable on the part of the Income Tax Depanment in not following an oruler passed by the adjudicating authority only on the ground that tht' appeals are pending, the Division Bench of the High Courr of Bombay held at paragraph No.25 as under, viz., : "25. Mr. Paridwalla has rightly drawn out attention {o the decision of this Court in Commissioner of lncome Tax vs. Smt Godavaridevi Sarafl2 as also lhe recent decision o' the co- ordinate Bench of this Court in Samp Furniture (P) Ltd. v. lTO13 of whir;ir orre of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the iudgment 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 the Supreme Court in Union of lndia vs. Kamlakshi Finance Corporation Ltd.14, the Cou( 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 11zOZS1 170 ra.xnrann.com 422 (Bornbay)l t' 1toz8; I lt n t( 589 (Bombay) IZOZ+1 165 rarmann.com 581/300 Taxman 452 (Bombay) 'o llggzl raxmann.com l6155 EI-T 433 (SC) -..-. l3 "6. Sri Reddy is perhaps right in saying that the olficers 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 rcnclusion 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, 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 Appellale 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 subiect 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 1'-r 't4 rule is nol followed, the result wall 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 observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Ccur1, seemingly vehement, and apparently unpalatable to lhe Revenue, are only intended to curb a tendency in revenue mafters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit [o the Revenue. We would iike to say that the department should take these observations in the proper spint. The obse^ratrons of the High Ccurt 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 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 litigatir)n on issues which have been laid to rest by a large number of IIigh Courts all of whom have taken a consistent stand that the action olthe Income Tax Department being violative of the t5 Finance Act, 2020 and Finance Act,2O2l. 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 Ksnkonala Ravindra Reddy (l supra) shall however be subject to the outcome of the SLPs which were fited by the Income Tax Dcpartment 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 fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which otherwise can be decided and disposed ofas a covered matter.

17. So far as the interest olthe 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 16 36,37 and 38 of the order which, for ready referencc, 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 suslainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the 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 pnnciples that when the initiation of the p!'oceedings itself was procedurally wrong, the subsequent orders also gets nullifi ed automatically. 37- The prelirninary ob.iection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictaonal issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclaned to proceed furthe!' and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.

38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of lndia, permitted the Revenue to proceed under the substituted provisaons, and this Court allowing the petitions only on the procedural flaw, the right 77 cuferred on the Revenue would remain reserved to proceed further if they so want from the sbge 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 Csurt in the case of Kanakala Ravindra Reddy (l supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the lncome 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 I{igh Court in the case of Konokala Ravindra Reddy (l xryra), This, in other words, would 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 Court in the pending SLP on the very same issue.

19. Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concemed. As a consequence, the impugned notice under challenge under Sections t4E-A and 148 stands set aside/quashed. 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 of Kankcnala Rovindra Reddy (l supra). There shail be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand, closed. To, //TRUE COPY// SD/. T(.BHAVANI SWAhfiY I;TANT REGISTRAR SECTION OFFICER

1. The Assessment Unit, National Faceless Assessment Centre, lncome Tax Department, Ministry of Finance, Room No. 4O1, 2"o Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi 110 003. The lncome Tax fficer, Ward - 15(1). l.T. Towers, A.C. Guards, Masabtank, Hyderabad - 500004. One CC to SRl. A. V. RAGHU RAM, Advocate IOPUCI one CC to SRl. K. SUDHAKAR REDDY (Sr SC FOR INCOME TAX) iOPUCI Two CD Copies

3. 4. 5. BM LS HIGH COURT DATED:31 1A712025 ORDER WP.No.22460 of 2025 .'.-.:'. S 2 7 0tT 7rr25 t ALLOWING THE WRIT PETITION WITHOUT COSTS 7 1.4 f,/taztr